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104th Congress                                            Rept. 104-204
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                       COMMUNICATIONS ACT OF 1995

                                _______


 July 24, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 1555]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Commerce, to whom was referred the bill 
(H.R. 1555) to promote competition and reduce regulation in 
order to secure lower prices and higher quality services for 
American telecommunications consumers and encourage the rapid 
deployment of new telecommunications technologies, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
                                CONTENTS

                                                                   Page
The amendment....................................................     2
Propose and summary..............................................    47
Background and need..............................................    48
Hearings.........................................................   055
Committee consideration..........................................    56
Roll call votes..................................................    56
Committee oversight findings.....................................    64
Committee on Government Reform and Oversight.....................    64
Committee cost estimates.........................................    64
Congressional Budget Office estimates............................    64
Inflationary impact statement....................................    71
Section-by-Section Analysis of the Legislation...................    71
Changes in existing law made by the bill, as reported............   127
Additional and dissenting views..................................

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Communications Act 
of 1995''.
  (b) References.--References in this Act to ``the Act'' are references 
to the Communications Act of 1934.
  (c) Table of Contents.--
Sec. 1. Short title; table of contents.

     TITLE I--DEVELOPMENT OF COMPETITIVE TELECOMMUNICATIONS MARKETS

Sec. 101. Establishment of part II of title II.

             ``Part II--Development of Competitive Markets

        ``Sec. 241. Interconnection.
        ``Sec. 242. Equal access and interconnection to the local loop 
                        for competing providers.
        ``Sec. 243. Preemption.
        ``Sec. 244. Statements of terms and conditions for access and 
                        interconnection.
        ``Sec. 245. Bell operating company entry into interLATA 
                        services.
        ``Sec. 246. Competitive safeguards.
        ``Sec. 247. Universal service.
        ``Sec. 248. Pricing flexibility and abolition of rate-of-return 
                        regulation.
        ``Sec. 249. Network functionality and accessibility.
        ``Sec. 250. Market entry barriers.
        ``Sec. 251. Illegal changes in subscriber carrier selections.
        ``Sec. 252. Study.
        ``Sec. 253. Territorial exemption.''.
Sec. 102. Competition in manufacturing, information services, alarm 
services, and pay phone services.

              ``Part III--Special and Temporary Provisions

        ``Sec. 271. Manufacturing by Bell operating companies.
        ``Sec. 272. Electronic publishing by Bell operating companies.
        ``Sec. 273. Alarm monitoring and telemessaging services by Bell 
                        operating companies.
        ``Sec. 274. Provision of payphone service.''.
Sec. 103. Forbearance from regulation.
        ``Sec. 230. Forbearance from regulation.''.
Sec. 104. Privacy of customer information.
        ``Sec. 222. Privacy of customer proprietary network 
                        information.''.
Sec. 105. Pole attachments.
Sec. 106. Preemption of franchising authority regulation of 
telecommunications services.
Sec. 107. Facilities siting; radio frequency emission standards.
Sec. 108. Mobile service access to long distance carriers.
Sec. 109. Freedom from toll fraud.
Sec. 110. Report on means of restricting access to unwanted material in 
interactive telecommunications systems.
Sec. 111. Authorization of appropriations.

             TITLE II--CABLE COMMUNICATIONS COMPETITIVENESS

Sec. 201. Cable service provided by telephone companies.

  ``Part V--Video Programming Services Provided by Telephone Companies

        ``Sec. 651. Definitions.
        ``Sec. 652. Separate video programming affiliate.
        ``Sec. 653. Establishment of video platform.
        ``Sec. 654. Authority to prohibit cross-subsidization.
        ``Sec. 655. Prohibition on buy outs.
        ``Sec. 656. Applicability of parts I through IV.
        ``Sec. 657. Rural area exemption.''.
Sec. 202. Competition from cable systems.
Sec. 203. Competitive availability of navigation devices.
        ``Sec. 713. Competitive availability of navigation devices.''.
Sec. 204. Video programming accessibility.
Sec. 205. Technical amendments.

          TITLE III--BROADCAST COMMUNICATIONS COMPETITIVENESS

Sec. 301. Broadcaster spectrum flexibility.
        ``Sec. 336. Broadcast spectrum flexibility.''.
Sec. 302. Broadcast ownership.
        ``Sec. 337. Broadcast ownership.''.
Sec. 303. Foreign investment and ownership.
Sec. 304. Term of licenses.
Sec. 305. Broadcast license renewal procedures.
Sec. 306. Exclusive Federal jurisdiction over direct broadcast 
satellite service.
Sec. 307. Automated ship distress and safety systems.
Sec. 308. Restrictions on over-the-air reception devices.
Sec. 309. DBS signal security.

                     TITLE IV--EFFECT ON OTHER LAWS

Sec. 401. Relationship to other laws.
Sec. 402. Preemption of local taxation with respect to DBS services.

                          TITLE V--DEFINITIONS

Sec. 501. Definitions.

              TITLE VI--SMALL BUSINESS COMPLAINT PROCEDURE

Sec. 601. Complaint procedure.
     TITLE I--DEVELOPMENT OF COMPETITIVE TELECOMMUNICATIONS MARKETS

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

  (a) Amendment.--Title II of the Act is amended by inserting after 
section 229 (47 U.S.C. 229) the following new part:

             ``PART II--DEVELOPMENT OF COMPETITIVE MARKETS

``SEC. 241. INTERCONNECTION.

  ``The duty of a common carrier under section 201(a) includes the duty 
to interconnect with the facilities and equipment of other providers of 
telecommunications services and information services.

``SEC. 242. EQUAL ACCESS AND INTERCONNECTION TO THE LOCAL LOOP FOR 
                    COMPETING PROVIDERS.

  ``(a) Openness and Accessibility Obligations.--The duty under section 
201(a) of a local exchange carrier includes the following duties:
          ``(1) Interconnection.--The duty to provide, in accordance 
        with subsection (b), equal access to and interconnection with 
        the facilities of the carrier's networks to any other carrier 
        or person offering (or seeking to offer) telecommunications 
        services or information services reasonably requesting such 
        equal access and interconnection, so that such networks are 
        fully interoperable with such telecommunications services and 
        information services. For purposes of this paragraph, a request 
        is not reasonable unless it contains a proposed plan, including 
        a reasonable schedule, for the implementation of the requested 
        access or interconnection.
          ``(2) Unbundling of network elements.--The duty to offer 
        unbundled services, elements, features, functions, and 
        capabilities whenever technically feasible, at just, 
        reasonable, and nondiscriminatory prices and in accordance with 
        subsection (b)(4).
          ``(3) Resale.--The duty to offer services, elements, 
        features, functions, and capabilities for resale at 
        economically feasible rates to the reseller, recognizing 
        pricing structures for telephone exchange service in the State, 
        and the duty not to prohibit, and not to impose unreasonable or 
        discriminatory conditions or limitations on, the resale, on a 
        bundled or unbundled basis, of services, elements, features, 
        functions, and capabilities in conjunction with the furnishing 
        of a telecommunications service or an information service.
          ``(4) Number portability.--The duty to provide, to the extent 
        technically feasible, number portability in accordance with 
        requirements prescribed by the Commission.
          ``(5) Dialing parity.--The duty to provide, in accordance 
        with subsection (c), dialing parity to competing providers of 
        telephone exchange service and telephone toll service.
          ``(6) 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 in 
        accordance with section 224(d).
          ``(7) Network functionality and accessibility.--The duty not 
        to install network features, functions, or capabilities that do 
        not comply with any standards established pursuant to section 
        249.
          ``(8) Good faith negotiation.--The duty to negotiate in good 
        faith, under the supervision of State commissions, the 
        particular terms and conditions of agreements to fulfill the 
        duties described in paragraphs (1) through (7). The other 
        carrier or person requesting interconnection shall also be 
        obligated to negotiate in good faith the particular terms and 
        conditions of agreements to fulfill the duties described in 
        paragraphs (1) through (7).
  ``(b) Interconnection, Compensation, and Equal Access.--
          ``(1) Interconnection.--A local exchange carrier shall 
        provide access to and interconnection with the facilities of 
        the carrier's network at any technically feasible point within 
        the carrier's network on just and reasonable terms and 
        conditions, to any other carrier or person offering (or seeking 
        to offer) telecommunications services or information services 
        requesting such access.
          ``(2) Intercarrier compensation between facilities-based 
        carriers.--
                  ``(A) In general.--For the purposes of paragraph (1), 
                the terms and conditions for interconnection of the 
                network facilities of a competing provider of telephone 
                exchange service shall not be considered 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 
                        termination on such carrier's network 
                        facilities of calls that originate on the 
                        network facilities of the other carrier;
                          ``(ii) such terms and conditions determine 
                        such costs on the basis of a reasonable 
                        approximation of the additional costs of 
                        terminating such calls; and
                          ``(iii) the recovery of costs permitted by 
                        such terms and conditions are reasonable in 
                        relation to the prices for termination of calls 
                        that would prevail in a competitive market.
                  ``(B) Rules of construction.--This paragraph shall 
                not be construed--
                          ``(i) to preclude arrangements that afford 
                        such 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 
                        terminating calls, or to require carriers to 
                        maintain records with respect to the additional 
                        costs of terminating calls.
          ``(3) Equal access.--A local exchange carrier shall afford, 
        to any other carrier or person offering (or seeking to offer) a 
        telecommunications service or an information service, 
        reasonable and nondiscriminatory access on an unbundled basis--
                  ``(A) to databases, signaling systems, billing and 
                collection services, poles, ducts, conduits, and 
                rights-of-way owned or controlled by a local exchange 
                carrier, or other facilities, functions, or information 
                (including subscriber numbers) integral to the 
                efficient transmission, routing, or other provision of 
                telephone exchange services or exchange access;
                  ``(B) that is equal in type and quality to the access 
                which the carrier affords to itself or to any other 
                person, and is available at nondiscriminatory prices; 
                and
                  ``(C) that is sufficient to ensure the full 
                interoperability of the equipment and facilities of the 
                carrier and of the person seeking such access.
          ``(4) Commission action required.--
                  ``(A) In general.--Within 15 months after the date of 
                enactment of this part, the Commission shall complete 
                all actions necessary (including any reconsideration) 
                to establish regulations to implement the requirements 
                of this section. The Commission shall establish such 
                regulations after consultation with the Joint Board 
                established pursuant to section 247.
                  ``(B) Collocation.--Such regulations shall provide 
                for actual collocation of equipment necessary for 
                interconnection for telecommunications services at the 
                premises of a local exchange carrier, except that the 
                regulations shall provide for virtual collocation where 
                the local exchange carrier demonstrates that actual 
                collocation is not practical for technical reasons or 
                because of space limitations.
                  ``(C) User payment of costs.--Such regulations shall 
                require that the costs that a carrier incurs in 
                offering access, interconnection, number portability, 
                or unbundled services, elements, features, functions, 
                and capabilities shall be borne by the users of such 
                access, interconnection, number portability, or 
                services, elements, features, functions, and 
                capabilities.
                  ``(D) Imputed charges to carrier.--Such regulations 
                shall require the carrier, to the extent it provides a 
                telecommunications service or an information service 
                that requires access or interconnection to its network 
                facilities, to impute such access and interconnection 
                charges to itself.
  ``(c) Number Portability and Dialing Parity.--
          ``(1) Availability.--A local exchange carrier shall ensure 
        that--
                  ``(A) number portability shall be available on 
                request in accordance with subsection (a)(4); and
                  ``(B) dialing parity shall be available upon request, 
                except that, in the case of a Bell operating company, 
                such company shall ensure that dialing parity for 
                intraLATA telephone toll service shall be available not 
                later than the date such company is authorized to 
                provide interLATA services.
          ``(2)  Number administration.--The Commission shall 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 any portion of such jurisdiction.
  ``(d) Joint Marketing of Resold Elements.--
          ``(1) Restriction.--Except as provided in paragraph (2), no 
        service, element, feature, function, or capability that is made 
        available for resale in any State by a Bell operating company 
        may be jointly marketed directly or indirectly with any 
        interLATA telephone toll service until such Bell operating 
        company is authorized pursuant to section 245(d) to provide 
        interLATA services in such State.
          ``(2) Existing providers.--Paragraph (1) shall not prohibit 
        joint marketing of services, elements, features, functions, or 
        capabilities acquired from a Bell operating company by another 
        provider if that provider jointly markets services, elements, 
        features, functions, and capabilities acquired from a Bell 
        operating company anywhere in the telephone service territory 
        of such Bell operating company, or in the telephone service 
        territory of any affiliate of such Bell operating company that 
        provides telephone exchange service, pursuant to any agreement, 
        tariff, or other arrangement entered into or in effect before 
        the date of enactment of this part.
  ``(e) Modifications and Waivers.--The Commission may modify or waive 
the requirements of this section for any local exchange carrier (or 
class or category of such carriers) that has, in the aggregate 
nationwide, fewer than 500,000 access lines installed, to the extent 
that the Commission determines that compliance with such requirements 
(without such modification) would be unduly economically burdensome, 
technologically infeasible, or otherwise not in the public interest.
  ``(f) Waiver for Rural Telephone Companies.--A State commission may 
waive the requirements of this section with respect to any rural 
telephone company.
  ``(g) Exemption for Certain Rural Telephone Companies.--Subsections 
(a) through (d) of this section shall not apply to a carrier that has 
fewer than 50,000 access lines in a local exchange study area, if such 
carrier does not provide video programming services over its telephone 
exchange facilities in such study area, except that a State commission 
may terminate the exemption under this subsection if the State 
commission determines that the termination of such exemption is 
consistent with the public interest, convenience, and necessity.
  ``(h) Avoidance of Redundant Regulations.--Nothing in this section 
shall be construed to prohibit the Commission or any State commission 
from enforcing regulations prescribed prior to the date of enactment of 
this part in fulfilling the requirements of this section, to the extent 
that such regulations are consistent with the provisions of this 
section.

``SEC. 243. PREEMPTION.

  ``(a) Removal of Barriers to Entry.--Except as provided in subsection 
(b) of this section, no State or local statute, regulation, or other 
legal requirement shall--
          ``(1) effectively prohibit any carrier or other person from 
        entering the business of providing interstate or intrastate 
        telecommunications services or information services; or
          ``(2) effectively prohibit any carrier or other person 
        providing (or seeking to provide) interstate or intrastate 
        telecommunications services or information services from 
        exercising the access and interconnection rights provided under 
        this part.
  ``(b) State and Local Authority.--Nothing in this section shall 
affect the ability of State or local officials to impose, on a 
nondiscriminatory basis, requirements necessary to preserve and advance 
universal service, protect the public safety and welfare, ensure the 
continued quality of telecommunications services, ensure that a 
provider's business practices are consistent with consumer protection 
laws and regulations, and ensure just and reasonable rates, provided 
that such requirements do not effectively prohibit any carrier or 
person from providing interstate or intrastate telecommunications 
services or information services.
  ``(c) Construction Permits.--Subsection (a) shall not be construed to 
prohibit a local government from requiring a person or carrier to 
obtain ordinary and usual construction or similar permits for its 
operations if--
          ``(1) such permit is required without regard to the nature of 
        the business; and
          ``(2) requiring such permit does not effectively prohibit any 
        person or carrier from providing any interstate or intrastate 
        telecommunications service or information service.
  ``(d) Exception.--In the case of commercial mobile services, the 
provisions of section 332(c)(3) shall apply in lieu of the provisions 
of this section.
  ``(e) Parity of Franchise and Other Charges.--Notwithstanding section 
2(b), no local government may impose or collect any franchise, license, 
permit, or right-of-way fee or any assessment, rental, or any other 
charge or equivalent thereof as a condition for operating in the 
locality or for obtaining access to, occupying, or crossing public 
rights-of-way from any provider of telecommunications services that 
distinguishes between or among providers of telecommunications 
services, including the local exchange carrier. For purposes of this 
subsection, a franchise, license, permit, or right-of-way fee or an 
assessment, rental, or any other charge or equivalent thereof does not 
include any imposition of general applicability which does not 
distinguish between or among providers of telecommunications services, 
or any tax.

``SEC. 244. STATEMENTS OF TERMS AND CONDITIONS FOR ACCESS AND 
                    INTERCONNECTION.

  ``(a) In General.--Within 18 months after the date of enactment of 
this part, and from time to time thereafter, a local exchange carrier 
shall prepare and file with a State commission statements of the terms 
and conditions that such carrier generally offers within that State 
with respect to the services, elements, features, functions, or 
capabilities provided to comply with the requirements of section 242 
and the regulations thereunder. Any such statement pertaining to the 
charges for interstate services, elements, features, functions, or 
capabilities shall be filed with the Commission.
  ``(b) Review.--
          ``(1) State commission review.--A State commission to which a 
        statement is submitted under subsection (a) shall review such 
        statement in accordance with State law. A State commission may 
        not approve such statement unless such statement complies with 
        section 242 and the regulations thereunder. Except as provided 
        in section 243, 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.
          ``(2) FCC review.--The Commission shall review such 
        statements to ensure that--
                  ``(A) the charges for interstate services, elements, 
                features, functions, or capabilities are just, 
                reasonable, and nondiscriminatory; and
                  ``(B) the terms and conditions for such interstate 
                services or elements unbundle any separable services, 
                elements, features, functions, or capabilities in 
                accordance with section 242(a)(2) and any regulations 
                thereunder.
  ``(c) Time for Review.--
          ``(1) Schedule for review.--The Commission and 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 
                subsection (b) (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.
          ``(2) Authority to continue review.--Paragraph (1) shall not 
        preclude the Commission or a State commission from continuing 
        to review a statement that has been permitted to take effect 
        under subparagraph (B) of such paragraph.
  ``(d) Effect of Agreements.--Nothing in this section shall prohibit a 
carrier from filing an agreement to provide services, elements, 
features, functions, or capabilities affording access and 
interconnection as a statement of terms and conditions that the carrier 
generally offers for purposes of this section. An agreement affording 
access and interconnection shall not be approved under this section 
unless the agreement contains a plan, including a reasonable schedule, 
for the implementation of the requested access or interconnection. The 
approval of a statement under this section shall not operate to 
prohibit a carrier from entering into subsequent agreements that 
contain terms and conditions that differ from those contained in a 
statement that has been reviewed and approved under this section, but--
          ``(1) each such subsequent agreement shall be filed under 
        this section; and
          ``(2) such carrier shall be obligated to offer access to such 
        services, elements, features, functions, or capabilities to 
        other carriers and persons (including carriers and persons 
        covered by previously approved statements) requesting such 
        access on terms and conditions that, in relation to the terms 
        and conditions in such subsequent agreements, are not 
        discriminatory.
  ``(e) Sunset.--The provisions of this section shall cease to apply in 
any local exchange market, defined by geographic area and class or 
category of service, that the Commission and the State determines has 
become subject to full and open competition.
``SEC. 245. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.

  ``(a) Verification of Access and Interconnection Compliance.--At any 
time after 18 months after the date of enactment of this part, a Bell 
operating company may provide to the Commission verification by such 
company with respect to one or more States that such company is in 
compliance with the requirements of this part. Such verification shall 
contain the following:
          ``(1) Certification.--A certification by each State 
        commission of such State or States that such carrier has fully 
        implemented the conditions described in subsection (b), except 
        as provided in subsection (d)(2).
          ``(2) Agreement or statement.--For each such State, either of 
        the following:
                  ``(A) Presence of a facilities-based competitor.--An 
                agreement that has been approved under section 244 
                specifying the terms and conditions under which the 
                Bell operating company is providing access and 
                interconnection to its network facilities in accordance 
                with section 242 for an unaffiliated competing provider 
                of telephone exchange service that is comparable in 
                price, features, and scope and that is provided over 
                the competitor's own network facilities to residential 
                and business subscribers.
                  ``(B) Failure to request access.--If no such provider 
                has requested such access and interconnection before 
                the date which is 3 months before the date the company 
                makes its submission under this subsection, a statement 
                of the terms and conditions that the carrier generally 
                offers to provide such access and interconnection that 
                has been approved or permitted to take effect by the 
                State commission under section 243.
        For purposes of subparagraph (B), a Bell operating company 
        shall be considered not to have received any request for access 
        or interconnection if the State commission of such State or 
        States certifies that the only provider or providers making 
        such request have (i) failed to bargain in good faith under the 
        supervision of such State commission pursuant to section 
        242(a)(8), or (ii) have violated the terms of their agreement 
        by failure to comply, within a reasonable period of time, with 
        the implementation schedule contained in such agreement.
  ``(b) Certification of Compliance With Part II.--For the purposes of 
subsection (a)(1), a Bell operating company shall submit to the 
Commission a certification by a State commission of compliance with 
each of the following conditions in any area where such company 
provides local exchange service or exchange access in such State:
          ``(1) Interconnection.--The Bell operating company provides 
        access and interconnection in accordance with subsections 
        (a)(1) and (b) of section 242 to any other carrier or person 
        offering telecommunications services requesting such access and 
        interconnection, and complies with the Commission regulations 
        pursuant to such section concerning such access and 
        interconnection.
          ``(2) Unbundling of network elements.--The Bell operating 
        company provides unbundled services, elements, features, 
        functions, and capabilities in accordance with subsection 
        (a)(2) of section 242 and the regulations prescribed by the 
        Commission pursuant to such section.
          ``(3) Resale.--The Bell operating company offers services, 
        elements, features, functions, and capabilities for resale in 
        accordance with section 242(a)(3), and neither the Bell 
        operating company, nor any unit of State or local government 
        within the State, imposes any restrictions on resale or sharing 
        of telephone exchange service (or unbundled services, elements, 
        features, or functions of telephone exchange service) in 
        violation of section 242(a)(3).
          ``(4) Number portability.--The Bell operating company 
        provides number portability in compliance with the Commission's 
        regulations pursuant to subsections (a)(4) and (c) of section 
        242.
          ``(5) Dialing parity.--The Bell operating company provides 
        dialing parity in accordance with subsections (a)(5) and (c) of 
        section 242, and will, not later than the effective date of its 
        authority to commence providing interLATA services, take such 
        actions as are necessary to provide dialing parity for 
        intraLATA telephone toll service in accordance with such 
        subsections.
          ``(6) Access to conduits and rights of way.--The poles, 
        ducts, conduits, and rights of way of such Bell operating 
        company are available to competing providers of 
        telecommunications services in accordance with the requirements 
        of sections 242(a)(6) and 224(d).
          ``(7) Elimination of franchise limitations.--No unit of the 
        State or local government in such State or States enforces any 
        prohibition or limitation in violation of section 243.
          ``(8) Network functionality and accessibility.--The Bell 
        operating company will not install network features, functions, 
        or capabilities that do not comply with the standards 
        established pursuant to section 249.
          ``(9) Negotiation of terms and conditions.--The Bell 
        operating company has negotiated in good faith, under the 
        supervision of the State commission, in accordance with the 
        requirements of section 242(a)(8) with any other carrier or 
        person requesting access or interconnection.
  ``(c) Application for Interim InterLATA Authority.--
          ``(1) Application submission and contents.--At any time after 
        the date of enactment of this part, and prior to the completion 
        by the Commission of all actions necessary to establish 
        regulations under section 242, a Bell operating company may 
        apply to the Commission for interim authority to provide 
        interLATA services. Such application shall specify the LATA or 
        LATAs for which the company is requesting authority to provide 
        interim interLATA services. Such application shall contain, 
        with respect to each LATA within a State for which 
        authorization is requested, the following:
                  ``(A) Presence of a facilities-based competitor.--An 
                agreement that the State commission has determined 
                complies with section 242 (without regard to any 
                regulations thereunder) and that specifies the terms 
                and conditions under which the Bell operating company 
                is providing access and interconnection to its network 
                facilities for an unaffiliated competing provider of 
                telephone exchange service that is comparable in price, 
                features, and scope and that is provided over the 
                competitor's own network facilities to residential and 
                business subscribers.
                  ``(B) Certification.--A certification by the State 
                commission of the State within which such LATA is 
                located that such company is in compliance with State 
                laws, rules, and regulations providing for the 
                implementation of the standards described in subsection 
                (b) as of the date of certification, including 
                certification that such company is offering services, 
                elements, features, functions, and capabilities for 
                resale at economically feasible rates to the reseller, 
                recognizing pricing structures for telephone exchange 
                service in such State.
          ``(2) State to participate.--The company shall serve a copy 
        of the application on the relevant State commission within 5 
        days of filing its application. The State shall file comments 
        to the Commission on the company's application within 40 days 
        of receiving a copy of the company's application.
          ``(3) Deadlines for commission action.--The Commission shall 
        make a determination on such application not more than 90 days 
        after such application is filed.
          ``(4) Expiration of interim authority.--Any interim authority 
        granted pursuant to this subsection shall cease to be effective 
        180 days after the completion by the Commission of all actions 
        necessary to establish regulations under section 242.
  ``(d) Commission Review.--
          ``(1) Review of state decisions and certifications.--The 
        Commission shall review any verification submitted by a Bell 
        operating company pursuant to subsection (a). The Commission 
        may require such company to submit such additional information 
        as is necessary to validate any of the items of such 
        verification.
          ``(2) De novo review.--If--
                  ``(A) a State commission does not have the 
                jurisdiction or authority to make the certification 
                required by subsection (b);
                  ``(B) the State commission has failed to act within 
                90 days after the date a request for such certification 
                is filed with such State commission; or
                  ``(C) the State commission has sought to impose a 
                term or condition in violation of section 243;
        the local exchange carrier may request the Commission to 
        certify the carrier's compliance with the conditions specified 
        in subsection (b).
          ``(3) Time for decision; public comment.--Unless such Bell 
        operating company consents to a longer period of time, the 
        Commission shall approve, disapprove, or approve with 
        conditions such verification within 90 days after the date of 
        its submission. During such 90 days, the Commission shall 
        afford interested persons an opportunity to present information 
        and evidence concerning such verification.
          ``(4) Standard for decision.--The Commission shall not 
        approve such verification unless the Commission determines 
        that--
                  ``(A) the Bell operating company meets each of the 
                conditions required to be certified under subsection 
                (b); and
                  ``(B) the agreement or statement submitted under 
                subsection (a)(2) complies with the requirements of 
                section 242 and the regulations thereunder.
  ``(e) Enforcement of Conditions.--
          ``(1) Commission authority.--If at any time after the 
        approval of a verification under subsection (d), the Commission 
        determines that a Bell operating company has ceased to meet any 
        of the conditions required to be certified under subsection 
        (b), the Commission may, after notice and opportunity for a 
        hearing--
                  ``(A) issue an order to such company to correct the 
                deficiency;
                  ``(B) impose a penalty on such company pursuant to 
                title V; or
                  ``(C) suspend or revoke such approval.
          ``(2) 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 to be certified under subsection (b). Unless the 
        parties otherwise agree, the Commission shall act on such 
        complaint within 90 days.
          ``(3) State authority.--The authority of the Commission under 
        this subsection shall not be construed to preempt any State 
        commission from taking actions to enforce the conditions 
        required to be certified under subsection (b).
  ``(f) Authority To Provide InterLATA Services.--
          ``(1) Prohibition.--Except as provided in paragraph (2) and 
        subsections (g) and (h), a Bell operating company or affiliate 
        thereof may not provide interLATA services.
          ``(2) Authority subject to certification.--A Bell operating 
        company or affiliate thereof may, in any States to which its 
        verification under subsection (a) applies, provide interLATA 
        services--
                  ``(A) during any period after the effective date of 
                the Commission's approval of such verification pursuant 
                to subsection (d), and
                  ``(B) until the approval of such verification is 
                suspended or revoked by the Commission pursuant to 
                subsection (d).
  ``(g) Exception for Previously Authorized Activities.--Subsection (f) 
shall not prohibit a Bell operating company or affiliate from engaging, 
at any time after the date of the enactment of this part, in any 
activity as authorized by an order entered by the United States 
District Court for the District of Columbia pursuant to section VII or 
VIII(C) of the Modification of Final Judgment, if--
          ``(1) such order was entered on or before the date of the 
        enactment of this part, or
          ``(2) a request for such authorization was pending before 
        such court on the date of the enactment of this part.
  ``(h) Exceptions for Incidental Services.--Subsection (f) shall not 
prohibit a Bell operating company or affiliate thereof, at any time 
after the date of the enactment of this part, from providing interLATA 
services for the purpose of--
          ``(1)(A) providing audio programming, video programming, or 
        other programming services to subscribers to such services of 
        such company;
          ``(B) providing the capability for interaction by such 
        subscribers to select or respond to such audio programming, 
        video programming, or other programming services; or
          ``(C) providing to distributors audio programming or video 
        programming that such company owns or controls, or is licensed 
        by the copyright owner of such programming (or by an assignee 
        of such owner) to distribute;
          ``(2) providing a telecommunications service, using the 
        transmission facilities of a cable system that is an affiliate 
        of such company, between local access and transport areas 
        within a cable system franchise area in which such company is 
        not, on the date of the enactment of this part, a provider of 
        wireline telephone exchange service;
          ``(3) providing 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) providing a service that permits a customer that is 
        located in one local access and transport area to retrieve 
        stored information from, or file information for storage in, 
        information storage facilities of such company that are located 
        in another local access and transport area;
          ``(5) providing signaling information used in connection with 
        the provision of telephone exchange services to a local 
        exchange carrier that, together with any affiliated local 
        exchange carriers, has aggregate annual revenues of less than 
        $100,000,000; or
          ``(6) providing network control signaling information to, and 
        receiving 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.
  ``(i) IntraLATA Toll Dialing Parity.--Neither the Commission nor any 
State may order any Bell operating company to provide dialing parity 
for intraLATA telephone toll service in any State before the date such 
company is authorized to provide interLATA services in such State 
pursuant to this section.
  ``(j) Forbearance.--The Commission may not, pursuant to section 230, 
forbear from applying any provision of this section or any regulation 
thereunder until at least 5 years after the date of enactment of this 
part.
  ``(k) Sunset.--The provisions of this section shall cease to apply in 
any local exchange market, defined by geographic area and class or 
category of service, that the Commission and the State determines has 
become subject to full and open competition.
  ``(l) Definitions.--As used in this section--
          ``(1) Audio programming.--The term `audio programming' means 
        programming provided by, or generally considered comparable to 
        programming provided by, a radio broadcast station.
          ``(2) Video programming.--The term `video programming' has 
        the meaning provided in section 602.
          ``(3) Other programming services.--The term `other 
        programming services' means information (other than audio 
        programming or video programming) that the person who offers a 
        video programming service makes available to all subscribers 
        generally. For purposes of the preceding sentence, the terms 
        `information' and `makes available to all subscribers 
        generally' have the same meaning such terms have under section 
        602(13) of this Act.
``SEC. 246. COMPETITIVE SAFEGUARDS.

  ``(a) In General.--In accordance with the requirements of this 
section and the regulations adopted thereunder, a Bell operating 
company or any affiliate thereof providing any interLATA 
telecommunications or information service, shall do so through a 
subsidiary that is separate from the Bell operating company or any 
affiliate thereof that provides telephone exchange service.
  ``(b) Transaction Requirements.--Any transaction between such a 
subsidiary and a Bell operating company and any other affiliate of such 
company shall be conducted on an arm's-length basis, in the same manner 
as the Bell operating company conducts business with unaffiliated 
persons, and shall not be based upon any preference or discrimination 
in favor of the subsidiary arising out of the subsidiary's affiliation 
with such company.
  ``(c) Separate Operation and Property.--A subsidiary required by this 
section shall--
          ``(1) operate independently from the Bell operating company 
        or any affiliate thereof,
          ``(2) have separate officers, directors, and employees who 
        may not also serve as officers, directors, or employees of the 
        Bell operating company or any affiliate thereof,
          ``(3) not enter into any joint venture activities or 
        partnership with a Bell operating company or any affiliate 
        thereof,
          ``(4) not own any telecommunications transmission or 
        switching facilities in common with the Bell operating company 
        or any affiliate thereof, and
          ``(5) not jointly own or share the use of any other property 
        with the Bell operating company or any affiliate thereof.
  ``(d) Books, Records, and Accounts.--Any subsidiary required by this 
section shall maintain books, records, and accounts in a manner 
prescribed by the Commission which shall be separate from the books, 
records, and accounts maintained by a Bell operating company or any 
affiliate thereof.
  ``(e) Provision of Services and Information.--A Bell operating 
company or any affiliate thereof may not discriminate between a 
subsidiary required by this section and any other person in the 
provision or procurement of goods, services, facilities, or 
information, or in the establishment of standards, and shall not 
provide any goods, services, facilities or information to a subsidiary 
required by this section unless such goods, services, facilities or 
information are made available to others on reasonable, 
nondiscriminatory terms and conditions.
  ``(f) Prevention of Cross-Subsidies.--A Bell operating company or any 
affiliate thereof required to maintain a subsidiary under this section 
shall establish and administer, in accordance with the requirements of 
this section and the regulations prescribed thereunder, a cost 
allocation system that prohibits any cost of providing interLATA 
telecommunications or information services from being subsidized by 
revenue from telephone exchange services and telephone exchange access 
services. The cost allocation system shall employ a formula that 
ensures that--
          ``(1) the rates for telephone exchange services and exchange 
        access are no greater than they would have been in the absence 
        of such investment in interLATA telecommunications or 
        information services (taking into account any decline in the 
        real costs of providing such telephone exchange services and 
        exchange access); and
          ``(2) such interLATA telecommunications or information 
        services bear a reasonable share of the joint and common costs 
        of facilities used to provide telephone exchange, exchange 
        access, and competitive services.
  ``(g) Assets.--The Commission shall, by regulation, ensure that the 
economic risks associated with the provision of interLATA 
telecommunications or information services by a Bell operating company 
or any affiliate thereof (including any increases in such company's 
cost of capital that occur as a result of the provision of such 
services) are not borne by customers of telephone exchange services and 
exchange access in the event of a business loss or failure. Investments 
or other expenditures assigned to interLATA telecommunications or 
information services shall not be reassigned to telephone exchange 
service or exchange access.
  ``(h) Debt.--A subsidiary required by this section shall not obtain 
credit under any arrangement that would--
          ``(1) permit a creditor, upon default, to have resource to 
        the assets of a Bell operating company; or
          ``(2) induce a creditor to rely on the tangible or intangible 
        assets of a Bell operating company in extending credit.
  ``(i) Fulfillment of Certain Requests.--A Bell operating company or 
an affiliate thereof shall--
          ``(1) 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) fulfill any such requests with telephone exchange 
        service and exchange access of a quality that meets or exceeds 
        the quality of telephone exchange services and exchange access 
        provided by the Bell operating company or its affiliates to 
        itself or its affiliates; and
          ``(3) provide telephone exchange service and exchange access 
        to all providers of intraLATA or interLATA telephone toll 
        services and interLATA information services at cost-based rates 
        that are not unreasonably discriminatory.
  ``(j) Charges for Access Services.--A Bell operating company or an 
affiliate thereof shall charge the subsidiary required by this section 
an amount for telephone exchange services, exchange access, and other 
necessary associated inputs no less than the rate charged to any 
unaffiliated entity for such access and inputs.
  ``(k) Sunset.--The provisions of this section shall cease to apply in 
any local exchange market 3 years after the date of enactment of this 
part.

``SEC. 247. UNIVERSAL SERVICE.

  ``(a) Joint Board To Preserve Universal Service.--Within 30 days 
after the date of enactment of this part, the Commission shall convene 
a Federal-State Joint Board under section 410(c) for the purpose of 
recommending actions to the Commission and State commissions for the 
preservation of universal service in furtherance of the purposes set 
forth in section 1 of this Act. In addition to the members required 
under section 410(c), one member of the Joint Board shall be a State-
appointed utility consumer advocate nominated by a national 
organization of State utility consumer advocates.
  ``(b) Principles.--The Joint Board shall base policies for the 
preservation of universal service on the following principles:
          ``(1) Just and reasonable rates.--A plan adopted by the 
        Commission and the States should ensure the continued viability 
        of universal service by maintaining quality services at just 
        and reasonable rates.
          ``(2) Definitions of included services; comparability in 
        urban and rural areas.--Such plan should recommend a definition 
        of the nature and extent of the services encompassed within 
        carriers' universal service obligations. Such plan should seek 
        to promote access to advanced telecommunications services and 
        capabilities, and to promote reasonably comparable services for 
        the general public in urban and rural areas, while maintaining 
        just and reasonable rates.
          ``(3) Adequate and sustainable support mechanisms.--Such plan 
        should recommend specific and predictable mechanisms to provide 
        adequate and sustainable support for universal service.
          ``(4) Equitable and nondiscriminatory contributions.--All 
        providers of telecommunications services should make an 
        equitable and nondiscriminatory contribution to the 
        preservation of universal service.
          ``(5) Educational access to advanced telecommunications 
        services.--To the extent that a common carrier establishes 
        advanced telecommunications services, such plan should include 
        recommendations to ensure access to advanced telecommunications 
        services for students in elementary and secondary schools.
          ``(6) Additional principles.--Such other principles as the 
        Board determines are necessary and appropriate for the 
        protection of the public interest, convenience, and necessity 
        and consistent with the purposes of this Act.
  ``(c) Definition of Universal Service.--In recommending a definition 
of the nature and extent of the services encompassed within carriers' 
universal service obligations under subsection (b)(2), the Joint Board 
shall consider the extent to which--
          ``(1) a telecommunications service has, through the operation 
        of market choices by customers, been subscribed to by a 
        substantial majority of residential customers;
          ``(2) such service or capability is essential to public 
        health, public safety, or the public interest;
          ``(3) such service has been deployed in the public switched 
        telecommunications network; and
          ``(4) inclusion of such service within carriers' universal 
        service obligations is otherwise consistent with the public 
        interest, convenience, and necessity.
The Joint Board may, from time to time, recommend to the Commission 
modifications in the definition proposed under subsection (b).
  ``(d) Report; Commission Response.--The Joint Board convened pursuant 
to subsection (a) shall report its recommendations within 270 days 
after the date of enactment of this part. The Commission shall complete 
any proceeding to act upon such recommendations and to comply with the 
principles set forth in subsection (b) within one year after such date 
of enactment.
  ``(e) State Authority.--Nothing in this section shall be construed to 
restrict the authority of any State to adopt regulations imposing 
universal service obligations on the provision of intrastate 
telecommunications services.
  ``(f) Sunset.--The Joint Board established by this section shall 
cease to exist 5 years after the date of enactment of this part.
``SEC. 248. PRICING FLEXIBILITY AND ABOLITION OF RATE-OF-RETURN 
                    REGULATION.

  ``(a) Pricing Flexibility.--
          ``(1) Commission criteria.--Within 270 days after the date of 
        enactment of this part, the Commission shall complete all 
        actions necessary (including any reconsideration) to 
        establish--
                  ``(A) criteria for determining whether a 
                telecommunications service or provider of such service 
                has become, or is substantially certain to become, 
                subject to competition, either within a geographic area 
                or within a class or category of service; and
                  ``(B) appropriate flexible pricing procedures that 
                afford a regulated provider of a service described in 
                subparagraph (A) the opportunity to respond fairly to 
                such competition and that are consistent with the 
                protection of subscribers and the public interest, 
                convenience, and necessity.
          ``(2) State selection.--A State commission may utilize the 
        flexible pricing procedures or procedures (established under 
        paragraph (1)(B)) that are appropriate in light of the criteria 
        established under paragraph (1)(A).
          ``(3) Determinations.--The Commission, with respect to rates 
        for interstate or foreign communications, and State 
        commissions, with respect to rates for intrastate 
        communications, shall, upon application--
                  ``(A) render determinations in accordance with the 
                criteria established under paragraph (1)(A) concerning 
                the services or providers that are the subject of such 
                application; and
                  ``(B) upon a proper showing, implement appropriate 
                flexible pricing procedures consistent with paragraphs 
                (1)(B) and (2) with respect to such services or 
                providers.
        The Commission and such State commission shall approve or 
        reject any such application within 180 days after the date of 
        its submission.
  ``(b) Abolition of Rate-of-Return Regulation.--Notwithstanding any 
other provision of law, to the extent that a carrier has complied with 
sections 242 and 244 of this part, the Commission, with respect to 
rates for interstate or foreign communications, and State commissions, 
with respect to rates for intrastate communications, shall not require 
rate-of-return regulation.
  ``(c) Termination of Price and Other Regulation.--Notwithstanding any 
other provision of law, to the extent that a carrier has complied with 
sections 242 and 244 of this part, the Commission, with respect to 
interstate or foreign communications, and State commissions, with 
respect to intrastate communications, shall not, for any service that 
is determined, in accordance with the criteria established under 
subsection (a)(1)(A), to be subject to competition that effectively 
prevents prices for such service that are unjust or unreasonable or 
unjustly or unreasonably discriminatory--
          ``(1) regulate the prices for such service;
          ``(2) require the filing of a schedule of charges for such 
        service;
          ``(3) require the filing of any cost or revenue projections 
        for such service;
          ``(4) regulate the depreciation charges for facilities used 
        to provide such service; or
          ``(5) require prior approval for the construction or 
        extension of lines or other equipment for the provision of such 
        service.
  ``(d) Ability To Continue Affordable Voice-Grade Service.--
Notwithstanding subsections (a), (b), and (c), each State commission 
shall, for a period of not more than 3 years, permit residential 
subscribers to continue to receive only basic voice-grade local 
telephone service equivalent to the service generally available to 
residential subscribers on the date of enactment of this part, at just, 
reasonable, and affordable rates. Determinations concerning the 
affordability of rates for such services shall take into account the 
rates generally available to residential subscribers on such date of 
enactment and the pricing rules established by the States. Any 
increases in the rates for such services for residential subscribers 
that are not attributable to changes in consumer prices generally shall 
be permitted in any proceeding commenced after the date of enactment of 
this section upon a showing that such increase is necessary to ensure 
the continued availability of universal service, prevent economic 
disadvantages for one or more service providers, and is in the public 
interest. Such increase in rates shall be minimized to the greatest 
extent practical and shall be implemented over a time period of not 
more than 3 years after the the date of enactment of this section. The 
requirements of this subsection shall not apply to any rural telephone 
company if the rates for basic voice-grade local telephone service of 
that company are not subject to regulation by a State commission on the 
date of enactment of this part.
  ``(e) Interstate Interexchange Service.--The rates charged by 
providers of interstate interexchange telecommunications service to 
customers in rural and high cost areas shall be maintained at levels no 
higher than those charged by each such provider to its customers in 
urban areas.
  ``(f) Exception.--In the case of commercial mobile services, the 
provisions of section 332(c)(1) shall apply in lieu of the provisions 
of this section.
  ``(g) Avoidance of Redundant Regulations.--Nothing in this section 
shall be construed to prohibit the Commission or a State commission 
from enforcing regulations prescribed prior to the date of enactment of 
this part in fulfilling the requirements of this section, to the extent 
that such regulations are consistent with the provisions of this 
section.

``SEC. 249. NETWORK FUNCTIONALITY AND ACCESSIBILITY.

  ``(a) Functionality and Accessibility.--The duty of a common carrier 
under section 201(a) to furnish communications service includes the 
duty to furnish that service in accordance with any standards 
established pursuant to this section.
  ``(b) Coordination for Interconnectivity.--The Commission--
          ``(1) shall establish procedures for Commission oversight of 
        coordinated network planning by common carriers and other 
        providers of telecommunications services for the effective and 
        efficient interconnection of public switched networks; 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 interconnection standards that promote 
        access to--
                  ``(A) network capabilities and services by 
                individuals with disabilities; and
                  ``(B) information services by subscribers to 
                telephone exchange service furnished by a rural 
                telephone company.
  ``(c) Accessibility for Individuals With Disabilities.--
          ``(1) Accessibility.--Within 1 year after the date of 
        enactment of this section, the Commission shall prescribe such 
        regulations as are necessary to ensure that, if readily 
        achievable, advances in network services deployed by common 
        carriers, and telecommunications equipment and customer 
        premises equipment manufactured for use in conjunction with 
        network services, shall be accessible and usable by individuals 
        with disabilities, including individuals with functional 
        limitations of hearing, vision, movement, manipulation, speech, 
        and interpretation of information. Such regulations shall 
        permit the use of both standard and special equipment, and seek 
        to minimize the need of individuals to acquire additional 
        devices beyond those used by the general public to obtain such 
        access. Throughout the process of developing such regulations, 
        the Commission shall coordinate and consult with 
        representatives of individuals with disabilities and interested 
        equipment and service providers to ensure their concerns and 
        interests are given full consideration in such process.
          ``(2) Compatibility.--Such regulations shall require that 
        whenever an undue burden or adverse competitive impact would 
        result from the requirements in paragraph (1), the local 
        exchange carrier that deploys the network service shall ensure 
        that the network service in question is compatible with 
        existing peripheral devices or specialized customer premises 
        equipment commonly used by persons with disabilities to achieve 
        access, unless doing so would result in an undue burden or 
        adverse competitive impact.
          ``(3) Undue burden.--The term `undue burden' means 
        significant difficulty or expense. In determining whether the 
        activity necessary to comply with the requirements of this 
        subsection would result in an undue burden, the factors to be 
        considered include the following:
                  ``(A) The nature and cost of the activity.
                  ``(B) The impact on the operation of the facility 
                involved in the deployment of the network service.
                  ``(C) The financial resources of the local exchange 
                carrier.
                  ``(D) The type of operations of the local exchange 
                carrier.
          ``(4) Adverse competitive impact.--In determining whether the 
        activity necessary to comply with the requirements of this 
        subsection would result in adverse competitive impact, the 
        following factors shall be considered:
                  ``(A) Whether such activity would raise the cost of 
                the network service in question beyond the level at 
                which there would be sufficient consumer demand by the 
                general population to make the network service 
                profitable.
                  ``(B) Whether such activity would, with respect to 
                the network service in question, put the local exchange 
                carrier at a competitive disadvantage. This factor may 
                be considered so long as competing network service 
                providers are not held to the same obligation with 
                respect to access by persons with disabilities.
          ``(5) Effective date.--The regulations required by this 
        subsection shall become effective 18 months after the date of 
        enactment of this part.
  ``(d) 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.
``SEC. 250. MARKET ENTRY BARRIERS.

  ``(a) Elimination of Barriers.--Within 15 months after the date of 
enactment of this part, 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 points of view, 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. 251. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.

  ``No common 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.

``SEC. 252. STUDY.

  ``At least once every three years, the Commission shall conduct a 
study that--
          ``(1) reviews the definition of, and the adequacy of support 
        for, universal service, and evaluates the extent to which 
        universal service has been protected and access to advanced 
        services has been facilitated pursuant to this part and the 
        plans and regulations thereunder;
          ``(2) evaluates the extent to which access to advanced 
        telecommunications services for students in elementary and 
        secondary school classrooms has been attained pursuant to 
        section 247(b)(5); and
          ``(3) determines whether the regulations established under 
        section 249(c) have ensured that advances in network services 
        by providers of telecommunications services and information 
        services are accessible and usable by individuals with 
        disabilities.
``SEC. 253. TERRITORIAL EXEMPTION.

  ``Until 5 years after the date of enactment of this part, the 
provisions of this part shall not apply to any local exchange carrier 
in any territory of the United States if (1) the local exchange carrier 
is owned by the government of such territory, and (2) on the date of 
enactment of this part, the number of households in such territory 
subscribing to telephone service is less than 85 percent of the total 
households located in such territory.''.
  (b) Consolidated Rulemaking Proceeding.--The Commission shall conduct 
a single consolidated rulemaking proceeding to prescribe or amend 
regulations necessary to implement the requirements of--
          (1) part II of title II of the Act as added by subsection (a) 
        of this section;
          (2) section 222 as amended by section 104 of this Act; and
          (3) section 224 as amended by section 105 of this Act.
  (c) 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--REGULATION OF DOMINANT COMMON CARRIERS''.
  (d) Sylistic 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 (c).
  (e) Conforming Amendments.
          (1) Federal-state jurisdiction.--Section 2(b) of the Act (47 
        U.S.C. 152(b)) is amended by inserting ``part II of title II,'' 
        after ``227, inclusive,''.
          (2) Forfeitures.--Sections 503(b)(1) and 504(b) of such Act 
        (47 U.S.C. 503(b)) are each amended by inserting ``part I of'' 
        before ``title II''.
SEC. 102. COMPETITION IN MANUFACTURING, INFORMATION SERVICES, ALARM 
                    SERVICES, AND PAY-PHONE SERVICES.

  (a) Competition in Manufacturing, Information Services, and Alarm 
Services.--Title II of the Act is amended by adding at the end of part 
II (as added by section 101) the following new part:

              ``PART III--SPECIAL AND TEMPORARY PROVISIONS
``SEC. 271. MANUFACTURING BY BELL OPERATING COMPANIES.

  ``(a) Access and Interconnection.--It shall be unlawful for a Bell 
operating company, directly or through an affiliate, to manufacture 
telecommunications equipment or customer premises equipment, until the 
Commission has approved under section 245(c) verifications that such 
Bell operating company, and each Bell operating company with which it 
is affiliated, are in compliance with the access and interconnection 
requirements of part II of this title.
  ``(b) 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.
  ``(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 contiguous common carriers providing 
        telephone exchange service, timely information on the planned 
        deployment of telecommunications equipment.
  ``(d) Manufacturing Limitations for Standard-Setting Organizations.--
          ``(1) Bell communications research.--The Bell Communications 
        Research Corporation, or any successor entity, shall not engage 
        in manufacturing telecommunications equipment or customer 
        premises equipment so long as--
                  ``(A) such Corporation or entity is owned, in whole 
                or in part, by one or more Bell operating companies; or
                  ``(B) such Corporation or entity engages in 
                establishing standards for telecommunications 
                equipment, customer premises equipment, or 
                telecommunications services, or any product 
                certification activities with respect to 
                telecommunications equipment or customer premises 
                equipment.
          ``(2) Participation in standard setting; protection of 
        proprietary information.--Any entity (including such 
        Corporation) that engages in establishing standards for--
                  ``(A) telecommunications equipment, customer premises 
                equipment, or telecommunications services, or
                  ``(B) any product certification activities with 
                respect to telecommunications equipment or customer 
                premises equipment,
        for one or more Bell operating companies shall allow any other 
        person to participate fully in such activities on a 
        nondiscriminatory basis. Any such entity shall protect 
        proprietary information submitted for review in the standards-
        setting and certification processes from release not 
        specifically authorized by the owner of such information, even 
        after such entity ceases to be so engaged.
  ``(e) Bell Operating Company Equipment Procurement and Sales.--
          ``(1) Objective basis.--Each Bell operating company and any 
        entity acting on behalf of a Bell operating company 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.
          ``(2) Sales restrictions.--A Bell operating company engaged 
        in manufacturing may not restrict sales to any local exchange 
        carrier of telecommunications equipment, including software 
        integral to the operation of such equipment and related 
        upgrades.
          ``(3) 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) Exception for Previously Authorized Activities.--Nothing in 
this section shall prohibit a Bell operating company or affiliate from 
engaging, at any time after the date of the enactment of this part, in 
any activity as authorized by an order entered by the United States 
District Court for the District of Columbia pursuant to section VII or 
VIII(C) of the Modification of Final Judgment, if--
          ``(1) such order was entered on or before the date of the 
        enactment of this part, or
          ``(2) a request for such authorization was pending before 
        such court on the date of the enactment of this part.
  ``(h) Antitrust Laws.--Nothing in this section shall be construed to 
modify, impair, or supersede the applicability of any of the antitrust 
laws.
  ``(i) Definition.--As used in this section, the term `manufacturing' 
has the same meaning as such term has under the Modification of Final 
Judgment.
``SEC. 272. 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 or were used 
        in common with 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;
          ``(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 any 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) 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.
  ``(e) 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.
  ``(f) 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 this section 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 June 30, 2000.
  ``(g) 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 Modification of Final Judgment.
                  ``(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.
  ``(h) 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 wireline 
        telephone exchange service 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, and
                  ``(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. 273. ALARM MONITORING AND TELEMESSAGING SERVICES BY BELL 
                    OPERATING COMPANIES.

  ``(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 6 years after the date of 
        enactment of this part.
          ``(2) Existing activities.--Paragraph (1) shall not apply to 
        any provision of alarm monitoring services in which a Bell 
        operating company or affiliate is lawfully engaged as of 
        January 1, 1995, except that such Bell operating company or any 
        affiliate may not acquire or otherwise obtain control of 
        additional entities providing alarm monitoring services after 
        such date.
  ``(b) Nondiscrimination.--A common carrier engaged in the provision 
of alarm monitoring services or telemessaging services shall--
          ``(1) provide nonaffiliated entities, upon reasonable 
        request, with the network services it provides to its own alarm 
        monitoring or telemessaging operations, on nondiscriminatory 
        terms and conditions; and
          ``(2) not subsidize its alarm monitoring services or its 
        telemessaging 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 or 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, as determined by the Commission in accordance with 
such regulations, the Commission shall, within 60 days after receipt of 
the complaint, order the common carrier and its affiliates to cease 
engaging in such violation pending such final determination.
  ``(d) Definitions.--As used in this section:
          ``(1) 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--
                  ``(A) 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
                  ``(B) to transmit a signal regarding such threat by 
                means of transmission facilities of a Bell operating 
                company 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.
          ``(2) Telemessaging services.--The term `telemessaging 
        services' means voice mail and voice storage and retrieval 
        services provided over telephone lines for telemessaging 
        customers and any live operator services used to answer, 
        record, transcribe, and relay messages (other than 
        telecommunications relay services) from incoming telephone 
        calls on behalf of the telemessaging customers (other than any 
        service incidental to directory assistance).
``SEC. 274. 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 with revenue from its telephone exchange service or 
        its exchange access service; and
          ``(2) shall not prefer or discriminate in favor of it 
        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 this section, 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 services 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 the date of enactment of this 
                section, 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; 
                and
                  ``(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 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, and provide for all payphone service 
                providers to have the right to negotiate with the 
                location provider on 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 the enactment of 
        this Act.
  ``(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 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.''.

SEC. 103. FORBEARANCE FROM REGULATION.

  Part I of title II of the Act (as redesignated by section 101(c) of 
this Act) is amended by inserting after section 229 (47 U.S.C. 229) the 
following new section:

``SEC. 230. FORBEARANCE FROM REGULATION.

  ``(a) Authority to Forbear.--The Commission shall forbear from 
applying any provision of this part or part II (other than sections 
201, 202, 208, 243, and 248), or any regulation thereunder, to a common 
carrier or service, or class of carriers or services, in any or some of 
its or their geographic markets, if the Commission determines that--
          ``(1) enforcement of such provision or regulation is not 
        necessary to ensure that the charges, practices, 
        classifications, or regulations by, for, or in connection with 
        that carrier or 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.''.
SEC. 104. PRIVACY OF CUSTOMER INFORMATION.

  (a) Privacy of Customer Proprietary Network Information.--Title II of 
the Act is amended by inserting after section 221 (47 U.S.C. 221) the 
following new section:

``SEC. 222. PRIVACY OF CUSTOMER PROPRIETARY NETWORK INFORMATION.
  ``(a) Subscriber List Information.--Notwithstanding subsections (b), 
(c), and (d), a carrier that provides local 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.
  ``(b) Privacy Requirements for Common Carriers.--A carrier--
          ``(1) shall not, except as required by law or with the 
        approval of the customer to which the information relates--
                  ``(A) use customer proprietary network information in 
                the provision of any service except to the extent 
                necessary (i) in the provision of common carrier 
                services, (ii) in the provision of a service necessary 
                to or used in the provision of common carrier services, 
                including the publishing of directories, or (iii) to 
                continue to provide a particular information service 
                that the carrier provided as of May 1, 1995, to persons 
                who were customers of such service on that date;
                  ``(B) use customer proprietary network information in 
                the identification or solicitation of potential 
                customers for any service other than the telephone 
                exchange service or telephone toll service from which 
                such information is derived;
                  ``(C) use customer proprietary network information in 
                the provision of customer premises equipment; or
                  ``(D) disclose customer proprietary network 
                information to any person except to the extent 
                necessary to permit such person to provide services or 
                products that are used in and necessary to the 
                provision by such carrier of the services described in 
                subparagraph (A);
          ``(2) shall disclose customer proprietary network 
        information, upon affirmative written request by the customer, 
        to any person designated by the customer;
          ``(3) shall, whenever such carrier provides any aggregate 
        information, notify the Commission of the availability of such 
        aggregate information and shall provide such aggregate 
        information on reasonable terms and conditions to any other 
        service or equipment provider upon reasonable request therefor; 
        and
          ``(4) except for disclosures permitted by paragraph (1)(D), 
        shall not unreasonably discriminate between affiliated and 
        unaffiliated service or equipment providers in providing access 
        to, or in the use and disclosure of, individual and aggregate 
        information made available consistent with this subsection.
  ``(c) Rule of Construction.--This section shall not be construed to 
prohibit the use or disclosure of customer proprietary network 
information as necessary--
          ``(1) to render, bill, and collect for the services 
        identified in subsection (b)(1)(A);
          ``(2) to render, bill, and collect for any other service that 
        the customer has requested;
          ``(3) to protect the rights or property of the carrier;
          ``(4) to protect users of any of those services and other 
        carriers from fraudulent, abusive, or unlawful use of or 
        subscription to such service; or
          ``(5) 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.
  ``(d) Exemption Permitted.--The Commission may, by rule, exempt from 
the requirements of subsection (b) carriers that have, together with 
any affiliated carriers, in the aggregate nationwide, fewer than 
500,000 access lines installed if the Commission determines that such 
exemption is in the public interest or if compliance with the 
requirements would impose an undue economic burden on the carrier.
  ``(e) Definitions.--As used in this section:
          ``(1) Customer proprietary network information.--The term 
        `customer proprietary network information' means--
                  ``(A) information which relates to the quantity, 
                technical configuration, type, destination, and amount 
                of use of telephone exchange service or telephone toll 
                service subscribed to by any customer of a carrier, and 
                is made available to the carrier by the customer solely 
                by virtue of the carrier-customer relationship;
                  ``(B) information contained in the bills pertaining 
                to telephone exchange service or telephone toll service 
                received by a customer of a carrier; and
                  ``(C) such other information concerning the customer 
                as is available to the local exchange carrier by virtue 
                of the customer's use of the carrier's telephone 
                exchange service or telephone toll services, and 
                specified as within the definition of such term by such 
                rules as the Commission shall prescribe consistent with 
                the public interest;
        except that such term does not include subscriber list 
        information.
          ``(2) 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.
          ``(3) Aggregate information.--The term `aggregate 
        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.''.
  (b) Converging Communications Technologies and Consumer Privacy.--
          (1) Commission examination.--Within one year after the date 
        of enactment of this Act, the Commission shall commence a 
        proceeding--
                  (A) to examine the impact of the integration into 
                interconnected communications networks of wireless 
                telephone, cable, satellite, and other technologies on 
                the privacy rights and remedies of the consumers of 
                those technologies;
                  (B) to examine the impact that the globalization of 
                such integrated communications networks has on the 
                international dissemination of consumer information and 
                the privacy rights and remedies to protect consumers;
                  (C) to propose changes in the Commission's 
                regulations to ensure that the effect on consumer 
                privacy rights is considered in the introduction of new 
                telecommunications services and that the protection of 
                such privacy rights is incorporated as necessary in the 
                design of such services or the rules regulating such 
                services;
                  (D) to propose changes in the Commission's 
                regulations as necessary to correct any defects 
                identified pursuant to subparagraph (A) in such rights 
                and remedies; and
                  (E) to prepare recommendations to the Congress for 
                any legislative changes required to correct such 
                defects.
          (2) Subjects for examination.--In conducting the examination 
        required by paragraph (1), the Commission shall determine 
        whether consumers are able, and, if not, the methods by which 
        consumers may be enabled--
                  (A) to have knowledge that consumer information is 
                being collected about them through their utilization of 
                various communications technologies;
                  (B) to have notice that such information could be 
                used, or is intended to be used, by the entity 
                collecting the data for reasons unrelated to the 
                original communications, or that such information could 
                be sold (or is intended to be sold) to other companies 
                or entities; and
                  (C) to stop the reuse or sale of that information.
          (3) Schedule for commission responses.--The Commission shall, 
        within 18 months after the date of enactment of this Act--
                  (A) complete any rulemaking required to revise 
                Commission regulations to correct defects in such 
                regulations identified pursuant to paragraph (1); and
                  (B) submit to the Congress a report containing the 
                recommendations required by paragraph (1)(C).
SEC. 105. POLE ATTACHMENTS.

  Section 224 of the Act (47 U.S.C. 224) is amended--
          (1) in subsection (a)(4)--
                  (A) by inserting after ``system'' the following: ``or 
                a provider of telecommunications service''; and
                  (B) by inserting after ``utility'' the following: ``, 
                which attachment may be used by such entities to 
                provide cable service or any telecommunications 
                service'';
          (2) in subsection (c)(2)(B), by striking ``cable television 
        services'' and inserting ``the services offered via such 
        attachments'';
          (3) by redesignating subsection (d)(2) as subsection (d)(4); 
        and
          (4) by striking subsection (d)(1) and inserting the 
        following:
  ``(d)(1) For purposes of subsection (b) of this section, the 
Commission shall, no later than 1 year after the date of enactment of 
the Communications Act of 1995, prescribe regulations for ensuring that 
utilities charge just and reasonable and nondiscriminatory rates for 
pole attachments provided to all providers of telecommunications 
services, including such attachments used by cable television systems 
to provide telecommunications services (as defined in section 3 of this 
Act). Such regulations shall--
          ``(A) recognize that the entire pole, duct, conduit, or 
        right-of-way other than the usable space is of equal benefit 
        all entities attaching to the pole and therefore apportion the 
        cost of the space other than the usable space equally among all 
        such attachments;
          ``(B) 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
          ``(C) allow for reasonable terms and conditions relating to 
        health, safety, and the provision of reliable utility service.
  ``(2) The final regulations prescribed by the Commission pursuant to 
paragraph (1) shall not apply to a cable television system that solely 
provides cable service as defined in section 602(6) of this Act; 
instead, the pole attachment rate for such systems shall assure a 
utility the recovery of not less than the additional costs of providing 
pole attachments, nor more than an amount determined by multiplying the 
percentage of the total usable space, or the percentage of the total 
duct or conduit capacity, which is occupied by the pole attachment by 
the sum of the operating expenses and actual capital costs of the 
utility attributable to the entire pole, duct, conduit, or right-of-
way.
  ``(3) Whenever the owner of a conduit or right-of-way intends to 
modify or alter such 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 conduit or right-of-way 
accessible.''.
SEC. 106. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF 
                    TELECOMMUNICATIONS SERVICES.

  (a) Telecommunications Services.--Section 621(b) of the Act (47 
U.S.C. 541(c)) is amended by adding at the end thereof the following 
new paragraph:
  ``(3)(A) To the extent that 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; and
          ``(ii) the provisions of this title shall not apply to such 
        cable operator or affiliate.
  ``(B) A franchising authority may not impose any requirement 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) A franchising authority may not require a cable operator to 
provide any telecommunications service or facilities as a condition of 
the initial grant of a franchise or a franchise renewal.''.
  (b) Franchise Fees.--Section 622(b) of the Act (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. 107. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.

  (a) National Wireless Telecommunications Siting Policy.--Section 
332(c) of the Act (47 U.S.C. 332(c)) is amended by adding at the end 
the following new paragraph:
          ``(7) Facilities siting policies.--(A) Within 180 days after 
        enactment of this paragraph, the Commission shall prescribe and 
        make effective a policy regarding State and local regulation of 
        the placement, construction, modification, or operation of 
        facilities for the provision of commercial mobile services.
          ``(B) Pursuant to subchapter III of chapter 5, title 5, 
        United States Code, the Commission shall establish a negotiated 
        rulemaking committee to negotiate and develop a proposed policy 
        to comply with the requirements of this paragraph. Such 
        committee shall include representatives from State and local 
        governments, affected industries, and public safety agencies. 
        In negotiating and developing such a policy, the committee 
        shall take into account--
                  ``(i) the desirability of enhancing the coverage and 
                quality of commercial mobile services and fostering 
                competition in the provision of such services;
                  ``(ii) the legitimate interests of State and local 
                governments in matters of exclusively local concern;
                  ``(iii) the effect of State and local regulation of 
                facilities siting on interstate commerce; and
                  ``(iv) the administrative costs to State and local 
                governments of reviewing requests for authorization to 
                locate facilities for the provision of commercial 
                mobile services.
          ``(C) The policy prescribed pursuant to this paragraph shall 
        ensure that--
                  ``(i) regulation of the placement, construction, and 
                modification of facilities for the provision of 
                commercial mobile services by any State or local 
                government or instrumentality thereof--
                          ``(I) is reasonable, nondiscriminatory, and 
                        limited to the minimum necessary to accomplish 
                        the State or local government's legitimate 
                        purposes; and
                          ``(II) does not prohibit or have the effect 
                        of precluding any commercial mobile service; 
                        and
                  ``(ii) a State or local government or instrumentality 
                thereof shall act on any request for authorization to 
                locate, construct, modify, or operate facilities for 
                the provision of commercial mobile services within a 
                reasonable period of time after the request is fully 
                filed with such government or instrumentality; and
                  ``(iii) any decision by a State or local government 
                or instrumentality thereof to deny a request for 
                authorization to locate, construct, modify, or operate 
                facilities for the provision of commercial mobile 
                services shall be in writing and shall be supported by 
                substantial evidence contained in a written record.
          ``(D) The policy prescribed pursuant to this paragraph shall 
        provide that no State or local government or any 
        instrumentality thereof may regulate the placement, 
        construction, modification, or operation of such 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.
          ``(E) In accordance with subchapter III of chapter 5, title 
        5, United States Code, the Commission shall periodically 
        establish a negotiated rulemaking committee to review the 
        policy prescribed by the Commission under this paragraph and to 
        recommend revisions to such policy.''.
  (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 Commission 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 facilities by 
duly licensed providers of 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 cost-
based 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. 108. MOBILE SERVICE ACCESS TO LONG DISTANCE CARRIERS.

  (a) Amendment.--Section 332(c) of the Act (47 U.S.C. 332(c)) is 
amended by adding at the end the following new paragraph:
          ``(8) Mobile services access.--(A) The Commission shall 
        prescribe regulations to afford subscribers of two-way switched 
        voice commercial mobile radio services access to a provider of 
        telephone toll service of the subscriber's choice, except to 
        the extent that the commercial mobile radio service is provided 
        by satellite. The Commission may exempt carriers or classes of 
        carriers from the requirements of such regulations to the 
        extent the Commission determines such exemption is consistent 
        with the public interest, convenience, and necessity. For 
        purposes of this paragraph, `access' shall mean access to a 
        provider of telephone toll service through the use of carrier 
        identification codes assigned to each such provider.
          ``(B) The regulations prescribed by the Commission pursuant 
        to subparagraph (A) shall supersede any inconsistent 
        requirements imposed by the Modification of Final Judgment or 
        any order in United States v. AT&T; Corp. and McCaw Cellular 
        Communications, Inc., Civil Action No. 94-01555 (United States 
        District Court, District of Columbia).''.
  (b) Effective Date Conforming Amendment.--Section 6002(c)(2)(B) of 
the Omnibus Budget Reconciliation Act of 1993 is amended by striking 
``section 332(c)(6)'' and inserting ``paragraphs (6) and (8) of section 
332(c)''.
SEC. 109. FREEDOM FROM TOLL FRAUD.

  (a) Amendment.--Section 228(c) of the Act (47 U.S.C. 228(c)) is 
amended--
          (1) by striking subparagraph (C) of paragraph (7) and 
        inserting the following:
                  ``(C) the calling party being charged for information 
                conveyed during the call unless--
                          ``(i) the calling party has a written 
                        subscription agreement with the information 
                        provider that meets the requirements of 
                        paragraph (8); or
                          ``(ii) the calling party is charged in 
                        accordance with paragraph (9); or''; and
          (2) 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 agreement shall 
                specify the terms and conditions under which the 
                information is offered and include--
                          ``(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 30 days in 
                        advance of all future changes in the rates 
                        charged for the information;
                          ``(vi) the signature of a legally competent 
                        subscriber agreeing to the terms of the 
                        agreement; and
                          ``(vii) the subscriber's choice of payment 
                        method, which may be by phone bill or credit, 
                        prepaid, or calling card.
                  ``(B) Billing arrangements.--If a subscriber elects, 
                pursuant to subparagraph (A)(vii), 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 pin's to prevent unauthorized use.--A 
                written agreement does not meet the requirements of 
                this paragraph unless it provides the subscriber a 
                personal identification number to obtain access to the 
                information provided, and includes instructions on its 
                use.
                  ``(D) Exceptions.--Notwithstanding paragraph (7)(C), 
                a written agreement that meets the requirements of this 
                paragraph is not required--
                          ``(i) for services provided pursuant to a 
                        tariff that has been approved or permitted to 
                        take effect by the Commission or a State 
                        commission; or
                          ``(ii) for any purchase of goods or of 
                        services that are not information services.
                  ``(E) Termination of service.--On complaint by any 
                person, a carrier 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. 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, 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, 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, or calling card;
                  ``(D) asks the caller for the credit or calling 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) 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.''.
  (b) Regulations.--The Federal Communications Commission shall revise 
its regulations to comply with the amendment made by subsection (a) of 
this section within 180 days after the date of enactment of this Act.
SEC. 110. REPORT ON MEANS OF RESTRICTING ACCESS TO UNWANTED MATERIAL IN 
                    INTERACTIVE TELECOMMUNICATIONS SYSTEMS.

  (a) Report.--Not later than 150 days after the date of the enactment 
of this Act, the Attorney General shall submit to the Committees on the 
Judiciary and Commerce, Science, and Transportation of the Senate and 
the Committees on the Judiciary and Commerce of the House of 
Representatives a report containing--
          (1) an evaluation of the enforceability with respect to 
        interactive media of current criminal laws governing the 
        distribution of obscenity over computer networks and the 
        creation and distribution of child pornography by means of 
        computers;
          (2) an assessment of the Federal, State, and local law 
        enforcement resources that are currently available to enforce 
        such laws;
          (3) an evaluation of the technical means available--
                  (A) to enable parents to exercise control over the 
                information that their children receive by interactive 
                telecommunications systems so that children may avoid 
                violent, sexually explicit, harassing, offensive, and 
                other unwanted material on such systems;
                  (B) to enable other users of such systems to exercise 
                control over the commercial and noncommercial 
                information that they receive by such systems so that 
                such users may avoid violent, sexually explicit, 
                harassing, offensive, and other unwanted material on 
                such systems; and
                  (C) to promote the free flow of information, 
                consistent with the values expressed in the 
                Constitution, in interactive media; and
          (4) recommendations on means of encouraging the development 
        and deployment of technology, including computer hardware and 
        software, to enable parents and other users of interactive 
        telecommunications systems to exercise the control described in 
        subparagraphs (A) and (B) of paragraph (3).
  (b) Consultation.--In preparing the report under subsection (a), the 
Attorney General shall consult with the Assistant Secretary of Commerce 
for Communications and Information.
SEC. 111. 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) of the Act 
(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 such Act.
             TITLE II--CABLE COMMUNICATIONS COMPETITIVENESS

SEC. 201. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

  (a) General Requirement.--
          (1) Amendment.--Section 613(b) of the Act (47 U.S.C. 533(b)) 
        is amended to read as follows:
  ``(b)(1) Subject to the requirements of part V and the other 
provisions of this title, any common carrier subject in whole or in 
part to title II of this Act may, either through its own facilities or 
through an affiliate, provide video programming directly to subscribers 
in its telephone service area.
  ``(2) Subject to the requirements of part V and the other provisions 
of this title, any common carrier subject in whole or in part to title 
II of this Act may provide channels of communications or pole, line, or 
conduit space, or other rental arrangements, to any entity which is 
directly or indirectly owned, operated, or controlled by, or under 
common control with, such common carrier, if such facilities or 
arrangements are to be used for, or in connection with, the provision 
of video programming directly to subscribers in its telephone service 
area.
  ``(3)(A) Notwithstanding paragraphs (1) and (2), an affiliate 
described in subparagraph (B) shall not be subject to the requirements 
of part V, but--
          ``(i) if providing video programming as a cable service using 
        a cable system, shall be subject to the requirements of this 
        part and parts III and IV; and
          ``(ii) if providing such video programming by means of radio 
        communication, shall be subject to the requirements of title 
        III.
  ``(B) For purposes of subparagraph (A), an affiliate is described in 
this subparagraph if such affiliate--
          ``(i) is, consistently with section 655, owned, operated, or 
        controlled by, or under common control with, a common carrier 
        subject in whole or in part to title II of this Act;
          ``(ii) provides video programming to subscribers in the 
        telephone service area of such carrier; and
          ``(iii) does not utilize the local exchange facilities or 
        services of any affiliated common carrier in distributing such 
        programming.''.
          (2) Conforming amendment.--Section 602 of the Act (47 U.S.C. 
        531) is amended--
                  (A) by redesignating paragraphs (18) and (19) as 
                paragraphs (19) and (20) respectively; and
                  (B) by inserting after paragraph (17) the following 
                new paragraph:
          ``(18) 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 
        provides telephone exchange service as of January 1, 1993, but 
        if any common carrier after such date transfers its 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;''.
  (b) Provisions for Regulation of Cable Service Provided by Telephone 
Companies.--Title VI of the Act (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. DEFINITIONS.

  ``For purposes of this part--
          ``(1) the term `control' means--
                  ``(A) an ownership interest in which an entity has 
                the right to vote more than 50 percent of the 
                outstanding common stock or other ownership interest; 
                or
                  ``(B) if no single entity directly or indirectly has 
                the right to vote more than 50 percent of the 
                outstanding common stock or other ownership interest, 
                actual working control, in whatever manner exercised, 
                as defined by the Commission by regulation on the basis 
                of relevant factors and circumstances, which shall 
                include partnership and direct ownership interests, 
                voting stock interests, the interests of officers and 
                directors, and the aggregation of voting interests; and
          ``(2) the term `rural area' means a geographic area that does 
        not include either--
                  ``(A) any incorporated or unincorporated place of 
                10,000 inhabitants or more, or any part thereof; or
                  ``(B) any territory, incorporated or unincorporated, 
                included in an urbanized area, as defined by the Bureau 
                of the Census.

``SEC. 652. SEPARATE VIDEO PROGRAMMING AFFILIATE.

  ``(a) In General.--Except as provided in subsection (d) of this 
section and section 613(b)(3), a common carrier subject to title II of 
this Act shall not provide video programming directly to subscribers in 
its telephone service area unless such video programming is provided 
through a video programming affiliate that is separate from such 
carrier.
  ``(b) Books and Marketing.--
          ``(1) In general.--A video programming affiliate of a common 
        carrier shall--
                  ``(A) maintain books, records, and accounts separate 
                from such carrier which identify all transactions with 
                such carrier;
                  ``(B) carry out directly (or through any 
                nonaffiliated person) its own promotion, except that 
                institutional advertising carried out by such carrier 
                shall be permitted so long as each party bears its pro 
                rata share of the costs; and
                  ``(C) not own real or personal property in common 
                with such carrier.
          ``(2) Inbound telemarketing and referral.--Notwithstanding 
        paragraph (1)(B), a common carrier may provide telemarketing or 
        referral services in response to the call of a customer or 
        potential customer related to the provision of video 
        programming by a video programming affiliate of such carrier. 
        If such services are provided to a video programming affiliate, 
        such services shall be made available to any video programmer 
        or cable operator on request, on nondiscriminatory terms, at 
        just and reasonable prices.
          ``(3) Joint marketing.--Notwithstanding paragraph (1)(B) or 
        section 613(b)(3), a common carrier may market video 
        programming directly upon a showing to the Commission that a 
        cable operator or other entity directly or indirectly provides 
        telecommunications services within the telephone service area 
        of the common carrier, and markets such telecommunications 
        services jointly with video programming services. The common 
        carrier shall specify the geographic region covered by the 
        showing. The Commission shall approve or disapprove such 
        showing within 60 days after the date of its submission.
  ``(c) Business Transactions With Carrier.--Any contract, agreement, 
arrangement, or other manner of conducting business, between a common 
carrier and its video programming affiliate, providing for--
          ``(1) the sale, exchange, or leasing of property between such 
        affiliate and such carrier,
          ``(2) the furnishing of goods or services between such 
        affiliate and such carrier, or
          ``(3) the transfer to or use by such affiliate for its 
        benefit of any asset or resource of such carrier,
shall be on a fully compensatory and auditable basis, shall be without 
cost to the telephone service ratepayers of the carrier, and shall be 
in compliance with regulations established by the Commission that will 
enable the Commission to assess the compliance of any transaction.
  ``(d) Waiver.--
          ``(1) Criteria for waiver.--The Commission may waive any of 
        the requirements of this section for small telephone companies 
        or telephone companies serving rural areas, if the Commission 
        determines, after notice and comment, that--
                  ``(A) such waiver will not affect the ability of the 
                Commission to ensure that all video programming 
                activity is carried out without any support from 
                telephone ratepayers;
                  ``(B) the interests of telephone ratepayers and cable 
                subscribers will not be harmed if such waiver is 
                granted;
                  ``(C) such waiver will not adversely affect the 
                ability of persons to obtain access to the video 
                platform of such carrier; and
                  ``(D) such waiver otherwise is in the public 
                interest.
          ``(2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 days 
        after the date it is filed.
          ``(3) Continued applicability of section 656.--In the case of 
        a common carrier that obtains a waiver under this subsection, 
        any requirement that section 656 applies to a video programming 
        affiliate shall instead apply to such carrier.
  ``(e) Sunset of Requirements.--The provisions of this section shall 
cease to be effective on July 1, 2000.

``SEC. 653. ESTABLISHMENT OF VIDEO PLATFORM.

  ``(a) Video Platform.--
          ``(1) In general.--Except as provided in section 613(b)(3), 
        any common carrier subject to title II of this Act, and that 
        provides video programming directly to subscribers in its 
        telephone service area, shall establish a video platform. This 
        paragraph shall not apply to any carrier to the extent that it 
        provides video programming directly to subscribers in its 
        telephone service area solely through a cable system acquired 
        in accordance with section 655(b).
          ``(2) Identification of demand for carriage.--Any common 
        carrier subject to the requirements of paragraph (1) shall, 
        prior to establishing a video platform, submit a notice to the 
        Commission of its intention to establish channel capacity for 
        the provision of video programming to meet the bona fide demand 
        for such capacity. Such notice shall--
                  ``(A) be in such form and contain information 
                concerning the geographic area intended to be served 
                and such information as the Commission may require by 
                regulations pursuant to subsection (b);
                  ``(B) specify the methods by which any entity seeking 
                to use such channel capacity should submit to such 
                carrier a specification of its channel capacity 
                requirements; and
                  ``(C) specify the procedures by which such carrier 
                will determine (in accordance with the Commission's 
                regulations under subsection (b)(1)(B)) whether such 
                requests for capacity are bona fide.
        The Commission shall submit any such notice for publication in 
        the Federal Register within 5 working days.
          ``(3) Response to request for carriage.--After receiving and 
        reviewing the requests for capacity submitted pursuant to such 
        notice, such common carrier shall establish channel capacity 
        that is sufficient to provide carriage for--
                  ``(A) all bona fide requests submitted pursuant to 
                such notice,
                  ``(B) any additional channels required pursuant to 
                section 656, and
                  ``(C) any additional channels required by the 
                Commission's regulations under subsection (b)(1)(C).
          ``(4) Responses to changes in demand for capacity.--Any 
        common carrier that establishes a video platform under this 
        section shall--
                  ``(A) immediately notify the Commission and each 
                video programming provider of any delay in or denial of 
                channel capacity or service, and the reasons therefor;
                  ``(B) continue to receive and grant, to the extent of 
                available capacity, carriage in response to bona fide 
                requests for carriage from existing or additional video 
                programming providers;
                  ``(C) if at any time the number of channels required 
                for bona fide requests for carriage may reasonably be 
                expected soon to exceed the existing capacity of such 
                video platform, immediately notify the Commission of 
                such expectation and of the manner and date by which 
                such carrier will provide sufficient capacity to meet 
                such excess demand; and
                  ``(D) construct such additional capacity as may be 
                necessary to meet such excess demand.
          ``(5) 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 award damages 
        sustained in consequence of any violation of this section to 
        any person denied carriage, or require carriage, or both. Any 
        aggrieved party may seek any other remedy available under this 
        Act.
  ``(b) Commission Actions.--
          ``(1) In general.--Within 15 months after the date of the 
        enactment of this section, the Commission shall complete all 
        actions necessary (including any reconsideration) to prescribe 
        regulations that--
                  ``(A) consistent with the requirements of section 
                656, prohibit a common carrier from discriminating 
                among video programming providers with regard to 
                carriage on its video platform, and ensure that the 
                rates, terms, and conditions for such carriage are 
                just, reasonable, and nondiscriminatory;
                  ``(B) prescribe definitions and criteria for the 
                purposes of determining whether a request shall be 
                considered a bona fide request for purposes of this 
                section;
                  ``(C) permit a common carrier to carry on only one 
                channel any video programming service that is offered 
                by more than one video programming provider (including 
                the common 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 video platforms the Commission's regulations 
                concerning network nonduplication (47 C.F.R. 76.92 et 
                seq.) and syndicated exclusivity (47 C.F.R. 76.151 et 
                seq.);
                  ``(E) require the video platform to provide service, 
                transmission, and interconnection for unaffiliated or 
                independent video programming providers that is 
                equivalent to that provided to the common carrier's 
                video programming affiliate, except that the video 
                platform shall not discriminate between analog and 
                digital video programming offered by such unaffiliated 
                or independent video programming providers;
                  ``(F)(i) prohibit a common carrier from unreasonably 
                discriminating in favor of its video programming 
                affiliate with regard to material or information 
                provided by the common carrier to subscribers for the 
                purposes of selecting programming on the video 
                platform, or in the way such material or information is 
                presented to subscribers;
                  ``(ii) require a common carrier to ensure that video 
                programming providers or copyright holders (or both) 
                are able suitably and uniquely to identify their 
                programming services to subscribers; and
                  ``(iii) if such identification is transmitted as part 
                of the programming signal, require the carrier to 
                transmit such identification without change or 
                alteration; and
                  ``(G) prohibit 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 provide for public comments on the adequacy 
                of the proposed service area on the basis of the 
                standards set forth under this subparagraph.
        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.
          ``(2) Applicability to other high capacity systems.--The 
        Commission shall apply the requirements of this section, in 
        lieu of the requirements of section 612, to any cable operator 
        of a cable system that has installed a switched, broadband 
        video programming delivery system, except that the Commission 
        shall not apply the requirements of the regulations prescribed 
        pursuant to subsection (b)(1)(D) or any other requirement that 
        the Commission determines is inappropriate.
  ``(c) Regulatory Streamlining.--With respect to the establishment and 
operation of a video platform, the requirements of this section shall 
apply in lieu of, and not in addition to, the requirements of title II.
  ``(d) Commission Inquiry.--The Commission shall conduct a study of 
whether it is in the public interest to extend the requirements of 
subsection (a) to any other cable operators in lieu of the requirements 
of section 612. The Commission shall submit to the Congress a report on 
the results of such study not later than 2 years after the date of 
enactment of this section.

``SEC. 654. AUTHORITY TO PROHIBIT CROSS-SUBSIDIZATION.

  ``Nothing in this part shall prohibit a State commission that 
regulates the rates for telephone exchange service or exchange access 
based on the cost of providing such service or access from--
          ``(1) prescribing regulations to prohibit a common carrier 
        from engaging in any practice that results in the inclusion in 
        rates for telephone exchange service or exchange access of any 
        operating expenses, costs, depreciation charges, capital 
        investments, or other expenses directly associated with the 
        provision of competing video programming services by the common 
        carrier or affiliate; or
          ``(2) ensuring such competing video programming services bear 
        a reasonable share of the joint and common costs of facilities 
        used to provide telephone exchange service or exchange access 
        and competing video programming services.
``SEC. 655. PROHIBITION ON BUY OUTS.

  ``(a) General Prohibition.--No common carrier that provides telephone 
exchange service, and no entity owned by or under common ownership or 
control with such carrier, may purchase or otherwise obtain control 
over any cable system that is located within its telephone service area 
and is owned by an unaffiliated person.
  ``(b) Exceptions.--Notwithstanding subsection (a), a common carrier 
may--
          ``(1) obtain a controlling interest in, or form a joint 
        venture or other partnership with, a cable system that serves a 
        rural area;
          ``(2) obtain, in addition to any interest, joint venture, or 
        partnership obtained or formed pursuant to paragraph (1), a 
        controlling interest in, or form a joint venture or other 
        partnership with, any cable system or systems if--
                  ``(A) such systems in the aggregate serve less than 
                10 percent of the households in the telephone service 
                area of such carrier; and
                  ``(B) no such system serves a franchise area with 
                more than 35,000 inhabitants, except that a common 
                carrier may obtain such interest or form such joint 
                venture or other partnership with a cable system that 
                serves a franchise area with more than 35,000 but not 
                more than 50,000 inhabitants if such system is not 
                affiliated with any other system whose franchise area 
                is contiguous to the franchise area of the acquired 
                system;
          ``(3) obtain, with the concurrence of the cable operator on 
        the rates, terms, and conditions, the use of that part of the 
        transmission facilities of such 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; or
          ``(4) 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 that has more than 1 cable system operator, and the 
                subject cable system is not the largest cable system in 
                such television market;
                  ``(B) the subject cable system and the largest cable 
                system 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 
                largest cable system operators as existed on May 1, 
                1995; and
                  ``(D) the largest system in the television market is 
                owned by or under common ownership or control of any 
                one of the 10 largest cable system operators as existed 
                on May 1, 1995.
  ``(c) Waiver.--
          ``(1) Criteria for waiver.--The Commission may waive the 
        restrictions in subsection (a) of this section only upon a 
        showing by the applicant that--
                  ``(A) because of the nature of the market served by 
                the cable system concerned--
                          ``(i) the incumbent cable operator would be 
                        subjected to undue economic distress by the 
                        enforcement of such subsection; or
                          ``(ii) the cable system would not be 
                        economically viable if such subsection were 
                        enforced; and
                  ``(B) the local franchising authority approves of 
                such waiver.
          ``(2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 days 
        after the date it is filed.

``SEC. 656. APPLICABILITY OF PARTS I THROUGH IV.

  ``(a) In General.--Any provision that applies to a cable operator 
under--
          ``(1) sections 613 (other than subsection (a)(2) thereof), 
        616, 617, 628, 631, 632, and 634 of this title, shall apply,
          ``(2) sections 611, 612, 614, and 615 of this title, and 
        section 325 of title III, shall apply in accordance with the 
        regulations prescribed under subsection (b), and
          ``(3) parts III and IV (other than sections 628, 631, 632, 
        and 634) of this title shall not apply,
to any video programming affiliate established by a common carrier in 
accordance with the requirements of this part.
  ``(b) Implementation.--
          ``(1) Commission action.--The Commission shall prescribe 
        regulations to ensure that a common carrier in the operation of 
        its video platform shall provide (A) capacity, services, 
        facilities, and equipment for public, educational, and 
        governmental use, (B) capacity for commercial use, (C) carriage 
        of commercial and non-commercial broadcast television stations, 
        and (D) an opportunity for commercial broadcast stations to 
        choose between mandatory carriage and reimbursement for 
        retransmission of the signal of such station. In prescribing 
        such regulations, the Commission shall, to the extent possible, 
        impose obligations that are no greater or lesser than the 
        obligations contained in the provisions described in subsection 
        (a)(2) of this section.
          ``(2) Fees.--A video programming affiliate of any common 
        carrier that establishes a video platform under this part, and 
        any multichannel video programming distributor offering a 
        competing service using such video platform (as determined in 
        accordance with regulations of the Commission), shall be 
        subject to the payment of fees imposed by a local franchising 
        authority, in lieu of the fees required 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 same service area.

``SEC. 657. RURAL AREA EXEMPTION.

  ``The provisions of sections 652, 653, and 655 shall not apply to 
video programming provided in a rural area by a common carrier that 
provides telephone exchange service in the same area.''.
SEC. 202. COMPETITION FROM CABLE SYSTEMS.

  (a) Definition of Cable Service.--Section 602(6)(B) of the Act (47 
U.S.C. 522(6)(B)) is amended by inserting ``or use'' after ``the 
selection''.
  (b) Clustering.--Section 613 of the Act (47 U.S.C. 533) is amended by 
adding at the end the following new subsection:
  ``(i) Acquisition of Cable Systems.--Except as provided in section 
655, the Commission may not require divestiture of, or restrict or 
prevent the acquisition of, an ownership interest in a cable system by 
any person based in whole or in part on the geographic location of such 
cable system.''.
  (c) Equipment.--Section 623(a) of the Act (47 U.S.C. 543(a)) is 
amended--
          (1) in paragraph (6)--
                  (A) by striking ``paragraph (4)'' and inserting 
                ``paragraph (5)'';
                  (B) by striking ``paragraph (5)'' and inserting 
                ``paragraph (6)''; and
                  (C) by striking ``paragraph (3)'' and inserting 
                ``paragraph (4)'';
          (2) by redesignating paragraphs (3) through (6) as paragraphs 
        (4) through (7), respectively; and
          (3) by inserting after paragraph (2) the following new 
        paragraph:
          ``(3) Equipment.--If the Commission finds that a cable system 
        is subject to effective competition under subparagraph (D) of 
        subsection (l)(1), the rates for equipment, installations, and 
        connections for additional television receivers (other than 
        equipment, installations, and connections furnished by such 
        system to subscribers who receive only a rate regulated basic 
        service tier) shall not be subject to regulation by the 
        Commission or by a State or franchising authority. If the 
        Commission finds that a cable system is subject to effective 
        competition under subparagraph (A), (B), or (C) of subsection 
        (l)(1), the rates for any equipment, installations, and 
        connections furnished by such system to any subscriber shall 
        not be subject to regulation by the Commission, or by a State 
        or franchising authority. No Federal agency, State, or 
        franchising authority may establish the price or rate for the 
        installation, sale, or lease of any equipment furnished to any 
        subscriber by a cable system solely in connection with video 
        programming offered on a per channel or per program basis.''.
  (d) Limitation on Basic Tier Rate Increases; Scope of Review.--
Section 623(a) of the Act (47 U.S.C. 543(a)) is further amended by 
adding at the end the following new paragraph:
          ``(8) Limitation on basic tier rate increases; scope of 
        review.--A cable operator may not increase its basic service 
        tier rate more than once every 6 months. Such increase may be 
        implemented, using any reasonable billing or proration method, 
        30 days after providing notice to subscribers and the 
        appropriate regulatory authority. The rate resulting from such 
        increase shall be deemed reasonable and shall not be subject to 
        reduction or refund if the franchising authority or the 
        Commission, as appropriate, does not complete its review and 
        issue a final order within 90 days after implementation of such 
        increase. The review by the franchising authority or the 
        Commission of any future increase in such rate shall be limited 
        to the incremental change in such rate effected by such 
        increase.''.
  (e) National Information Infrastructure Development.--Section 623(a) 
of the Act (47 U.S.C. 543) is further amended by adding at the end the 
following new paragraph:
          ``(9) National information infrastructure.--
                  ``(A) Purpose.--It is the purpose of this paragraph 
                to--
                          ``(i) promote the development of the National 
                        Information Infrastructure;
                          ``(ii) enhance the competitiveness of the 
                        National Information Infrastructure by ensuring 
                        that cable operators have incentives comparable 
                        to other industries to develop such 
                        infrastructure; and
                          ``(iii) encourage the rapid deployment of 
                        digital technology necessary to the development 
                        of the National Information Infrastructure.
                  ``(B) Aggregation of equipment costs.--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.
                  ``(C) Revision to commission rules; forms.--Within 
                120 days of the date of enactment of this paragraph, 
                the Commission shall issue revisions to the appropriate 
                rules and forms necessary to implement subparagraph 
                (B).''.
  (f) Complaint Threshold; Scope of Commission Review.--Section 623(c) 
of the Act (47 U.S.C. 543(c)) is amended--
          (1) by striking paragraph (3) and inserting the following:
          ``(3) Review of complaints.--
                  ``(A) Complaint threshold.--The Commission shall have 
                the authority to review any increase in the rates for 
                cable programming services implemented after the date 
                of enactment of the Communications Act of 1995 only if, 
                within 90 days after such increase becomes effective, 
                at least 10 subscribers to such services or 5 percent 
                of the subscribers to such services, whichever is 
                greater, file separate, individual complaints against 
                such increase with the Commission in accordance with 
                the requirements established under paragraph (1)(B).
                  ``(B) Time period for commission review.--The 
                Commission shall complete its review of any such 
                increase and issue a final order within 90 days after 
                it receives the number of complaints required by 
                subparagraph (A).
          ``(4) Treatment of pending cable programming services 
        complaints.--Upon enactment of the Communications Act of 1995, 
        the Commission shall suspend the processing of all pending 
        cable programming services rate complaints. These pending 
        complaints shall be counted by the Commission toward the 
        complaint threshold specified in paragraph (3)(A). Parties 
        shall have an additional 90 days from the date of enactment of 
        such Act to file complaints about prior increases in cable 
        programming services rates if such rate increases were already 
        subject to a valid, pending complaint on such date of 
        enactment. At the expiration of such 90-day period, the 
        Commission shall dismiss all pending cable programming services 
        rate cases for which the complaint threshold has not been met, 
        and may resume its review of those pending cable programming 
        services rate cases for which the complaint threshold has been 
        met, which review shall be completed within 180 days after the 
        date of enactment of the Communications Act of 1995.
          ``(5) Scope of commission review.--A cable programming 
        services rate shall be deemed not unreasonable and shall not be 
        subject to reduction or refund if--
                  ``(A) such rate was not the subject of a pending 
                complaint at the time of enactment of the 
                Communications Act of 1995;
                  ``(B) such rate was the subject of a complaint that 
                was dismissed pursuant to paragraph (4);
                  ``(C) such rate resulted from an increase for which 
                the complaint threshold specified in paragraph (3)(A) 
                has not been met;
                  ``(D) the Commission does not complete its review and 
                issue a final order in the time period specified in 
                paragraph (3)(B) or (4); or
                  ``(E) the Commission issues an order finding such 
                rate to be not unreasonable.
        The review by the Commission of any future increase in such 
        rate shall be limited to the incremental change in such rate 
        effected by such increase.'';
          (2) in paragraph (1)(B) by striking ``obtain Commission 
        consideration and resolution of whether the rate in question is 
        unreasonable'' and inserting ``be counted toward the complaint 
        threshold specified in paragraph (3)(A)''; and
          (3) in paragraph (1)(C) by striking ``such complaint'' and 
        inserting in lieu thereof ``the first complaint''.
  (g) Uniform Rate Structure.--Section 623(d) of the Act (47 U.S.C. 
543(d)) is amended to read as follows:
  ``(d) Uniform Rate Structure.--A cable operator shall have a uniform 
rate structure throughout its franchise area for the provision of cable 
services that are regulated by the Commission or the franchising 
authority. Bulk discounts to multiple dwelling units shall not be 
subject to this requirement.''.
  (h) Effective Competition.--Section 623(l)(1) of the Act (47 U.S.C. 
543(l)(1)) is amended--
          (1) in subparagraph (B)(ii)--
                  (A) by inserting ``all'' before ``multichannel video 
                programming distributors''; and
                  (B) by striking ``or'' at the end thereof;
          (2) by striking the period at the end of subparagraph (C) and 
        inserting ``; or''; and
          (3) by adding at the end the following:
                  ``(D) with respect to cable programming services and 
                subscriber equipment, installations, and connections 
                for additional television receivers (other than 
                equipment, installations, and connections furnished to 
                subscribers who receive only a rate regulated basic 
                service tier)--
                          ``(i) a common carrier has been authorized by 
                        the Commission to construct facilities to 
                        provide video dialtone service in the cable 
                        operator's franchise area;
                          ``(ii) a common carrier has been authorized 
                        by the Commission or pursuant to a franchise to 
                        provide video programming directly to 
                        subscribers in the franchise area; or
                          ``(iii) the Commission has completed all 
                        actions necessary (including any 
                        reconsideration) to prescribe regulations 
                        pursuant to section 653(b)(1) relating to video 
                        platforms.''.
  (i) Relief for Small Cable Operators.--Section 623 of the Act (47 
U.S.C. 543) is amended by adding at the end the following new 
subsection:
  ``(m) Small Cable Operators.--
          ``(1) Small cable operator relief.--A small cable operator 
        shall not be subject to subsections (a), (b), (c), or (d) in 
        any franchise area with respect to the provision of cable 
        programming services, or a basic service tier where such tier 
        was the only tier offered in such area on December 31, 1994.
          ``(2) Definition of small cable operator.--For purposes of 
        this subsection, `small cable operator' means a cable operator 
        that--
                  ``(A) directly or through an affiliate, serves in the 
                aggregate fewer than 1 percent of all cable subscribers 
                in the United States; and
                  ``(B) is not affiliated with any entity or entities 
                whose gross annual revenues in the aggregate exceed 
                $250,000,000.''.
  (j) Technical Standards.--Section 624(e) of the Act (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.''.
  (k) Cable Security Systems.--Section 624A(b)(2) of the Act (47 U.S.C. 
544a(b)(2)) is amended to read as follows:
          ``(2) Cable security systems.--No Federal agency, State, or 
        franchising authority may prohibit a cable operator's use of 
        any security system (including scrambling, encryption, traps, 
        and interdiction), except that the Commission may prohibit the 
        use of any such system solely with respect to the delivery of a 
        basic service tier that, as of January 1, 1995, contained only 
        the signals and programming specified in section 623(b)(7)(A), 
        unless the use of such system is necessary to prevent the 
        unauthorized reception of such tier.''.
  (l) Cable Equipment Compatibility.--Section 624A of the Act (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 casette 
                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;''.
  (m) Retiering of Basic Tier Services.--Section 625(d) of the Act (47 
U.S.C. 543(d)) is amended by adding at the end the following new 
sentence: ``Any signals or services carried on the basic service tier 
but not required under section 623(b)(7)(A) may be moved from the basic 
service tier at the operator's sole discretion, provided that the 
removal of such a signal or service from the basic service tier is 
permitted by contract. The movement of such signals or services to an 
unregulated package of services shall not subject such package to 
regulation.''.
  (n) Subscriber Notice.--Section 632 of the Act (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.''.
  (o) 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 (including losses 
associated with the acquisitions of such 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.

SEC. 203. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

  Title VII of the Act is amended by adding at the end the following 
new section:

``SEC. 713. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

  ``(a) Definitions.--As used in this section:
          ``(1) The term `telecommunications subscription service' 
        means the provision directly to subscribers of video, voice, or 
        data services for which a subscriber charge is made.
          ``(2) The term `telecommunications system' or a 
        `telecommunications system operator' means a provider of 
        telecommunications subscription service.
  ``(b) Competitive Consumer Availability of Customer Premises 
Equipment.--The Commission shall adopt regulations to assure 
competitive availability, to consumers of telecommunications 
subscription services, of converter boxes, interactive communications 
devices, and other customer premises equipment from manufacturers, 
retailers, and other vendors not affiliated with any telecommunications 
system operator. Such regulations shall take into account the needs of 
owners and distributors of video programming and information services 
to ensure system and signal security and prevent theft of service. Such 
regulations shall not prohibit any telecommunications system operator 
from also offering devices and customer premises equipment to 
consumers, provided that the system operator's charges to consumers for 
such devices and equipment are separately stated and not bundled with 
or subsidized by charges for any telecommunications subscription 
service.
  ``(c) Waiver for New Network Services.--The Commission may waive a 
regulation adopted pursuant to subsection (b) for a limited time upon 
an appropriate showing by a telecommunications system operator that 
such waiver is necessary to the introduction of a new 
telecommunications subscription service.
  ``(d) Sunset.--The regulations adopted pursuant to this section shall 
cease to apply to any market for the acquisition of converter boxes, 
interactive communications devices, or other customer premises 
equipment when the Commission determines that such market is 
competitive.''.
SEC. 204. VIDEO PROGRAMMING ACCESSIBILITY.

  (a) Commission Inquiry.--Within 180 days after the date of enactment 
of this section, 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 the 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 this Act, 
        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 this Act, 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. Following the completion of such inquiry, 
the Commission may adopt regulation it deems necessary to promote the 
accessibility of video programming to persons with visual impairments.
  (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.

SEC. 205. TECHNICAL AMENDMENTS.

  (a) Retransmission.--Section 325(b)(2)(D) of the Act (47 U.S.C. 
325(b)(2)(D)) is amended to read as follows:
          ``(D) retransmission by a cable operator or other 
        multichannel video programming distributor of the signal of a 
        superstation if (i) the customers served by the cable operator 
        or other multichannel video programming distributor reside 
        outside the originating station's television market, as defined 
        by the Commission for purposes of section 614(h)(1)(C); (ii) 
        such signal was obtained from a satellite carrier or 
        terrestrial microwave common carrier; and (iii) and the 
        origination station was a superstation on May 1, 1991.''.
  (b) Market Determinations.--Section 614(h)(1)(C)(i) of the Act (47 
U.S.C. 534(h)(1)(C)(i)) is amended by striking out ``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,'' and inserting ``by the 
Commission by regulation or order using, where available, commercial 
publications which delineate television markets based on viewing 
patterns,''.
  (c) Time for Decision.--Section 614(h)(1)(C)(iv) of such Act is 
amended to read as follows:
                  ``(iv) Within 120 days after the date a request is 
                filed under this subparagraph, the Commission shall 
                grant or deny the request.''.
  (d) Processing of Pending Complaints.--The Commission shall, unless 
otherwise informed by the person making the request, assume that any 
person making a request to include or exclude additional communities 
under section 614(h)(1)(C) of such Act (as in effect prior to the date 
of enactment of this Act) continues to request such inclusion or 
exclusion under such section as amended under subsection (b).
          TITLE III--BROADCAST COMMUNICATIONS COMPETITIVENESS

SEC. 301. BROADCASTER SPECTRUM FLEXIBILITY.

  Title III of the Act 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 
shall--
          ``(1) 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) adopt regulations that allow such licensees or 
        permittees 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.--
          ``(1) Conditions required.--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, upon a determination by the 
        Commission pursuant to the regulations prescribed under 
        paragraph (2), either the additional license or the original 
        license held by the licensee be surrendered to the Commission 
        in accordance with such regulations for reallocation or 
        reassignment (or both) pursuant to Commission regulation.
          ``(2) Criteria.--The Commission shall prescribe criteria for 
        rendering determinations concerning license surrender pursuant 
        to license conditions required by paragraph (1). Such criteria 
        shall--
                  ``(A) require such determinations to be based, on a 
                market-by-market basis, on whether the substantial 
                majority of the public have obtained television 
                receivers that are capable of receiving advanced 
                television services; and
                  ``(B) not require the cessation of the broadcasting 
                under either the original or additional license if such 
                cessation would render the television receivers of a 
                substantial portion of the public useless, or otherwise 
                cause undue burdens on the owners of such television 
                receivers.
          ``(3) Auction of returned spectrum.--Any license surrendered 
        under the requirements of this subsection shall be subject to 
        assignment by use of competitive bidding pursuant to section 
        309(j), notwithstanding any limitations contained in paragraph 
        (2) of such section.
  ``(d) 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 the enactment 
        of this section, 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.
  ``(e) 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.
  ``(f) 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 this section, as further 
        defined in the proceedings described in paragraph (1) of this 
        subsection.''.
SEC. 302. BROADCAST OWNERSHIP.

  (a) Amendment.--Title III of the Act is amended by inserting after 
section 336 (as added by section 301) the following new section:

``SEC. 337. BROADCAST OWNERSHIP.

  ``(a) Limitations on Commission Rulemaking Authority.--Except as 
expressly permitted in this section, the Commission shall not prescribe 
or enforce any regulation--
          ``(1) prohibiting or limiting, either nationally or within 
        any particular area, a person or entity from holding any form 
        of ownership or other interest in two or more broadcasting 
        stations or in a broadcasting station and any other medium of 
        mass communication; or
          ``(2) prohibiting a person or entity from owning, operating, 
        or controlling two or more networks of broadcasting stations or 
        from owning, operating, or controlling a network of 
        broadcasting stations and any other medium of mass 
        communications.
  ``(b) Television Ownership Limitations.--
          ``(1) National audience reach limitations.--The Commission 
        shall prohibit a person or entity from obtaining any license if 
        such license would result in such person or entity directly or 
        indirectly owning, operating, or controlling, or having a 
        cognizable interest in, television stations which have an 
        aggregate national audience reach exceeding--
                  ``(A) 35 percent, for any determination made under 
                this paragraph before one year after the date of 
                enactment of this section; or
                  ``(B) 50 percent, for any determination made under 
                this paragraph on or after one year after such date of 
                enactment.
        Within 3 years after such date of enactment, the Commission 
        shall conduct a study on the operation of this paragraph and 
        submit a report to the Congress on the development of 
        competition in the television marketplace and the need for any 
        revisions to or elimination of this paragraph.
          ``(2) Multiple licenses in a market.--
                  ``(A) In general.--The Commission shall prohibit a 
                person or entity from obtaining any license if such 
                license would result in such person or entity directly 
                or indirectly owning, operating, or controlling, or 
                having a cognizable interest in, two or more television 
                stations within the same television market.
                  ``(B) Exception for multiple uhf stations and for 
                uhf-vhf combinations.--Notwithstanding subparagraph 
                (A), the Commission shall not prohibit a person or 
                entity from directly or indirectly owning, operating, 
                or controlling, or having a cognizable interest in, two 
                television stations within the same television market 
                if at least one of such stations is a UHF television, 
                unless the Commission determines that permitting such 
                ownership, operation, or control will harm competition 
                or will harm the preservation of a diversity of media 
                voices in the local television market.
                  ``(C) Exception for vhf-vhf combinations.--
                Notwithstanding subparagraph (A), the Commission may 
                permit a person or entity to directly or indirectly 
                own, operate, or control, or have a cognizable interest 
                in, two VHF television stations within the same 
                television market, if the Commission determines that 
                permitting such ownership, operation, or control will 
                not harm competition and will not harm the preservation 
                of a diversity of media voices in the local television 
                market.
  ``(c) Local Cross-Media Ownership Limits.--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 
nonbroadcast media of mass communication would result in an undue 
concentration of media voices in the respective local market. In 
considering any such combination, the Commission shall not grant the 
application if all the media of mass communication in such local market 
would be owned, operated, or controlled by two or fewer persons or 
entities. This subsection shall not constitute authority for the 
Commission to prescribe regulations containing local cross-media 
ownership limitations. The Commission may not, under the authority of 
this subsection, require any person or entity to divest itself of any 
portion of any combination of stations and other media of mass 
communications that such person or entity owns, operates, or controls 
on the date of enactment of this section unless such person or entity 
acquires another station or other media of mass communications after 
such date in such local market.
  ``(d) Transition Provisions.--Any provision of any regulation 
prescribed before the date of enactment of this section that is 
inconsistent with the requirements of this section shall cease to be 
effective on such date of enactment. The Commission shall complete all 
actions (including any reconsideration) necessary to amend its 
regulations to conform to the requirements of this section not later 
than 6 months after such date of enactment. Nothing in this section 
shall be construed to prohibit the continuation or renewal of any 
television local marketing agreement that is in effect on such date of 
enactment and that is in compliance with Commission regulations on such 
date.''.
  (b) Conforming Amendment.--Section 613(a) of the Act (47 U.S.C. 
533(a)) is repealed.
SEC. 303. FOREIGN INVESTMENT AND OWNERSHIP.

  (a) Station Licenses.--Section 310(a) (47 U.S.C. 310(a)) is amended 
to read as follows:
  ``(a) Grant to or Holding by Foreign Government or Representative.--
No station license required under title III of this Act shall be 
granted to or held by any foreign government or any representative 
thereof. This subsection shall not apply to licenses issued under such 
terms and conditions as the Commission may prescribe to mobile earth 
stations engaged in occasional or short-term transmissions via 
satellite of audio or television program material and auxilliary 
signals if such transmissions are not intended for direct reception by 
the general public in the United States.''.
  (b) Termination of Foreign Ownership Restrictions.--Section 310 (47 
U.S.C. 310) is amended by adding at the end thereof the following new 
subsection:
  ``(f) Termination of Foreign Ownership Restrictions.--
          ``(1) Restriction not to apply.--Subsection (b) shall not 
        apply to any common carrier license granted, or for which 
        application is made, after the date of enactment of this 
        subsection with respect to any alien (or representative 
        thereof), corporation, or foreign government (or representative 
        thereof) if--
                  ``(A) the President determines that the foreign 
                country of which such alien is a citizen, in which such 
                corporation is organized, or in which the foreign 
                government is in control is party to an international 
                agreement which requires the United States to provide 
                national or most-favored-nation treatment in the grant 
                of common carrier licenses; or
                  ``(B) the Commission determines that not applying 
                subsection (b) would serve the public interest.
          ``(2) Commission considerations.--In making its 
        determination, under paragraph (1)(B), the Commission may 
        consider, among other public interest factors, whether 
        effective competitive opportunities are available to United 
        States nationals or corporations in the applicant's home 
        market. In evaluating the public interest, the Commission shall 
        exercise great deference to the President with respect to 
        United States national security, law enforcement requirements, 
        foreign policy, the interpretation of international agreements, 
        and trade policy (as well as direct investment as it relates to 
        international trade policy). Upon receipt of an application 
        that requires a finding under this paragraph, the Commission 
        shall cause notice thereof to be given to the President or any 
        agencies designated by the President to receive such 
        notification.
          ``(3) Further commission review.--Except as otherwise 
        provided in this paragraph, the Commission may determine that 
        any foreign country with respect to which it has made a 
        determination under paragraph (1) has ceased to meet the 
        requirements for that determination. In making this 
        determination, the Commission shall exercise great deference to 
        the President with respect to United States national security, 
        law enforcement requirements, foreign policy, the 
        interpretation of international agreements, and trade policy 
        (as well as direct investment as it relates to international 
        trade policy). If a determination under this paragraph is made 
        then--
                  ``(A) subsection (b) shall apply with respect to such 
                aliens, corporation, and government (or their 
                representatives) on the date that the Commission 
                publishes notice of its determination under this 
                paragraph; and
                  ``(B) any license held, or application filed, which 
                could not be held or granted under subsection (b) shall 
                be reviewed by the Commission under the provisions of 
                paragraphs (1)(B) and (2).
          ``(4) Observance of international obligations.--Paragraph (3) 
        shall not apply to the extent the President determines that it 
        is inconsistent with any international agreement to which the 
        United States is a party.
          ``(5) Notifications to congress.--The President and the 
        Commission shall notify the appropriate committees of the 
        Congress of any determinations made under paragraph (1), (2), 
        or (3).''.
SEC. 304. TERM OF LICENSES.

  Section 307(c) of the Act (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 seven years. Upon application therefor, a renewal 
        of such license may be granted from time to time for a term of 
        not to exceed seven 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, 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. 305. BROADCAST LICENSE RENEWAL PROCEDURES.

  (a) Amendment.--Section 309 of the Act (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.''.
  (b) Conforming Amendment.--Section 309(d) of the Act (47 U.S.C. 
309(d)) is amended by inserting after ``with subsection (a)'' each 
place such term appears the following: ``(or subsection (k) in the case 
of renewal of any broadcast station license)''.
  (c) Effective Date.--The amendments made by this section shall apply 
to any application for renewal filed on or after May 31, 1995.

SEC. 306. EXCLUSIVE FEDERAL JURISDICTION OVER DIRECT BROADCAST 
                    SATELLITE SERVICE.

  Section 303 of the Act (47 U.S.C. 303) is amended by adding at the 
end thereof the following new subsection:
  ``(v) Have exclusive jurisdiction over the regulation of the direct 
broadcast satellite service.''.

SEC. 307. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

  Notwithstanding any provision of the Act, 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.

SEC. 308. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.

  Within 180 days after the enactment of this Act, the Commission 
shall, pursuant to section 303, promulgate regulations to prohibit 
restrictions that inhibit a viewer's ability to receive video 
programming services through signal receiving devices designed for off-
the-air reception of television broadcast signals or direct broadcast 
satellite services.

SEC. 309. DBS SIGNAL SECURITY.

  Section 705(e)(4) of the Act (47 U.S.C. 605(e)) is amended by 
inserting after ``satellite cable programming'' the following: ``or 
programming of a licensee in the direct broadcast satellite service''.
                     TITLE IV--EFFECT ON OTHER LAWS

SEC. 401. RELATIONSHIP TO OTHER LAWS.

  (a) Modification of Final Judgment.--Parts II and III of title II of 
the Communications Act of 1934 (as added by this Act) shall supersede 
the Modification of Final Judgment, except that such part shall not 
affect--
          (1) section I of the Modification of Final Judgment, relating 
        to AT&T; reorganization,
          (2) section II(A) (including appendix B) and II(B) of the 
        Modification of Final Judgment, relating to equal access and 
        nondiscrimination,
          (3) section IV(F) and IV(I) of the Modification of Final 
        Judgment, with respect to the requirements included in the 
        definitions of ``exchange access'' and ``information access'',
          (4) section VIII(B) of the Modification of Final Judgment, 
        relating to printed advertising directories,
          (5) section VIII(E) of the Modification of Final Judgment, 
        relating to notice to customers of AT&T;,
          (6) section VIII(F) of the Modification of Final Judgment, 
        relating to less than equal exchange access,
          (7) section VIII(G) of the Modification of Final Judgment, 
        relating to transfer of AT&T; assets, including all exceptions 
        granted thereunder before the date of the enactment of this 
        Act, and
          (8) with respect to the parts of the Modification of Final 
        Judgment described in paragraphs (1) through (7)--
                  (A) section III of the Modification of Final 
                Judgment, relating to applicability and effect,
                  (B) section IV of the Modification of Final Judgment, 
                relating to definitions,
                  (C) section V of the Modification of Final Judgment, 
                relating to compliance,
                  (D) section VI of the Modification of Final Judgment, 
                relating to visitorial provisions,
                  (E) section VII of the Modification of Final 
                Judgment, relating to retention of jurisdiction, and
                  (F) section VIII(I) of the Modification of Final 
                Judgment, relating to the court's sua sponte authority.
  (b) Antitrust Laws.--Nothing in this Act shall be construed to 
modify, impair, or supersede the applicability of any of the antitrust 
laws.
  (c) Federal, State, and Local Law.--(1) Except as provided in 
paragraph (2), parts II and III of title II of the Communications Act 
of 1934 shall not be construed to modify, impair, or supersede Federal, 
State, or local law unless expressly so provided in such part.
  (2) Parts II and III of title II of the Communications Act of 1934 
shall supersede State and local law to the extent that such law would 
impair or prevent the operation of such part.
  (d) Termination.--The provisions of the GTE consent decree shall 
cease to be effective on the date of enactment of this Act. For 
purposes of this subsection, the term ``GTE consent decree'' means the 
order entered on December 21, 1984 (as restated on January 11, 1985), 
in United States v. GTE Corporation, Civil Action No. 83-1298, 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 
December 21, 1984.
  (e) Inapplicability of Final Judgment to Wireless Successors.--No 
person shall be subject to the provisions of the Modification of Final 
Judgment by reason of having acquired wireless exchange assets or 
operations previously owned by a Bell operating company or an affiliate 
of a Bell operating company.
  (f) Antitrust Laws.--As used in this section, 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. 402. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO DBS SERVICES.

  (a) Preemption.--A provider of direct-to-home satellite service, or 
its agent or representative for the sale or distribution of direct-to-
home satellite services, shall be exempt from the collection or 
remittance, or both, of any tax or fee, as defined by subsection 
(b)(4), imposed by any local taxing jurisdiction with respect to the 
provision of direct-to-home satellite services. Nothing in this section 
shall be construed to exempt from collection or remittance any tax or 
fee on the sale of equipment.
  (b) Definitions.--For the purposes of this section--
          (1) Direct-to-home satellite service.--The term ``direct-to-
        home satellite service'' means the transmission or broadcasting 
        by satellite of programming 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) Direct-to-home satellite service provider.--For purposes 
        of this section, a ``provider of direct-to-home satellite 
        service'' means a person who transmits or broadcasts direct-to-
        home satellite services.
          (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 with the authority to impose a tax 
        or fee.
          (4) 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) Effective Date.--This section shall be effective as of June 1, 
1994.
                          TITLE V--DEFINITIONS

SEC. 501. DEFINITIONS.

  (a) Additional Definitions.--Section 3 of the Act (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) 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 within a State but which 
                does not result in the subscriber incurring a telephone 
                toll charge''; and
          (2) by adding at the end thereof the following:
          ``(35) Affiliate.--The term `affiliate', when used in 
        relation to any person or entity, means another person or 
        entity who owns or controls, is owned or controlled by, or is 
        under common ownership or control with, such person or entity.
          ``(36) Bell operating company.--The term `Bell operating 
        company' means--
                  ``(A) 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;
                  ``(B) any successor or assign of any such company 
                that provides telephone exchange service.
          ``(37) Cable system.--The term `cable system' has the meaning 
        given such term in section 602(7) of this Act.
          ``(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 affiliated enterprise 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 telephone exchange services or facilities for the 
        purpose of the origination or termination of interLATA 
        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 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 Modification of Final 
                Judgment before the date of the enactment of this 
                paragraph; or
                  ``(B) established or modified by a Bell operating 
                company after the date of enactment of this paragraph 
                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 as provided by such person in a State is a replacement 
        for a substantial portion of the wireline telephone exchange 
        service within such State.
          ``(45) Modification of final judgment.--The term 
        `Modification of Final Judgment' 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.
          ``(46) Number portability.--The term `number portability' 
        means the ability of users of telecommunications services to 
        retain existing telecommunications numbers without impairment 
        of quality, reliability, or convenience when changing from one 
        provider of telecommunications services to another, as long as 
        such user continues to be located within the area served by the 
        same central office of the carrier from which the user is 
        changing.
          ``(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 recent 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 
                telephone exchange access service, 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 this paragraph.
          ``(48) Telecommunications.--The term `telecommunications' 
        means the transmission, between or among points specified by 
        the subscriber, of information of the subscriber's choosing, 
        without change in the form or content of the information as 
        sent and received, by means of an electromagnetic transmission 
        medium, including all instrumentalities, facilities, apparatus, 
        and services (including the collection, storage, forwarding, 
        switching, and delivery of such information) essential to such 
        transmission.
          ``(49) 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).
          ``(50) Telecommunications service.--The term 
        `telecommunications service' means the offering, on a common 
        carrier basis, of telecommunications facilities, or of 
        telecommunications by means of such facilities. Such term does 
        not include an information service.''.
  (b) Stylistic Consistency.--Section 3 of the Act (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.
  (c) 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 VI--SMALL BUSINESS COMPLAINT PROCEDURE

SEC. 601. COMPLAINT PROCEDURE.

  (a) Procedure Required.--The Federal Communications Commission shall 
establish procedures for the receipt and review of complaints 
concerning violations of the Communications Act of 1934, and the rules 
and regulations thereunder, that are likely to result, or have 
resulted, as a result of the violation, in material financial harm to a 
provider of telemessaging service, or other small business engaged in 
providing an information service or other telecommunications service. 
Such procedures shall be established within 120 days after the date of 
enactment of this Act.
  (b) Deadlines for Procedures; Sanctions.--The procedures under this 
section 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 common carrier 
and its affiliates to cease engaging in such violation pending such 
final determination. In addition, the Commission may exercise its 
authority to impose other penalties or sanctions, to the extent 
otherwise provided by law.
  (c) Definition.--For purposes of this section, a small business shall 
be any business entity that, along with any affiliate or subsidiary, 
has fewer than 300 employees.
                          Purpose and Summary

    H.R. 1555, the Communications Act of 1995, as amended, 
promotes competition and reduces regulation in order to secure 
lower prices and higher quality services for American 
telecommunications consumers and encourage the rapid 
development of new telecommunications technologies.
    For decades, U.S. telecommunications policy has relied on 
heavily regulated monopolies to provide communications services 
to businesses and consumers. Advances in telecommunications 
have greatly benefitted consumers and American businesses. 
Technological advances would be more rapid and services would 
be more widely available and at lower prices if 
telecommunications markets were competitive rather than 
regulated monopolies. Consequently, the Communications Act of 
1995 opens all communications services to competition. The 
result will be lower prices to consumers and businesses, 
greater choice of services, more innovation, a competitive edge 
for American businesses, and less regulation. Indeed, the 
enormous benefits to American businesses and consumers from 
lifting the shackles of monopoly regulation will almost 
certainly earn the Communications Act of 1995 the distinction 
of being the most deregulatory bill in history.
    The bill has three main components. First, the bill 
promotes competition in the market for local telephone service 
by requiring local telephone companies (or ``local exchange 
carriers'') to offer competitors access to parts of their 
networks. Second, the bill spurs competition in the 
multichannel video market by permitting telephone companies, 
through separate affiliates, to provide video programming to 
subscribers in its telephone service areas. This policy change 
also will provide a strong incentive for local exchange 
carriers (LECs) to invest in and upgrade their networks. 
Finally, the bill seeks to preserve and to promote the 
competitiveness of over-the-air broadcast stations.

                  Background and Need for Legislation

                             i. background

    In 1974, the U.S. Department of Justice brought an 
antitrust lawsuit against the then-integrated AT&T.; The 
Government alleged that AT&T; had violated the Sherman Act by 
foreclosing markets to other corporations through its control 
over the local telephone networks. First, the Government 
alleged that AT&T; and its manufacturing subsidiary, Western 
Electric, discriminated against other manufacturers in the 
procurement of network equipment and customer premises 
equipment (CPE). Later, the Government enlarged the scope of 
its complaint, and alleged that AT&T; had also violated the 
Sherman Act with respect to long distance services. In each 
case, the Government alleged that it was AT&T;'s control over 
its 24 local telephone companies that enabled it to preclude 
entry by manufacturers and by long distance companies such as 
MCI. After several years of discovery and pre-trial activities, 
the case finally went to trial in 1978.
    The suit was ultimately settled in 1982. Pursuant to the 
settlement, otherwise known as the Modification of the Final 
Judgment (MFJ) of the 1956 Antitrust Consent Decree, AT&T; 
retained ownership of its manufacturing and long distance 
service operations but had to divest ownership of its 24 local 
telephone companies by January 1, 1984. All but two of the 
local telephone companies were subsequently restructured into 
seven Bell Operating Companies (BOCs). The remaining two, in 
which AT&T; owned a minority interest, became separate 
corporations. In effect, the BOCs inherited AT&T;'s local 
exchange service, but because of concerns relating to the 
potential for discrimination by monopoly providers of local 
exchange service, the BOCs were prohibited from manufacturing 
telecommunications and CPE and from providing long distance 
service.
    The MFJ also addressed a third issue that was not 
considered at trial: information services, e.g., electronic 
publishing and alarm monitoring services. While it had been 
manufacturing equipment and providing long distance service, 
AT&T; had not been providing information services at the time 
the MFJ was negotiated. The prohibition against the BOCs 
providing information services was a prophylactic measure, 
given that the information services industry was just beginning 
to emerge. Judge Harold Greene, who oversaw and put into place 
the MFJ, felt that the underlying rationale for the two other 
MFJ restrictions led to the conclusion that a similar 
restriction was needed for the information services. In 1991, a 
Federal appeals court in Washington, D.C. overturned this 
restriction, and the BOCs were thus allowed to provide 
information services.
    Local telephone service means local exchange service to 
residential and business customers and exchange access services 
to interexchange carriers such as AT&T;, MCI and Sprint. The 
seven BOCs provide over 80% of local telephone service in the 
United States. Several hundred other carriers provide the 
balance of local service. While some competition has developed 
in the local business service and exchange access markets, 
local residential service remains a monopoly service. The MFJ 
designated exchange areas as Local Access and Transport Areas 
(LATAs), within which the Bell Operating Company (BOC) is the 
local telephone service provider. In most cases, LATAs 
correspond roughly with area code territories. As a result of 
these provisions, BOCs could provide local telephone services 
but were restricted from competing against interLATA or 
interexchange carriers. The MFJ required the BOCs to provide 
all interexchange carriers with access to all BOC exchange 
facilities on terms with type, quality and price equal to that 
provided to AT&T.;
    In providing local telephone service, telephone companies 
have historically been protected from competition by State and 
local government barriers to entry. The LECs are subject to 
extensive State government regulation of their business charges 
and practices. Customers receive an array of local services at 
prices influenced heavily by regulatory policies. In addition, 
LECs also have the obligation of maintaining ``universal 
service'' as codified by the Communications Act of 1934, and 
administered by Federal and State regulators.
    In the overwhelming majority of markets today, because of 
their government-sanctioned-monopoly status, local providers 
maintain bottleneck control over the essential facilities 
needed for the provision of local telephone service. The 
bottleneck consists of the elements needed to originate or 
terminate a telephone call--the equipment with capabilities of 
routing and signaling calls, network capacity and network 
standards. The inability of other service providers to gain 
access to the local telephone companies equipment inhibits 
competition that could otherwise develop in the local exchange 
market. In contrast, in the exchange-access market, competition 
among facilities-based carriers emerged.

                         ii. local competition

    The local telephone service exchange connects callers 
within an exchange area, and also connects subscribers to the 
long distance company of their choice. This service is provided 
by over 1,400 local telephone companies. However, the seven 
BOCs control over 80 percent of the local telephone network. 
The top 10 telephone companies control 92 percent of the local 
telephone network. The Committee found that in the large number 
of markets for local telephone service, there was no instance 
where any of the top 10 telephone companies compete with one 
another.
    For much of the past 60 years, the provision of local 
telephone service has been a monopoly service, and the 
telephone companies operating today have been the monopoly 
suppliers. Ironically, the infant telephone industry was not 
dominated by monopolies. In the early part of the century there 
was a period of active competition in local telephone service 
and in local telephone service markets. As recently as 1949, 
Philadelphia was served by two telephone companies. 
Unfortunately, competing systems in the early 20th century were 
not interconnected and subscribers had to subscribe to each 
competing system to have access to all available lines. Public 
dissatisfaction with this result partly led to the 
establishment of telephone as a monopoly service.
    Today, LECs are subject to extensive government regulation 
of their business charges and practices. In addition, the 
carriers are frequently protected from competition by 
government barriers to entry. In fact, the Committee found that 
the majority of States restrict full and fair competition in 
the local exchange, either by statute or through the public 
utility commission's regulations. In return for this 
arrangement, customers receive an array of local services and 
associated prices, determined primarily by State Public Utility 
Commissions. In addition, LECs also have the obligation of 
``universal service'' as established by the Communications Act 
of 1934, and administered by the Federal and State regulators. 
H.R. 1555 reflects the Committee's belief that more 
competition, rather than more regulation, will benefit all 
consumers.
              iii. telephone company/cable cross-ownership

    Under current law, telephone companies are prohibited from 
offering cable service within their telephone service areas. 
The statutory prohibition codified long-standing Federal 
Communications Commission (the Commission) policy keeping 
telephone companies out of the cable business.
    Cable television service was introduced in this country in 
the early 1950s, originally marketed as a means of providing 
antenna service to communities that had difficulty receiving 
television broadcast signals. Cable technology continued to 
serve almost exclusively as an antenna service for many years, 
and was considered a fledgling industry until the early 1970s.
    In the early 1970s, largely because cable had served 
primarily in this ancillary capacity, no national policy had 
been established to guide the development of the cable 
industry. Local authorities in charge of awarding franchises 
had asserted regulatory control over the cable companies, and 
as a result, cable regulatory policy had been dictated on a 
case-by-case basis according to the needs of each community.
    While there were varying degrees of State and Federal 
involvement in the local franchise process, the terms of the 
franchise contracts themselves were left largely to the 
discretion of local authorities. As service offerings 
increased, franchise authorities began adopting new rules to 
address such issues as rate regulation, amount of franchise 
fees, public access and customer service requirements. These 
rules varied from community to community, establishing an 
inconsistent approach to cable regulation.
    By the early 1980s, this haphazard system was regarded as 
inhibiting the development of the industry. Congress recognized 
the need for a national policy to develop guidelines for the 
future of the cable television industry. In 1984, Congress 
enacted the ``Cable Communications Policy Act of 1984'' 1 
(1984 Cable Act). While the primary function of the Act was to 
develop a national policy for the cable industry, the Act was 
also intended to deregulate the industry. Congress believed 
that deregulation would enable the industry to prosper, 
benefiting both consumers and industry participants 
alike.2 One of the purposes for deregulating the industry 
was to facilitate further expansion of the cable industry.
    \1\ Cable Communications Policy Act of 1984, P.L. No. 98-549, 98 
Stat. 2779 (1984).
    \2\ H. Rept. No. 98-934, Second Sess., at 19-20.
---------------------------------------------------------------------------
    By 1984, the need to maintain overall cross-ownership 
restrictions between cable and telephone companies was still 
strong. While the cable industry had evolved into a formidable 
communications force, the local telephone industry still 
maintained a strong competitive advantage in terms of its 
financial resources, monopoly control, and reach into every 
home. The Commission's regulations, as promulgated in the 1970 
rules 3 and as modified in 1981,4 were included into 
the 1984 Cable Act so as to preserve and enhance the viability 
of the cable industry and to limit the monopoly reach of the 
telephone industry.
    \3\ FCC Rules and Regulations, 47 C.F.R. Sec. 63.54-63.58, 22 FCC 
2d 746 (1970).
    \4\ Report and Order in CC Docket No. 80-767, 88 FCC 2d 564, 
(1981).
---------------------------------------------------------------------------
    Specifically, section 613 of the Communications Act of 1934 
defined ownership rules designed to prohibit the development of 
local media monopolies, and to encourage a diversity of 
ownership and communications outlets. Common carriers were thus 
barred from providing video programming directly to subscribers 
within their telephone service areas, either directly or 
indirectly through an affiliate. Rules governing common carrier 
provision of video programming in rural areas were also 
clarified.
    In July 1987, the Commission initiated an inquiry to 
reexamine its cross-ownership rules.5 The original docket 
questioned the continued need to preserve an environment where, 
in light of the steady growth and high penetration of the cable 
industry, full competition between cable and telephone 
companies was limited. Specifically, the Commission questioned 
``whether the cable television industry [had] not matured to 
the point where telephone company competition in the provision 
of local cable service may spur, rather than impede, the 
offering of a variety of video programming at reasonable 
rates.6
    \5\ FCC Notice of Inquiry in the Matter of Telephone Company-Cable 
Television Cross-Ownership Rules, Sections 63.54-63.58, CC Docket No. 
87-266, FCC 87-243 (1987).
    \6\ Id., at 2.
---------------------------------------------------------------------------
    This docket remained inactive until October 1991, when the 
Commission, based upon the findings of a second Notice of 
Inquiry, asserted that, while there was still a strong need to 
maintain certain cross-subsidization limitations and pole and 
conduit control restrictions, changes within the marketplace 
may warrant a review of the cross-ownership rules. In an effort 
to provide the public with the greatest access to cable 
television, it became apparent that a relaxation of some of the 
restrictions was necessary.7
    \7\ See also NTIA: ``Telecom 2000: Charting the Course for a New 
Century'' (Oct. 1988) (study by the National Telecommunications and 
Information Administration which recommended reform of the cross-
ownership restrictions).
---------------------------------------------------------------------------
    The Commission took the first significant step to ease the 
cross-ownership rules with its 1992 decision permitting local 
telephone companies to provide ``video dialtone.'' 8 This 
decision authorized local telephone companies to provide a 
platform so that competing service providers could transmit a 
wide variety of video or any future telecommunications services 
to their subscribers.
    \8\ FCC Second Report and Order, Recommendation to Congress and 
Second Further Notice of Proposed Rule Making, FCC 92-327 and CC Docket 
87-266 (1982).
---------------------------------------------------------------------------
    The Commission included in its decision a recommendation 
that Congress repeal the cable-telephone cross-ownership rules, 
citing a changed communications environment. The Commission 
further asserted that the marketplace had evolved to a level 
where it was capable of facilitating equitable competition 
between the cable and telephone industries, largely due to the 
fact that the cable television industry had developed to a 
point where it could effectively compete against the monopoly-
telephone provider in the delivery of video service.
    In 1993, Bell Atlantic successfully challenged the 
telephone-cable cross-ownership prohibition in Federal district 
court. Numerous other parties then filed their own cases. In 
all cases, the courts found that prohibiting telephone 
companies from providing video programming was an 
unconstitutional burden on their First Amendment right to 
engage in free speech. Specifically, each court found that the 
statute swept too broadly in restricting telephone company free 
speech, and therefore failed the ``intermediate scrutiny'' 
test, which requires a restriction to be narrowly tailored to a 
significant government interest.9
    \9\ See Chesapeake and Potomac Tel. Co. v. United States, et. al., 
830 F. Supp. 909 (E.D. Va (1993)), aff'd, 42F.3d 131 (4th Cir. 1994, 
cert. granted, 63 USLW 3899, No. 94-1893). The Supreme Court also 
granted certiorari to the Fourth Circuit in a related case: National 
Cable Television Assn. Inc. v. Bell Atlantic Corp., cert. granted, 63 
USLW 3899, No. 94-1900. See also US West v. United States, 855 F. Supp 
1184 (W.D. Wash. 1994), aff'd, 48 F.3d 1092 (9th Cir. Dec. 30, 1994), 
petition for rehearing pending (Also grants relief to Pacific Telecom, 
and Washington Independent Telephone Association members); Pacific Bell 
v. United States, No. 94-16064, 48 F.3d 1106 (9th Cir. Sec. 30, 1994) 
(reversing district court order denying preliminary injunction in light 
of the US West decision); Ameritech v. United States, No. 93-C-6642 
(October 27, 1994) (also grants relief to CCI, and Illinois 
Consolidated Tel. Co. as intervenors), appeal pending, No. 95-1223 (7th 
Cir.); BellSouth Corp. v. United States, 868 F. Supp. 1335 (N.D. Ala 
1994), appeal pending, No. 94-7036 (11th Cir.); NYNEX v. United States, 
No. 92-323-P-C (D. Me. 1994), appeal pending, No. 95-1183 (1st Cir.); 
GTE South, Inc. v. United States, No. 94-1588-A (E.D. Va January 13, 
1995), appeal pending, No. 95-1738 (4th Cir.); USTA et. al. v. United 
States, No. 94-1961 (D.D.C. January 27, 1995), appeal pending, No. 95-
5117 (D.C. Cir.); Southwestern Bell et. al. v. United States, No. 3:94-
CV-0193-D (N.D. Tex. March 27, 1995); and Southern New England Tel. v. 
United States, No. 3:94-CV-80 (DJS) (D. Conn. April 28, 1995).
---------------------------------------------------------------------------
    The original rationale for adopting the prohibition of 
telephone company entry into video services has been satisfied, 
and given the changes in technology and the evolution of the 
cable industry, the prohibition is no longer valid. In fact, 
three governmental bodies, the Commission, the Commerce 
Department's National Telecommunications and Information 
Administration (NTIA) and the Department of Justice's Antitrust 
Division have expressly found that the statute impedes 
competition in the cable industry. Concern over the need to 
upgrade our Nation's telecommunications networks, the need to 
ensure the United States' competitive position internationally, 
and the need to promote competition in the video market, have 
provided a major impetus for lifting the restrictions.
    Telephone company entry into the delivery of video services 
will encourage telephone companies to modernize their 
communications infrastructure. Specifically, the deployment of 
broadband networks would be accelerated if telephone companies 
were permitted to offer video programming. These networks would 
be capable of transmitting voice, data, and video to consumers. 
Without this incentive, telephone companies will build advanced 
networks more slowly. Moreover, telephone company entry into 
cable would encourage technological innovation. Telephone 
company entry into cable also would create a healthier 
communications marketplace. Telephone company competition with 
the entrenched cable operators would enable consumers to 
benefit from lower rates, better quality service, improved 
maintenance, and a larger diversity of new information 
services.

                   iv. competition from cable systems

    The 1984 Cable Act permitted franchising authorities to 
regulate basic cable rates only where the cable system was not 
subject to ``effective competition.'' ``Effective competition'' 
was defined by the Commission to exist in franchise areas in 
which three or more unduplicated broadcasting signals were 
available. Under the Commission's criteria, most cable systems 
were not subject to rate regulation. By 1990, there was 
considerable demand for reregulation of cable rates. In 1990, 
the Commission adopted a stricter test for ``effective 
competition'' which was found to exist if either (a) six 
unduplicated over-the-air broadcast television signals are 
available in the cable community, or (b) an independently 
owned, competing multichannel video delivery system is 
available to 50 percent of the homes passed by the cable 
alternative system in the cable system's franchise area.10 
Despite this stricter test, most cable systems remained 
unregulated.
    \10\ See Reexamination of the Effective Competition Standard for 
the Regulation of Cable Television Basic Service Rates, Report and 
Order and Second Further Notice of Proposed Rulemaking, MM Dkt. Nos. 
90-94, 84-1296, 6 F.C.C. Rcd. 4545, (1991).
---------------------------------------------------------------------------
    In 1992, Congress enacted the ``Cable Television Consumer 
Protection and Competition Act'' (referred to hereinafter as 
the 1992 Cable Act). The 1992 Cable Act was designed to rein in 
``renegade'' cable operators that charged unreasonable rates. 
However, in implementing the Act, the Commission broadened the 
intent of the Act by adopting rate regulations that affected 
the rates of virtually all cable operators. In doing so, the 
Commission created a complicated regulatory structure and a 
large bureaucracy to manage it. Since passage of the 1992 Act, 
the Commission staff has increased by 30 percent. Much of this 
increase is directly attributable to the Cable Services Bureau, 
which was created for the express purpose of implementing the 
Act.
    The complicated and intrusive regulatory structure created 
by the Commission has severely inhibited the industry's growth. 
During testimony at hearings on the legislation, the Committee 
heard evidence that the regulations have slowed development of 
new programming and dampened the industry's efforts to expand 
system capacity and introduce new technology. The Committee 
also heard testimony that the regulations have severely 
hampered the industry's ability to obtain capital from the 
financial community, which, in turn, has delayed cable 
operators' efforts to rebuild their systems and develop new 
infrastructures.
    Under one of the most onerous Commission rules, a single 
complaint triggers the cumbersome rate regulation process. For 
example, in one cable system with 220,000 subscribers, one 
subscriber complaint forced the operator into a complex and 
costly rate case. Similarly, another cable company recently 
filed an affidavit with the Commission demonstrating that in a 
system franchise area where it serves over 40,000 customers, a 
rate complaint filed by one subscriber required a costly rate 
case. Further inquiry revealed that more than 100 of its 
franchises, representing over 500,000 subscribers, are subject 
to rate regulation because a single complaint was filed in the 
franchise area. The single complaint threshold imposes 
significant administrative and legal costs on cable operators 
that ultimately are borne by all subscribers.
    The Committee finds that the impact of the complex rate 
regulations has been particularly harsh on small cable 
operators. The already strained resources of these companies 
have been further taxed by the burdensome regulations 
promulgated by the Commission. In addition, the reduced cash 
flows experienced by these companies as a result of the rate 
rules have made it exceedingly difficult for them to survive 
financially.
    The Committee believes there is a need to enact reform 
legislation that deregulates the industry. The legislation 
eliminates the Commission rate regulations, and relies instead 
on the development of marketplace forces to ensure that 
consumers have diverse and high quality entertainment and 
information choices at affordable rates.

              v. broadcast communications competitiveness

    Broadcast regulation, particularly restrictions on 
ownership created by Commission rules dating back, in many 
instances, to the 1940's, were promulgated to ensure that the 
American consumer received audio and video programming from a 
variety of sources utilizing a scare resource, the radio 
frequency spectrum. The audio and video marketplace, however, 
has undergone significant changes over the past fifty years and 
the scarcity rationale for government regulation no longer 
applies. Today, there are in excess of 11,000 radio stations 
and over 1,100 commercial television stations, a 30% increase 
in the number of stations from just ten years ago. In addition, 
a fourth network has developed and two new networks are being 
launched. There is also competition from cable systems as 
suppliers of video programming. Cable systems pass more than 95 
percent of all U.S. television households and 63 percent of 
U.S. television households subscribe to cable. In addition, 
other technologies such as wireless cable, low power 
television, backyard dishes, satellite master antenna 
television service (SMATV) and video cassette recorders (VCRs) 
provide consumers with additional program distribution outlets 
that compete with broadcast stations. To date, twenty four 
telephone companies have applied to provide ``video dialtone 
service'' to customers over telephone lines. As a result of 
H.R. 1555, competition from telephone companies providing video 
programming becomes a reality. This explosion of programming 
distribution sources calls for a substantial reform of 
Congressional and Commission oversight of the way the 
broadcasting industry develops and competes.
    Despite the explosion of video distribution technologies 
and subscription-based programming sources, the Committee 
believes free over-the-air broadcasting should remain a vital 
element in the video market. To ensure the industry's ability 
to compete effectively in a multichannel media market, Congress 
and the Commission must reform Federal policy and the current 
regulatory framework to reflect the new marketplace realities. 
To accomplish this goal, the Committee chooses to depart from 
the traditional notions of broadcast regulation and to rely 
more on competitive market forces. In a competitive 
environment, arbitrary limitations on broadcast ownership and 
blanket prohibitions on mergers or joint ventures between 
distribution outlets are no longer necessary.

                                Hearings

    The Committee's Subcommittee on Telecommunications and 
Finance held three days of hearings on H.R. 1555, the 
Communications Act of 1995, and related bills including H.R. 
912, a bill to permit the utility holding companies to provide 
telecommunications services; H.R. 514, a bill to repeal section 
310(b) of the Communications Act of 1934; and H.R. 1556, a bill 
to reform Broadcast Ownership Restrictions. Testimony was 
received from 49 witnesses.
    On Wednesday, May 10, 1995, the Subcommittee received 
testimony from the following individuals: Robert E. Allen, 
Chairman and CEO, AT&T; Corporation; Laurence Harris, Senior 
Vice President for Public Policy, MCI Communications 
Corporation; Charles Houser, CEO Telemanagers Group, Inc.; 
James Cullen, Vice Chairman, Bell Atlantic Corporation; Joe T. 
Ford, Chairman, President and CEO, Alltel Corporation; Brian T. 
Roberts, President, Comcast Corporation; Gerald Levin, Chairman 
and CEO, Time Warner Inc.; Bennett W. Hooks, Jr., President, 
Buford Television, Inc.; H. Brian Thompson, Chairman and CEO, 
LCI International, Inc.; Richard Devlin, Executive Vice 
President and General Counsel, Sprint Corporation; Wayne Perry, 
Vice Chairman, McCaw Cellular Communications, Inc.; Robert A. 
Boaldin, President, Elkhart Telephone Company; Royce J. 
Holland, President and Chief Operating Officer, MFS 
Communications Company; Ed Whitacre, Chairman and CEO, SBC 
Communications, Inc.; Richard H. Brown, Vice Chairman, 
Ameritech Corporation; Robert Annunziata, Chairman, President, 
and CEO, Teleport Communications Group; Thomas V. Shockley, 
III, Executive Vice President, Central and South West 
Corporation; and John Anderson, the Electricity Consumers 
Resource Council.
    On Thursday, May 11, 1995, the Subcommittee received 
testimony from the following individuals: The Honorable Reed 
Hundt, Chairman, Federal Communications Commission (FCC); The 
Honorable Larry Irving, Assistant Secretary for the National 
Telecommunications and Information Administration (NTIA), U.S. 
Department of Commerce; The Honorable Anne K. Bingaman, 
Assistant Attorney General for Antitrust, U.S. Department of 
Justice; Jane Scully, Council Member, City of Falls Church; 
Rochelle Specter, Council Member, City of Baltimore; Bradley 
Stillman, Telecommunications Policy Director, Consumer 
Federation of America; Julie Carroll, Director of Government 
Affairs, The American Council of the Blind; The Honorable Lisa 
Rosenblum, Deputy Chairman, New York Public Service Commission; 
Alfred A. Sonnenstrahl, Executive Director, Telecommunications 
for the Deaf, Inc.; Ronald E. Harrold, Manager for Strategic 
Programs, ARI Network Services, Inc.; Ronald J. Binz, Director, 
Colorado Office of Consumer Counsel; and Barbara J. Easterling, 
Secretary-Treasurer, Communications Workers of America.
    On Friday, May 12, 1995, the Subcommittee received 
testimony from the following individuals: Peter Lund, 
President, CBS Broadcast Group; Dean Goodman, President, Paxon 
Communications Corporation; John Siegel, Senior Vice President, 
Chris Craft Industries, Inc.; Gary Chapman, President, LIN 
Television Corporation; Edward T. Reilly, President, McGraw-
Hill Broadcasting Company; Richard Ferguson, President and CEO, 
New City Communications; Sherwin Grossman, President, Sherjan 
Broadcasting Company, Inc.; Michael Eigner, Executive Vice 
President and General Manager, WPIX-TV; Andy Schwartzman, 
Executive Director, Media Access Project; Jim Synk, Executive 
Director, National Burglar and Fire Alarm Association; Robert 
W. Decherd, Chairman, President and CEO, A.H. Belo Corporation; 
Chris Galvin, President and Chief Operating Officer, Motorola, 
Inc; Paul Weyrich, President and CEO, NET; Gail Thoma 
Patterson, President and CEO, Proxy Message Center; Terry 
Colbert, President and CEO, Communications Central, Inc.; John 
S. Hendricks, Chairman and CEO, Discovery Communications, Inc.; 
Donald Deutsch, Director of Strategic Standards Planning, 
Sybase, Inc.; Steven Katz, Chairman and CEO, Nationwide 
Cellular Service, Inc.; and Tom Gooch, Executive Vice 
President, Storage Technology Corporation.
                        Committee Consideration

    On Wednesday, May 17, 1995, the Subcommittee on 
Telecommunications and Finance met in open session and approved 
H.R. 1555, as amended, for Full Committee consideration by a 
voice vote, a quorum being present. On Wednesday, May 24, 1995, 
and Thursday, May 25, 1995, the Committee met in open session 
to consider H.R. 1555. On May 25, 1995, the Committee ordered 
H.R. 1555 reported to the House, as amended, by a recorded vote 
of 38-5, a quorum being present.

                             Rollcall Votes

    Pursuant to clause 2(l)(2)(B) of rule XI of the Rules of 
the House of Representatives, following are listed the recorded 
votes on the motion to report H.R. 1555 and on amendments 
offered to the measure, including the names of those Members 
voting for and against.

       committee on commerce--104th congress rollcall vote no. 46

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Tauzin re: resale.
    Disposition: Not Agreed To, by a rollcall vote of 11 ayes 
to 35 nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............  ........        X   .........  Mr. Dingell.............        X   ........  .........
Mr. Moorhead............  ........        X   .........  Mr. Waxman..............  ........        X   .........
Mr. Fields..............  ........        X   .........  Mr. Markey..............  ........        X   .........
Mr. Oxley...............  ........        X   .........  Mr. Tauzin..............        X   ........  .........
Mr. Bilirakis...........  ........        X   .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............  ........        X   .........  Mr. Hall................  ........        X   .........
Mr. Barton..............  ........        X   .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............  ........        X   .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............  ........        X   .........  Mr. Manton..............  ........        X   .........
Mr. Stearns.............  ........        X   .........  Mr. Towns...............  ........        X   .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............  ........  ........  .........
Mr. Gillmor.............  ........        X   .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................  ........        X   .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............        X   ........  .........
Mr. Greenwood...........  ........        X   .........  Mr. Gordon..............  ........        X   .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................  ........        X   .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................        X   ........  .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............  ........        X   .........  Mr. Klink...............  ........        X   .........
Mr. Whitfield...........  ........        X   .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       committee on commerce--104th congress rollcall vote no. 47

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Crapo re: affordable voice 
grade service.
    Disposition: Agreed to, by a rollcall vote of 30 ayes to 13 
nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............  ........  ........  .........  Mr. Dingell.............  ........        X   .........
Mr. Moorhead............        X   ........  .........  Mr. Waxman..............  ........        X   .........
Mr. Fields..............        X   ........  .........  Mr. Markey..............  ........        X   .........
Mr. Oxley...............        X   ........  .........  Mr. Tauzin..............  ........  ........  .........
Mr. Bilirakis...........        X   ........  .........  Mr. Wyden...............  ........        X   .........
Mr. Schaefer............        X   ........  .........  Mr. Hall................        X   ........  .........
Mr. Barton..............        X   ........  .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............        X   ........  .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............        X   ........  .........  Mr. Manton..............  ........        X   .........
Mr. Stearns.............        X   ........  .........  Mr. Towns...............  ........        X   .........
Mr. Paxon...............        X   ........  .........  Mr. Studds..............  ........        X   .........
Mr. Gillmor.............        X   ........  .........  Mr. Pallone.............  ........        X   .........
Mr. Klug................        X   ........  .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............        X   ........  .........  Mrs. Lincoln............        X   ........  .........
Mr. Greenwood...........  ........  ........  .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............        X   ........  .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................        X   ........  .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................        X   ........  .........  Mr. Rush................  ........        X   .........
Mr. Burr................        X   ........  .........  Ms. Eshoo...............  ........        X   .........
Mr. Bilbray.............        X   ........  .........  Mr. Klink...............  ........        X   .........
Mr. Whitfield...........  ........  ........  .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............        X   ........  .........  ........................  ........  ........  .........
Mr. Frisa...............        X   ........  .........  ........................  ........  ........  .........
Mr. Norwood.............        X   ........  .........  ........................  ........  ........  .........
Mr. White...............        X   ........  .........  ........................  ........  ........  .........
Mr. Coburn..............        X   ........  .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

                 COMMITTEE ON COMMERCE--104TH CONGRESS

                          ROLLCALL VOTE NO. 48

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Bryant re: separate subsidiary.
    Disposition: Not Agreed To, by a rollcall vote of 22 ayes 
to 22 nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............        X   ........  .........   Mr. Dingell............  ........        X   .........
Mr. Moorhead............  ........        X   .........   Mr. Waxman.............        X   ........  .........
Mr. Fields..............        X   ........  .........   Mr. Markey.............        X   ........  .........
Mr. Oxley...............  ........        X   .........   Mr. Tauzin.............  ........        X   .........
Mr. Bilirakis...........        X   ........  .........   Mr. Wyden..............        X   ........  .........
Mr. Schaefer............        X   ........  .........   Mr. Hall...............        X   ........  .........
Mr. Barton..............  ........        X   .........   Mr. Bryant.............        X   ........  .........
Mr. Hastert.............  ........  ........  .........   Mr. Boucher............  ........        X   .........
Mr. Upton...............  ........        X   .........   Mr. Manton.............        X   ........  .........
Mr. Stearns.............        X   ........  .........   Mr. Towns..............        X   ........  .........
Mr. Paxon...............  ........        X   .........   Mr. Studds.............  ........  ........  .........
Mr. Gillmor.............        X   ........  .........   Mr. Pallone............        X   ........  .........
Mr. Klug................  ........        X   .........   Mr. Brown..............  ........        X   .........
Mr. Franks..............  ........        X   .........   Mrs. Lincoln...........        X   ........  .........
Mr. Greenwood...........  ........  ........  .........   Mr. Gordon.............        X   ........  .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................        X   ........  .........   Mr. Deutsch............  ........        X   .........
Mr. Deal................  ........        X   .........   Mr. Rush...............        X   ........  .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............        X   ........  .........   Mr. Klink..............        X   ........  .........
Mr. Whitfield...........  ........        X   .........   Mr. Stupak.............  ........        X   .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       committee on commerce--104th congress rollcall vote no. 49

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Towns re: interLATA alarm 
services.
    Disposition: Not Agreed To, by a rollcall vote 9 ayes to 30 
nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............        X   ........  .........  Mr. Dingell.............  ........  ........  .........
Mr. Moorhead............  ........  ........  .........  Mr. Waxman..............  ........        X   .........
Mr. Fields..............  ........        X   .........  Mr. Markey..............  ........        X   .........
Mr. Oxley...............  ........        X   .........  Mr. Tauzin..............  ........        X   .........
Mr. Bilirakis...........  ........        X   .........  Mr. Wyden...............  ........        X   .........
Mr. Schaefer............  ........        X   .........  Mr. Hall................        X   ........  .........
Mr. Barton..............  ........  ........  .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............  ........        X   .........  Mr. Boucher.............  ........        X   .........
Mr. Upton...............  ........        X   .........  Mr. Manton..............        X   ........  .........
Mr. Stearns.............        X   ........  .........  Mr. Towns...............        X   ........  .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............        X   ........  .........
Mr. Gillmor.............  ........  ........  .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................        X   ........  .........  Mr. Brown...............  ........        X   .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............  ........  ........  .........
Mr. Greenwood...........  ........  ........  .........  Mr. Gordon..............  ........        X   .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............  ........        X   .........
Mr. Cox.................  ........  ........  .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................  ........        X   .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............  ........        X   .........
Mr. Bilbray.............  ........  ........  .........  Mr. Klink...............        X   ........  .........
Mr. Whitfield...........  ........        X   .........  Mr. Stupak..............  ........        X   .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 50

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Bryant re: separate subsidiary.
    Disposition: Agreed to, by a rollcall vote of 29 ayes to 15 
nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............        X   ........  .........  Mr. Dingell.............  ........  ........  .........
Mr. Moorhead............  ........        X   .........  Mr. Waxman..............        X   ........  .........
Mr. Fields..............        X   ........  .........  Mr. Markey..............        X   ........  .........
Mr. Oxley...............        X   ........  .........  Mr. Tauzin..............  ........        X   .........
Mr. Bilirakis...........        X   ........  .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............        X   ........  .........  Mr. Hall................        X   ........  .........
Mr. Barton..............  ........        X   .........  Mr. Bryant..............        X   ........  .........
Mr. Hastert.............  ........  ........  .........  Mr. Boucher.............  ........        X   .........
Mr. Upton...............        X   ........  .........  Mr. Manton..............        X   ........  .........
Mr. Stearns.............        X   ........  .........  Mr. Towns...............        X   ........  .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............  ........        X   .........
Mr. Gillmor.............        X   ........  .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................        X   ........  .........  Mr. Brown...............  ........        X   .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............  ........  ........  .........
Mr. Greenwood...........  ........        X   .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............        X   ........  .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................  ........        X   .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................        X   ........  .........
Mr. Burr................        X   ........  .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............        X   ........  .........  Mr. Klink...............        X   ........  .........
Mr. Whitfield...........        X   ........  .........  Mr. Stupak..............  ........        X   .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............        X   ........  .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............        X   ........  .........  ........................  ........  ........  .........
Mr. Coburn..............        X   ........  .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 51

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Markey re: cable regulation.
    Disposition: Not Agreed To, by a rollcall vote of 14 ayes 
to 32 nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............  ........        X   .........  Mr. Dingell.............        X   ........  .........
Mr. Moorhead............  ........        X   .........  Mr. Waxman..............        X   ........  .........
Mr. Fields..............  ........        X   .........  Mr. Markey..............        X   ........  .........
Mr. Oxley...............  ........        X   .........  Mr. Tauzin..............  ........        X   .........
Mr. Bilirakis...........  ........        X   .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............  ........        X   .........  Mr. Hall................  ........        X   .........
Mr. Barton..............  ........        X   .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............  ........        X   .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............  ........        X   .........  Mr. Manton..............  ........        X   .........
Mr. Stearns.............  ........        X   .........  Mr. Towns...............  ........        X   .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............        X   ........  .........
Mr. Gillmor.............  ........        X   .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................  ........        X   .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............        X   ........  .........
Mr. Greenwood...........  ........        X   .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................  ........  ........  .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................        X   ........  .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............  ........        X   .........
Mr. Bilbray.............  ........        X   .........  Mr. Klink...............        X   ........  .........
Mr. Whitfield...........  ........        X   .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 52

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment to the Stearns Amendment by Mr. Markey 
re: limitations on Commission rulemaking authority.
    Disposition: Not Agreed to, by a rollcall vote of 21 ayes 
to 26 nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............  ........        X   .........  Mr. Dingell.............        X   ........  .........
Mr. Moorhead............  ........        X   .........  Mr. Waxman..............        X   ........  .........
Mr. Fields..............  ........        X   .........  Mr. Markey..............        X   ........  .........
Mr. Oxley...............  ........        X   .........  Mr. Tauzin..............        X   ........  .........
Mr. Bilirakis...........  ........        X   .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............  ........        X   .........  Mr. Hall................        X   ........  .........
Mr. Barton..............  ........        X   .........  Mr. Bryant..............        X   ........  .........
Mr. Hastert.............  ........        X   .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............  ........        X   .........  Mr. Manton..............  ........        X   .........
Mr. Stearns.............  ........        X   .........  Mr. Towns...............        X   ........  .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............        X   ........  .........
Mr. Gillmor.............  ........        X   .........  Mr. Pallone.............  ........        X   .........
Mr. Klug................        X   ........  .........  Mr. Brown...............  ........        X   .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............        X   ........  .........
Mr. Greenwood...........  ........        X   .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............        X   ........  .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................  ........        X   .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................        X   ........  .........
Mr. Burr................        X   ........  .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............  ........        X   .........  Mr. Klink...............        X   ........  .........
Mr. Whitfield...........        X   ........  .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

                 COMMITTEE ON COMMERCE--104TH CONGRESS

                          ROLLCALL VOTE NO. 53

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment to the Stearns Amendment by Mr. Markey 
re: local cross-media ownership limits, children's programming, 
and signal blocking.
    Disposition: Not Agreed To, by a rollcall vote of 15 ayes 
to 32 nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............  ........        X   .........   Mr. Dingell............        X   ........  .........
Mr. Moorhead............  ........        X   .........  Mr. Waxman..............        X   ........  .........
Mr. Fields..............  ........        X   .........  Mr. Markey..............        X   ........  .........
Mr. Oxley...............  ........        X   .........  Mr. Tauzin..............  ........        X   .........
Mr. Bilirakis...........  ........        X   .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............  ........        X   .........  Mr. Hall................        X   ........  .........
Mr. Barton..............  ........        X   .........  Mr. Bryant..............        X   ........  .........
Mr. Hastert.............  ........        X   .........  Mr. Boucher.............  ........        X   .........
Mr. Upton...............  ........        X   .........  Mr. Manton..............  ........        X   .........
Mr. Stearns.............  ........        X   .........  Mr. Towns...............        X   ........  .........
Mr. Paxon...............  ........        X   .........  Mr. Studds..............        X   ........  .........
Mr. Gillmor.............  ........        X   .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................  ........        X   .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............  ........        X   .........  Mrs. Lincoln............  ........        X   .........
Mr. Greenwood...........  ........        X   .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................  ........        X   .........  Mr. Deutsch.............  ........        X   .........
Mr. Deal................  ........        X   .........  Mr. Rush................        X   ........  .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............  ........        X   .........  Mr. Klink...............        X   ........  .........
Mr. Whitfield...........  ........        X   .........  Mr. Stupak..............  ........        X   .........
Mr. Ganske..............  ........        X   .........  ........................  ........  ........  .........
Mr. Frisa...............  ........        X   .........  ........................  ........  ........  .........
Mr. Norwood.............  ........        X   .........  ........................  ........  ........  .........
Mr. White...............  ........        X   .........  ........................  ........  ........  .........
Mr. Coburn..............  ........        X   .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE No. 54

    Bill: H.R. 1555, Communications Act of 1995.
    Amendment: Amendment by Mr. Stearns re: broadcast 
ownership.
    Disposition: Agreed To, by a rollcall vote of 34 ayes to 13 
nays.

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............        X   ........  .........  Mr. Dingell.............        X   ........  .........
Mr. Moorhead............        X   ........  .........  Mr. Waxman..............  ........        X   .........
Mr. Fields..............        X   ........  .........  Mr. Markey..............  ........        X   .........
Mr. Oxley...............        X   ........  .........  Mr. Tauzin..............        X   ........  .........
Mr. Bilirakis...........        X   ........  .........  Mr. Wyden...............  ........        X   .........
Mr. Schaefer............        X   ........  .........  Mr. Hall................        X   ........  .........
Mr. Barton..............        X   ........  .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............        X   ........  .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............        X   ........  .........  Mr. Manton..............        X   ........  .........
Mr. Stearns.............        X   ........  .........  Mr. Towns...............        X   ........  .........
Mr. Paxon...............        X   ........  .........  Mr. Studds..............  ........        X   .........
Mr. Gillmor.............        X   ........  .........  Mr. Pallone.............        X   ........  .........
Mr. Klug................        X   ........  .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............        X   ........  .........  Mrs. Lincoln............  ........        X   .........
Mr. Greenwood...........        X   ........  .........  Mr. Gordon..............  ........        X   .........
Mr. Crapo...............  ........        X   .........  Ms. Furse...............  ........        X   .........
Mr. Cox.................        X   ........  .........  Mr. Deutsch.............        X   ........  .........
Mr. Deal................        X   ........  .........  Mr. Rush................        X   ........  .........
Mr. Burr................  ........        X   .........  Ms. Eshoo...............  ........        X   .........
Mr. Bilbray.............        X   ........  .........  Mr. Klink...............  ........        X   .........
Mr. Whitfield...........  ........        X   .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............        X   ........  .........  ........................  ........  ........  .........
Mr. Frisa...............        X   ........  .........  ........................  ........  ........  .........
Mr. Norwood.............        X   ........  .........  ........................  ........  ........  .........
Mr. White...............        X   ........  .........  ........................  ........  ........  .........
Mr. Coburn..............        X   ........  .........  ........................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

       COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 55

    Bill: H.R. 1555, Communications Act of 1995
    Motion: Motion by Mr. Bliley to order H.R. 1555 reported to 
the House, as amended
    Disposition: Agreed To, by a rollcall vote of 38 ayes to 5 
nays

----------------------------------------------------------------------------------------------------------------
     Representative          Aye       Nay     Present        Representative          Aye       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Bliley..............        X   ........  .........  Mr. Dingell.............        X   ........  .........
Mr. Moorhead............        X   ........  .........  Mr. Waxman..............  ........  ........  .........
Mr. Fields..............        X   ........  .........  Mr. Markey..............  ........        X   .........
Mr. Oxley...............        X   ........  .........  Mr. Tauzin..............        X   ........  .........
Mr. Bilirakis...........        X   ........  .........  Mr. Wyden...............        X   ........  .........
Mr. Schaefer............        X   ........  .........  Mr. Hall................        X   ........  .........
Mr. Barton..............        X   ........  .........  Mr. Bryant..............  ........        X   .........
Mr. Hastert.............        X   ........  .........  Mr. Boucher.............        X   ........  .........
Mr. Upton...............        X   ........  .........  Mr. Manton..............        X   ........  .........
Mr. Stearns.............        X   ........  .........  Mr. Towns...............  ........  ........  .........
Mr. Paxon...............        X   ........  .........  Mr. Studds..............  ........        X   .........
Mr. Gillmor.............        X   ........  .........  Mr. Pallone.............  ........        X   .........
Mr. Klug................        X   ........  .........  Mr. Brown...............        X   ........  .........
Mr. Franks..............        X   ........  .........  Mrs. Lincoln............        X   ........  .........
Mr. Greenwood...........        X   ........  .........  Mr. Gordon..............        X   ........  .........
Mr. Crapo...............        X   ........  .........  Ms. Furse...............        X   ........  .........
Mr. Cox.................        X   ........  .........  Mr. Deutsch.............        X   ........  .........
Mr. Deal................        X   ........  .........  Mr. Rush................        X   ........  .........
Mr. Burr................        X   ........  .........  Ms. Eshoo...............        X   ........  .........
Mr. Bilbray.............  ........  ........  .........  Mr. Klink...............  ........        X   .........
Mr. Whitfield...........        X   ........  .........  Mr. Stupak..............        X   ........  .........
Mr. Ganske..............        X   ........  .........  ........................  ........  ........           
Mr. Frisa...............        X   ........  .........  ........................  ........  ........           
Mr. Norwood.............  ........  ........  .........  ........................  ........  ........           
Mr. White...............        X   ........  .........  ........................  ........  ........           
Mr. Coburn..............        X   ........  .........  ........................  ........  ........           
----------------------------------------------------------------------------------------------------------------

           committee on commerce--104th congress voice votes

    Amendment: Amendment by Mr. Barton re: pay phones.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Boucher re: small carrier 
exemption.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. White re: interconnectivity.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Tauzin re: advanced network 
capability.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Burr re: CMRS joint marketing.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Boucher re: procurement.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Fields re: joint marketing.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Wyden re: State preemption/
telemedicine.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Boucher re: removal of 
unnecessary regulation.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Bryant re: private right of 
action.
    Disposition: Not Agreed To, by a voice vote.
    Amendment: Amendment Mr. Gordon re: telemessaging joint 
marketing prohibition.
    Disposition: Agreed To, by a voice vote.
    Amendment: En Bloc Amendment by Mr. Fields re: technical 
amendments.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Klink re: Universal Service 
Board sunset.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Boucher re: good faith 
negotiation.
    Disposition: Agreed To, by a voice vote.
    Amendment: En Bloc Amendment by Mr. Bliley re: interim 
interLATA entry, dialing parity and out of region.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment to the Bliley En Bloc Amendment by Mr. 
Klug re: permit States to enforce intraLATA requirements 
adopted or proposed prior to the date of enactment.
    Disposition: Not Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Markey re: appropriations 
authorization.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Stupak re: removal of barriers 
to entry.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Crapo re: video platform.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Ms. Eshoo re: cable equipment 
compatibility.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Markey re: uniform rate 
structure.
    Disposition: Not Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Klink re: low power television.
    Disposition: Not Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Oxley re: foreign investment 
and ownership.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Barton re: commercial mobile 
services interconnection.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Stupak re: stations without 
individual licenses.
    Disposition: Withdrawn, by unanimous consent.
    Amendment: Amendment by Mr. Barton, as amended by unanimous 
consent, re: small business complaint procedure.
    Disposition: Agreed To, by a voice vote.
    Amendment: Amendment by Mr. Studds re: line-standers.
    Disposition: Ruled Non-Germane.
                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Subcommittee on 
Telecommunications and Finance and the Subcommittee on 
Commerce, Trade and Hazardous Materials held oversight and 
legislative hearings and made findings that are reflected in 
this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

                      Advisory Committee Statement

    No advisory committees with the meaning of Section 5(b) of 
the Federal Advisory Committee Act are created by this 
legislation.

                        Committee Cost Estimate

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the Committee adopts as its own 
the cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to Section 403 of the Congressional 
Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
403 of the Congressional Budget Act of 1974:

                                      U.S. Congress
                               Congressional Budget Office,
                                     Washington, DC, July 19, 1995.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1555, the 
Communications Act of 1995.
    Enactment of H.R. 1555 would affect direct spending and 
receipts. Therefore, pay-as-you-go procedures would apply to 
the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                           June E. O'Neill.
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    1. Bill Number: H.R. 1555.
    2. Bill Title: Communications Act of 1995.
    3. Bill Status: As ordered reported by the House Committee 
on Commerce on May 25, 1995.
    4. Bill Purpose: H.R. 1555 would remove many restrictions 
on competition in telecommunications market.
    Title I would require local telephone companies to 
negotiate to provide for service connections with any 
requesting telecommunications carrier, and would establish 
procedures for such connections. It would forbid states and 
local governments from preventing any entity from providing 
telecommunications services. Title I also would permit regional 
Bell operating companies to compete with long-distance 
carriers, under certain circumstances. It would require the 
Federal Communications commission (FCC) to convene a federal-
state joint board to make recommendations on the preservation 
of universal telecommunications services at affordable rates to 
all Americans. The title states several principles on which the 
joint board would be required to base its recommendations 
including the principles that services offered should be 
reasonably comparable between urban and rural areas, that rates 
should be just and reasonable, and that all providers of 
telecommunications services should make equitable and 
nondiscriminatory contributions to universal service. The FCC 
would be required to complete action on the joint board's 
recommendations within one year after the bill's enactment.
    Title I would permit telecommunications companies to use 
flexible pricing of services, abolish rate-of-return-
regulation, and eliminate pricing regulation under certain 
circumstances. Title I also would permit the Bell operating 
companies to manufacture and provide telecommunications 
equipment, engage in electronic publishing through affiliates 
and joint ventures, and provide alarm monitoring and 
telemessaging services under certain conditions. It would 
restrict the conditions under which a caller to a toll-free 
number could be charged for the information conveyed during the 
call. Finally, Title I would authorize appropriations to the 
FCC to implement the bill, and would permit the FCC to adjust 
certain fees to offset those appropriations.
    Title II would permit telephone companies to offer cable 
television services under certain circumstances, and would 
establish procedures under which those companies could enter 
the cable television market. It would prohibit telephone 
companies from acquiring cable systems within their telephone 
service areas, with certain exceptions. Title II also would 
deregulate cable companies that the FCC finds are subject to 
effective competition, permit cable operators to make certain 
rate changes, restrict the FCC's authority to review rate 
increases, and make other changes to regulations governing 
cable television.
    Title III would prescribe procedures for issuing licenses 
for advanced television (ATV). It also would provide for 
transition from the current standard of television broadcasting 
to that of ATV, and for the return and reassignment by auction 
of part of the radio spectrum currently allocated to television 
broadcasting. It would require the FCC to adopt regulations 
that would permit broadcast licensees to offer ancillary or 
supplemental services using frequencies allocated to 
broadcasting, if the FCC determines that those activities are 
consistent with public interest. It would require the FCC to 
collect a fee from licensees offering ancillary or supplemental 
services, under certain circumstances, and would permit the FCC 
to retain amounts necessary to pay for regulating ATV services. 
Title III would reduce, and in some cases remove, restrictions 
on the ownership of television stations and other media of mass 
communications.
    Title IV would provide that the bill would supersede the 
Modification of Final Judgment (the decree entered on August 
24, 1982, in United States v. Western Electric, Civil Action 
No. 82-0192, United States District Court, District of 
Columbia). It would exempt providers of direct-to-home 
satellite services from taxation by local jurisdictions. Title 
V would define various terms and make conforming amendments. 
Title VI would require the FCC to establish a procedure to 
handle complaints from small businesses. The bill also would 
require the FCC to perform various studies, prepare reports, 
and promulgate a variety of regulations.
    5. Estimated cost to the Federal Government: The largest 
budgetary impact of this bill would result from the provisions 
dealing with universal service. Current standards for universal 
telecommunications service are implemented through a system of 
external subsidies (those entailing payments between companies) 
and internal subsidies (where companies charge low-cost and 
high-cost customers roughly the same rates). CBO estimates that 
telecommunications firms would have to pay an additional $7 
billion in external subsidies over the next five years in order 
to implement the universal service provisions of H.R. 1555 and 
that the amount of internal subsidies would fall by a somewhat 
greater amount. CBO believes that the external subsidy payments 
should be included as governmental receipts in the federal 
budget. The net annual impact of such payments on the federal 
deficit would be zero because outlays from a universal service 
fund would be equal to the receipts.
    In addition, CBO estimates that enacting H.R. 1555 would 
increase spending requirements for the FCC by about $15 million 
over the 1996-1997 period. Because the bill would permit the 
FCC to increase various fees to offset the costs of 
implementing its provisions, the increased costs in 1996 and 
1997 would be offset by collections of those fees, resulting in 
no net budgetary impact. CBO also estimates that the FCC would 
incur additional costs after 1997 for enforcing new regulations 
issued in 1996 and 1997. CBO estimates that reductions in the 
FCC's regulatory workload pursuant to the enactment of H.R. 
1555 would result in savings sufficiently large to offset those 
costs. The estimated budgetary impacts are summarized in the 
following table.

------------------------------------------------------------------------
                               1996     1997     1998     1999     2000 
------------------------------------------------------------------------
    SPENDING SUBJECT TO                                                 
   APPROPRIATIONS ACTION                                                
Estimated authorization                                                 
 level \1\.................       10        5        0        0        0
Estimated offsetting                                                    
 collections...............      -10       -5        0        0        0
Net estimated budged                                                    
 authority.................        0        0        0        0        0
      Estimated outlays....        0        0        0        0        0
          REVENUES                                                      
                                                                        
Existing external subsidy                                               
 collections under current                                              
 law \2\...................    4,300    4,300    4,300    4,300    4,400
Proposed changes in                                                     
 external subsidy                                                       
 collections...............        0      600    1,400    2,200    2,900
      Estimated revenues                                                
       under H.R. 1555.....    4,300    4,900    5,700    6,500    7,300
      DIRECT SPENDING                                                   
                                                                        
Existing external subsidy                                               
 payment under current law                                              
 \2\.......................  .......  .......  .......  .......  .......
Estimated obligations......    4,300    4,300    4,300    4,300    4,400
Estimated disbursements....    4,300    4,300    4,300    4,300    4,400
Proposed changes in                                                     
 external subsidy payments                                              
 \3\.......................  .......  .......  .......  .......  .......
Estimated budget authority.        0      600    1,400    2,200    2,900
Estimated outlays..........        0      600    1,400    2,200    2,900
Total external subsidy:                                                 
    Payments under H.R.                                                 
     1555..................  .......  .......  .......  .......  .......
    Estimated budget                                                    
     authority.............    4,300    4,900    5,700    6,500    7,300
    Estimated outlays......    4,300    4,900    5,700    6,500    7,300
------------------------------------------------------------------------
\1\ Appropriations for the FCC are $69 million in fiscal year 1995. No  
  funding has yet been authorized for fiscal year 1996 or subsequent    
  years.                                                                
\2\ These amounts are not currently shown in the federal budget.        
  Estimated collections and disbursements of external subsidies in      
  fiscal year 1995 are $4,200 million.                                  
\3\ CBO estimates that over the 1996-2000 period, H.R. 1555 would reduce
  internal subsidy payments by a total of $9 billion to $10 billion.    

    The costs of this bill fall within budget function 370.
    6. Basis of Estimate: This estimate assumes that H.R. 1555 
will be enacted by the end of fiscal year 1995, and that the 
necessary funds will be appropriated each year.

                            Costs of the FCC

    H.R. 1555 would require the FCC to promulgate and enforce 
numerous regulations and to prepare various studies and 
reports. Based on information from the FCC, CBO estimates that 
implementing the provisions of H.R. 1555 would cost the 
commission $105 million over the 1996-2000 period, but that 
those increased costs would be offset by a combination of fees 
and reductions in the FCC regulatory costs. New costs in the 
first year would be divided between personnel costs associated 
with rulemakings and studies and overhead costs associated with 
acquiring necessary space, furnishings, hardware, and software. 
New costs in later years are primarily for personnel to enforce 
the new regulations. The FCC would realize savings, however, by 
transferring personnel and overhead costs from activities that 
are no longer needed because of the bill to the activities 
required by the bill. CBO estimates that these savings would 
total about $90 million over the 1996-2000 period. The bill 
would permit the FCC to increase various fees to pay for 
increases in costs resulting from the bill's implementation, so 
there would be no net increase in discretionary spending 
resulting from the bill's enactment.

                           Universal Service

    Universal Service Under Current Law.--Current FCC 
regulations establish standards for universal service, which 
are implemented through various types of subsidies to local 
telephone companies from other local telephone and long 
distance carriers. The external subsidies (those entailing 
payments between companies) will total approximately $4.3 
billion in 1996 and $4.4 billion by 2000. These subsidies aid 
telephone companies facing higher than average costs, aid low-
income customers by providing some services at no cost to those 
customers, and help pay for special services for the deaf. 
Telephone companies also internal subsidize their high-cost 
customers by charging high- and low-cost customers roughly the 
same rates, and by setting those rates high enough that the 
excess amount paid by low-cost customers makes up the loss for 
providing service to the high-cost customers. CBO estimates 
that this rate averaging will total approximately $4.9 billion 
in 1996 and $5.1 billion by 2000. None of these receipts and 
payments currently appear in the federal budget.
    Universal Service Under H.R. 1555.--The primary purpose of 
H.R. 1555 is to increase competition in telecommunications 
markets and to provide for an orderly transition from a 
regulated market to a competitive and deregulated market. The 
mechanisms currently providing for universal service are 
uniquely suited for a regulated market where limits on 
competition guarantee economic returns that are sufficient to 
attract private investment and to allow firms to subsidize 
their own high-cost consumers. The market environment that H.R. 
1555 would create would make such internal subsidies much less 
viable because deregulation would remove the near-guaranteed 
returns allowed in a regulated market, and with them the 
ability of the regulated firm to subsidize high-cost customers. 
Thus, CBO expects that over time enactment of H.R. 1555 would 
lead to the disappearance of internal subsidies (those conveyed 
within companies, between classes of users). In its place, we 
would expect a new system of transfers consisting almost 
entirely of external subsidies that would appear in the federal 
budget.
    CBO expects that the standard for universal service under 
H.R. 1555 would be similar to the existing one. Hence, as the 
current system of internal and external subsidies is replaced 
by a system consisting primarily of external subsidies, the 
total amount of subsidies collected from low-cost customers and 
passed on to high-cost customers would not change 
significantly. Over time, CBO expects that the operating costs 
of telephone companies would tend to fall as a result of 
competitive pressures and that the total amount of subsidies 
necessary would decline.
    Under H.R. 1555, the FCC would establish a definition of 
universal service, based on the recommendations of a federal-
state joint board. The board could revisit that definition from 
time to time over its five-year life. Under the principles 
enunciated in H.R. 1555, all telecommunications carriers would 
participate in the provision and advancement of universal 
service. In order to implement the goals of universal service 
in a competitive telecommunications market, the FCC would 
likely take a variety of actions to ensure the provision of 
universal telecommunications service, including requiring 
contributions by companies serving relatively few high-cost 
customers. Based on information from a variety of industry and 
regulatory sources, CBO believes that most if not all of the 
contributions by companies not serving a large number of high-
cost customers would be in the form of cash payments, and that 
these financial payments would be distributed, either by the 
FCC or by its designee, as a subsidy to those companies serving 
a large number of high-cost customers.
    H.R. 1555 would require that the FCC begin implementing the 
initial definition of universal service within one year of 
enactment. CBO assumes that, for the first five-year period 
after the bill's enactment, universal service would consist of 
basic touchtone voice service with long distance access, 911 
emergency service, 411 information service, operator assistance 
services, directory listing, and telecommunications relay 
services for the deaf. We expect that advanced 
telecommunications services probably would not be included at 
this time, but could be included in the future. CBO assumes 
that the initial implementation of universal service would be 
phased in over a five-year period.
    Budgetary Impact of the New Universal Service 
Requirement.--CBO assumes that the new system of subsidies 
would begin in 1997, and that the phasing in of the new system 
and the phasing out of the old system occur over a five-year 
period. As a result, CBO estimates that collections to finance 
subsidy payments between companies would increase by about $600 
million in fiscal year 1997 and by a total of $7 billion over 
the 1997-2000 period. Outlays would grow by the same amounts, 
resulting in no net change in the federal deficit.
    CBO believes that the cash flows from the external 
subsidies should appear on budget as governmental receipts and 
direct spending because the payments between companies are made 
as a result of the exercise of the sovereign power of the 
federal government, not as a normal business transaction 
between companies. The payments are a federally-mandated 
condition for doing business with no relationship between the 
amounts paid and the level of benefits received. Even if the 
funds are collected and disbursed by a nonfederal entity, the 
amounts collected and paid out would be determined by a federal 
agency under procedures specified in federal law. A nonfederal 
entity handling these transactions would thus be acting as an 
agent of the federal government.
    The current exclusion of subsidy transfers from the budget 
may be attributable, at least in part, to the fact that those 
transfers are the result of judicial and regulatory actions and 
were not subject to the budgetary scrutiny usually applied to 
legislation. If H.R. 1555 were enacted, the Administration 
would determine whether subsidy transfers are included as 
budget receipts and outlays. CBO's review of the bill, however, 
leads us to conclude that consistency with current budget 
concepts requires their inclusion.
    Other Budgetary Effects.--A number of other provisions 
would have a minor impact on receipts and direct spending. The 
FCC would be permitted to levy fines for violations of certain 
provisions of the bill. CBO estimates that receipts from fines 
would not be significant.
    Finally, the bill would permit the FCC to charge a fee to 
television broadcasters who choose to use their broadcast 
spectrum to provide certain additional types of services. CBO 
does not expect that broadcasters would receive a significant 
amount of income over the next five years from diverting 
spectrum from current uses to other commercial services. 
Therefore, we estimate that any income to the government as a 
result of imposing a royalty or fee would not be significant.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. The provisions dealing with universal 
service, royalties charged to television broadcasters, and 
fines and penalties would affect direct spending and receipts. 
The following table summarizes the estimated pay-as-you-go 
impact of H.R. 1555.

------------------------------------------------------------------------
                                        1995     1996     1997     1988 
------------------------------------------------------------------------
Change in outlays...................        0        0      600    1,400
Change in receipts..................        0        0      600    1,400
------------------------------------------------------------------------

    8. Estimated cost to state and local governments: 
Implementing the provisions of H.R. 1555 would result in 
increased costs to most states. The bill would require states 
to promulgate regulations, direct various audits of Bell 
companies, and participate in various joint federal-state 
boards. Based on information from the National Association of 
Regulatory Utility Commissioners, CBO estimates that states 
would spend an average of $1.5 million per state over the next 
two years, and approximately $1 million per state over the 
period 1998-2000, for a total estimated cost of about $125 
million to all states over the five-year period. CBO expects 
that implementation of H.R. 1555 would result in some costs to 
local governments to promulgate various regulations and to 
adapt their laws to the changes made by H.R. 1555. The extent 
of those costs will depend on the specific details of 
regulations promulgated by the FCC. As a result, local 
governments have been unable to provide CBO with any clear 
indication of the magnitude of the potential costs, and CBO 
cannot estimate these amounts.
    The bill also would require that state and local 
governments not discriminate between various telecommunications 
services when assessing franchise and other fees. If these 
bodies were to decrease the rates charged for the different 
services to that of the lowest fee, they could lose substantial 
amounts of revenues. The bill also would permit state and local 
governments to charge certain new fees that could offset some 
or all of any lost revenues. CBO expects that state and local 
governments would adjust the rates they charge for the various 
services so that the total amount collected by each state would 
not diminish significantly, and that state and local 
governments would further adjust rates to make up at least some 
of the costs incurred in implementing the requirements of the 
bill.
    H.R. 1555 would prohibit local governments from imposing 
taxes on direct broadcast satellite services under certain 
circumstances. CBO does not believe that this provision would 
have a significant effect on the revenues of state and local 
governments.
    9. Estimate comparison: None.
    10. Previous CBO estimate: On May 5, 1995, CBO prepared a 
cost estimate for S. 652, the Telecommunications Competition 
and Deregulation Act of 1995, as reported by the Senate 
Committee on Commerce, Science, and Transportation on March 30, 
1995. That estimate stated that implementation of S. 652 would 
require approximately $62 million in appropriated spending over 
the 1996-2000 period. We now believe that our estimate of FCC 
administrative costs resulting from S. 652 was too high, and 
that costs to the FCC of implementing S. 652 would be similar 
to those estimated for this bill. The bills differ, however, in 
that H.R. 1555 would permit the FCC to collect fees to cover 
those costs.
    S. 652 would require that universal service be extended to 
every household, whereas H.R. 1555 has no such requirements. 
While subsidy revenues and payments under S. 652 would probably 
be slightly higher than those estimated for H.R. 1555 over the 
next five years, the amounts would not differ significantly.
    11. Estimate prepared by: John Webb and Melissa Sampson.
    12. Estimate approved by: Robert A. Sunshine, for Paul N. 
Van de Water, Assistant Director for Budget Analysis.
                     Inflationary Impact Statement
    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the bill 
would result in decreased rates for both telephone and cable 
services, and therefore would not have an inflationary impact.
             Section-by-Section Analysis of the Legislation
Section 1. Short title
    Section 1 designates the short title as the 
``Communications Act of 1995.''
     TITLE I--DEVELOPMENT OF COMPETITIVE TELECOMMUNICATIONS MARKETS
Section 101. Establishment of part II of title II
    Section 241 restates the obligation contained in section 
201(a) of the Communications Act of 1934 on all common carriers 
to interconnect with the facilities and equipment of other 
providers of telecommunications services and information 
services. The interconnection requirement in section 201(a) is 
a cornerstone principle of common carriage, and it is restated 
here in light of its importance and relevance as the local 
telephone industry undergoes the transition to a competitive 
market.
    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. LECs are required to 
satisfy reasonable requests for equal access and 
interconnection to their networks. A request is deemed not 
reasonable unless the provider includes in it a proposed plan 
and a reasonable schedule for providing a service that 
implements the requested access and interconnection. This 
requirement will ensure that the request for access and 
interconnection is bona fide. Under Section 242(a)(2), LECs 
have the duty to offer unbundled services, elements, features, 
functions, and capabilities whenever technically feasible. 
During the Committee's consideration of the bill, the Committee 
deleted a requirement that unbundling be done on an 
``economically reasonable'' basis out of concern that this 
requirement could result in certain unbundled services, 
elements, features, functions, and capabilities not being made 
available. The Committee clarified, however, in section 
242(b)(4)(C), that the beneficiary of unbundling must pay its 
cost.
    Section 242(a)(3) imposes the duty to offer resale at 
economically feasible rates to the reseller. This duty is 
important in order for non-facilities-based carriers to have an 
opportunity to compete in the local exchange market, in the 
same way that it was critical initially for the early 
development of competition in the long distance market. In 
markets where a facilities-based competitor is not likely to 
emerge in the near term, the Committee believes that it is 
imperative that meaningful resale opportunities are available 
for competition in the local exchange.
    Nonetheless, in determining the resale rate, it is the 
Committee's intent that there be a recognition of pricing 
structures for telephone exchange service in the State. In 
other words, determining the resale rates should be 
accomplished by taking into account the rate at which local 
service is tariffed in a particular State. The rate should 
reflect whether, and to what extent, the local dialtone service 
is subsidized by other services, such as toll service, long 
distance access, subsidized through the pricing for other 
features, such as call forwarding and call waiting, or 
subsidized through explicit subsidies from a universal service 
fund.
    Section 242(a)(4) sets out the duty to provide number 
portability, to the extent technically feasible. Number 
portability is the means by which customers may stop receiving 
service from their local telephone service provider and 
``take'' their telephone number with them to a new provider. 
The ability to change service providers is only meaningful if a 
customer can retain his or her local telephone number. The 
``technically feasible'' requirement in this provision is 
important, because the software necessary for ``true'' number 
portability, as opposed to ``interim'' number portability 
(which is an advanced call forwarding feature), is not 
presently available for local telephone service, although 
testing is presently under way. The Committee recognizes that 
the local exchange industry is dependent on the software 
manufacturers for development of ``true'' number portability, 
and expects that technology to be deployed when it is 
technically feasible.
    Section 242(a)(5) sets out the duty to provide dialing 
parity. Like number portability, dialing parity is essential 
for a local customer to consider changing local service. 
Dialing parity means the ability to dial the same number of 
digits in calling another number, regardless of who provides 
the service. For local service, obviously this is seven digits; 
for toll or ``short haul'' long distance service, it is known 
as ``one plus'', or ``1+'' dialing.
    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. This 
requirement is implicit in, and related to, the duty to 
interconnect. Section 242(a)(8) places a duty on both parties 
to negotiate in good faith all of the requirements in section 
242 that comprise opening the local exchange.
    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). In determining the cost of interconnection, 
some approximation of the cost of terminating calls in a 
competitive market should be made. However, neither the 
Commission or any State commission is authorized to conduct a 
proceeding to determine these costs with particularity.
    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 reasonable 
and nondiscriminatory equal access to and interconnection with 
the facilities and capabilities of a local exchange carrier 
(LEC), within fifteen (15) months.
    Paragraph (4)(B) mandates actual collocation, or physical 
collocation, of equipment necessary for interconnection at the 
premises of a 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. The Committee finds that actual collocation is 
both important and preferable to accomplish two of the goals of 
this legislation, reasonable and non-discriminatory access, and 
that the duty to provide actual collocation is an obligation 
that flows from the ability of the LEC to interconnect with the 
interstate telecommunications networks. The experience at the 
Commission, with its proceeding on expanded interconnection, 
(Expanded Interconnection Mandated for Interstate Special 
Access (CC Docket 91-141)(Sept. 17, 1992)), and the experience 
in some of the States on implementing interconnection, leads 
the Committee to conclude that the risk of discriminatory 
interconnection grows the farther one gets away from the 
central office of the carrier. It is for this reason that the 
legislation mandates actual, or physical, collocation with the 
exception as noted above. The Committee intends that the 
requirements of this paragraph shall only apply to the 
provision of telecommunications service. Finally, this 
provision is necessary to promote local competition because a 
recent court decision indicates that the Commission lacks the 
authority under the Communications Act to order physical 
collocation. (See Bell Atlantic Tel. Co. v. Federal 
Communications Commission, No. 92-1619 (D.C. Cir. June 10, 
1994)).
    Section 242(b)(4)(C) 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. Section 242(b)(4)(D) 
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. The Committee included this provision for two 
reasons: First, it provides a benchmark to ensure that the 
compensation rates established by the carrier for access are in 
fact just and reasonable; and second, it guards against anti-
competitive behavior by requiring a LEC to assess the same 
charge to itself for access as it charges others.
    Section 242(d)(1) prohibits a provider from joint marketing 
of local and interLATA toll service (''long haul'' long 
distance) until the BOC in that State is authorized to provide 
long distance service pursuant to section 245. Subsection 
(d)(2) grandfathers joint marketing arrangements in place 
before the date of enactment.
    Section 242(e) grants to the Commission the authority to 
modify, in whole or in part, or waive the requirements of 
subsections 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, technologically 
infeasible, or otherwise not in the public interest.
    This authority is necessary for both ``new entrants'' into 
the market and certain incumbents. The Committee included this 
modification authority because it recognizes that new entrants 
into the market for telephone exchange service will face 
tremendous obstacles since they will be competing against an 
entrenched service provider. The Committee further recognizes 
that saddling the full weight of all of these requirements 
immediately on new entrants will discourage persons from 
entering the market. This provision gives the Commission the 
authority to modify any requirements so as to achieve the 
policy goal of encouraging competition in the provision of 
telephone exchange service and exchange access service. 
However, the Committee further recognizes that, at some point, 
the new competitors have grown and matured sufficiently so that 
they are no longer in need of special treatment. The Committee 
has determined that when a carrier has 500,000 access lines 
installed in the aggregate nationwide, the protection provided 
in section 242(e) is no longer necessary. This threshold number 
effectively separates small LECs from large ones that should 
have the interconnection and equal access obligations.
    Additionally, the Committee recognizes that the equal 
access and interconnection requirements under section 242 may 
be technologically infeasible, unduly economically burdensome 
economically, and otherwise not in the public interest for 
certain incumbent LECs, especially rural telephone companies. 
Section 242(e) therefore gives the Commission the authority to 
modify or waive section 242 requirements for any LEC (or class 
or category of such carriers) that has, in the aggregate 
nationwide, fewer than 500,000 access lines installed. By 
stating ``class of carriers,'' it is the Committee's intent to 
allow groups of similarly situated carriers to file for 
modification or waiver at the Commission collectively, so as to 
lessen the administrative and financial burden on those 
carriers. Section 242(f) gives State commissions the authority 
to waive section 242 requirements with respect to rural 
telephone companies.
    The Committee recognizes that there are significant costs 
associated with seeking a modification or waiver before the 
Commission or a State commission. Thus, section 242(g) 
establishes an outright statutory exemption from section 242 
requirements for a rural telephone company with fewer than 
50,000 access lines in a local exchange study area, provided 
such rural telephone company does not provide video programming 
services over its telephone exchange facilities in such study 
area.
    In the future, however, it may be in the public interest to 
terminate the exemption due to a change in the economic, 
technical and public interest premises underlying the 
exemption. Therefore, State commissions are given the authority 
to terminate the exemption if a State commission determines 
that the termination of such exemption is consistent with the 
public interest, convenience, and necessity. If a State 
commission terminates a company's statutory exemption under 
subsection (g), those rural telephone companies are not 
prohibited from requesting a modification or waiver of section 
242 requirements pursuant to subsections (e) and (f) of section 
242.
    Section 243(a) provides that no State or local government 
may have regulations, rules or laws in place on the date of 
enactment that effectively prohibit the offering of interstate 
or intrastate telecommunications or information services, or 
that effectively prohibit the entry of persons into the 
business of providing such services. Subsections (a)(1) and (2) 
clarify that the equal access and interconnection requirements 
established in this section are essential, and that States or 
local governments shall not prohibit or limit application of 
those requirements nor shall they prohibit or limit persons who 
want to make use of the services made available by those 
requirements.
    Nonetheless, section 243(b) provides that subsection (a) 
shall not be construed to prohibit a State from imposing 
certain terms or conditions on telecommunications providers if 
such terms and conditions do not effectively prohibit the 
provision of competitive services, and are necessary and 
appropriate to (1) protect the public safety, (2) ensure 
continued quality of intrastate telecommunications, (3) ensure 
a person's business practices are consistent with State 
consumer protection laws and regulations, and (4) ensure just 
and reasonable rates. By ``public safety and welfare,'' the 
Committee means, among other things, making certain that 
emergency services, such as 911, are available to the public. 
Section 243(c) makes explicit a local government's continuing 
authority to issue construction permits regulating how and when 
construction is conducted on roads and other public rights-of-
way. This provision clarifies that local control over 
construction on public rights-of-way is not disturbed.
    Section 243(d) is intended to clarify that nothing in this 
paragraph should be construed to establish a different system 
of State preemption than was adopted as part of the Omnibus 
Reconciliation Act of 1993 and codified at section 332(C)(3) of 
the Communications Act of 1934.
    Section 243(e) prohibits a local government from imposing a 
franchise fee or its equivalent for access to public rights-of-
way in any manner that discriminates among providers of 
telecommunications services (including the LEC). The purpose of 
this provision is to create a level playing field for the 
development of competitive telecommunications networks. 
Harmonizing the assessment of fees from all providers is one 
means of creating this parity. It is not the intent of the 
Committee to deny local governments their authority to impose 
franchise fees, but rather simply to require such fees be 
imposed in a non-discriminatory manner. This paragraph is not 
intended to affect local governments' franchise powers under 
Title VI of the Communications Act.
    Local governments can remedy any situation in which a fee 
structure violates this section by expanding the application of 
their fees to all providers of telecommunications services, 
including LECs. Moreover, this section does not invalidate any 
general imposition that does not distinguish between or among 
providers of telecommunications services, nor does it apply to 
any lawfully imposed tax.
    Section 244 requires, within eighteen (18) months, a LEC to 
file with the State commission in that State in which it is 
offering service a statement of terms and conditions confirming 
that it is in compliance with the section 242 requirements. 
Several States have already begun to require LECs to open their 
local exchanges to competition; under section 243, no State 
will be allowed to bar such competition after the date of 
enactment. While final Federal rules under section 242 may not 
be available for 15 months, it is the Committee's expectation 
that incumbent LECs and new entrants will be negotiating the 
terms and conditions required in the statements filed under 
section 244 prior to the issuance of Federal rules. Statements 
of terms and conditions would be have to be modified later, if 
necessary, to conform to Federal rules.
    Section 244(b) requires a State commission to ensure that a 
LEC's statement conforms with the Federal requirements and 
standards of section 242. A State may impose its own ``openness 
and accessibility'' obligations, provided such obligations do 
not violate the preemption clause of section 243. The 
Commission shall conduct a similar review. Under section 
244(c), both reviews shall be completed within sixty (60) days 
of the submission of statements to the respective regulatory 
authorities, or simply 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 a LEC 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.
    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 eighteen (18) 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.
    Under section 245(a)(2)(A), the Commission must determine 
that there is a facilities-based competitor that is providing 
service to 
residential and business subscribers. This is the integral 
requirement of the checklist, in that it is the tangible 
affirmation that the local exchange is indeed open to 
competition. In the Committee's view, the ``openness and 
accessibility'' requirements are truly validated only when an 
entity offers a competitive local service in reliance on those 
requirements.
    The Committee requires that the service be made available 
to both residential and business subscribers, so that the 
service is, in fact, local telephone exchange service. It is 
not sufficient for a competitor to offer exchange access 
service to business customers only, as presently offered by 
competitive access providers (CAPs) in the business community. 
The Committee does not intend for cellular service to qualify, 
since the Commission has not determined that cellular is a 
substitute for local telephone service.
    The Committee expects the Commission to determine that a 
competitive alternative is operational and offering a 
competitive service somewhere in the State prior to granting a 
BOC's petition for entry into long distance. The requirement of 
an operational competitor is crucial because, under the terms 
of section 244, whatever agreement the competitor is operating 
under must be made generally available throughout the State. 
Any carrier in another part of the State could immediately take 
advantage of the ``agreement'' and be operational fairly 
quickly. By creating this potential for competitive 
alternatives to flourish rapidly throughout a State, with an 
absolute minimum of lengthy and contentious negotiations once 
an initial agreement is entered into, the Committee is 
satisfied that the ``openness and accessibility'' requirements 
have been met.
    It is also the Committee's intent that the competitor offer 
a true ``dialtone'' alternative within the State, and not 
merely offer service in one business location that has an 
incidental, insignificant residential presence. The Committee 
does not intend that the competitor should have to provide a 
fully redundant facilities-based network to the incumbent 
telephone company's network, yet it is expected that the 
facilities necessary for a competitive provider will be 
present. In this regard, the Committee notes that the cable 
industry, which is expected to provide meaningful facilities-
based competition, has wired 95% of the local residences in the 
United States and thus has a network with the potential of 
offering this sort of competitive alternative. Conversely, 
resale, as described in section 242(a)(3), would not qualify 
because resellers would not have their own facilities in the 
local exchange over which they would provide service, thus 
failing the facilities-based test.
    Section 245(a)(2)(B) is intended to ensure that a BOC is 
not effectively prevented from seeking entry into the long 
distance market simply because no facilities-based competitor 
which meets the criteria specified in the Act sought to enter 
the market. To the extent that a BOC does not receive a request 
from a competitor that comports with the criteria established 
by this section, it is not penalized in terms of its ability to 
obtain long distance relief. Because negotiating for access and 
interconnection may begin on the date of enactment, and in many 
of these States that have opened their local exchanges to 
competition, such negotiations have already begun, the 
Committee believes that it does not create an unreasonable 
burden on a would-be competitor to step forward and request 
access and interconnection as prescribed in the legislation.
    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 requirement 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) provides that a BOC may apply for interim 
interLATA authority any time after the date of enactment, and 
prior to completion of the Commission actions under section 
242, on the basis of one or more local access and transport 
areas (LATAs) within a State. LATAs represent local calling 
areas, as created by the AT&T; divestiture court, which, in 
certain instances, may have local competition fairly quickly. 
In seeking this interim authority, the BOC must include in the 
application proof of the presence of a facilities-based 
competitor and a State commission certification that the BOC is 
in compliance with State laws and regulations governing opening 
of the local exchange to competition, including the offering of 
resale as mandated in section 242(a)(3).
    Section 245(c)(2) and (3) set out the time periods for 
State commission and Commission review of the interim interLATA 
authority. The State must file comments within 40 days of 
receiving the BOC's application and the Commission must make a 
determination within 90 days. Section 245(c)(4) states that the 
interim authority sunsets 180 days after all Commission actions 
under section 242 are completed.
    Section 245(d)(1) sets out the Commission review process 
for interLATA authorization on a statewide, permanent basis. 
Under section 245(d)(2), the Commission may conduct a de novo 
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(d)(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(d)(4), the Commission must 
determine that the BOC has complied with each and every one of 
the requirements. Failure to comply with any one of the 
checklist requirements is grounds for not granting the approval 
for BOC entry. As mandated in section 245(e), 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. If the 
Commission determines there is a deficiency, after notice and 
opportunity for a hearing, the Commission may issue an order 
requiring the deficiency be corrected, impose a monetary 
penalty, or suspend or revoke the BOC's approval to offer 
interLATA service.
    Section 245(f) prohibits a BOC from providing interLATA 
service, unless authorized by the Commission. Section 245(g) 
grandfathers any activity authorized by court order or pending 
before the court prior to the date of enactment.
    Section 245(h) creates exceptions for the provision of 
incidental services. Specifically, these are exceptions for 
certain rather limited interLATA services that are truly 
``incidental'' to other services that a BOC otherwise may 
lawfully provide.
    Section 245(h)(1) permits a BOC to engage in interLATA 
activities related to the provision of cable services. This is 
necessary because much of the cable programming must be 
``downlinked'' from a satellite. Section 245(h)(2) permits a 
BOC to offer interLATA services over cable system facilities 
located outside the BOC's region. In other words, a BOC seeking 
to offer telecommunications services over cable facilities 
outside its ``home'' region in competition with the incumbent 
telephone company is permitted to do so. Section 245(h)(3) 
allows a BOC to offer commercial mobile services, as defined in 
section 332(d)(1) of the Communications Act of 1934.
    Section 245(h)(4) allows a BOC to engage in interLATA 
services relevant to the provision of information services from 
a central computer. This would spare the BOC the expense of 
locating such a computer within each LATA for customer access 
to information services, such as stock market quotes, sports 
scores, and voice mail. Section 245(h)(5) and (6) allow a BOC 
to engage in interLATA services related to signaling 
information integral to the internal operation of the telephone 
network, including, for example, ``Signaling Systems 7'' which 
sends information over the network prior to the completion of 
the call.
    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.
    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 three years after 
the date of enactment.
     Section 247 establishes a Federal-State Joint Board, 
pursuant to section 410(c) of the Communications Act of 1934, 
for the purpose of recommending actions the Commission and the 
States should take to preserve universal service. The Committee 
intends that this Joint Board should evaluate universal service 
in the context of a local market changing from one 
characterized by monopoly to one of competition.
    Section 247(b) sets forth six principles upon which the 
Board shall base its policies for the preservation of universal 
service. The Committee intends that these principles shall form 
the basis of the deliberations of the Joint Board. The 
Committee also recognizes that although these principles will 
shape the basis of the Joint Board's recommendations, the 
ultimate decision-making authority rests with the Commission 
and with State regulators. Therefore, the Joint Board serves an 
important function by assessing the current condition of 
universal service and how it should evolve over time, and by 
formulating a set of recommendations, taking into account the 
principles enumerated here.
    Section 247(b)(1) requires that any plan adopted 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. The Committee included this 
provision to make certain that the definition of universal 
service is considered in light of the functions and 
capabilities of the telephone network as it evolves and as the 
state of competition within the local telephone industry 
advances. Section 247(b)(3) and (4) mandate that the plan 
provides 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 services are deployed in the public switched 
network; and (4) whether inclusion of such service is otherwise 
consistent with the public interest, convenience, and 
necessity. The Committee included this language to give some 
direction to the Joint Board on when a service should be 
included into a definition of universal service. The factors 
included in subsection (c) are intended to guide the Board in 
walking the fine line between including new services too fast, 
and risk increasing prices dramatically and ``gold plating'' 
the network, and being slow to include the services.
    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.
    Section 248 establishes a process by which a LEC may obtain 
permission from a State or Federal authority to have pricing 
flexibility in the offering of telecommunications services. The 
Commission is required to establish Federal criteria and 
procedures for determining when pricing flexibility is 
appropriate. It is the Committee's intent that the Commission, 
in developing these criteria and procedures, should carefully 
consider, and draw significantly on, the experience of those 
States that have been at the forefront of promoting local 
competition and pricing procedures appropriate for a 
competitive environment. The States may then select from the 
procedural options developed by the Commission in reviewing 
applications for pricing flexibility. The Commission is 
required to respond to any application relating to interstate 
services within 180 days.
    The primary objective of Title I of this legislation is to 
foster competition for local exchange and exchange access 
services. The Committee believes that the development of 
competition for these services is in the public interest, and 
will result in the provision of innovative services, improved 
service quality, and lower prices. The Committee also 
recognizes that, as local competition develops, regulated LECs 
will require flexibility in establishing prices for their 
services. Requiring these carriers to charge regulated prices 
may not be in the consumers' best interest if it results in 
maintaining prices at artificially high levels. Accordingly, 
the legislation authorizes the Commission to establish flexible 
pricing procedures that may be available to a carrier when a 
telecommunications service is subject, or is substantially 
certain to become subject, to competition, either within a 
geographic area or within a class or category of services.
    The Committee intends for the Commission and for State 
authorities to grant flexibility to carriers that is 
commensurate with the level of competition. The Committee 
believes that affording carriers pricing flexibility will both 
foster competition in emerging markets and enable the 
Commission and State authorities to ensure that incumbent 
exchange carriers have the ability to respond to competitive 
entry. In establishing regulations pursuant to this paragraph, 
the Commission is broadly authorized to design flexible pricing 
procedures that are in the public interest, including, but not 
limited to, streamlined tariff requirements, informational 
tariff requirements, annual reports, pricing schedules that 
list maximum rates for service, or some combination of these 
requirements, and other requirements and procedures that will 
promote competition.
    Section 248(b) abolishes rate-of-return regulation for 
those LECs that have complied with the ``openness and 
accessibility'' requirements under section 242 and have filed a 
certification to that effect under section 244. This section 
makes clear that LECs that are no longer a monopoly, because of 
the presence of competition, must no longer be subject to 
monopoly regulation, particularly rate-of-return regulation.
    The purpose of section 248(c) is to ensure the removal of 
unnecessary regulation of telephone companies once a local 
telephone service market faces competition. Specifically, to 
the extent that a carrier has complied with sections 242 and 
244, the Commission, with respect to interstate or foreign 
communications, and State commissions, with respect to 
intrastate communications, shall not apply certain regulations, 
for any service that is determined, in accordance with the 
criteria under section 248(a)(1)(A), to be subject to 
competition that effectively prevents prices for such service 
that are unjust or unreasonable or unjustly or unreasonably 
discriminatory. These prohibited regulations include: (1) 
regulation of the prices for such service; (2) requirements for 
the filing of a schedule of charges for such service; (3) 
requirements for the filing of any cost or revenue projections 
for such service; (4) regulation of the depreciation charges 
for facilities used to provide such service; or (5) 
requirements for prior approval for the construction or 
extension of lines or other equipment for the provision of such 
service. Section 248(c) protects providers of competitive 
communications services from harmful regulation notwithstanding 
any other provision of the Communications Act of 1995 and 
notwithstanding any other provision of law.
    Under section 248(d), the Committee intends that State 
commissions, for a period of three years after the date of 
enactment of this part, and notwithstanding subsections (a), 
(b) and (c) of this section, shall permit residential 
subscribers to receive basic voice-grade local telephone 
service equivalent to the service generally available to 
residential subscribers at the date of enactment of this part. 
For the period of three years after the date of enactment of 
this part, the rate for basic voice-grade residential local 
telephone service shall be just, reasonable and affordable.
    For a period of three years after enactment, State 
commissions may only approve LEC rate filings made after the 
date of enactment that would increase the price of basic 
residential voice-grade local telephone service, (other than 
when that increase is attributable to changes in the consumer 
prices generally) when the rate increase is shown (1) to be in 
the public interest; (2) to preserve the continuation of 
universal telephone service; and (3) to prevent economic 
disadvantages for one or more service providers. The service 
provider who is economically disadvantaged can be the LEC who 
made the filing with the State commission. The Committee does 
not intend to disturb State rate proceedings filed prior to the 
date of enactment of this part. Any price increases implemented 
in accordance with this subsection shall be minimized to the 
greatest extent practical and shall be implemented in a period 
not to exceed three years. The requirements of this subsection 
shall not apply to any rural telephone company if the rates for 
basic voice-grade local telephone service of that company are 
not subject to regulation by a State commission on the date of 
enactment of this part.
     Section 248(e) requires that interstate long distance 
rates must be maintained at the same levels in rural and urban 
areas. This section continues the principle of toll rate 
averaging.
     Section 248(f) states that for commercial mobile services, 
the provisions of section 332(c)(1) of the Communications Act 
of 1934 shall apply in lieu of the provisions of section 248.
     Finally, section 248(g) provides that nothing in section 
248 shall be construed to prohibit the Commission and State 
commissions from enforcing regulations prescribed prior to the 
date of enactment, to the extent that such regulations are 
consistent with the provisions of section 248. This savings 
clause is intended to permit the Commission and State 
commissions to continue enforcing current regulations and laws 
that enhance local competition and promote LEC efficiency, 
including such portions of the Federal LEC price cap regime as 
set out in the April 7, 1995, First Report and order in CC 
Docket No. 94-1, In the Matter of Price Cap Performance Review 
for Local Exchange Carriers. The Committee finds that 
eliminating the last vestiges of Federal LEC rate-of-return 
regulation will end the incentive to cross subsidize 
competitive services with revenues from less competitive 
services. State regulatory regimes and legislative mandates 
that promote competition, including the elimination of LEC rate 
of return regulation, should also continue.
    Section 249(a) reaffirms the duty of all common carriers to 
ensure network functionality and accessibility. 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. The 
Committee intends this requirement to reflect the vital 
Commission oversight role in making certain that standards for 
interconnection to the public switched network and access 
continue to be developed and enforced. The goal of subsection 
(b) is to require the private sector, through the appropriate 
industry standards-setting bodies, to bear the primary 
responsibility to develop and to set standards for 
telecommunications networks. While in certain instances the 
Commission may, and does, participate in the deliberations of 
industry standards-setting bodies, the Committee does not 
intend for the Commission to have any new authority under this 
section.
     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 CPE. While the Commission may 
enforce standards for the interconnection of CPE with the 
telephone network (currently enforced under Part 68 of the 
Commission's rules), this provision is specifically not 
intended to permit the Commission to develop standards for 
computer equipment, computer software, or CPE. The focus of 
attention is on standards for points of connection with 
telecommunications networks. Allowing the Commission to 
establish standards for computers, software, and other 
technologies would have the effect of freezing technology, 
slowing innovation, and limiting the development of new 
features and capabilities.
    As used in this section, the term ``interconnectivity'' 
includes three essential elements: (1) the ability of end-users 
to interconnect competitively-provided CPE to public 
telecommunications networks (the Commission's Part 68 Rules); 
(2) the requirement that carriers disclose all information, in 
a timely manner, relating to network design and technical 
standards and information affecting changes to the 
telecommunications network which would affect the manner in 
which CPE is attached to the network (the Commission's 
``network disclosure'' rules); and (3) the requirement that the 
provision of CPE be separate and distinct from the provision of 
common carrier communications service and not be offered on a 
tariffed basis (the Commission's ``unbundling'' rules). 
Together, these interconnectivity requirements ensure that 
firms that offer CPE can design--and consumers can purchase--
equipment which will connect to and operate with the 
telecommunications network. 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.
    Section 249(c) 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 
of 1934.
    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 section 250.
    Section 251 requires the Commission to adopt rules to 
prevent illegal changes in subscriber carrier 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 
Committee intends that the Commission should adopt rules to 
thwart the development of similar illegal practices as local 
exchanges become open to competition.
    Section 252 directs the Commission to conduct a study to 
review its rules at least once every three years to determine 
whether universal service has been protected, whether access to 
advanced services for the elementary and secondary schools has 
been attained, and whether the accessibility to advances in 
network services by disabled individuals has been ensured.
    Section 253 creates a statutory exemption from the 
``openness'' requirements of section 242 for five years for any 
government-owned LEC operating in a U.S. territory in which the 
percentage of household subscribership is less than 85 percent 
of the households in the territory. Certain United States 
territories have telephone service penetration rates far below 
the 94 percent penetration rate of the U.S. and have embarked 
upon programs to increase telephone subscribership. This 
transitional provision is intended to support efforts by 
territorial governments to achieve a level of telephone service 
penetration comparable to that prevailing in the United States 
before becoming fully subject to the local loop opening 
requirements. This provision will permit qualifying government-
owned LECs to devote substantial resources to achieving 
universal service during a five-year transition period to a 
fully competitive market.
    Section 101(b) mandates that the Commission conduct the 
proceeding to prescribe rules necessary to open the local 
exchange to competition in a single rulemaking.

Section 102. Competition in Manufacturing, Information Services, Alarm 
        Services, and Pay Phone Services.

    This section amends Title II of the Communications Act of 
1934 to add a new ``Part III--Special and Temporary 
Provisions'' and adds a number of new sections to Title II of 
the Act.
    Section 271(a) allows a BOC to engage in equipment 
manufacturing when the Commission has verified 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. In other words, the restriction on manufacturing 
is removed only when all operating companies within a BOC's 
region are verified as open by the Commission. Section 271(b) 
allows a BOC to engage in close collaboration with 
manufacturers during the design and development of hardware and 
software. 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) addresses the concern of companies that sell 
equipment to BOCs by requiring that BOCs make equipment 
procurement decisions based on objective commercial criteria, 
such as price, quality, delivery, and other commercial factors. 
It is not the Committee's intent to impose, or permit the 
Commission or any other government entity to impose, a 
government procurement requirement on the BOCs, or to require 
that they procure from any particular suppliers.
    Nor is it the Committee's intent to have the Commission 
interfere with the relationships established among the BOCs and 
their vendors. The provision is meant to ensure that vendors 
continue to have the opportunity to pursue BOC business. The 
provision will assure continuing opportunities for vendors to 
sell to the BOCs based on usual commercial considerations 
without requiring that BOCs make their procurement decisions 
based on competitive bidding.
    Section 271(e)(2) requires that each BOC sell equipment to 
any other local telephone company which offers to buy it in 
order to assure that innovation within the industry does not 
remain solely in the hands of a single 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.
    Section 271(g) grandfathers all previously authorized 
manufacturing related activities.
    Section 272 sets forth regulatory requirements for BOC 
participation in electronic publishing. Subsection (a) of this 
section states generally that a BOC 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) requires the separate 
affiliate to have an annual compliance review performed for 
five years. 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)(A) 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 (h)(7) to mean ``the marketing of 
property, goods, or services by telephone to a customer or 
potential customer who initiated the call.'' Thus, a BOC may 
refer a customer who seeks information on an electronic 
publishing service to its affiliate, but must make sure that 
the referral service is available to unaffiliated providers. No 
outbound telemarketing or similar activity, under which the 
call is initiated by the BOC or its affiliate or someone on its 
behalf, is permitted.
    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. The Committee 
intends that the term ``small, local electronic publishers'' 
covers publishers serving communities of fewer than 50,000 
persons. Officers and employees of a BOC are prohibited from 
collectively having more than 50% of the voting control of the 
venture. The BOC is permitted to provide promotion, marketing, 
sales, or advertising personnel services for the joint venture.
    Subsection (d) 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 of 1934. 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)(1) gives the BOC one year from the date of 
enactment to comply with the requirements of this section.
    Subsection (f)(2) provides that the provisions of this 
section cease to apply after June 30, 2000.
    Subsection (g) establishes several definitions applicable 
to this section. Subparagraph (g)(1) defines ``electronic 
publishing'' to mean the dissemination, provision, publication, 
or sale to an unaffiliated entity or person, using a BOC's 
basic telephone service, of any news, including sports; 
entertainment, excluding 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. 
Subparagraph (g)(2) includes numerous exceptions from the 
definition of electronic publishing. Subsection (h)(1) defines 
``affiliate'' in terms of ``owns or controls,'' and paragraph 
(4) defines ``control'' with reference to the regulations of 
the Securities and Exchange Commission. Together, these 
definitions provide a useful definition of the nature of the 
relationship between BOCs and other entities for regulatory 
purposes. Subsection (h)(2) defines the term ``basis telephone 
service'' to mean any wireline telephone service provided by a 
BOC in a telephone exchange area, but not commercial mobile 
services.
    Paragraph (7) defines ``inbound telemarketing'' as the 
marketing of property, goods, or services by telephone to a 
customer or potential customer who initiated the call. 
``Customer'' refers to a person who purchases or would purchase 
property, goods, services other than basic telephone service, 
because a person who purchases basic telephone service is a 
subscriber.
    Paragraphs (8), (9), and (10) define the terms ``own,'' 
``separated affiliate,'' and ``Bell operating company,'' 
respectively.
    Section 273 governs BOC provision of alarm monitoring and 
telemessaging services. The small business dominated alarm 
industry and telemessaging industry provide service in 
virtually every community in this country in a highly 
competitive atmosphere. In the alarm industry, consumers have 
benefited from competition which has produced a 40 percent 
reduction in installation costs over the past ten years, 
monitoring fees which have remained constant, and has resulted 
in prompt reliable service which consumers have come to depend 
upon.
    The state-of-art service provided by the alarm and 
telemessaging industries are dependent on the local telephone 
wires. There is no practical alternative currently available. 
These industries have had problems with the local telephone 
companies. On several occasions, the Federal government has 
stepped in to ensure a level playing field. Thus, the concerns 
raised by the industry are real and not theoretical.
    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, in which 
case, the BOC may continue to offer the service and add 
customers, but not purchase other alarm companies.
    Section 273(b) prohibits discrimination by a telephone 
company in the provision of these 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 274 of the Communications Act addresses the 
competitive imbalances that exist in the payphone industry 
because the BOCs offer their competitive pay telephone service 
as an integral part of their regulated local exchange 
operations. As a result, the BOCs are assured of recovering 
their payphone costs, even if those costs must be subsidized by 
other regulated accounts. By contrast, independent payphone 
companies may pay the BOCs for essential network services and 
must recover all their costs from revenues derived from 
competitive activities alone.
    Section 274 terminates the current system of payphone 
regulation. The Commission is directed 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 BOCs' 
unregulated books. The Commission's implementing safeguards 
must be at least equal to those adopted in the Commission's 
Computer III proceedings. These safeguards were adopted in 
Amendment of Section 64.702 of the Commission's Rules and 
Regulations (Third Computer Inquiry), and a number of related 
Commission proceedings. In place of the existing regulatory 
structure, the Commission is directed to establish a new system 
whereby all payphone service providers--BOC and independent--
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. Carriers and 
customers that benefit from the availability of a payphone 
should pay for the service they receive when a payphone is used 
to place a call. 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 of 1934.
    Currently, under a 1988 court interpretation of the MFJ, 
the BOCs are prohibited from selecting the interLATA carriers 
serving their payphones, or even negotiating with location 
owners concerning the selection of interLATA carriers. Section 
274(b)(1)(D) removes that prohibition. 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 contract. Section 274(c) authorizes the Commission 
to preempt State regulations that are inconsistent with the 
Commission's regulations under section 274.

Section 103. Forbearance From Regulation

    This section creates a new section 230 of the 
Communications Act of 1934 requiring the Commission to forbear 
from Title II common carrier regulation, with certain limited 
exceptions. Given that the purpose of this legislation is to 
shift monopoly markets to competition as quickly as possible, 
the Committee anticipates this forbearance authority will be a 
useful tool in ending unnecessary regulation.

Section 104. Privacy of Customer Information

    This section adds a new section 222 to the Communications 
Act of 1934. 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. Subscriber list information is 
information about a subscriber's name, telephone number, 
address, or advertising classification that the carrier 
possesses, including information for recently connected 
customers. This provision is intended to ensure that persons 
who use subscriber information, including publishers of 
telephone directories unaffiliated with LECs, are able to 
purchase published or soon-to-be published subscriber listings 
and updates from carriers on reasonable terms and conditions. 
Reasonable terms and conditions include, but are not limited 
to, the ability to purchase listings and updates on a periodic 
basis at reasonable prices, by zip code or area code, and in 
electronic format.
    LECs have total control over subscriber list information. 
Over the past decade, some LECs have charged excessive and 
discriminatory prices for subscriber listings. Some have 
imposed unreasonable conditions such as requiring that the 
listings be purchased only on a statewide basis or refusing 
outright to sell listings or updates. This provision prohibits 
such practices. Section 222 ensures that independent directory 
publishers have access to subscriber listing information 
gathered by all LECs. This section meets the needs of 
independent publishers for access to subscriber data on 
reasonable terms and conditions, while at the same time 
ensuring that the telephone companies that gather and maintain 
such data are fairly compensated for the value of the listings. 
Section 222 requires that subscriber listing information be 
made available ``under non-discriminatory and reasonable rates, 
terms and conditions to any person upon request for the purpose 
of publishing directories.''
    Section 222 states that CPNI may be disclosed if disclosure 
is required by law, or if the customer approves of release of 
the information to a carrier or to another service provider 
designated by the customer. All carriers are prohibited from 
using the information for any service other than the service 
from which it is derived or if it is necessary in the provision 
of customer premise equipment. These new privacy rules will 
apply to all telecommunications carriers--LECs, interexchange 
carriers and any other entity which offers services to the 
public generally (or to some segment of the public).
    The protections contained in section 222(b) and (c) 
represent a careful balance of competing, often conflicting, 
considerations. First, of course, is the need for customers to 
be sure that personal information that carriers may collect is 
not misused; this consideration argues for strict controls on a 
carrier's use of all customer data. Customers, on the other 
hand, rightfully expect that when they are dealing with their 
carrier concerning their telecommunications services, the 
carrier's employees will have available all relevant 
information about their service. This consideration argues for 
looser restrictions on internal use of customer information. 
The balance is reflected in subsections 222(b) and (c), which 
impose strict controls, with limited exceptions for the 
carrier's use of customer information in connection with 
providing its own services to that customer. For example, a 
carrier is not required to obtain the approval of customers to 
use customer information in the provision of common carrier 
communications services, or services necessary to, or used in, 
the provision of such services, such as the publishing of 
directories by a carrier or affiliate.
    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.'' The Committee intends that ``service'' be defined 
narrowly. Thus, in no event should this section be construed to 
permit a carrier to use CPNI to market long distance services 
to their local customers or local telephone exchange services 
to their long distance customers.
    With respect to section 222(b)(2), the Committee 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. 
For example, a carrier operating in a competitive market would 
not be required by this section to disclose information it has 
amassed at real expense over years of telemarketing. In other 
words, MCI would not be required as part of its ``Friends and 
Family'' program to disclose information to competitors such as 
Sprint, AT&T;, and various resellers. 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 Committee 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. Subsection (d) is not, however, 
intended to preclude the Commission from granting relief in 
other meritorious circumstances where the public interest may 
warrant as, for example, in the case of rural telephone 
companies.
    Section 222(e) defines ``customer propriety network 
information,'' ``subscriber list information,'' and ``aggregate 
information.'' Subsection (e)(1) defines ``customer proprietary 
network information.'' The term ``customer'' is intended to 
refer to the carrier's subscribers. The term ``subscriber list 
information'' is not intended to include any information 
identifying subscribers that is prepared or distributed within 
a company or between affiliates or that is provided to any 
person in a non-public manner.
    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.

Section 105. Pole Attachments

    Pursuant to section 224 of the Communications Act of 1934, 
the Commission regulates pole attachment rates for cable 
television systems. Under current law, cable television systems 
pay for pole attachments based on a formula that sets a floor 
and ceiling for the rates. The formula, developed in 1978, 
gives cable companies a more favorable rate for attachment than 
other telecommunications service providers. The beneficial rate 
to cable companies was established to spur the growth of the 
cable industry, which in 1978 was in its infancy.
    Section 105 is intended to remedy the inequity for pole 
attachments among providers of telecommunications services. 
First, it expands the scope of the coverage of section 224. 
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, the new provision changes the formula for the rates 
pole owners may charge for attachments to poles. 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 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. It is 
not the intention of the Committee to require a cable 
television system to pay twice for a single pole attachment if 
the operator is providing both cable and telecommunications 
services.
    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.

Section 106. Preemption of Franchising Authority Regulation of 
        Telecommunications Services

    Section 106 creates a new section 621(b)(3)(A) of the 
Communications Act of 1934 that States 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 of 1934 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) states that a franchising authority may 
not terminate an operator's offering of a telecommunications 
service (other than cable service), nor may the franchising 
authority discontinue the cable system's operations for failure 
of the operator to obtain a franchise for provision of 
telecommunications services. Subparagraph (D) establishes that 
franchising authorities may collect franchise fees under 
section 622 of the Communications Act solely on the basis of 
the revenues derived by an operator from the provision of cable 
service.
    The Committee intends that this section precludes a local 
government from imposing a franchise obligation on provision of 
telecommunications services, but this section does not 
otherwise limit the right of local governments to impose fees 
and other charges pursuant to section 201(c)(3)(D), or limit 
the rights of local governments with respect to franchise 
obligations applying to cable service.
    In addition, this section does not restrict the right of 
franchising authorities to collect franchise fees on revenues 
from cable services and cable-related services, such as, but 
not limited to, revenue from the installation of cable service, 
equipment used to receive cable service, advertising over video 
channels, compensation received from video programmers, and 
other sources related to the provision of cable service over 
the cable system.
    The intent of this provision is to ensure that regulation 
of telecommunications services, which traditionally has been 
regulated at the Federal and State level, remains a Federal and 
State regulatory activity. The Committee is aware that some 
local franchising authorities have attempted to expand their 
authority over the provision of cable service to include 
telecommunications service offered by cable operators. Since 
1934, the regulation of interstate and foreign 
telecommunications services has been reserved to the 
Commission; the State regulatory agencies have regulated 
intrastate services. It is the Committee's intention that when 
an entity, whether a cable operator or some other entity, 
enters the telephone exchange service business, such entity 
should be subject to the appropriate regulations of Federal or 
State regulators.
    The Committee does not intend that section 106(b) be used 
by cable operators to escape their obligations under Title VI 
qua cable operators. For that reason, paragraph (3)(A) begins, 
``To the extent that a cable operator or affiliate is engaged 
in the provision of telecommunications services ***.'' This 
language makes clear that a cable operator does not escape from 
all of its Title VI obligations, including franchise fees, 
simply because it begins to offer a telecommunications service 
other than cable service. Rather, the force of paragraph (3) 
only falls on that portion of the cable operator's business 
related to telecommunications services.
    Finally, the Committee does not intend to exempt a cable 
operator's intrastate telecommunications services or facilities 
from regulation by a State regulatory body.

Section 107. Facilities Siting; Radio Frequency Emission Standards

    Section 107 provides that within 180 days of enactment, the 
Commission is to prescribe a national policy for the siting of 
commercial mobile radio services facilities. Representatives of 
affected industries, State and local governments and public 
safety agencies are to be included in the negotiation 
committee. It is the Committee's intent that the Commission 
establish a negotiated rulemaking committee authorized by the 
Negotiated Rulemaking Act of 1990 (subchapter III of chapter 5, 
Title 5 of the U.S. Code) comprised of representatives of State 
and local governments, public safety agencies and affected 
wireless telecommunications (Commercial Mobile Radio Service) 
industries. The committee is to develop a uniform national 
policy for the siting of Commercial Mobile Radio Service (CMRS) 
facilities for antennas, cell sites and other infrastructure-
related equipment necessary to provide efficient wireless 
telecommunications services to the public.
    The committee's recommendations must ensure that (1) State 
and local regulation is reasonable, nondiscriminatory, and the 
minimum necessary and does not have the effect of precluding 
any commercial mobile service; (2) siting requests are acted 
upon within a reasonable period of time; and (3) denials of 
requests are issued in writing and supported by substantial 
evidence. The siting of facilities cannot be denied on the 
basis of Radio Frequency (RF) emission levels which are in 
compliance with Commission RF emission regulated levels. The 
Commission is to complete within 180 days its action on RF 
emission standards. The Federal Government, within 180 days 
after enactment, is to prescribe procedures to make available 
to wireless telecommunications providers property and rights-
of-way under its control on a fair, reasonable and 
nondiscriminatory basis.
    The Committee finds that current State and local 
requirements, siting and zoning decisions by non-federal units 
of government, have created an inconsistent and, at times, 
conflicting patchwork of requirements which will inhibit the 
deployment of Personal Communications Services (PCS) as well as 
the rebuilding of a digital technology-based cellular 
telecommunications network. The Committee believes it is in the 
national interest that uniform, consistent requirements, with 
adequate safeguards of the public health and safety, be 
established as soon as possible. Such requirements will ensure 
an appropriate balance in policy and will speed deployment and 
the availability of competitive wireless telecommunications 
services which ultimately will provide consumers with lower 
costs as well as with a greater range and options for such 
services.
    The Committee recognizes that there are legitimate State 
and local concerns involved in regulating the siting of such 
facilities and believes the negotiated rulemaking committee 
should address those matters, such as aesthetic values and the 
costs associated with the use and maintenance of public rights-
of-way. The intent of the Committee is that requirements 
resulting from the negotiated rulemaking committee's work and 
subsequent Commission rulemaking will allow construction of a 
CMRS network at a lower cost for siting and construction 
compatible with legitimate public health, safety and property 
protections while fully addressing the legitimate concerns of 
all affected parties and providing certainty for planning and 
building.
    The Committee has received substantial evidence that local 
zoning decisions, while responsive to local concern about the 
potential effects of radio frequency emission levels, are at 
times not supported by scientific and medical evidence. A high 
quality national wireless telecommunications network cannot 
exist if each of its component must meet different RF standards 
in each community. The Committee believes the Commission 
rulemaking on this issue (ET Docket 93-62) should contain 
adequate, appropriate and necessary levels of protection to the 
public, and needs to be completed expeditiously. No State or 
local government, solely on the basis of RF emissions, should 
block the construction of sites and facilities or installation 
of equipment which comply with the Commission RF standards.
    The Commission is directed to develop and issue procedures 
to make available to the maximum extent possible the use of 
Federal Government property, rights-of-ways, easements and any 
other physical instruments and appropriate assets that could be 
used as CMRS facilities sites that do not conflict with the 
intent of other Federal laws and regulations. The Committee 
recognizes, for example, that use of the Washington Monument, 
Yellowstone National Park or a pristine wildlife sanctuary, 
while perhaps prime sites for an antenna and other facilities, 
are not appropriate and use of them would be contrary to 
environmental, conservation, and public safety laws.

Section 108. Mobile Service Access to Long Distance Carriers

    The Commission may not impose any long distance access 
requirements on providers of commercial mobile services for 
two-way switched voice services other than as required by 
section 332(c)(7). For purposes of this provision, a ``carrier 
identification code'' means dial up access to long distance 
providers, such as a 950-XXXX number, or an 800 number. While 
the Commission may not prescribe requirements other than those 
provided for in this section, it is not the Committee's intent 
to limit carriers from providing additional forms of 
interexchange access to their subscribers. The Commission is 
granted the authority to exempt carriers or classes of carriers 
from the requirements of this section if it is consistent with 
the public interest, convenience and necessity, while the 
provision of mobile services by satellite is specifically 
exempt from the requirements of this section.
    The dial up access code regulations prescribed by the 
Commission to carry out subparagraph (A) will supersede the 
interexchange equal access, balloting and presubscription 
requirements imposed by the MFJ and the consent decree in U.S. 
v. AT&T; Corp. and McCaw Cellular.
    The Committee is concerned about the current disparities in 
the commercial mobile services market where RBOC wireless 
affiliates and AT&T;/McCaw cellular properties are subject to 
restrictive equal access and long distance presubscription 
requirements while other wireless carriers are not. Those 
mobile wireless providers not subject to court order have been 
able to design and offer customers attractive calling 
arrangements, such as larger local calling areas and discounted 
long distance plans, which more appropriately reflect the 
mobile nature of the industry. RBOC and AT&T;/McCaw wireless 
affiliates should be free to offer their customers the same 
level of innovative services.
    The Committee believes that the alternative of imposing 
equal access requirements on all commercial mobile services is 
unwise under current and emerging market conditions and may be 
counterproductive in a competitive environment. Imposition of 
equal access requirements on wireless services will only serve 
to disadvantage customers and inflate the cost of service. The 
purpose of this provision is to remedy the current disparity on 
access to long distance services between commercial mobile 
services by removing the equal access and presubscription 
requirements from RBOC affiliated wireless services and AT&T;/
McCaw.
    With these restrictions removed, all carriers will be able 
to design the best plans for their customers. Subscriber choice 
of interexchange carriers is preserved by requiring that 
commercial mobile service providers do not block a subscriber 
from obtaining access to an interexchange carrier through the 
use of interexchange access codes. For more than a decade, the 
Commission has passed upon, and carriers have implemented, a 
variety of dialing access code arrangements facilitating 
consumers' access to interexchange carriers of their choice. 
This process, undertaken with the assistance of Bellcore as 
number administrator, has worked well, and has produced a 
variety of access arrangements, including 950-XXXX, and 800 
numbers. It is the Committee's intent both that consumers 
continue to have the opportunity to use the interexchange 
carrier of their choice and that commercial mobile service 
providers have the freedom to provide access to them in a cost-
effective manner.

Section 109. Freedom From Toll Fraud

    Section 109 protects unsuspecting callers from being 
charged for 800 calls 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 preauthorized 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.
Section 110. Report on Means Restricting Access to Unwanted Material in 
        Interactive Telecommunications Systems

    Section 110 requires the Attorney General to report to the 
Committees on Judiciary and Commerce in the House and Senate on 
the enforceability of current laws governing the distribution 
of obscenity and child pornography by means of computer 
technology. In addition, the report must evaluate current law 
enforcement resources and technology (both currently available 
and in development) to enable parents and other computer users 
to block reception of sexually offensive material. A fast-track 
study from the Department of Justice will provide Congress with 
a close examination of the issues at stake and the 
recommendations of experts to deal with obscenity and child 
pornography in the interactive media.
    Earlier this year, a 28-year-old Gaithersburg, MD, man 
pleaded guilty to statutory rape in a case in which he had sex 
in a Pennsylvania hotel room with a 12-year-old girl. That 
encounter followed five months of computer correspondence 
between the man and the girl. The following week, a California 
software company released a program that will permit users to 
block indecent text and images on the Internet.
    The Department of Justice is currently prosecuting these 
crimes, so they are the appropriate agency to provide this 
report. In addition, Section 110 may help to reprioritize 
obscenity prosecutions at the Justice Department. Furthermore, 
Congress needs more information on the technologies available 
to parents, teachers and others, that will give them control 
over the kinds of material that children have access to over 
the Internet. Section 110 will provide that information.

Section 111. Authorization of Appropriations

    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 of 1934.

             TITLE II--CABLE COMMUNICATIONS COMPETITIVENESS

Section 201. Cable Service Provided by Telephone Companies

    This section amends section 613(b) of the Communications 
Act of 1934 to provide that any common carrier subject to Title 
II of the Communications Act may provide video programming to 
subscribers within its telephone service area if it provides 
video programming through a separate affiliate and otherwise 
complies with a new Part V of Title VI of the Communications 
Act, as added by this legislation. This section also makes a 
conforming change to section 602 to define ``telephone service 
area'' and to add ``or use'' to the definition of ``cable 
service,'' reflecting the evolution of video programming toward 
interactive services.
    Paragraph (3) provides that any affiliate of a common 
carrier that provides video programming in the telephone 
service area of such a carrier but does not utilize the local 
exchange facilities or services of the carrier, shall not be 
subject to the requirements of Part V, but shall be treated as 
either a cable operator subject to the requirements of Title 
VI, or, if it provides video programming by means of radio 
communications, subject to the requirements of Title III. The 
Committee added this provision to make clear that a telephone 
company can be treated as a cable operator if it establishes 
and maintains its cable operations separately from its 
telephone operations and does not make use of the services or 
facilities of its local telephone plant, thereby creating a 
completely separate infrastructure for the delivery of video 
programming. This provision recognizes the ability of a 
telephone company to make such purchases, in addition to 
investing in and building a cable system.
    This section also amends Title VI of the Communications Act 
to add a new 'Part V-Video Programming Service Provided by 
Telephone Companies' and adds a number of new sections to Title 
VI, which are discussed below.
    Section 651(1) defines ``control'' as including an 
ownership interest in which an entity has the right to vote 
more than 50 percent of the outstanding common stock or other 
ownership interest.
    In adopting the definition of ``actual working control'' in 
new section 651(1)(B), the Committee anticipates that the 
Commission will continue its fact-specific examinations in 
considering whether actual working control exists, in whatever 
manner exercised, just as it has committed to do in its order 
entitled ``Implementation of Sections 11 and 13 of the Cable 
Television Consumer Protection and Competitive Act of 1992--
Horizontal and Vertical Ownership Limits, Cross-Ownership 
Limitations, and Anti-Trafficking Provisions,'' MM Docket 92-
264, (adopted September 23, 1993). In determining whether 
actual working control exists, the Committee expects the 
Commission to continue to assess all relevant factors 
including, but not limited to, whether there exists partnership 
and limited partnership interests, interest in trust, and any 
interests of officers and directors. The Commission may 
aggregate ownership interests for purposes of determining when 
actual control exists.
    In general, the Committee endorses the approach that the 
Commission has used to determine whether actual working control 
exists. This provision permits the Commission to continue to 
have flexibility to consider whether factors are relevant to 
serve the purposes of the legislation and the Communications 
Act. The Committee does not intend that an attributable 
interest in an entity, as defined in the Commission's broadcast 
or cable-telco cross ownership rules, would automatically 
confer ``actual working control.''
    Section 651(2) defines ``rural area'' as a geographic area 
that does not include either an incorporated or unincorporated 
place of 10,000 persons or more or any incorporated or 
unincorporated territory defined by the Bureau of the Census as 
an urbanized area.
    Section 652 provides that a common carrier subject to Title 
II of the Communications Act of 1934 shall provide video 
programming directly to its telephone subscribers only through 
a separate affiliate. Subsection (b) sets forth rules on 
separation, including requirements to (1) maintain separate 
books, (2) not own in common real or personal property, and (3) 
maintain separate marketing and product or service specific 
advertising.
    Paragraph (2) permits a carrier to provide inbound 
telemarketing or referral services related to the provision of 
video programming if it provides the same service on the same 
terms, conditions, and prices to its affiliates as to non-
affiliates. By ``inbound telemarketing,'' the Committee means 
inbound telemarketing or referral services that occur during a 
call initiated by a customer or a potential customer of such 
service. The Committee intends that a carrier should be able to 
refer a customer who seeks information on a competitive 
service.
    Paragraph (3) states that if a cable company is jointly 
marketing video and telephone services, then the common carrier 
may jointly market video programming and telephone. The common 
carrier may do so upon a showing to the Commission that the 
cable operator in the telephone company's service area is 
joint-marketing telecommunications services with its video 
programming services. The Commission is directed to grant or 
deny the petition within 60 days.
    Section 652(c) requires that transactions between a video 
programming affiliate and a common carrier with respect to the 
sale, exchange, or lease of property, the furnishing or goods 
and services, and the transfer to or use of any asset or 
resource of such carrier, shall be subject to certain 
Commission rules. Such rules shall ensure that the transaction 
is auditable, which means that it adheres to generally accepted 
accounting principles; that it is fully compensatory, by which 
the Committee means the value paid for the property, goods and 
services, or asset or resource at minimum covers all costs of 
obtaining such property, goods and services, or asset or 
resource and be consistent with the fair market value, if 
applicable; and that such transaction shall be without cost to 
telephone ratepayers. The ``transfer of asset or resource'' 
covers both tangible assets, e.g., capital or equipment, as 
well as intangibles, e.g., goodwill or human resources. The 
requirement on furnishing goods and services applies to 
transmission services and other access services, as well as 
goods, which might include telecommunications equipment if a 
LEC is permitted to manufacture or provide such equipment.
    Subsection (d) permits the Commission to grant small or 
rural telephone companies waivers from these requirements if 
the Commission finds that telephone ratepayers will not be 
harmed and that granting the waiver will have no effect on the 
ability of the Commission to enforce its rules on cross-
subsidization and access. By 'small telephone company' the 
Committee means telephone companies that are similar in size 
and scope to rural telephone companies but which might fall 
outside that definition. The Committee intends that in no event 
shall such term include any carrier classified as Tier I by the 
Commission.
    Subsection (d)(3) clarifies that if a common carrier 
obtains a waiver and no longer is required to have a video 
programming affiliate then the carrier itself must meet the 
obligations of section 656. It is the Committee's intent that 
these requirements apply to one or the other aspect of a common 
carrier's organizational structure regardless of how the 
carrier chooses to provide or offer video programming to its 
customers.
    The provisions of section 652 sunset on July 1, 2000.
    Section 653 requires that a common carrier which provides 
video programming directly to its subscribers shall establish a 
video platform. The Committee intends that the video platform 
be the sole source of capacity for all entities, including any 
video programming affiliate, and that unaffiliated program 
providers must obtain transmission capacity at 
nondiscriminatory rates, terms, and conditions.
    Section 653(a)(2) imposes a requirement on common carriers 
seeking to establish a video platform to submit a notice to the 
Commission of intention to establish channel capacity to meet 
all bona fide demands of video programmers as well as meet any 
channel capacity pursuant to section 656. The notice shall 
conform to the regulations established by the Commission 
pursuant to subsection (b), and shall specify how, within what 
reasonable time period, and in what form a person seeking to 
use such channel capacity should submit its requirements for 
capacity to the carrier.
    Subsection (a)(2) further requires the notice to specify 
the procedures the carrier will use to determine whether a 
request for capacity is bona fide. This requirement ensures 
that all parties understand how the carrier will administer the 
Commission's regulations, issued under subsection (b)(1)(B), 
for determining whether a request is bona fide. The Committee 
expects the Commission to set forth the criteria for 
determining the bona fides of a request, and for the carrier to 
apply those criteria in an objective way. The Committee further 
expects that the Commission will establish procedures for 
review of any denial, or effective denial, of carriage for a 
particular programmer. This includes issues regarding carriage 
and related issues arising out of the protection provided 
throughout this section. Any such review shall be undertaken 
within an expedited time frame in order to avoid prejudice to 
the programmer's opportunity to obtain carriage. In its review 
of any denial, the Commission should exercise its full range of 
remedies, including mandatory carriage by the common carrier. 
Paragraph (a)(2) also directs the Commission to submit notices 
that comply with the Commission's regulations to the Federal 
Register for publication within five working days. The 
Committee does not intend for publication to give legal effect 
to any notice that fails to comply with the Commission's 
regulations under subsection (b), or for such publication to 
restrict in any way the Commission's authority to require the 
common carrier to amend its notice or otherwise comply with 
Commission regulations.
    Paragraph (3) states that the common carrier shall 
establish channel capacity that is sufficient to meet the 
following: all bona fide requests submitted in response to the 
notice; all requirements imposed under section 656 (including 
carriage of commercial and non-commercial television stations, 
and capacity of public, educational, government use as well as 
for commercial use); and any additional channels required by 
the Commission under subsection (b)(1)(C).
    The Committee's intent in adopting this provision is to 
balance the interest of programmers, who would prefer always to 
have channel capacity available, and the concern of consumers 
and telephone companies, who do not want to see excessive 
channel capacity lay fallow, since that would represent wasted 
investment and excessive costs. The process established here 
attempts to catalog the legitimate demand for capacity, mandate 
carriage requirements established in section 656, and then 
require that the carrier build a system to meet the sum of this 
calculus.
    Paragraph (4) builds on the system established in paragraph 
(2) by codifying certain elements of the general practice of 
common carriers. First, subparagraph (A) directs a carrier to 
notify immediately the Commission if a request for carriage by 
any programmer has been delayed or denied. If a carrier fails 
to notify the Commission, the Commission may take official 
notice of any complaint submitted by an affected programmer. 
Subparagraph (B) makes explicit that the requirements in 
paragraph (3) with respect to extending carriage to a bona fide 
request continue to apply once the video platform is operating. 
Thus, an operating video platform has an ongoing obligation to 
extend carriage to bona fide programmers as long as capacity is 
available.
    Subparagraph (C) imposes on carriers the obligation to 
notify the Commission when it becomes apparent to the carrier 
that there will be no available excess capacity reasonably 
soon. In making this determination, the carrier should consider 
initial bona fide demands, the rate at which bona fide requests 
have been received and granted pursuant to subparagraph (B), 
and general trends among all sources of demand, including 
public, educational and governmental institutions, for 
additional capacity. Subparagraph (C) further requires the 
carrier to file with the Commission the manner and date by 
which such carrier will provide sufficient capacity to meet 
such excess demand. This provision requires the carrier to 
submit a plan either to construct additional capacity in a 
timely fashion, or make other accommodations, i.e., voluntary 
reallocation or sharing of capacity so as to meet the excess 
demand. Subparagraph (D) states that a carrier that establishes 
a video platform shall construct such additional capacity as 
may be necessary to meet excess demand.
    Paragraph (5) authorizes the Commission to resolve 
carriage-related disputes. The Commission is directed to 
resolve these disputes within 180 days. The Commission may 
require carriage or award damages, or both. Moreover, the 
paragraph clarifies that an aggrieved party may seek any other 
remedy that it may have under the Communications Act.
    Section 653(b)(1) requires the Commission to prescribe 
regulations relating to the video platform. Section 
653(b)(1)(A) states that such regulations shall prohibit a 
carrier from discriminating among video programming providers. 
This subparagraph also requires regulations to ensure that 
rates, terms, and conditions for carriage are just, reasonable, 
and nondiscriminatory. The Committee recognizes, however, that 
sections 656(a)(2) and (b)(1) require unique carriage and 
payment requirements that reflect the obligations applicable to 
cable systems under the 1992 Cable Act, including 
retransmission consent rights and must carry, and thus, the 
carriage of such video programming providers to section 656 on 
terms, rates and conditions as required by sections 614, 615 
and 325 of the Communications Act will not be a violation of 
this subsection. One aspect of the terms and conditions for 
carriage is service, transmission, interconnection, and 
interoperability. Subparagraph (E) amplifies the general 
nondiscrimination requirement in subsection (b)(1)(A) by 
requiring such services be offered by the common carrier to 
unaffiliated programming providers on an equivalent basis as is 
offered to an affiliate.
    Subparagraph (B) requires regulations on determining when a 
carriage request is bona fide. With respect to criteria for 
determining a bona fide request, the Committee intends that the 
Commission look carefully to a number of factors indicating the 
bona fides of the request, and develop criteria that recognize 
that the requester has a legitimate business and programming 
omission. The Committee recognizes that the Commission may 
establish different sets of criteria for commercial and non-
commercial programmers. The Commission also should seek to 
develop, to the maximum extent possible, regulations that are 
objective and therefore easily administered by the carrier.
    Subparagraph (C) directs the Commission to permit the 
common carrier to share channel space among video programming 
providers (including the carrier's programming affiliate). It 
is the Committee's intention that a common carrier should not 
be required to provide separate channels for duplicative 
programming services.
    Subparagraph (D) extends the Commission network non-
duplication (47 C.F.R. 76.92 et seq.) and syndicated 
exclusively (47 C.F.R. 76.151 et seq.) rules to the 
distribution of programming over the video platform.
    Subparagraph (E) requires that the service, transmission, 
and interconnection of all unaffiliated video programming 
providers be equivalent to that provided to the common 
carrier's video programming affiliate. The Committee, however, 
does not intend that this nondiscrimination requirement be used 
to discriminate between analog and digital programming provided 
by unaffiliated program providers and, therefore, prohibits 
such discrimination.
    Subparagraph (F) addresses another potential source of 
discrimination: information given to the subscriber for 
purposes of selecting programming on the video platform. This 
subparagraph requires regulations that prohibit unreasonable 
discrimination among programmers with regard to information 
given to the subscriber on programming selection. The 
Commission's regulations should also ensure that a video 
programmer can identify its product, and have its unique 
identification passed to the subscriber.
    Subparagraph (G) ensures that, as common carriers develop 
video platform services, they do not totally exclude areas on 
the basis of the ethnicity, race or income of residents of 
geographic service areas. The Committee is convinced that our 
country will only reap the many possible benefits and 
advantages of video platform services if those services are 
available to all citizens. The Committee believes this 
provision is necessary to ensure that common carriers recognize 
an affirmative obligation to build-out new video service in a 
manner that does not disadvantage communities on the basis of 
the ethnicity, race, or income of the residents of a geographic 
service area. The Commission is also required to provide for 
public comments on the adequacy of the proposed service areas 
in meeting this criteria.
    Notwithstanding the nondiscrimination requirements of the 
rules enacted pursuant to subsection (b), the Committee intends 
that a common carrier and/or its programming affiliates are 
free to negotiate mutually agreeable terms and conditions with 
unaffiliated program providers with respect to access to any 
providers, signals on a program menu guide.
    Paragraph (2) directs the Commission to extend the 
requirements of this section to those specific cable systems 
that have installed a switched, broadband video programming 
delivery system. This paragraph also recognizes that some of 
the requirements included in this section with respect to 
requests for carriage overlap with the requirement in section 
612 (channels for commercial use), and that the requirements in 
this section would supplant section 612 requirements. However, 
the requirements included in this section are broader than 
section 612, and should be applied to such cable operators, 
except in cases where such regulations would be clearly 
inappropriate or duplicative.
    In keeping with the Committee's intention to reduce 
unnecessary regulatory burdens whenever possible, subsection 
(d) replaces all Title II regulations over common carriers 
providing video programming services over a video platform with 
the requirements established pursuant to section 653.
    Subsection (d) directs the Commission to study whether the 
video platform requirements of this section should be applied 
to all cable operators, and to report to Congress within 2 
years of enactment. The Committee has required this study to 
determine whether it is in the public interest to extend the 
requirements of this section on access and nondiscrimination to 
those cable operators who are not covered by subsection (b)(2).
    Section 654 permits the State commissions to prescribe 
regulations prohibiting cross subsidization from telephone 
rates any expenses with the provision of video programming or 
regulations prohibiting cable operators from cross subsidizing 
the cost of cable service any expenses associated with the 
provision of telephone service if the State finds such 
regulations are necessary.
    Section 655 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.
    In determining whether the scope and duration is reasonably 
limited, the Commission should look to the underlying policy 
goals of this legislation: to promote competition both in 
services and facilities, and to encourage long term investment 
in the infrastructure. Consequently, for example, a contract 
providing for the use of 90 percent of the cable operator's 
capacity by the telephone company would not only defeat the 
policy goal of competition, it would also enable the carrier to 
circumvent effectively the prohibitions on buy-outs contained 
in this section. Such an arrangement on scope would not be 
reasonably limited. By contrast, an arrangement that provides a 
carrier with the same or similar capacity as used by the cable 
operator granting the capacity would tend to be reasonably 
limited in scope. Similarly, the Commission should look to the 
same policy goals when assessing the reasonableness of 
duration. An arrangement that, for example, runs for 50 years, 
given the rapid change in technology in the communications 
industry, on its face appears not to be reasonably limited. By 
contrast, an arrangement for 5 years, given the need for some 
predictability in the market, would appear to be reasonable. 
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. By 
``nature of the market served'' the Committee intends the 
Commission to review the particular circumstances that would 
lead to making a franchise area a high cost area. By ``undue 
economic distress'' the Committee does not mean that the owner 
is simply failing to obtain the highest possible price. Rather, 
the Committee intends this provision to be limited to genuine 
hardship cases. The Commission is directed to act on a waiver 
application within 180 days after it is filed.
    Section 656 provides which sections of Title VI will apply 
to a video affiliate or a video platform. Subsection (a) 
requires that all video programming affiliates must comply with 
the rules on ownership restrictions, carriage agreements, sales 
of systems prohibiting unfair and discriminatory practices in 
the sale of video programming, subscriber privacy, customer 
service obligations, and equal employment opportunity 
requirements.
    This section also states that existing provisions of Title 
VI requiring the carriage of public, educational and 
governmental channels, cable channels for commercial use, and 
local commercial and non-commercial educational television 
signals apply to video programming affiliates or video 
platforms.
    All rules presently imposed upon multichannel video 
programming distributors as required under section 325 of Title 
III also apply. In applying section 325 of the Communications 
Act of 1934 to operations of the video programming affiliate of 
a common carrier, the Committee notes that the plain language 
of section 325 already covers any multichannel video 
programming distributor. Section 656 of this Act makes it clear 
which sections of current law will apply to the operation of 
the video programming affiliate or video platform. The fact 
that section 325 was included specifically in this Act should 
not be interpreted to suggest that the Committee in any way 
intends to limit the application of section 325 to any other 
multichannel video programming distributor. To the extent that 
third party packages assemble multiple channels of programming 
for distribution on a common carrier's video platform, they 
also would fall clearly within the plain language of section 
325. Paragraph (a)(3) specifies the portions of Title VI 
regulation that will not apply to video programming affiliates.
    Section 656(b)(1) directs the Commission to prescribe 
regulations requiring a common carrier in the operation of the 
video platform to comply with the rules on capacity for public, 
educational, and governmental (PEG) channels, capacity for 
commercial use, carriage of commercial and non-commercial 
educational television signals and retransmission consent 
obligations. These regulations shall impose obligations on 
video platforms that are equivalent to the obligations imposed 
on cable operators.
    In considering how to implement the capacity, services, 
facilities, and equipment requirements for PEG use pursuant to 
paragraph (b)(1), the Committee intends that the Commission 
give substantial weight to the input of local governments, 
which have long-standing and extensive experience in 
establishing and implementing such requirements. Moreover, 
where appropriate, the Commission shall permit, but not 
require, States and local government to implement and enforce 
the PEG requirements the Commission adopts pursuant to this 
section. The Committee intends for the PEG requirements to be 
substantially equivalent to those to which cable operators 
typically must meet in cable franchise areas across the 
country. Nothing in section 656 or in the Commission's 
regulations should prevent or discourage voluntary offers of 
capacity, services, facilities and equipment by either cable 
operators or common carrier programming affiliates that exceed 
any requirements imposed pursuant to either section 611 or 
section 656.
    Section 656 also applies to video platforms the same 
mandatory carriage obligations that were applied to cable 
operators in the 1992 Cable Act. The Commission shall prescribe 
regulations that adopt the requirements of sections 614 and 615 
of the Communications Act so as to impose obligations that are, 
to the extent feasible, equivalent to those that apply to cable 
operators.
    Although section 656 effectively precludes a local 
government from requiring that a video programming affiliate 
obtain a cable franchise pursuant to section 621 in order to 
provide cable service, the Committee does not intend to 
prohibit a local government from exercising its authority 
pursuant to sections 613, 617, 631, and 632 of Title VI or 
impose requirements, pursuant to a local ordinance, statute, 
regulation, permit, license, contracts or other authorization.
    Subsection (b)(2) requires the video programming affiliate 
of a carrier and competing video programming providers to pay a 
fee equivalent to a franchising fee that cable operators are 
required to pay to the local franchising authority under 
section 622. It clarifies the right of a local government to 
collect fees from any multichannel programming affiliate of a 
common carrier and from any multichannel video programming 
distributor offering video programming over a video platform. 
The Committee does not intend for paragraph (2) to prohibit a 
local jurisdiction from collecting fees pursuant to paragraph 
(2) if no cable operator serves the jurisdiction. Such a 
jurisdiction shall have the right to collect fees at a rate 
which does not exceed the maximum rate at which a franchising 
authority may impose franchise fees under section 622 of Title 
VI. The fees shall be determined in a manner consistent with 
section 622(g) and therefore shall be in addition to (1) any 
tax, fee, or assessment of general applicability and (2) any 
provision of services, facilities and equipment which, as 
explained in the House Report accompanying the 1984 Cable Act, 
are not monetary payments included in the definition of ``fee'' 
in section 622. 11 The same House Report further notes 
that any payments which a cable operator makes voluntarily to 
support public, educational and governmental access and which 
are not required by the franchise would be subject to the five 
percent franchise fee cap. This understanding also should apply 
to paragraph (b)(2).
    \11\ H.Report No. 98-234, Second Session, at 64-65 (1984).
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    The Committee intends such fees to be collected by the 
local government that franchises the cable operator in the 
local jurisdiction, or, in jurisdictions where there is no 
cable operator, by the local government authority that would 
have the right to grant a franchise to a cable operator. The 
Committee intends for a video programming affiliate or 
multichannel video programming distributor using a video 
platform to pay fees to the local government in each locality 
where it provides video programming. Each local jurisdiction 
shall have discretion as to the method of collecting fees, the 
frequency of payment, and other matters related to such 
authority's right to collect fees pursuant to this section. In 
order to be consistent with section 656(b)(2), the method, the 
frequency and other matters determined by the local government 
that franchises the cable operator must be essentially similar 
to and no greater or lesser than the requirement imposed on 
cable operators in the same locality.
    The Committee extended the fee requirement beyond the video 
programming affiliate to any multichannel programming 
distributor offering a competing service. This will ensure 
franchise authorities receive appropriate compensation, and to 
establish horizontal equity among competing programmers. By 
``competing service'' the Committee does not intend 
mathematical exactitude whereby the multichannel video 
distributor must have the same number or type of channels as 
the carrier's affiliate. Rather, the Committee expects the 
Commission to use a practical test to determine which 
multichannel services are competing with the video programming 
affiliate.
    Finally, a cable operator that establishes a video 
platform, whether voluntarily or pursuant to the requirements 
of section 653(b)(2), would be subject to Title VI only to the 
extent provided in this section. This will ensure regulatory 
parity between common carriers, which are required to establish 
video platforms under section 653, and cable operators which 
establish such platforms.
    Section 657 stipulates that several of the provisions added 
by this legislation (specifically sections 652, 653, and 655) 
do not apply to common carriers providing service in rural 
areas. In the Committee's view, these requirements likely are 
too burdensome and unnecessary, given the demographics of the 
areas served by the carriers in question.

Section 202. Competition from cable systems

    Subsection (a) 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. By permitting clustering of cable systems, the 
Committee intends that the scale and scope of economies 
achievable through cable system clustering will generate lower 
costs, more efficient regional advertising, and higher quality 
services for consumers and will enhance the cable industry's 
ability to enter and compete in the local telephone business.
    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). The Committee 
intends that such equipment deregulation extends to any 
requirements imposed by States or franchising authorities, as 
well as by the Commission. Equipment, installations, and 
additional connections for basic-only subscribers continue to 
be regulated until a cable system meets effective competition 
as defined by section 623(l). Subsection (c) also clarifies 
that the Commission may not regulate the rates of equipment 
that is furnished to subscribe solely in connection with video 
programming offered on a per channel or per program basis.
    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. For 
example, if a cable operator raises its basic service tier rate 
from $10 to $10.50, the franchise authority may only consider 
the $.50 increase, but may not consider previous rate increases 
that have been deemed reasonable. Local franchise authorities 
have 90 days to review a basic tier increase and order a rate 
reduction and refund if the increase is found to be 
unreasonable.
    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. 
It is the Committee's belief that aggregating equipment costs 
into broad categories will enable cable operators to reduce the 
monthly charges to consumers that often are associated with the 
introduction of new technology.
    The Committee finds that current Commission regulations do 
not adequately encourage deployment of the digital technology. 
For example, the regulations require cable operators to 
calculate separately the lease charges for analog and digital 
converter boxes. Broad averaging of the costs of new technology 
would be a significant advantage for rural and low-income 
consumers. In the absence of averaging, cable operators are 
forced to recover the costs of digital equipment through 
higher-priced services. That, in turn, encourages operators to 
provide digital boxes in economically upscale areas where they 
are more likely to be able to recoup their investment through 
higher service prices.
    The Committee is particularly concerned that the consumer 
equipment necessary to implement digital technology will be too 
expensive for most consumers. Some observers have estimated, 
for example, that the cost of a digital converter is expected 
to be in the $400-$500 range, with monthly charges in excess of 
$4. The Committee finds that, in order to facilitate deployment 
of digital technology, cable operators must be permitted to 
allocate the costs of such equipment in a manner that reduces 
the price for consumers. Subsection (e) permits cable operators 
to broadly average equipment costs as one way of accomplishing 
this goal. 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 five 
percent of a system's subscribers, or 10 subscribers, whichever 
is greater, before it initiates a rate case. The Committee 
finds that this subsection is consistent with the intent of the 
1992 Cable Act that there be a reasonable demonstration that 
consumers believe there is a problem with a cable operator's 
cable programming service rate before triggering a protracted 
and expensive rate case. The Committee finds that current 
Commission regulations do not provide a reasonable threshold 
for invoking the Commission's regulatory authority and that 
this often resulting in needless expense for taxpayers and 
cable operators. The Committee intends that subscriber 
complaints must be filed individually and not by filing a 
single complaint with multiple subscriber signatures.
    Subsection (f) also directs the Commission to resolve cable 
programming service rate cases within 90 days. Existing 
Commission regulations do not set a time period for resolution 
of rate complaints and rate cases have not been processed in a 
timely manner. The Committee believes the 90-day requirement 
allows sufficient time for the Commission to adequately review 
rate increases.
    It is the Committee's intention that subscribers' rights to 
complain to the Commission about cable programming service rate 
increases be fully preserved. Subsection (f), therefore, 
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.
    Finally, 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. The Committee finds that current Commission 
rules are unclear as to whether the Commission would consider 
rolling back a consumer programming service rate beyond its 
current level even if no complaints had previously been filed 
against this current level. For example, under current rule, if 
a cable operator raises its consumer programming service rate 
from $10 to $10.50 and subsequently increases the rate from 
$10.50 to $11.00, some have argued that the Commission not only 
may reject the increase from $10.50 to $11.00, but may further 
reduce the rate below $10.50, even though the first $.50 rate 
increase was never the subject to a complaint and should, 
therefore, be deemed reasonable. The Committee intends that 
only the incremental increase over the base rate is appropriate 
for review.
    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. 
The subsection is consistent with the recent U.S. Court of 
Appeals decision holding that the Commission's interpretation 
imposing the uniform rate structure requirement on all services 
and all cable systems, regardless of whether the system is 
subject to effective competition, is inconsistent with the 1992 
Act. Time Warner v. FCC, No. 93-1723 slip op. (D.C. Cir. June 
6, 1995). Imposing a uniform rate structure requirement on 
services that are not regulated is unnecessary, since, in those 
instances, market forces are actively working to ensure 
reasonable rates.
    Subsection (g) amends section 623(d) of the Communications 
Act to exempt bulk discounts to multiple dwelling units 
(``MDUs'') from the uniform rate requirement. Current 
Commission regulations require that if a cable operator offers 
a lower rate in one MDU it must offer the same low rate to MDUs 
across the franchise area. The Committee finds that this 
regulation does not serve consumers well by effectively 
prohibiting cable operators from offering lower prices in an 
MDU even where there is another distributor offering the same 
video programming in that MDU.
    Subsection (h) amends section 623(l)(1) of the 
Communications Act by adding a fourth effective competition 
test which recognizes that the provision of video programming 
services by a telephone company subjects a cable operator to 
effective competition that will ensure reasonable rates and 
high quality services much more effectively than government 
micromanagement. 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.
    The Committee intends that any common carrier, or an 
affiliate of such common carrier, that is authorized to provide 
video programming through video dialtone or directly to 
consumers by any means will trigger a finding of effective 
competition under subsection (h) of the legislation.
    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.
    The Committee believes subsection (h) restores Congress' 
original intent of effective competition by making clear that 
the penetration of all multichannel video program distributors 
in a franchise area is to be counted towards the 15% 
penetration threshold as long as one cable competitor in the 
franchise area achieves 15% availability. This provision is 
consistent with the recent decision of the U.S. Court of 
Appeals for the D.C. Circuit, holding that the Commission's 
rule, under which only video program distributors with 50% 
availability are counted toward the 15% threshold, is 
inconsistent with the 1992 Cable Act. See Time Warner v. FCC, 
supra.
    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. By deregulating small cable 
systems, the Committee intends to provide regulatory relief to 
those companies that lack the capital and technical expertise 
necessary to comply with the Commission's rate regulations and 
to survive the substantial rate reductions imposed by the 
rules. 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. The Committee intends 
by this subsection to avoid the effects of disjointed local 
regulation. The Committee finds that the patchwork of 
regulations that would result from a locality-by-locality 
approach is particularly inappropriate in today's intensely 
dynamic technological environment.
    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. The Committee finds that it is 
imperative that cable operators be provided maximum flexibility 
to protect the intellectual property that they transmit over 
their systems. The Committee wants to stress that governmental 
entities should not prohibit cable operators from scrambling 
their services, given that scrambling is the most difficult 
security system for pirates to defeat.
    The Committee believes it is particularly important that 
cable operators are permitted to scramble their signals given 
the critical need to protect consumers, especially children, 
from excessively violent or sexually explicit programming, or 
other programming that might be deemed objectionable. 
Scrambling is the best way to ensure that consumers are not 
exposed to programming they wish to avoid. Moreover, the U.S. 
Court of Appeals for the D.C. Circuit recently affirmed that 
cable operators have liability for the distribution of obscene 
or indecent programming over leased and public access channels. 
See Alliance for Community Media v. FCC, No. 93-1169 slip op. 
(D.C. Cir. June 6, 1995). Given this liability, the government 
should not restrict cable operators' use of scrambling, or any 
other security method, to prevent unwanted reception of such 
programming.
    Subsection (l) amends section 624A of the Communications 
Act to maximize the rate of competition and avoid unnecessary 
government intervention in the area of cable television 
equipment. Subsection (l) directs 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. The Committee finds that with respect to cable 
compatibility; any mandatory requirements should address only 
the minimum degree of common design and operation necessary to 
achieve this end. 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.
    The Committee notes that subsection (l) does not preclude 
the Commission from developing or enforcing standards for 
telecommunications networks. It merely clarifies that the 
Commission's implementation of section 624A of the 
Communications Act of 1934 should not include adoption of 
requirements that go beyond the scope intended by that section.
    Subsection (l) is not intended to restrict the Commission's 
authority to promote the competitive availability of converter 
boxes, interactive communications devices, and other customer 
premises equipment as required by section 203 of this 
legislation.
    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. The Committee recognizes that carriage 
of program services is pursuant to contract between cable 
operators and programmers. The Committee does not intend 
subsection (l) to modify the terms and conditions of such 
contracts and, therefore, would permit movement of a program 
service off a basic tier only if the operator is permitted to 
do so by its contract with the programmer.
    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. The Committee believes this increased flexibility will 
reduce operator costs and streamline the implementation of rate 
adjustments to which the operator is entitled, while at the 
same continuing to ensure that cable subscribers are 
effectively and timely informed in writing of changes in rates 
and services.
    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.
    The purpose of a notice requirement is to ensure that 
consumers have sufficient warning about rate and service 
changes so they can choose to disconnect their service prior to 
the implementation of the change. The requirement that 
subscriber notice occur 30 days before the change is 
implemented achieves this purpose. There is no need for 
intrusive regulations to dictate how cable operators 
communicate this 30-day advance notice to subscribers, as long 
as the method of notification used by the operator is 
reasonable and conspicuous.
    Subsection (o) amends section 623 of the 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.

Section 203. Competitive availability of navigation devices

    Section 203 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. 
These devices will connect consumers to the network of 
communications and entertainment services that will be provided 
by telecommunications providers.
    The Committee intends that the rules adopted by the 
Commission pursuant to section 203 will assure consumers of the 
availability of navigation devices and other customer premises 
equipment from a variety of sources during the transition 
period to a competitive market for such devices.
    The Committee believes that the transition to competition 
in network navigation devices and other customer premises 
equipment is an important national goal. Competition in the 
manufacturing and distribution of consumer devices has always 
led to innovation, lower prices and higher quality. Clearly, 
consumers will benefit from having more choices among 
telecommunications subscription services arriving by various 
distribution sources. A competitive market in navigation 
devices and equipment will allow common circuitry to be built 
into a single box or, eventually into televisions, video 
recorders, etc.
    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. Section 203 
directs the Commission to take this interest into account in 
developing its regulations. The Committee does not endorse any 
particular method for providing security and does not authorize 
the Commission to adopt regulations which would jeopardize the 
security of a telecommunications system.
    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 allows 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 defines ``telecommunications subscription 
service'' to include those services provided directly to 
consumers. The Committee does not intend to include in the 
definition services that sell programming to those networks 
rather than directly to the consumer.
    The Committee intends that the regulations adopted pursuant 
to this section are transitional and must cease to apply to any 
market for customer premises equipment, including navigation 
devices, when the Commission determines that such market has 
become competitive. In order to reduce the regulatory burden on 
the Commission, the Committee does not intend that the 
Commission disturb its rulings with respect to market 
competitiveness prior to the date of enactment. For example, 
the Commission's 1992 decision in Bundling Cellular Premises 
Equipment and Cellular Service, 7 FCC Rcd. 4028, which found 
that the CPE market for cellular is competitive, will be deemed 
to satisfy the requirements of this section and thus further 
action by the Commission is not necessary to determine that CPE 
for cellular service is competitively available.
    Finally, the Committee does not intend that section 202(l) 
in any way limits or circumscribes Commission authority under 
section 203.

Section 204. Video programming accessibility

    Section 204 is designed to ensure that video services are 
accessible to hearing impaired and visually impaired 
individuals. Advances in communications technology and 
communications networks have dramatically improved 
opportunities for independence, productivity, and integration 
for people with disabilities. The convergence of 
telecommunications technology and high speed networks could 
lead to enormous new opportunities for full and equal 
participation by citizens with disabilities in employment, 
commerce, education, health care, entertainment, and democratic 
government. Yet if accessibility for people with disabilities 
is not a priority during the development of new technologies 
and services, it can be expensive and difficult to retrofit. 
For this reason, the Committee states its clear goal that 
access for people with disabilities be considered and pursued 
at the outset of the development of the information 
technologies and in the creation of products and services that 
will be available using these technologies.
    The Committee recognizes that there has been a significant 
increase in the amount of programming that has been closed 
captioned since the passage of the Television Decoder Circuitry 
Act of 1990. In particular, many network programs aired during 
prime time are captioned. Nevertheless, the Committee is 
concerned that video programming through all delivery systems 
should be accessible, and that new products and services 
offered using the information networks of the future should be 
accessible to people with disabilities.
    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. While the goal of 
the Committee is to ensure that video programming is accessible 
to the hearing impaired, the Committee recognizes that the cost 
to caption certain programming may be prohibitive given the 
market demand for such programs and other factors. 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.
    It is clearly more efficient and economical to caption 
programming at the time of production and to distribute it with 
captions than to have each delivery system or local broadcaster 
caption the program. Therefore, the Committee expects that most 
new programming will be closed captioned, and that preexisting 
programming will be captioned to the maximum extent possible, 
with the recognition that economic or logistical difficulties 
make it unrealistic to caption all previously produced 
programming. In general, the Committee does not intend that the 
requirement for captioning should result in a previously 
produced programming not being aired due to the costs of the 
captions.
    Section 204(d) allows the Commission to exempt specific 
programs, or classes of programs, or entire services from 
captioning requirements. For example, the Commission may 
determine that it is economically burdensome to require 
captioning for certain types of programming, such as locally 
produced or regionally distributed programs. 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 Committee 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. Thus, private rights of action are expressly 
prohibited.

          title iii--broadcast communications competitiveness

Section 301. Broadcaster spectrum flexibility

    Section 301 directs the Commission, if the Commission 
issues licenses for advanced television services, to limit the 
initial eligibility for such 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. The Committee believes 
that permitting broadcasters more flexibility in using their 
spectrum assignments is consistent with the public policy goal 
of providing additional services to the public. Such a policy 
not only promotes more efficient spectrum use, but also 
encourages innovation. This action is no way precludes the 
Commission's decision-making in developing standards and 
requirements for advanced television services. Apart from the 
restrictions contained herein, this section leaves the final 
determination of the uses of spectrum assigned to the 
broadcasters to the Commission. 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.
    Within each 6 megahertz (mHz) assignment, a variety of 
digitally transmitted services can be offered by a broadcast 
licensee. The characteristics of a digital transmission permit 
it to be used for an intermixed flow of data. Given the dynamic 
nature of the data flow, these services probably cannot be 
separated or segmented. Therefore, these different digital 
services are ``indivisible'' within the 6 mHz assignment, and 
these services are provided along with the signal that the 
licensee broadcasts advanced television (ATV) programming.
    Nothing in this provision, however, is intended to prevent 
licensees from providing such other services as the Commission 
may permit during those periods when the licensee is not 
actually transmitting a main broadcast signal. For example, if 
during the initial transition to digital broadcasting, a 
licensee is transmitting only four hours of ATV service, the 
licensee could deliver ancillary or supplementary services 
across the entire 6 mHz during other times of the day.
    Paragraph (b)(2) requires the Commission to prescribe 
regulations that avoid the derogation of any advanced 
television services, including high definition television 
(HDTV) services. It is not the intent of the Committee in any 
way to undermine the considerable efforts expended by the 
Commission and private industry over the past several years to 
develop advanced television. The Commission should ensure that 
if it issues additional licenses for advanced television, 
adequate transmission capacity shall be retained to support the 
primary use of the spectrum for advanced television services.
    Paragraph (b)(3) clarifies the regulation of ancillary and 
supplementary services. It requires that Commission regulations 
that are applicable to such analogous 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. This section need not result in any 
increase in the number of hours broadcast by any station except 
where the Commission might find it to be in the public 
interest. The Committee intends that the Commission continue in 
its efforts to ensure the quality of the ATV signal that 
consumers will be receiving. Rather, the Commission maintains 
its discretion to address requirements for the minimum hours 
per day of broadcast service to be transmitted.
    Subsection (c) provides that if the Commission issues 
licenses for advanced television services, it shall 
precondition such issuance on the requirement to one or the 
other of the licenses be surrendered to the Commission pursuant 
to its regulations. 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.
    The Committee notes that if the Commission were to allow 
subscriber-supported services under its advanced television 
proceeding, subsection (d) would permit the Commission to 
designate such services as ancillary and supplementary services 
subject to the payment of a fee.
    The Committee intends that the Commission establish fees 
which are, to the maximum extent feasible, equal to but do not 
exceed (over the term of the license) the amount the public 
would have received had the spectrum for such services been 
auctioned publicly under section 309(j) of the Communications 
Act, and which avoid unjust enrichment of the licensee for such 
use of the spectrum.
    Subsection (e) requires the Commission to conduct an 
evaluation within 10 years after the date it issues its 
licenses for advanced television services. This report shall 
(1) assess the willingness of consumers to purchase new 
television receivers to receive ATV signals; (2) assess 
alternative uses of the frequencies used for broadcast of ATV; 
and (3) evaluate the extent to which the Commission has been 
able to reduce the amount of spectrum assigned to licensees.
    In subsection (f), the Committee adopts the Commission's 
definition of high definition television, i.e., systems that 
offer approximately twice the vertical and horizontal 
resolution of NTSC receivers with picture quality approaching 
that of 35 mm film and audio quality equal to that of compact 
discs. The Committee notes that high definition television is a 
subset of advanced television services.

Section 302. Broadcast ownership

    Section 302 amends Title III of the Communications Act by 
inserting a new section 337 addressing broadcast ownership.
    Section 337, subject to the restrictions specified in this 
section, 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 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.
    For purposes of this section, it is the intention of the 
Committee that ``medium of mass communication'' in a given 
local market shall include only radio and television broadcast 
stations licensed to communities in the market, daily 
newspapers published in communities in the market, and cable 
television or other equivalent video delivery systems which 
serve communities in the market. The Committee intends that the 
ownership restrictions contained in section 337 apply only to 
the acquisition of media outlets and not to the creation of new 
media outlets.
    Section 337(b)(1) is intended to eliminate current limits 
placed on television audience nationwide and to place 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 and, after one year, to 50 
percent of the national audience. This section does not change 
the methodology for calculating ``national audience reach'' 
currently employed by the Commission. For example, currently, 
the audience reach of UHF stations is discounted. This ``UHF 
discount'' appropriately reflects the technical and economic 
handicaps applicable to UHF facilities and the Committee does 
not envision that the UHF discount calculation will be modified 
so as to impede the objectives 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. The Committee believes that significant changes 
in local video markets, which include increases in the number 
of local television stations and other multichannel 
competitors, require substantial deregulation of the local 
television ownership rules. This is especially true with 
respect to UHF stations which continue to operate with 
significant technical and economic handicaps. The Committee 
believes that these market developments require substantial 
deregulation of local station ownership and greater reliance on 
marketplace forces to assure vigorous competition and 
diversity. Permitting common ownership of stations will promote 
the public interest by harnessing operating efficiencies of 
commonly owned facilities, thereby increasing competition and 
diversity.
    Subparagraph (B) creates a strong presumption in favor of 
UHF/UHF and UHF/VHF combinations. The Committee does not 
envision that this section will be utilized by the Commission 
to impose a case-by-case review process. Rather, the Committee 
expects that the Commission's review of UHF/UHF and UHF/VHF 
combinations will be triggered only where there if evidence of 
harm to competition and diversity, e.g., where there is a 
danger of undue concentration.
    Subparagraph (C) clarifies that the Commission may also 
permit VHF/VHF combinations where it determines that doing so 
will not harm competition and diversity. Unlike the presumption 
in favor of UHF/UHF and UHF/VHF combinations, the Committee 
envisions the Commission's review under subparagraph (C) will 
be on a case-by-case basis.
    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. This section does not constitute authority for the 
Commission to prescribe regulations containing local cross-
media ownership limitations. Further, it is not the intent of 
the Committee to require divestiture of any existing interests, 
but the Commission may condition the grant of an application to 
acquire additional media interests. The Committee intends this 
limitation to balance the needs of owners of media properties 
and the historic interest in maintaining a diversity of voices 
in the media. The Committee believes that these provisions 
permit appropriate consolidation of media properties to occur 
while maintaining several independent voices in each local 
market.
    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 
effectively repealed on the date of enactment. It is the 
Committee's intention that rules necessary to implement the 
provision of the Act concerning broadcast ownership be 
finalized within six months of enactment. Again, the Committee 
notes that in adopting limits in ownership, it specifically has 
not changed the Commission's current methodology of calculating 
or attributing ownership. The Committee does not envision the 
Commission, either in pending rulemaking proceedings on 
television ownership and attribution standards, making changes 
in its rules which would impede the objectives of this section.
    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. The Committee 
wishes to note the positive contributions of television local 
marketing agreements and to assure that this legislation does 
not deprive the public of the benefits of existing local 
marketing agreements that were otherwise in compliance with 
Commission regulations on the date of enactment of this 
legislation. The efficiencies gained through these agreements 
have reaped substantial rewards for both competition and 
diversity, enabling stations to go on the air which would not 
otherwise be able to obtain financing, and saving failing 
stations which would otherwise go dark.

Section 303. Foreign investment and ownership

    Section 303 amends section 310(a) of the Communications Act 
to exempt licenses to mobile earth stations engaged in 
occasional or short-term transmissions via satellite of audio 
or television program material and auxiliary signals if such 
transmissions are not intended for direct reception by the 
general public in the United States. The Committee intends this 
provision to exempt satellite newsgathering (SNG) equipment 
from the provisions of section 310(a), which bars foreign 
government representatives from receiving a radio station 
license. SNG terminals are satellite earth stations that can be 
transported to a program origination site, either in the U.S. 
or in foreign countries, by car, truck and/or commercial 
aircraft.
    Broadcast stations or networks owned by a foreign 
government, receiving some form of government support, or 
having some form of relationship with the government (which 
constitute the vast majority of foreign broadcast stations or 
networks) under current law may be construed to be foreign 
governments or ``representatives'' for purposes of section 
310(a). Because of the widespread impression that U.S. law 
imposes an impediment to the operation of SNG facilities by 
foreign broadcast stations or networks, foreign authorities 
have reacted by taking actions, or are considering taking 
actions, that effectively bar or make it more difficult for the 
U.S. media to operate their own SNG terminals within the 
foreign authorities' jurisdictions. By amending section 310(a), 
the Committee intends to provide the Commission with explicit 
authority for licensing SNG operations in the United States for 
these entities that have some form of relationship to a foreign 
government and to assure that U.S. broadcast stations or 
networks maintain their current authority to operate SNG 
equipment in other countries.
    Section 310(b)(4) of the Communications Act allows foreign 
ownership of the holding company of a radio licensee to exceed 
25 percent but it gives the Commission the discretion to revoke 
or deny the grant of a license ``if the Commission finds that 
the public interest will be served by the refusal or revocation 
of such license.'' 12 A treatise on international 
telecommunications regulation compiled by the Federal 
Communications Bar Association in 1993 correctly interprets 
section 310(b)(4) as follows: ``Under the terms of the statute, 
the Commission must find that a refusal of the license to a 
company in which alien ownership in its holding company exceeds 
the twenty-five percent benchmark serves the public interest. 
Therefore, the onus is on the Commission to prove that the 
relaxed public interest standard mandates a refusal of the 
license request. 13 The Committee notes that the 
Commission has consistently misinterpreted section 310(b)(4) by 
creating a presumption that foreign investment is not in the 
public interest if it exceeds 25 percent of the equity of an 
American radio licensee.'' 14 The Committee notes, 
however, that the amendments to section 310(b) under this 
section do not constitute congressional acquiescence to the 
Commission's past misinterpretation of section 310(b)(4).
    \12\ 47 U.S.C. Sec. 301(b)(4) (emphasis added).
    \13\ Tara Kalgher Giunta, ``Foreign Participation in 
Telecommunications Projects,'' in Federal Communications Bar 
Association, International Practice Committee, International 
Communications Practice Handbook, 1993 at 43, 46 (Paul J. Berman & 
Ellen K. Snyder eds. 1993) (emphasis in original).
    \14\ See, e.g., PrimeMedia Broadcasting, Inc., 3 F.C.C. Rcd. 4293, 
4295 para. 2(1988)(``alien equity interests in a parent corporation . . 
. may only amount to 25%, unless the Commission finds that the public 
interest would be served'') (emphasis added).
---------------------------------------------------------------------------
    Subsection (b) amends section 310 of the Communications Act 
by adding a new subsection (f) setting out the conditions for 
terminating foreign ownership restrictions on common carrier 
radio licenses. Under subsection (f), the general limitations 
of 310(b) do not apply to foreign companies whose countries 
have opened their markets to U.S. investment.
    The Committee recognizes the importance of ongoing 
international negotiations that may lead to multilateral and 
bilateral frameworks to grant national or most favored nation 
treatment in the grant of common carrier licenses. Thus, under 
subsection (f)(1)(A), applicants whose home market is a country 
that is signatory to such an international agreement would not 
be subject to the requirements of subsection (b).
    Absent a multilateral or bilateral agreement being in 
effect between the home country of an applicant and the U.S., 
foreign applicants would not be restricted by the application 
of section 310(b) unless applying the restriction would serve 
the public interest. In making its determination under this new 
subsection (f), the Commission should consider, with great 
deference to the President regarding national security, law 
enforcement, foreign policy, the interpretation of 
international agreements, and trade policy, whether effective 
competitive opportunities are available to U.S. nationals or 
corporations in the applicants' home market.
    The Committee notes that foreign countries point to section 
310(b) as a reason to deny U.S. companies entry into their 
markets. It is the Committee's intent that by applying a 
``reciprocity'' approach, U.S. markets will be open to foreign 
investment from another country, to the same extent that 
country's market is open to U.S. investment. Thus, in making 
such determinations, it is the Committee's intent that the 
Commission focus principally on the effective competitive 
opportunities. In other words, absent the unusual circumstance 
of a serious national security or law enforcement 
consideration, if an applicant is otherwise well-qualified, a 
finding of adequate reciprocity in the relevant country should 
result in a grant of a license.
    Subsection (f) does not preclude that Commission 
determinations of whether there are effective competitive 
opportunities in the relevant country could be made on a market 
segment-specific basis. In other words, the Commission may 
classify each application in a particular common carrier 
submarket (e.g., paging, cellular, etc.) and consider the legal 
and regulatory regime of the relevant country in that sub-
market. The Committee notes that this type of classification is 
uniquely within the expertise of the Commission. Foreign 
country policies and regulations addressing sub-markets 
different from that applied for need not be considered for 
purposes of section 310(f). Notwithstanding a determination 
made for purposes of this section, the Committee recognizes 
that cross market discussions could be undertaken in trade 
negotiations by the United States.
    In determining the home market of any applicant, the 
Commission should use the citizenship of the applicant (if the 
applicant is an individual or partnership) or the country under 
whose laws a corporation is controlled by entities (including 
individuals, other corporations or governments) in another 
country, the Commission may look beyond where it is organized 
to such other country. Thus, a foreign entity could not 
organize in a country with a more open policy toward U.S. 
investment than its home country in order to circumvent the 
U.S. rules.
    The Committee believes that in order to encourage 
competitiveness in the global telecommunications market, 
applications for licenses for spectrum-based services should be 
considered promptly. Accordingly, the Committee intends that 
the Commission act upon such applications in a reasonable time 
frame.
    Subparagraph (3) authorizes the Commission to continue to 
review whether a foreign country meets the requirements 
permitting an investment approved by the Commission. This 
provision permits the Commission, under limited circumstances 
and with great deference to the President, to withdraw licenses 
granted where a foreign country changes its policies and 
retention of a license is no longer in the public interest and 
could not be granted under section 310(b). The Committee 
anticipates that this provision would be utilized only where 
the policies and practices of a foreign country are egregious 
and would result in significant harm to U.S. companies, e.g., 
where national security and law enforcement concerns would 
require such action.
    It is not the Committee's intent to have the U.S. 
government implement a unilateral provision to remove 
negotiated benefits which would be unacceptable to the U.S. 
government if proposed by other nations for themselves. 
Sufficient authority to accomplish the desired results already 
exists under current trade and regulatory provisions.

Section 304. Terms of licenses

    Section 304 amends section 307(c) of the Communications Act 
to provide for a seven year license term for broadcast 
licenses. Under current law, radio broadcast licenses are seven 
years and television broadcast licenses are for five years. By 
applying a uniform license term of seven years for all 
broadcast station licenses, the Committee simply recognizes 
that there is no reason for longer radio license terms than for 
television licenses. The Committee intends that applying a 
uniform license term of seven years for radio and television 
licenses will enable the Commission to operate more efficiently 
in the awarding of new or renewed licenses for all broadcast 
licenses.

Section 305. Broadcast license renewal procedures

    Section 305 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 Act or 
Commission rules; and there had been no other violations of the 
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.
    The Committee believes this change in procedure will lead 
to a more efficient method of renewing broadcast licenses and 
should result in a significant cost saving to the Commission. 
The Committee notes that subsection (k) does not alter the 
standard of renewal employed by the Commission and does not 
jeopardize the ability of the public to participate actively in 
the renewal process through the use of petitions-to-deny and 
informal complaints. Further, this section in no way limits the 
ability of the Commission to act sua sponte in enforcing the 
Act or Commission rules.

Section 306. Exclusive Federal jurisdiction over direct broadcast 
        satellite service

    Section 306 amends section 303 of the Communications Act of 
1934 to clarify that the Commission has exclusive jurisdiction 
over the regulation of direct broadcast satellite (DBS) 
service. DBS is a direct-to-home satellite broadcasting service 
which utilizes Ku-Band satellites. The Commission currently 
regulates and issues licenses for DBS service pursuant to its 
authority contained in Title III of the Communications Act. 
Section 306 reaffirms and clarifies that the Commission has 
exclusive authority over the regulation of DBS service. Federal 
jurisdiction over DBS service will ensure that there is a 
unified, national system of rules reflecting the national, 
interstate nature of DBS service.

Section 307. Automated ship distress and safety systems

    This section states that notwithstanding the Communications 
Act of 1934, a ship shall not be required to be equipped with a 
radio telegraphy station operated by one or more radio officers 
or operators.

Section 308. Restrictions on over-the-air reception devices

    Section 308 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. The Committee intends 
this section to preempt enforcement of State or local statutes 
and regulations, or State or local legal requirements, or 
restrictive covenants or encumbrances that prevent the use of 
antennae designed for off-the-air reception of television 
broadcast signals or of satellite receivers designed for 
receipt of DBS services. Existing regulations, including but 
not limited to, zoning laws, ordinances, restrictive covenants 
or homeowners' association rules, shall be unenforceable to the 
extent contrary to this section.
    The Committee notes that the ``Direct Broadcast Satellite 
Service'' is a specific service that is limited to higher power 
DBS satellites. This service does not include lower power C-
band satellites, which require larger dishes in order for 
subscribers to receive their signals. Thus, this section does 
not prevent the enforcement of State or local statutes and 
regulations, or State or local legal requirements, or 
restrictive covenants or encumbrances that limit the use and 
placement of C-band satellite dishes.

Section 309. DBS signal security

    Section 309 amends section 705(e)(4) of the Communications 
Act of 1934 to extend the current legal protection against 
signal piracy to direct-broadcast services. The Committee finds 
this section necessary to protect the DBS industry from 
unauthorized decryption of its signals by pirates or hackers.

                     TITLE IV--EFFECT ON OTHER LAWS

Section 401. Relationship to other laws

    Section 401 of the bill contains savings provisions for 
other applicable laws.
    Subsection (a) provides that, although Title I of the bill 
supersedes the MFJ's line-of-business restrictions, the other 
parts of the MFJ are not affected. For clarity, those other 
parts are explicitly enumerated.
    Subsection (b) provides that nothing in this Act shall be 
construed to modify, impair, or supersede any of the Federal 
antitrust laws.
    Subsection (c) provides that nothing in the Act shall be 
construed to modify, impair, or supersede any other Federal law 
other than law expressly referred to in this Act. This 
subsection also contains a savings clause for State and local 
law, except ``to the extent such law would impair or prevent 
the operation of this Act.''
    Subsection (d) provides that the provisions of the GTE 
consent decree shall cease to be effective on the date of the 
enactment of this Act. GTE's consent decree resulted from its 
1982 acquisition of Southern Pacific Communications Company 
(Sprint), which provided national long distance service, and 
Southern Pacific Satellite Company (Spacenet), a provider of 
satellite communications services. The Department of Justice, 
as part of its statutory Hart-Scott-Rodino Act review of the 
proposed acquisition, negotiated a consent decree with GTE. The 
consent decree was approved in December, 1984 and permitted GTE 
to proceed with its acquisition of Sprint, but regulated its 
provision of interexchange services. The agreement required 
structural separation between General Telephone Operating 
Companies (GTOCs) and the Sprint assets and prohibited the 
GTOCs from providing interexchange services. The decree also 
prohibited the joint marketing of those services. The Committee 
further notes that GTE has since disposed of all Sprint assets 
and has sold Spacenet to a subsidiary of General Electric 
Company. Despite the disposition of these assets, and other 
changes in the marketplace, the decree remains in effect, 
making GTE the only independent telephone company subject to 
such restrictions. The Committee notes that GTE's consent 
decree is not related to the court ordered line of business 
restriction imposed on the BOCs. Because of the changes in 
circumstances that have occurred since 1984, the Committee 
finds that the GTE consent decree should be vacated.
    Subsection (e) makes clear that the provisions of the MFJ 
do not apply to wireless companies which were previously owned 
by a BOC or its affiliate. The Committee, by this subsection, 
intends to ensure that former BOC wireless operations will be 
free from any restrictions imposed under the MFJ once they are 
no longer affiliated with the BOC's wireline exchange monopoly. 
The Committee emphasizes that it does not matter how that 
termination of affiliation is achieved, whether by transfer, 
spinoff, or in any other manner.

Section 402. Preemption of local taxation with respect to DBS services

    Section 402 preempts local taxation on the provision of 
direct-to-home satellite services. Direct-to-home (DTH) 
satellite services are delivered via satellite directly to 
consumers equipped with satellite receivers at their premises.
    The Committee finds that DTH satellite service is a 
national rather than local service. A DTH satellite service 
provider transmits the service via a Commission-licensed 
satellite and bills consumers for that service. Unlike other 
video programming distributions systems, satellite-delivered 
programming services do not require the use of the public 
rights-of-way, or the physical facilities or services of a 
community.
    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.

                          TITLE V--DEFINITIONS

Section 501. Definitions

    Subsection (a) adds new definitions to the Communications 
Act of 1934, including definitions 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. 15 The definition of 
``telecommunications'' refers to transmission ``by means of an 
electromagnetic transmission medium.'' The Committee is aware 
that there is some disagreement whether ``an electromagnetic 
transmission medium'' encompasses fiber optic transmission 
technology. The Committee intends that a transmission that 
utilizes fiber optics and that would otherwise qualify shall be 
covered by this definition.
     15 522 F. Supp. at 229.
---------------------------------------------------------------------------
    The term ``local exchange carrier'' does not include a 
person insofar as such person is engaged in the provision of 
commercial mobile service 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. As part of the 
Omnibus Budget Reconciliation Act of 1993, Congress enacted 
section 332(c), which establishes the statutory framework for 
commercial mobile services. Section 332(c) would continue to 
govern the offering of commercial mobile services after the 
enactment of this bill, until such time as the Commission finds 
that a commercial mobile service has become an effective 
substitute for wireline service. If or when the Commission 
makes such a finding, the provider of such a mobile service 
shall be considered a LEC for purposes of the bill and subject 
to section 201(c).
    By defining ``telecommunications service'' as those 
services and facilities offered on a ``common carrier'' basis, 
the Committee recognizes the distinction between common carrier 
offerings that are provided indifferently 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 LEC to the extent that such carrier serves an 
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 lines or fewer 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 its access lines in 
communities of more than 50,000 residents. This definition 
reflects the Committee's finding that some companies are multi-
state providers of telephone service to rural areas and that 
while service areas may not be exclusively rural, they are 
overwhelmingly so.
    The definition of a ``Bell operating company'' does not 
include an entity that owns former BOC wireless operations that 
are no longer affiliated with a BOC's wireline exchange 
facilities.

              TITLE VI--SMALL BUSINESS COMPLAINT PROCEDURE

Section 601. Complaint procedure

    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 an information or telecommunications 
service. This section defines a small business as any business 
entity, including any affiliate or subsidiary, with fewer than 
300 employees. The Committee notes that the process established 
by this section is distinct from the expedited complaint 
process contained in section 208(b) of the Communications Act, 
as it is narrowly tailored to meet the special needs and 
concerns of small businesses. The Committee believes that the 
expedited complaint process for small telecommunications 
companies contained in this section is necessary for ensuring 
that such entities have an opportunity to pursue complaints 
against larger carriers, notwithstanding their limited 
resources.
         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                       COMMUNICATIONS ACT OF 1934

                     [Title I--General Provisions]
                      TITLE I--GENERAL PROVISIONS
          * * * * * * *

SEC. 2. APPLICATION OF ACT.

  (a)  * * *
  (b) Except as provided in sections 223 through 227, 
inclusive, part II of title II, and section 332, and subject to 
the provisions of section 301 and title VI, nothing in this Act 
shall be construed to apply or to give the Commission 
jurisdiction with respect to (1) charges, classifications, 
practices, services, facilities, or regulations for or in 
connection with intrastate communication service by wire or 
radio of any carrier, or (2) any carrier engaged in interstate 
or foreign communication solely through physical connection 
with the facilities of another carrier not directly or 
indirectly controlling or controlled by, or under direct or 
indirect common control with such carrier, or (3) any carrier 
engaged in interstate or foreign communication solely through 
connection by radio, or by wire and radio, with facilities, 
located in an adjoining State or in Canada or Mexico (where 
they adjoin the State in which the carrier is doing business), 
of another carrier not directly or indirectly controlling or 
controlled by, or under direct or indirect common control with 
such carrier, or (4) any carrier to which clause (2) or clause 
(3) would be applicable except for furnishing interstate mobile 
radio communication service or radio communication service to 
mobile stations on land vehicles in Canada or Mexico; except 
that sections 201 through 205 of this Act, both inclusive, 
shall, except as otherwise provided therein, apply to carriers 
described in clauses (2), (3), and (4).
SEC. 3. DEFINITIONS.

  For the purposes of this Act, unless the context otherwise 
requires--
          (1) Affiliate.--The term ``affiliate'', when used in 
        relation to any person or entity, means another person 
        or entity who owns or controls, is owned or controlled 
        by, or is under common ownership or control with, such 
        person or entity.
          [(q) ``Amateur station''] (2) Amateur station.--The 
        term ``amateur station'' means a radio station operated 
        by a duly authorized person interested in radio 
        technique solely with a personal aim and without 
        pecuniary interest.
          (3) Bell operating company.--The term ``Bell 
        operating company'' means--
                  (A) 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;
                  (B) any successor or assign of any such 
                company that provides telephone exchange 
                service.
          [(dd) ``Broadcast station''] (4) Broadcast station.--
        The term ``broadcast station'', ``broadcasting 
        station,'' or ``radio broadcast station'' means a radio 
        station equipped to engage in broadcasting as herein 
        defined.
          [(o) ``Broadcasting''] (5) Broadcasting.--The term 
        ``broadcasting'' means the dissemination of radio 
        communications intended to be received by the public, 
        directly or by the intermediary of relay stations.
          (6) Cable system.--The term ``cable system'' has the 
        meaning given such term in section 602(7) of this Act.
          [(p) ``Chain broadcasting''] (7) Chain 
        broadcasting.--The term ``chain broadcasting'' means 
        simultaneous broadcasting of an identical program by 
        two or more connected stations.
          [(h) ``Common carrier''] (8) Common carrier.--The 
        term ``common carrier'' or ``carrier'' means any person 
        engaged as a common carrier for hire, in interstate or 
        foreign communication by wire or radio or in interstate 
        or foreign radio transmission of energy, except where 
        reference is made to common carriers not subject to 
        this Act; but a person engaged in radio broadcasting 
        shall not, insofar as such person is so engaged, be 
        deemed a common carrier.
          [(u) ``Connecting carrier''] (9) Connecting 
        carrier.--The term ``connecting carrier'' means a 
        carrier described in clauses (2), (3), or (4) of 
        section 2(b).
          [(ee) ``Construction permit''] (10) Construction 
        permit.--The term ``construction permit'' or ``permit 
        for construction'' means that instrument of 
        authorization required by this Act or the rules and 
        regulations of the Commission made pursuant to this Act 
        for the construction of a station, or the installation 
        of apparatus, for the transmission of energy, or 
        communications, or signals by radio, by whatever name 
        the instrument may be designated by the Commission.
          [(j) ``Corporation''] (11) Corporation.--The term 
        ``corporation'' includes any corporation, joint-stock 
        company, or association.
          (12) 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.
          (13) Dialing parity.--The term ``dialing parity'' 
        means that a person that is not an affiliated 
        enterprise 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).
          (14) Exchange access.--The term ``exchange access'' 
        means the offering of telephone exchange services or 
        facilities for the purpose of the origination or 
        termination of interLATA services.
          [(f) ``Foreign communication''] (15) Foreign 
        communication.--The term ``foreign communication'' or 
        ``foreign transmission'' means communication or 
        transmission from or to any place in the United States 
        to or from a foreign country, or between a station in 
        the United States and a mobile station located outside 
        the United States.
          [(ff) ``Great Lakes Agreement''] (16) Great lakes 
        agreement.--The term ``Great Lakes Agreement'' means 
        the Agreement for the Promotion of Safety on the Great 
        Lakes by Means of Radio in force and the regulations 
        referred to therein.
          [(aa) ``Harbor''] (17) Harbor.--The term ``harbor'' 
        or ``port'' means any place to which ships may resort 
        for shelter or to load or unload passengers or goods, 
        or to obtain fuel, water, or supplies. This term shall 
        apply to such places whether proclaimed public or not 
        and whether natural or artifical.
          (18) 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.
          (19) 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.
          [(e) ``Interstate communication''] (20) Interstate 
        communication.--The term ``interstate communication'' 
        or ``interstate transmission'' means communication or 
        transmission [(1)] (A) from any State, Territory, or 
        possession of the United States (other than the Canal 
        Zone), or the District of Columbia, to any other State, 
        Territory, or possession of the United States (other 
        than the Canal Zone), or the District of Columbia, 
        [(2)] (B) from or to the United States to or from the 
        Canal Zone, insofar as such communication or 
        transmission takes place within the United States, or 
        [(3)] (C) between points within the United States but 
        through a foreign country; but shall not, with respect 
        to the provisions of title II of this Act (other than 
        section 223 thereof), include wire or radio 
        communication between points in the same State, 
        Territory, or possession of the United States, or the 
        District of Columbia, through any place outside 
        thereof, if such communication is regulated by a State 
        commission.
          [(m) ``Land station''] (21) Land station.--The term 
        ``land station'' means a station, other than a mobile 
        station, used for radio communication with mobile 
        stations.
          [(c) ``Licensee''] (22) Licensee.--The term 
        ``licensee'' means the holder of a radio station 
        license granted or continued in force under authority 
        of this Act.
          (23) Local access and transport area.--The term 
        ``local access and transport area'' or ``LATA'' means a 
        contiguous geographic area--
                  (A) established 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 Modification of Final Judgment before 
                the date of the enactment of this paragraph; or
                  (B) established or modified by a Bell 
                operating company after the date of enactment 
                of this paragraph and approved by the 
                Commission.
          (24) 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 as 
        provided by such person in a State is a replacement for 
        a substantial portion of the wireline telephone 
        exchange service within such State.
          [(n) ``Mobile service''] (25) Mobile service.-- The 
        term ``mobile service'' means a radio communication 
        service carried on between mobile stations or receivers 
        and land stations, and by mobile stations communicating 
        among themselves, and includes [(1)] (A) both one-way 
        and two-way radio communication services, [(2)] (B) a 
        mobile service which provides a regularly interacting 
        group of base, mobile, portable, and associated control 
        and relay stations (whether licensed on an individual, 
        cooperative, or multiple basis) for private one-way or 
        two-way land mobile radio communications by eligible 
        users over designated areas of operation, and [(3)] (C) 
        any service for which a license is required in a 
        personal communications service established pursuant to 
        the proceeding entitled ``Amendment to the Commission's 
        Rules to Establish New Personal Communications 
        Services'' (GEN Docket No. 90-314; ET Docket No. 92-
        100), or any successor proceeding.
          [(l) ``Mobile station''] (26) Mobile station.--The 
        term ``mobile station'' means a radio-communication 
        station capable of being moved and which ordinarily 
        does move.
          (27) Modification of final judgment.--The term 
        ``Modification of Final Judgment'' 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.
          (28) Number portability.--The term ``number 
        portability'' means the ability of users of 
        telecommunications services to retain existing 
        telecommunications numbers without impairment of 
        quality, reliability, or convenience when changing from 
        one provider of telecommunications services to another, 
        as long as such user continues to be located within the 
        area served by the same central office of the carrier 
        from which the user is changing.
          [(y)(1) ``Operator''] (29) Operator.--(A) The term 
        ``operator'' on a ship of the United States means, for 
        the purpose of parts II and III of title III of this 
        Act, a person holding a radio operator's license of the 
        proper class as prescribed and issued by the 
        Commission.
          [(2)] (B) ``Operator'' on a foreign ship means, for 
        the purpose of part II of title III of this Act, a 
        person holding a certificate as such of the proper 
        class complying with the provision of the radio 
        regulations annexed to the International 
        Telecommunication Convention in force, or complyng with 
        an agreement or treaty between the United States and 
        the country in which the ship is registered.
          [(i) ``Person''] (30) Person.--The term ``person'' 
        includes an individual, partnership, association, 
        joint-stock company, trust, or corporation.
          [(b) ``Radio communication''] (31) Radio 
        communication.--The term ``radio communication'' or 
        ``communication by radio'' means the transmission by 
        radio of writing, signs, signals, pictures, and sounds 
        of all kinds, including all instrumentalities, 
        facilities, apparatus, and services (among other 
        things, the receipt, forwarding, and delivery of 
        communications) incidental to such transmission.
          [(z)(1) ``Radio officer''] (32) Radio officer.--(A) 
        The term ``radio officer'' on a ship of the United 
        States means, for the purpose of part II of title III 
        of this Act, a person holding at least a first or 
        second clase radiotelegraph operator's license as 
        prescribed and issued by the Commission. When such 
        person is employed to operate a radiotelegraph station 
        aboard a ship of the United States, he is also required 
        to be licensed as a ``radio officer'' in accordance 
        with the Act of May 12, 1948 (46 U.S.C. 229a-h).
          [(2)] (B) ``Radio officer'' on a foreign ship means, 
        for the purpose of part II of title III of this Act, a 
        person holding at least a first or second class 
        radiotelegraph operator's certificate complying with 
        the provisions of the radio regulations annexed to the 
        International Telecommunication Convention in force.
          [(k) ``Radio station''] (33) Radio station.--The term 
        ``radio station'' or ``station'' means a station 
        equipped to engage in radio communication or radio 
        transmission of energy.
          [(x) ``Radiotelegraph auto alarm''] (34) 
        Radiotelegraph auto alarm.--The term ``radiotelegraph 
        auto alarm'' on a ship of the United States subject to 
        the provisions of part II of title III of this Act 
        means an automatic alarm receiving apparatus which 
        responds to the radiotelegraph alarm signal and has 
        been approved by the Commission. ``Radiotelegraph auto 
        alarm'' on a foreign ship means an automatic alarm 
        receiving apparatus which responds to the 
        radiotelegraph alarm signal and has been approved by 
        the government of the country in which the ship is 
        registered: Provided, That the United States and the 
        country in which the ship is registered are parties to 
        the same treaty, convention, or agreement prescribing 
        the requirements for such apparatus. Nothing in this 
        Act or in any other provision of law shall be construed 
        to require the recognition of a radiotelegraph auto 
        alarm as complying with part II of title III of this 
        Act, on a foreign ship subject to such part, where the 
        country in which the ship is registered and the United 
        States are not parties to the same treaty, convention, 
        or agreements prescribing the requirements for such 
        apparatus.
          (35) 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 recent 
                        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 telephone exchange access service, 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 this paragraph.
          [(bb) ``Safety convention''] (36) Safety 
        convention.--The term ``safety convention'' means the 
        International Convention for the Safety of Life at Sea 
        in force and the regulations referred to therein.
          [(w) (1) ``Ship''] (37) Ship.--(A) The term ``ship'' 
        or ``vessel'' includes every description of watercraft 
        or other artificial contrivance, except aircraft, used 
        or capable of being used as a means of transportation 
        on water, whether or not it is actually afloat.
    [(2)] (B) A ship shall be considered a passenger ship if it 
carries or is licensed or certificated to carry more than 
twelve passengers.
    [(3)] (C) A cargo ship means any ship not a passenger ship.
    [(4)] (D) A passenger is any person carried on board a ship 
or vessel except (1) the officers and crew actually employed to 
man and operate the ship, (2) persons employed to carry on the 
business of the ship, and (3) persons on board a ship when they 
are carried, either because of the obligation laid upon the 
master to carry shipwrecked, distressed, or other persons in 
like or similar situations or by reason of any circumstance 
over which neither the master, the owner, nor the charterer (if 
any) has control.
    [(5)] (E) ``Nuclear ship'' means a ship provided with a 
nuclear powerplant.
    [(v) ``State''] (38) State.--The term ``State'' includes 
the District of Columbia and the Territories and possessions.
    [(t) ``State commission''] (39) State commission.-- The 
term ``State commission'' means the commission, board, or 
official (by whatever name designated) which under the laws of 
any State has regulatory jurisdiction with respect to 
intrastate operations of carriers.
    [(cc) ``Station license''] (40) Station license.--The term 
``station license'', ``radio station license,'' or ``license'' 
means that instrument of authorization required by this Act or 
the rules and regulations of the Commission made pursuant to 
this Act, for the use or operation of apparatus for 
transmission of energy, or communications, or signals by radio 
by whatever name the instrument may be designated by the 
Commission.
          (41) Telecommunications.--The term 
        ``telecommunications'' means the transmission, between 
        or among points specified by the subscriber, of 
        information of the subscriber's choosing, without 
        change in the form or content of the information as 
        sent and received, by means of an electromagnetic 
        transmission medium, including all instrumentalities, 
        facilities, apparatus, and services (including the 
        collection, storage, forwarding, switching, and 
        delivery of such information) essential to such 
        transmission.
          (42) 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).
          (43) Telecommunications service.--The term 
        ``telecommunications service'' means the offering, on a 
        common carrier basis, of telecommunications facilities, 
        or of telecommunications by means of such facilities. 
        Such term does not include an information service.
          [(r) ``Telephone exchange service''] (44) Telephone 
        exchange service.--The term ``telephone exchange 
        service'' means (A) service within a telephone 
        exchange, or within a connected system of telephone 
        exchanges within the same exchange area operated to 
        furnish to subscribers intercommunicating service of 
        the character ordinarily furnished by a single 
        exchange, and which is covered by the exchange service 
        charge, or (B) 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 
        within a State but which does not result in the 
        subscriber incurring a telephone toll charge.
          [(s) ``Telephone toll service''] (45) Telephone toll 
        service.--The term ``telephone toll service'' means 
        telephone service between stations in different 
        exchange areas for which there is made a separate 
        charge not included in contracts with subscribers for 
        exchange service.
          [(d) ``Transmission of energy by radio''] (46) 
        Transmission of energy by radio.--The term 
        ``transmission of energy by radio'' or ``radio 
        transmission of energy'' includes both such 
        transmission and all instrumentalities, facilities, and 
        services incidental to such transmission.
          [(g) ``United States''] (47) United states.--The term 
        ``United States'' means the several States and 
        Territories, the District of Columbia, and the 
        possessions of the United States, but does not include 
        the Canal Zone.
          [(a) ``Wire communication''] (48) Wire 
        communication.--The term ``wire communication'' or 
        ``communication by wire'' means the transmission of 
        writing, signs, signals, pictures, and sounds of all 
        kinds by aid of wire, cable, or other like connection 
        between the points of origin and reception of such 
        transmission, including all instrumentalities, 
        facilities, apparatus, and services (among other 
        things, the receipt, forwarding, and delivery of 
        communications) incidental to such transmission.
          * * * * * * *

                      [Title II--Common Carriers]
                       TITLE II--COMMON CARRIERS

             PART I--REGULATION OF DOMINANT COMMON CARRIERS
SEC. 201. SERVICE AND CHARGES.

  (a) It shall be the duty of every common carrier engaged in 
interstate or foreign communication by wire or radio to furnish 
such communication service upon reasonable request therefor; 
and, in accordance with the orders of the Commission, in cases 
where the Commission, after opportunity for hearing, finds such 
action necessary or desirable in the public interest, to 
establish physical connections with other carriers, to 
establish through routes and charges applicable thereto and the 
divisions of such charges, and to establish and provide 
facilities and regulations for operating such through routes.
          * * * * * * *
SEC. 222. PRIVACY OF CUSTOMER PROPRIETARY NETWORK INFORMATION.
  (a) Subscriber List Information.--Notwithstanding subsections 
(b), (c), and (d), a carrier that provides local 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.
  (b) Privacy Requirements for Common Carriers.--A carrier--
          (1) shall not, except as required by law or with the 
        approval of the customer to which the information 
        relates--
                  (A) use customer proprietary network 
                information in the provision of any service 
                except to the extent necessary (i) in the 
                provision of common carrier services, (ii) in 
                the provision of a service necessary to or used 
                in the provision of common carrier services, 
                including the publishing of directories, or 
                (iii) to continue to provide a particular 
                information service that the carrier provided 
                as of May 1, 1995, to persons who were 
                customers of such service on that date;
                  (B) use customer proprietary network 
                information in the identification or 
                solicitation of potential customers for any 
                service other than the telephone exchange 
                service or telephone toll service from which 
                such information is derived;
                  (C) use customer proprietary network 
                information in the provision of customer 
                premises equipment; or
                  (D) disclose customer proprietary network 
                information to any person except to the extent 
                necessary to permit such person to provide 
                services or products that are used in and 
                necessary to the provision by such carrier of 
                the services described in subparagraph (A);
          (2) shall disclose customer proprietary network 
        information, upon affirmative written request by the 
        customer, to any person designated by the customer;
          (3) shall, whenever such carrier provides any 
        aggregate information, notify the Commission of the 
        availability of such aggregate information and shall 
        provide such aggregate information on reasonable terms 
        and conditions to any other service or equipment 
        provider upon reasonable request therefor; and
          (4) except for disclosures permitted by paragraph 
        (1)(D), shall not unreasonably discriminate between 
        affiliated and unaffiliated service or equipment 
        providers in providing access to, or in the use and 
        disclosure of, individual and aggregate information 
        made available consistent with this subsection.
  (c) Rule of Construction.--This section shall not be 
construed to prohibit the use or disclosure of customer 
proprietary network information as necessary--
          (1) to render, bill, and collect for the services 
        identified in subsection (b)(1)(A);
          (2) to render, bill, and collect for any other 
        service that the customer has requested;
          (3) to protect the rights or property of the carrier;
          (4) to protect users of any of those services and 
        other carriers from fraudulent, abusive, or unlawful 
        use of or subscription to such service; or
          (5) 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.
  (d) Exemption Permitted.--The Commission may, by rule, exempt 
from the requirements of subsection (b) carriers that have, 
together with any affiliated carriers, in the aggregate 
nationwide, fewer than 500,000 access lines installed if the 
Commission determines that such exemption is in the public 
interest or if compliance with the requirements would impose an 
undue economic burden on the carrier.
  (e) Definitions.--As used in this section:
          (1) Customer proprietary network information.--The 
        term ``customer proprietary network information'' 
        means--
                  (A) information which relates to the 
                quantity, technical configuration, type, 
                destination, and amount of use of telephone 
                exchange service or telephone toll service 
                subscribed to by any customer of a carrier, and 
                is made available to the carrier by the 
                customer solely by virtue of the carrier-
                customer relationship;
                  (B) information contained in the bills 
                pertaining to telephone exchange service or 
                telephone toll service received by a customer 
                of a carrier; and
                  (C) such other information concerning the 
                customer as is available to the local exchange 
                carrier by virtue of the customer's use of the 
                carrier's telephone exchange service or 
                telephone toll services, and specified as 
                within the definition of such term by such 
                rules as the Commission shall prescribe 
                consistent with the public interest;
        except that such term does not include subscriber list 
        information.
          (2) 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.
          (3) Aggregate information.--The term ``aggregate 
        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.
          * * * * * * *

SEC. 224. REGULATION OF POLE ATTACHMENTS.

  (a) As used in this section:
  (1)  * * *
          * * * * * * *
  (4) The term ``pole attachment'' means any attachment by a 
cable television system or a provider of telecommunications 
service to a pole, duct, conduit, or right-of-way owned or 
controlled by a utility, which attachment may be used by such 
entities to provide cable service or any telecommunications 
service.
          * * * * * * *
  (c)(1) Nothing in this section shall be construed to apply 
to, or to give the Commission jurisdiction with respect to 
rates, terms, and conditions for pole attachments in any case 
where such matters are regulated by a State.
  (2) Each State which regulates the rates, terms, and 
conditions for pole attachments shall certify to the Commission 
that--
          (A) it regulates such rates, terms, and conditions; 
        and
          (B) in so regulating such rates, terms, and 
        conditions, the State has the authority to consider and 
        does consider the interests of the subscribers of 
        [cable television services] the services offered via 
        such attachments, as well as the interests of the 
        consumers of the utility services.
          * * * * * * *
  [(d)(1) For purposes of subsection (b) of this section, a 
rate is just and reasonable if it assures a utility the 
recovery of not less than the additional costs of providing 
pole attachments, nor more than an amount determined by 
multiplying the percentage of the total usable space, or the 
percentage of the total duct or conduit capacity, which is 
occupied by the pole attachment by the sum of the operating 
expenses and actual capital costs of the utility attributable 
to the entire pole, duct, conduit, or right-of-way.]
  (d)(1) For purposes of subsection (b) of this section, the 
Commission shall, no later than 1 year after the date of 
enactment of the Communications Act of 1995, prescribe 
regulations for ensuring that utilities charge just and 
reasonable and nondiscriminatory rates for pole attachments 
provided to all providers of telecommunications services, 
including such attachments used by cable television systems to 
provide telecommunications services (as defined in section 3 of 
this Act). Such regulations shall--
          (A) recognize that the entire pole, duct, conduit, or 
        right-of-way other than the usable space is of equal 
        benefit all entities attaching to the pole and 
        therefore apportion the cost of the space other than 
        the usable space equally among all such attachments;
          (B) 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
          (C) allow for reasonable terms and conditions 
        relating to health, safety, and the provision of 
        reliable utility service.
  (2) The final regulations prescribed by the Commission 
pursuant to paragraph (1) shall not apply to a cable television 
system that solely provides cable service as defined in section 
602(6) of this Act; instead, the pole attachment rate for such 
systems shall assure a utility the recovery of not less than 
the additional costs of providing pole attachments, nor more 
than an amount determined by multiplying the percentage of the 
total usable space, or the percentage of the total duct or 
conduit capacity, which is occupied by the pole attachment by 
the sum of the operating expenses and actual capital costs of 
the utility attributable to the entire pole, duct, conduit, or 
right-of-way.
  (3) Whenever the owner of a conduit or right-of-way intends 
to modify or alter such 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 conduit or right-of-way 
accessible.
  [(2)] (4) As used in this subsection, the term ``usable 
space'' means the space above the minimum grade level which can 
be used for the attachment of wires, cables, and associated 
equipment.

SEC. 225. TELECOMMUNICATIONS SERVICES FOR HEARING-IMPAIRED AND SPEECH-
                    IMPAIRED INDIVIDUALS.

  (a) Definitions.--As used in this section--
          (1) Common carrier or carrier.--The term ``common 
        carrier'' or ``carrier'' includes any common carrier 
        engaged in interstate communication by wire or radio as 
        defined in [section 3(h)] section 3 and any common 
        carrier engaged in intrastate communication by wire or 
        radio, notwithstanding sections 2(b) and 221(b).
          * * * * * * *

SEC. 228. REGULATION OF CARRIER OFFERING OF PAY-PER-CALL SERVICES.

  (a)  * * *
          * * * * * * *
  (c) Common Carrier Obligations.--Within 270 days after the 
date of enactment of this section, the Commission shall, by 
regulation, establish the following requirements for common 
carriers:
          (1)  * * *
          * * * * * * *
          (7) Billing for 800 calls.--A common carrier shall 
        prohibit by tariff or contract the use of any 800 
        telephone number, or other telephone number advertised 
        or widely understood to be toll free, in a manner that 
        would result in--
                  (A) the calling party being assessed, by 
                virtue of completing the call, a charge for the 
                call;
                  (B) the calling party being connected to a 
                pay-per-call service;
                  [(C) the calling party being charged for 
                information conveyed during the call unless the 
                calling party has a preexisting agreement to be 
                charged for the information or discloses a 
                credit or charge card number during the call; 
                or]
                  (C) the calling party being charged for 
                information conveyed during the call unless--
                          (i) the calling party has a written 
                        subscription agreement with the 
                        information provider that meets the 
                        requirements of paragraph (8); or
                          (ii) the calling party is charged in 
                        accordance with paragraph (9); or
          * * * * * * *
          (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 agreement 
                shall specify the terms and conditions under 
                which the information is offered and include--
                          (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 30 days in advance of all future 
                        changes in the rates charged for the 
                        information;
                          (vi) the signature of a legally 
                        competent subscriber agreeing to the 
                        terms of the agreement; and
                          (vii) the subscriber's choice of 
                        payment method, which may be by phone 
                        bill or credit, prepaid, or calling 
                        card.
                  (B) Billing arrangements.--If a subscriber 
                elects, pursuant to subparagraph (A)(vii), 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 pin's to prevent unauthorized 
                use.--A written agreement does not meet the 
                requirements of this paragraph unless it 
                provides the subscriber a personal 
                identification number to obtain access to the 
                information provided, and includes instructions 
                on its use.
                  (D) Exceptions.--Notwithstanding paragraph 
                (7)(C), a written agreement that meets the 
                requirements of this paragraph is not 
                required--
                          (i) for services provided pursuant to 
                        a tariff that has been approved or 
                        permitted to take effect by the 
                        Commission or a State commission; or
                          (ii) for any purchase of goods or of 
                        services that are not information 
                        services.
                  (E) Termination of service.--On complaint by 
                any person, a carrier 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. 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, 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, 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, or calling card;
                  (D) asks the caller for the credit or calling 
                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) 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.
          * * * * * * *
SEC. 230. FORBEARANCE FROM REGULATION.

  (a) Authority to Forbear.--The Commission shall forbear from 
applying any provision of this part or part II (other than 
sections 201, 202, 208, 243, and 248), or any regulation 
thereunder, to a common carrier or service, or class of 
carriers or services, in any or some of its or their geographic 
markets, if the Commission determines that--
          (1) enforcement of such provision or regulation is 
        not necessary to ensure that the charges, practices, 
        classifications, or regulations by, for, or in 
        connection with that carrier or 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.
              PART II--DEVELOPMENT OF COMPETITIVE MARKETS

SEC. 241. INTERCONNECTION.

  The duty of a common carrier under section 201(a) includes 
the duty to interconnect with the facilities and equipment of 
other providers of telecommunications services and information 
services.

SEC. 242. EQUAL ACCESS AND INTERCONNECTION TO THE LOCAL LOOP FOR 
                    COMPETING PROVIDERS.

  (a) Openness and Accessibility Obligations.--The duty under 
section 201(a) of a local exchange carrier includes the 
following duties:
          (1) Interconnection.--The duty to provide, in 
        accordance with subsection (b), equal access to and 
        interconnection with the facilities of the carrier's 
        networks to any other carrier or person offering (or 
        seeking to offer) telecommunications services or 
        information services reasonably requesting such equal 
        access and interconnection, so that such networks are 
        fully interoperable with such telecommunications 
        services and information services. For purposes of this 
        paragraph, a request is not reasonable unless it 
        contains a proposed plan, including a reasonable 
        schedule, for the implementation of the requested 
        access or interconnection.
          (2) Unbundling of network elements.--The duty to 
        offer unbundled services, elements, features, 
        functions, and capabilities whenever technically 
        feasible, at just, reasonable, and nondiscriminatory 
        prices and in accordance with subsection (b)(4).
          (3) Resale.--The duty to offer services, elements, 
        features, functions, and capabilities for resale at 
        economically feasible rates to the reseller, 
        recognizing pricing structures for telephone exchange 
        service in the State, and the duty not to prohibit, and 
        not to impose unreasonable or discriminatory conditions 
        or limitations on, the resale, on a bundled or 
        unbundled basis, of services, elements, features, 
        functions, and capabilities in conjunction with the 
        furnishing of a telecommunications service or an 
        information service.
          (4) Number portability.--The duty to provide, to the 
        extent technically feasible, number portability in 
        accordance with requirements prescribed by the 
        Commission.
          (5) Dialing parity.--The duty to provide, in 
        accordance with subsection (c), dialing parity to 
        competing providers of telephone exchange service and 
        telephone toll service.
          (6) 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 in accordance with section 
        224(d).
          (7) Network functionality and accessibility.--The 
        duty not to install network features, functions, or 
        capabilities that do not comply with any standards 
        established pursuant to section 249.
          (8) Good faith negotiation.--The duty to negotiate in 
        good faith, under the supervision of State commissions, 
        the particular terms and conditions of agreements to 
        fulfill the duties described in paragraphs (1) through 
        (7). The other carrier or person requesting 
        interconnection shall also be obligated to negotiate in 
        good faith the particular terms and conditions of 
        agreements to fulfill the duties described in 
        paragraphs (1) through (7).
  (b) Interconnection, Compensation, and Equal Access.--
          (1) Interconnection.--A local exchange carrier shall 
        provide access to and interconnection with the 
        facilities of the carrier's network at any technically 
        feasible point within the carrier's network on just and 
        reasonable terms and conditions, to any other carrier 
        or person offering (or seeking to offer) 
        telecommunications services or information services 
        requesting such access.
          (2) Intercarrier compensation between facilities-
        based carriers.--
                  (A) In general.--For the purposes of 
                paragraph (1), the terms and conditions for 
                interconnection of the network facilities of a 
                competing provider of telephone exchange 
                service shall not be considered 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 termination on such carrier's 
                        network facilities of calls that 
                        originate on the network facilities of 
                        the other carrier;
                          (ii) such terms and conditions 
                        determine such costs on the basis of a 
                        reasonable approximation of the 
                        additional costs of terminating such 
                        calls; and
                          (iii) the recovery of costs permitted 
                        by such terms and conditions are 
                        reasonable in relation to the prices 
                        for termination of calls that would 
                        prevail in a competitive market.
                  (B) Rules of construction.--This paragraph 
                shall not be construed--
                          (i) to preclude arrangements that 
                        afford such 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 terminating calls, or to require 
                        carriers to maintain records with 
                        respect to the additional costs of 
                        terminating calls.
          (3) Equal access.--A local exchange carrier shall 
        afford, to any other carrier or person offering (or 
        seeking to offer) a telecommunications service or an 
        information service, reasonable and nondiscriminatory 
        access on an unbundled basis--
                  (A) to databases, signaling systems, billing 
                and collection services, poles, ducts, 
                conduits, and rights-of-way owned or controlled 
                by a local exchange carrier, or other 
                facilities, functions, or information 
                (including subscriber numbers) integral to the 
                efficient transmission, routing, or other 
                provision of telephone exchange services or 
                exchange access;
                  (B) that is equal in type and quality to the 
                access which the carrier affords to itself or 
                to any other person, and is available at 
                nondiscriminatory prices; and
                  (C) that is sufficient to ensure the full 
                interoperability of the equipment and 
                facilities of the carrier and of the person 
                seeking such access.
          (4) Commission action required.--
                  (A) In general.--Within 15 months after the 
                date of enactment of this part, the Commission 
                shall complete all actions necessary (including 
                any reconsideration) to establish regulations 
                to implement the requirements of this section. 
                The Commission shall establish such regulations 
                after consultation with the Joint Board 
                established pursuant to section 247.
                  (B) Collocation.--Such regulations shall 
                provide for actual collocation of equipment 
                necessary for interconnection for 
                telecommunications services at the premises of 
                a local exchange carrier, except that the 
                regulations shall provide for virtual 
                collocation where the local exchange carrier 
                demonstrates that actual collocation is not 
                practical for technical reasons or because of 
                space limitations.
                  (C) User payment of costs.--Such regulations 
                shall require that the costs that a carrier 
                incurs in offering access, interconnection, 
                number portability, or unbundled services, 
                elements, features, functions, and capabilities 
                shall be borne by the users of such access, 
                interconnection, number portability, or 
                services, elements, features, functions, and 
                capabilities.
                  (D) Imputed charges to carrier.--Such 
                regulations shall require the carrier, to the 
                extent it provides a telecommunications service 
                or an information service that requires access 
                or interconnection to its network facilities, 
                to impute such access and interconnection 
                charges to itself.
  (c) Number Portability and Dialing Parity.--
          (1) Availability.--A local exchange carrier shall 
        ensure that--
                  (A) number portability shall be available on 
                request in accordance with subsection (a)(4); 
                and
                  (B) dialing parity shall be available upon 
                request, except that, in the case of a Bell 
                operating company, such company shall ensure 
                that dialing parity for intraLATA telephone 
                toll service shall be available not later than 
                the date such company is authorized to provide 
                interLATA services.
          (2)  Number administration.--The Commission shall 
        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 any portion of such jurisdiction.
  (d) Joint Marketing of Resold Elements.--
          (1) Restriction.--Except as provided in paragraph 
        (2), no service, element, feature, function, or 
        capability that is made available for resale in any 
        State by a Bell operating company may be jointly 
        marketed directly or indirectly with any interLATA 
        telephone toll service until such Bell operating 
        company is authorized pursuant to section 245(d) to 
        provide interLATA services in such State.
          (2) Existing providers.--Paragraph (1) shall not 
        prohibit joint marketing of services, elements, 
        features, functions, or capabilities acquired from a 
        Bell operating company by another provider if that 
        provider jointly markets services, elements, features, 
        functions, and capabilities acquired from a Bell 
        operating company anywhere in the telephone service 
        territory of such Bell operating company, or in the 
        telephone service territory of any affiliate of such 
        Bell operating company that provides telephone exchange 
        service, pursuant to any agreement, tariff, or other 
        arrangement entered into or in effect before the date 
        of enactment of this part.
  (e) Modifications and Waivers.--The Commission may modify or 
waive the requirements of this section for any local exchange 
carrier (or class or category of such carriers) that has, in 
the aggregate nationwide, fewer than 500,000 access lines 
installed, to the extent that the Commission determines that 
compliance with such requirements (without such modification) 
would be unduly economically burdensome, technologically 
infeasible, or otherwise not in the public interest.
  (f) Waiver for Rural Telephone Companies.--A State commission 
may waive the requirements of this section with respect to any 
rural telephone company.
  (g) Exemption for Certain Rural Telephone Companies.--
Subsections (a) through (d) of this section shall not apply to 
a carrier that has fewer than 50,000 access lines in a local 
exchange study area, if such carrier does not provide video 
programming services over its telephone exchange facilities in 
such study area, except that a State commission may terminate 
the exemption under this subsection if the State commission 
determines that the termination of such exemption is consistent 
with the public interest, convenience, and necessity.
  (h) Avoidance of Redundant Regulations.--Nothing in this 
section shall be construed to prohibit the Commission or any 
State commission from enforcing regulations prescribed prior to 
the date of enactment of this part in fulfilling the 
requirements of this section, to the extent that such 
regulations are consistent with the provisions of this section.
SEC. 243. PREEMPTION.

  (a) Removal of Barriers to Entry.--Except as provided in 
subsection (b) of this section, no State or local statute, 
regulation, or other legal requirement shall--
          (1) effectively prohibit any carrier or other person 
        from entering the business of providing interstate or 
        intrastate telecommunications services or information 
        services; or
          (2) effectively prohibit any carrier or other person 
        providing (or seeking to provide) interstate or 
        intrastate telecommunications services or information 
        services from exercising the access and interconnection 
        rights provided under this part.
  (b) State and Local Authority.--Nothing in this section shall 
affect the ability of State or local officials to impose, on a 
nondiscriminatory basis, requirements necessary to preserve and 
advance universal service, protect the public safety and 
welfare, ensure the continued quality of telecommunications 
services, ensure that a provider's business practices are 
consistent with consumer protection laws and regulations, and 
ensure just and reasonable rates, provided that such 
requirements do not effectively prohibit any carrier or person 
from providing interstate or intrastate telecommunications 
services or information services.
  (c) Construction Permits.--Subsection (a) shall not be 
construed to prohibit a local government from requiring a 
person or carrier to obtain ordinary and usual construction or 
similar permits for its operations if--
          (1) such permit is required without regard to the 
        nature of the business; and
          (2) requiring such permit does not effectively 
        prohibit any person or carrier from providing any 
        interstate or intrastate telecommunications service or 
        information service.
  (d) Exception.--In the case of commercial mobile services, 
the provisions of section 332(c)(3) shall apply in lieu of the 
provisions of this section.
  (e) Parity of Franchise and Other Charges.--Notwithstanding 
section 2(b), no local government may impose or collect any 
franchise, license, permit, or right-of-way fee or any 
assessment, rental, or any other charge or equivalent thereof 
as a condition for operating in the locality or for obtaining 
access to, occupying, or crossing public rights-of-way from any 
provider of telecommunications services that distinguishes 
between or among providers of telecommunications services, 
including the local exchange carrier. For purposes of this 
subsection, a franchise, license, permit, or right-of-way fee 
or an assessment, rental, or any other charge or equivalent 
thereof does not include any imposition of general 
applicability which does not distinguish between or among 
providers of telecommunications services, or any tax.

SEC. 244. STATEMENTS OF TERMS AND CONDITIONS FOR ACCESS AND 
                    INTERCONNECTION.

  (a) In General.--Within 18 months after the date of enactment 
of this part, and from time to time thereafter, a local 
exchange carrier shall prepare and file with a State commission 
statements of the terms and conditions that such carrier 
generally offers within that State with respect to the 
services, elements, features, functions, or capabilities 
provided to comply with the requirements of section 242 and the 
regulations thereunder. Any such statement pertaining to the 
charges for interstate services, elements, features, functions, 
or capabilities shall be filed with the Commission.
  (b) Review.--
          (1) State commission review.--A State commission to 
        which a statement is submitted under subsection (a) 
        shall review such statement in accordance with State 
        law. A State commission may not approve such statement 
        unless such statement complies with section 242 and the 
        regulations thereunder. Except as provided in section 
        243, 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.
          (2) FCC review.--The Commission shall review such 
        statements to ensure that--
                  (A) the charges for interstate services, 
                elements, features, functions, or capabilities 
                are just, reasonable, and nondiscriminatory; 
                and
                  (B) the terms and conditions for such 
                interstate services or elements unbundle any 
                separable services, elements, features, 
                functions, or capabilities in accordance with 
                section 242(a)(2) and any regulations 
                thereunder.
  (c) Time for Review.--
          (1) Schedule for review.--The Commission and 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 subsection (b) (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.
          (2) Authority to continue review.--Paragraph (1) 
        shall not preclude the Commission or a State commission 
        from continuing to review a statement that has been 
        permitted to take effect under subparagraph (B) of such 
        paragraph.
  (d) Effect of Agreements.--Nothing in this section shall 
prohibit a carrier from filing an agreement to provide 
services, elements, features, functions, or capabilities 
affording access and interconnection as a statement of terms 
and conditions that the carrier generally offers for purposes 
of this section. An agreement affording access and 
interconnection shall not be approved under this section unless 
the agreement contains a plan, including a reasonable schedule, 
for the implementation of the requested access or 
interconnection. The approval of a statement under this section 
shall not operate to prohibit a carrier from entering into 
subsequent agreements that contain terms and conditions that 
differ from those contained in a statement that has been 
reviewed and approved under this section, but--
          (1) each such subsequent agreement shall be filed 
        under this section; and
          (2) such carrier shall be obligated to offer access 
        to such services, elements, features, functions, or 
        capabilities to other carriers and persons (including 
        carriers and persons covered by previously approved 
        statements) requesting such access on terms and 
        conditions that, in relation to the terms and 
        conditions in such subsequent agreements, are not 
        discriminatory.
  (e) Sunset.--The provisions of this section shall cease to 
apply in any local exchange market, defined by geographic area 
and class or category of service, that the Commission and the 
State determines has become subject to full and open 
competition.
SEC. 245. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.

  (a) Verification of Access and Interconnection Compliance.--
At any time after 18 months after the date of enactment of this 
part, a Bell operating company may provide to the Commission 
verification by such company with respect to one or more States 
that such company is in compliance with the requirements of 
this part. Such verification shall contain the following:
          (1) Certification.--A certification by each State 
        commission of such State or States that such carrier 
        has fully implemented the conditions described in 
        subsection (b), except as provided in subsection 
        (d)(2).
          (2) Agreement or statement.--For each such State, 
        either of the following:
                  (A) Presence of a facilities-based 
                competitor.--An agreement that has been 
                approved under section 244 specifying the terms 
                and conditions under which the Bell operating 
                company is providing access and interconnection 
                to its network facilities in accordance with 
                section 242 for an unaffiliated competing 
                provider of telephone exchange service that is 
                comparable in price, features, and scope and 
                that is provided over the competitor's own 
                network facilities to residential and business 
                subscribers.
                  (B) Failure to request access.--If no such 
                provider has requested such access and 
                interconnection before the date which is 3 
                months before the date the company makes its 
                submission under this subsection, a statement 
                of the terms and conditions that the carrier 
                generally offers to provide such access and 
                interconnection that has been approved or 
                permitted to take effect by the State 
                commission under section 243.
        For purposes of subparagraph (B), a Bell operating 
        company shall be considered not to have received any 
        request for access or interconnection if the State 
        commission of such State or States certifies that the 
        only provider or providers making such request have (i) 
        failed to bargain in good faith under the supervision 
        of such State commission pursuant to section 242(a)(8), 
        or (ii) have violated the terms of their agreement by 
        failure to comply, within a reasonable period of time, 
        with the implementation schedule contained in such 
        agreement.
  (b) Certification of Compliance With Part II.--For the 
purposes of subsection (a)(1), a Bell operating company shall 
submit to the Commission a certification by a State commission 
of compliance with each of the following conditions in any area 
where such company provides local exchange service or exchange 
access in such State:
          (1) Interconnection.--The Bell operating company 
        provides access and interconnection in accordance with 
        subsections (a)(1) and (b) of section 242 to any other 
        carrier or person offering telecommunications services 
        requesting such access and interconnection, and 
        complies with the Commission regulations pursuant to 
        such section concerning such access and 
        interconnection.
          (2) Unbundling of network elements.--The Bell 
        operating company provides unbundled services, 
        elements, features, functions, and capabilities in 
        accordance with subsection (a)(2) of section 242 and 
        the regulations prescribed by the Commission pursuant 
        to such section.
          (3) Resale.--The Bell operating company offers 
        services, elements, features, functions, and 
        capabilities for resale in accordance with section 
        242(a)(3), and neither the Bell operating company, nor 
        any unit of State or local government within the State, 
        imposes any restrictions on resale or sharing of 
        telephone exchange service (or unbundled services, 
        elements, features, or functions of telephone exchange 
        service) in violation of section 242(a)(3).
          (4) Number portability.--The Bell operating company 
        provides number portability in compliance with the 
        Commission's regulations pursuant to subsections (a)(4) 
        and (c) of section 242.
          (5) Dialing parity.--The Bell operating company 
        provides dialing parity in accordance with subsections 
        (a)(5) and (c) of section 242, and will, not later than 
        the effective date of its authority to commence 
        providing interLATA services, take such actions as are 
        necessary to provide dialing parity for intraLATA 
        telephone toll service in accordance with such 
        subsections.
          (6) Access to conduits and rights of way.--The poles, 
        ducts, conduits, and rights of way of such Bell 
        operating company are available to competing providers 
        of telecommunications services in accordance with the 
        requirements of sections 242(a)(6) and 224(d).
          (7) Elimination of franchise limitations.--No unit of 
        the State or local government in such State or States 
        enforces any prohibition or limitation in violation of 
        section 243.
          (8) Network functionality and accessibility.--The 
        Bell operating company will not install network 
        features, functions, or capabilities that do not comply 
        with the standards established pursuant to section 249.
          (9) Negotiation of terms and conditions.--The Bell 
        operating company has negotiated in good faith, under 
        the supervision of the State commission, in accordance 
        with the requirements of section 242(a)(8) with any 
        other carrier or person requesting access or 
        interconnection.
  (c) Application for Interim InterLATA Authority.--
          (1) Application submission and contents.--At any time 
        after the date of enactment of this part, and prior to 
        the completion by the Commission of all actions 
        necessary to establish regulations under section 242, a 
        Bell operating company may apply to the Commission for 
        interim authority to provide interLATA services. Such 
        application shall specify the LATA or LATAs for which 
        the company is requesting authority to provide interim 
        interLATA services. Such application shall contain, 
        with respect to each LATA within a State for which 
        authorization is requested, the following:
                  (A) Presence of a facilities-based 
                competitor.--An agreement that the State 
                commission has determined complies with section 
                242 (without regard to any regulations 
                thereunder) and that specifies the terms and 
                conditions under which the Bell operating 
                company is providing access and interconnection 
                to its network facilities for the network 
                facilities an unaffiliated competing provider 
                of telephone exchange service that is 
                comparable in price, features, and scope and 
                that is provided over the competitor's own 
                facilities to residential and business 
                subscribers.
                  (B) Certification.--A certification by the 
                State commission of the State within which such 
                LATA is located that such company is in 
                compliance with State laws, rules, and 
                regulations providing for the implementation of 
                the standards described in subsection (b) as of 
                the date of certification, including 
                certification that such company is offering 
                services, elements, features, functions, and 
                capabilities for resale at economically 
                feasible rates to the reseller, recognizing 
                pricing structures for telephone exchange 
                service in such State.
          (2) State to participate.--The company shall serve a 
        copy of the application on the relevant State 
        commission within 5 days of filing its application. The 
        State shall file comments to the Commission on the 
        company's application within 40 days of receiving a 
        copy of the company's application.
          (3) Deadlines for commission action.--The Commission 
        shall make a determination on such application not more 
        than 90 days after such application is filed.
          (4) Expiration of interim authority.--Any interim 
        authority granted pursuant to this subsection shall 
        cease to be effective 180 days after the completion by 
        the Commission of all actions necessary to establish 
        regulations under section 242.
  (d) Commission Review.--
          (1) Review of state decisions and certifications.--
        The Commission shall review any verification submitted 
        by a Bell operating company pursuant to subsection (a). 
        The Commission may require such company to submit such 
        additional information as is necessary to validate any 
        of the items of such verification.
          (2) De novo review.--If--
                  (A) a State commission does not have the 
                jurisdiction or authority to make the 
                certification required by subsection (b);
                  (B) the State commission has failed to act 
                within 90 days after the date a request for 
                such certification is filed with such State 
                commission; or
                  (C) the State commission has sought to impose 
                a term or condition in violation of section 
                243;
        the local exchange carrier may request the Commission 
        to certify the carrier's compliance with the conditions 
        specified in subsection (b).
          (3) Time for decision; public comment.--Unless such 
        Bell operating company consents to a longer period of 
        time, the Commission shall approve, disapprove, or 
        approve with conditions such verification within 90 
        days after the date of its submission. During such 90 
        days, the Commission shall afford interested persons an 
        opportunity to present information and evidence 
        concerning such verification.
          (4) Standard for decision.--The Commission shall not 
        approve such verification unless the Commission 
        determines that--
                  (A) the Bell operating company meets each of 
                the conditions required to be certified under 
                subsection (b); and
                  (B) the agreement or statement submitted 
                under subsection (a)(2) complies with the 
                requirements of section 242 and the regulations 
                thereunder.
  (e) Enforcement of Conditions.--
          (1) Commission authority.--If at any time after the 
        approval of a verification under subsection (d), the 
        Commission determines that a Bell operating company has 
        ceased to meet any of the conditions required to be 
        certified under subsection (b), the Commission may, 
        after notice and opportunity for a hearing--
                  (A) issue an order to such company to correct 
                the deficiency;
                  (B) impose a penalty on such company pursuant 
                to title V; or
                  (C) suspend or revoke such approval.
          (2) 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 to be certified under subsection 
        (b). Unless the parties otherwise agree, the Commission 
        shall act on such complaint within 90 days.
          (3) State authority.--The authority of the Commission 
        under this subsection shall not be construed to preempt 
        any State commission from taking actions to enforce the 
        conditions required to be certified under subsection 
        (b).
  (f) Authority To Provide InterLATA Services.--
          (1) Prohibition.--Except as provided in paragraph (2) 
        and subsections (g) and (h), a Bell operating company 
        or affiliate thereof may not provide interLATA 
        services.
          (2) Authority subject to certification.--A Bell 
        operating company or affiliate thereof may, in any 
        States to which its verification under subsection (a) 
        applies, provide interLATA services--
                  (A) during any period after the effective 
                date of the Commission's approval of such 
                verification pursuant to subsection (d), and
                  (B) until the approval of such verification 
                is suspended or revoked by the Commission 
                pursuant to subsection (d).
  (g) Exception for Previously Authorized Activities.--
Subsection (f) shall not prohibit a Bell operating company or 
affiliate from engaging, at any time after the date of the 
enactment of this part, in any activity as authorized by an 
order entered by the United States District Court for the 
District of Columbia pursuant to section VII or VIII(C) of the 
Modification of Final Judgment, if--
          (1) such order was entered on or before the date of 
        the enactment of this part, or
          (2) a request for such authorization was pending 
        before such court on the date of the enactment of this 
        part.
  (h) Exceptions for Incidental Services.--Subsection (f) shall 
not prohibit a Bell operating company or affiliate thereof, at 
any time after the date of the enactment of this part, from 
providing interLATA services for the purpose of--
          (1)(A) providing audio programming, video 
        programming, or other programming services to 
        subscribers to such services of such company;
          (B) providing the capability for interaction by such 
        subscribers to select or respond to such audio 
        programming, video programming, or other programming 
        services; or
          (C) providing to distributors audio programming or 
        video programming that such company owns or controls, 
        or is licensed by the copyright owner of such 
        programming (or by an assignee of such owner) to 
        distribute;
          (2) providing a telecommunications service, using the 
        transmission facilities of a cable system that is an 
        affiliate of such company, between local access and 
        transport areas within a cable system franchise area in 
        which such company is not, on the date of the enactment 
        of this part, a provider of wireline telephone exchange 
        service;
          (3) providing 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) providing a service that permits a customer that 
        is located in one local access and transport area to 
        retrieve stored information from, or file information 
        for storage in, information storage facilities of such 
        company that are located in another local access and 
        transport area;
          (5) providing signaling information used in 
        connection with the provision of telephone exchange 
        services to a local exchange carrier that, together 
        with any affiliated local exchange carriers, has 
        aggregate annual revenues of less than $100,000,000; or
          (6) providing network control signaling information 
        to, and receiving 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.
  (i) IntraLATA Toll Dialing Parity.--Neither the Commission 
nor any State may order any Bell operating company to provide 
dialing parity for intraLATA telephone toll service in any 
State before the date such company is authorized to provide 
interLATA services in such State pursuant to this section.
  (j) Forbearance.--The Commission may not, pursuant to section 
230, forbear from applying any provision of this section or any 
regulation thereunder until at least 5 years after the date of 
enactment of this part.
  (k) Sunset.--The provisions of this section shall cease to 
apply in any local exchange market, defined by geographic area 
and class or category of service, that the Commission and the 
State determines has become subject to full and open 
competition.
  (l) Definitions.--As used in this section--
          (1) Audio programming.--The term ``audio 
        programming'' means programming provided by, or 
        generally considered comparable to programming provided 
        by, a radio broadcast station.
          (2) Video programming.--The term ``video 
        programming'' has the meaning provided in section 602.
          (3) Other programming services.--The term ``other 
        programming services'' means information (other than 
        audio programming or video programming) that the person 
        who offers a video programming service makes available 
        to all subscribers generally. For purposes of the 
        preceding sentence, the terms ``information'' and 
        ``makes available to all subscribers generally'' have 
        the same meaning such terms have under section 602(13) 
        of this Act.
SEC. 246. COMPETITIVE SAFEGUARDS.

  (a) In General.--In accordance with the requirements of this 
section and the regulations adopted thereunder, a Bell 
operating company or any affiliate thereof providing any 
interLATA telecommunications or information service, shall do 
so through a subsidiary that is separate from the Bell 
operating company or any affiliate thereof that provides 
telephone exchange service.
  (b) Transaction Requirements.--Any transaction between such a 
subsidiary and a Bell operating company and any other affiliate 
of such company shall be conducted on an arm's-length basis, in 
the same manner as the Bell operating company conducts business 
with unaffiliated persons, and shall not be based upon any 
preference or discrimination in favor of the subsidiary arising 
out of the subsidiary's affiliation with such company.
  (c) Separate Operation and Property.--A subsidiary required 
by this section shall--
          (1) operate independently from the Bell operating 
        company or any affiliate thereof,
          (2) have separate officers, directors, and employees 
        who may not also serve as officers, directors, or 
        employees of the Bell operating company or any 
        affiliate thereof,
          (3) not enter into any joint venture activities or 
        partnership with a Bell operating company or any 
        affiliate thereof,
          (4) not own any telecommunications transmission or 
        switching facilities in common with the Bell operating 
        company or any affiliate thereof, and
          (5) not jointly own or share the use of any other 
        property with the Bell operating company or any 
        affiliate thereof.
  (d) Books, Records, and Accounts.--Any subsidiary required by 
this section shall maintain books, records, and accounts in a 
manner prescribed by the Commission which shall be separate 
from the books, records, and accounts maintained by a Bell 
operating company or any affiliate thereof.
  (e) Provision of Services and Information.--A Bell operating 
company or any affiliate thereof may not discriminate between a 
subsidiary required by this section and any other person in the 
provision or procurement of goods, services, facilities, or 
information, or in the establishment of standards, and shall 
not provide any goods, services, facilities or information to a 
subsidiary required by this section unless such goods, 
services, facilities or information are made available to 
others on reasonable, nondiscriminatory terms and conditions.
  (f) Prevention of Cross-Subsidies.--A Bell operating company 
or any affiliate thereof required to maintain a subsidiary 
under this section shall establish and administer, in 
accordance with the requirements of this section and the 
regulations prescribed thereunder, a cost allocation system 
that prohibits any cost of providing interLATA 
telecommunications or information services from being 
subsidized by revenue from telephone exchange services and 
telephone exchange access services. The cost allocation system 
shall employ a formula that ensures that--
          (1) the rates for telephone exchange services and 
        exchange access are no greater than they would have 
        been in the absence of such investment in interLATA 
        telecommunications or information services (taking into 
        account any decline in the real costs of providing such 
        telephone exchange services and exchange access); and
          (2) such interLATA telecommunications or information 
        services bear a reasonable share of the joint and 
        common costs of facilities used to provide telephone 
        exchange, exchange access, and competitive services.
  (g) Assets.--The Commission shall, by regulation, ensure that 
the economic risks associated with the provision of interLATA 
telecommunications or information services by a Bell operating 
company or any affiliate thereof (including any increases in 
such company's cost of capital that occur as a result of the 
provision of such services) are not borne by customers of 
telephone exchange services and exchange access in the event of 
a business loss or failure. Investments or other expenditures 
assigned to interLATA telecommunications or information 
services shall not be reassigned to telephone exchange service 
or exchange access.
  (h) Debt.--A subsidiary required by this section shall not 
obtain credit under any arrangement that would--
          (1) permit a creditor, upon default, to have resource 
        to the assets of a Bell operating company; or
          (2) induce a creditor to rely on the tangible or 
        intangible assets of a Bell operating company in 
        extending credit.
  (i) Fulfillment of Certain Requests.--A Bell operating 
company or an affiliate thereof shall--
          (1) 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) fulfill any such requests with telephone exchange 
        service and exchange access of a quality that meets or 
        exceeds the quality of telephone exchange services and 
        exchange access provided by the Bell operating company 
        or its affiliates to itself or its affiliates; and
          (3) provide telephone exchange service and exchange 
        access to all providers of intraLATA or interLATA 
        telephone toll services and interLATA information 
        services at cost-based rates that are not unreasonably 
        discriminatory.
  (j) Charges for Access Services.--A Bell operating company or 
an affiliate thereof shall charge the subsidiary required by 
this section an amount for telephone exchange services, 
exchange access, and other necessary associated inputs no less 
than the rate charged to any unaffiliated entity for such 
access and inputs.
  (k) Sunset.--The provisions of this section shall cease to 
apply in any local exchange market 3 years after the date of 
enactment of this part.

SEC. 247. UNIVERSAL SERVICE.

  (a) Joint Board To Preserve Universal Service.--Within 30 
days after the date of enactment of this part, the Commission 
shall convene a Federal-State Joint Board under section 410(c) 
for the purpose of recommending actions to the Commission and 
State commissions for the preservation of universal service in 
furtherance of the purposes set forth in section 1 of this Act. 
In addition to the members required under section 410(c), one 
member of the Joint Board shall be a State-appointed utility 
consumer advocate nominated by a national organization of State 
utility consumer advocates.
  (b) Principles.--The Joint Board shall base policies for the 
preservation of universal service on the following principles:
          (1) Just and reasonable rates.--A plan adopted by the 
        Commission and the States should ensure the continued 
        viability of universal service by maintaining quality 
        services at just and reasonable rates.
          (2) Definitions of included services; comparability 
        in urban and rural areas.--Such plan should recommend a 
        definition of the nature and extent of the services 
        encompassed within carriers' universal service 
        obligations. Such plan should seek to promote access to 
        advanced telecommunications services and capabilities, 
        and to promote reasonably comparable services for the 
        general public in urban and rural areas, while 
        maintaining just and reasonable rates.
          (3) Adequate and sustainable support mechanisms.--
        Such plan should recommend specific and predictable 
        mechanisms to provide adequate and sustainable support 
        for universal service.
          (4) Equitable and nondiscriminatory contributions.--
        All providers of telecommunications services should 
        make an equitable and nondiscriminatory contribution to 
        the preservation of universal service.
          (5) Educational access to advanced telecommunications 
        services.--To the extent that a common carrier 
        establishes advanced telecommunications services, such 
        plan should include recommendations to ensure access to 
        advanced telecommunications services for students in 
        elementary and secondary schools.
          (6) Additional principles.--Such other principles as 
        the Board determines are necessary and appropriate for 
        the protection of the public interest, convenience, and 
        necessity and consistent with the purposes of this Act.
  (c) Definition of Universal Service.--In recommending a 
definition of the nature and extent of the services encompassed 
within carriers' universal service obligations under subsection 
(b)(2), the Joint Board shall consider the extent to which--
          (1) a telecommunications service has, through the 
        operation of market choices by customers, been 
        subscribed to by a substantial majority of residential 
        customers;
          (2) such service or capability is essential to public 
        health, public safety, or the public interest;
          (3) such service has been deployed in the public 
        switched telecommunications network; and
          (4) inclusion of such service within carriers' 
        universal service obligations is otherwise consistent 
        with the public interest, convenience, and necessity.
The Joint Board may, from time to time, recommend to the 
Commission modifications in the definition proposed under 
subsection (b).
  (d) Report; Commission Response.--The Joint Board convened 
pursuant to subsection (a) shall report its recommendations 
within 270 days after the date of enactment of this part. The 
Commission shall complete any proceeding to act upon such 
recommendations and to comply with the principles set forth in 
subsection (b) within one year after such date of enactment.
  (e) State Authority.--Nothing in this section shall be 
construed to restrict the authority of any State to adopt 
regulations imposing universal service obligations on the 
provision of intrastate telecommunications services.
  (f) Sunset.--The Joint Board established by this section 
shall cease to exist 5 years after the date of enactment of 
this part.
SEC. 248. PRICING FLEXIBILITY AND ABOLITION OF RATE-OF-RETURN 
                    REGULATION.

  (a) Pricing Flexibility.--
          (1) Commission criteria.--Within 270 days after the 
        date of enactment of this part, the Commission shall 
        complete all actions necessary (including any 
        reconsideration) to establish--
                  (A) criteria for determining whether a 
                telecommunications service or provider of such 
                service has become, or is substantially certain 
                to become, subject to competition, either 
                within a geographic area or within a class or 
                category of service; and
                  (B) appropriate flexible pricing procedures 
                that afford a regulated provider of a service 
                described in subparagraph (A) the opportunity 
                to respond fairly to such competition and that 
                are consistent with the protection of 
                subscribers and the public interest, 
                convenience, and necessity.
          (2) State selection.--A State commission may utilize 
        the flexible pricing procedures or procedures 
        (established under paragraph (1)(B)) that are 
        appropriate in light of the criteria established under 
        paragraph (1)(A).
          (3) Determinations.--The Commission, with respect to 
        rates for interstate or foreign communications, and 
        State commissions, with respect to rates for intrastate 
        communications, shall, upon application--
                  (A) render determinations in accordance with 
                the criteria established under paragraph (1)(A) 
                concerning the services or providers that are 
                the subject of such application; and
                  (B) upon a proper showing, implement 
                appropriate flexible pricing procedures 
                consistent with paragraphs (1)(B) and (2) with 
                respect to such services or providers.
        The Commission and such State commission shall approve 
        or reject any such application within 180 days after 
        the date of its submission.
  (b) Abolition of Rate-of-Return Regulation.--Notwithstanding 
any other provision of law, to the extent that a carrier has 
complied with sections 242 and 244 of this part, the 
Commission, with respect to rates for interstate or foreign 
communications, and State commissions, with respect to rates 
for intrastate communications, shall not require rate-of-return 
regulation.
  (c) Termination of Price and Other Regulation.--
Notwithstanding any other provision of law, to the extent that 
a carrier has complied with sections 242 and 244 of this part, 
the Commission, with respect to interstate or foreign 
communications, and State commissions, with respect to 
intrastate communications, shall not, for any service that is 
determined, in accordance with the criteria established under 
subsection (a)(1)(A), to be subject to competition that 
effectively prevents prices for such service that are unjust or 
unreasonable or unjustly or unreasonably discriminatory--
          (1) regulate the prices for such service;
          (2) require the filing of a schedule of charges for 
        such service;
          (3) require the filing of any cost or revenue 
        projections for such service;
          (4) regulate the depreciation charges for facilities 
        used to provide such service; or
          (5) require prior approval for the construction or 
        extension of lines or other equipment for the provision 
        of such service.
  (d) Ability To Continue Affordable Voice-Grade Service.--
Notwithstanding subsections (a), (b), and (c), each State 
commission shall, for a period of not more than 3 years, permit 
residential subscribers to continue to receive only basic 
voice-grade local telephone service equivalent to the service 
generally available to residential subscribers on the date of 
enactment of this part, at just, reasonable, and affordable 
rates. Determinations concerning the affordability of rates for 
such services shall take into account the rates generally 
available to residential subscribers on such date of enactment 
and the pricing rules established by the States. Any increases 
in the rates for such services for residential subscribers that 
are not attributable to changes in consumer prices generally 
shall be permitted in any proceeding commenced after the date 
of enactment of this section upon a showing that such increase 
is necessary to ensure the continued availability of universal 
service, prevent economic disadvantages for one or more service 
providers, and is in the public interest. Such increase in 
rates shall be minimized to the greatest extent practical and 
shall be implemented over a time period of not more than 3 
years after the date of enactment of this section. The 
requirements of this subsection shall not apply to any rural 
telephone company if the rates for basic voice-grade local 
telephone service of that company are not subject to regulation 
by a State commission on the date of enactment of this part.
  (e) Interstate Interexchange Service.--The rates charged by 
providers of interstate interexchange telecommunications 
service to customers in rural and high cost areas shall be 
maintained at levels no higher than those charged by each such 
provider to its customers in urban areas.
  (f) Exception.--In the case of commercial mobile services, 
the provisions of section 332(c)(1) shall apply in lieu of the 
provisions of this section.
  (g) Avoidance of Redundant Regulations.--Nothing in this 
section shall be construed to prohibit the Commission or a 
State commission from enforcing regulations prescribed prior to 
the date of enactment of this part in fulfilling the 
requirements of this section, to the extent that such 
regulations are consistent with the provisions of this section.

SEC. 249. NETWORK FUNCTIONALITY AND ACCESSIBILITY.

  (a) Functionality and Accessibility.--The duty of a common 
carrier under section 201(a) to furnish communications service 
includes the duty to furnish that service in accordance with 
any standards established pursuant to this section.
  (b) Coordination for Interconnectivity.--The Commission--
          (1) shall establish procedures for Commission 
        oversight of coordinated network planning by common 
        carriers and other providers of telecommunications 
        services for the effective and efficient 
        interconnection of public switched networks; 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 
        interconnection standards that promote access to--
                  (A) network capabilities and services by 
                individuals with disabilities; and
                  (B) information services by subscribers to 
                telephone exchange service furnished by a rural 
                telephone company.
  (c) Accessibility for Individuals With Disabilities.--
          (1) Accessibility.--Within 1 year after the date of 
        enactment of this section, the Commission shall 
        prescribe such regulations as are necessary to ensure 
        that, if readily achievable, advances in network 
        services deployed by common carriers, and 
        telecommunications equipment and customer premises 
        equipment manufactured for use in conjunction with 
        network services, shall be accessible and usable by 
        individuals with disabilities, including individuals 
        with functional limitations of hearing, vision, 
        movement, manipulation, speech, and interpretation of 
        information. Such regulations shall permit the use of 
        both standard and special equipment, and seek to 
        minimize the need of individuals to acquire additional 
        devices beyond those used by the general public to 
        obtain such access. Throughout the process of 
        developing such regulations, the Commission shall 
        coordinate and consult with representatives of 
        individuals with disabilities and interested equipment 
        and service providers to ensure their concerns and 
        interests are given full consideration in such process.
          (2) Compatibility.--Such regulations shall require 
        that whenever an undue burden or adverse competitive 
        impact would result from the requirements in paragraph 
        (1), the local exchange carrier that deploys the 
        network service shall ensure that the network service 
        in question is compatible with existing peripheral 
        devices or specialized customer premises equipment 
        commonly used by persons with disabilities to achieve 
        access, unless doing so would result in an undue burden 
        or adverse competitive impact.
          (3) Undue burden.--The term ``undue burden'' means 
        significant difficulty or expense. In determining 
        whether the activity necessary to comply with the 
        requirements of this subsection would result in an 
        undue burden, the factors to be considered include the 
        following:
                  (A) The nature and cost of the activity.
                  (B) The impact on the operation of the 
                facility involved in the deployment of the 
                network service.
                  (C) The financial resources of the local 
                exchange carrier.
                  (D) The type of operations of the local 
                exchange carrier.
          (4) Adverse competitive impact.--In determining 
        whether the activity necessary to comply with the 
        requirements of this subsection would result in adverse 
        competitive impact, the following factors shall be 
        considered:
                  (A) Whether such activity would raise the 
                cost of the network service in question beyond 
                the level at which there would be sufficient 
                consumer demand by the general population to 
                make the network service profitable.
                  (B) Whether such activity would, with respect 
                to the network service in question, put the 
                local exchange carrier at a competitive 
                disadvantage. This factor may be considered so 
                long as competing network service providers are 
                not held to the same obligation with respect to 
                access by persons with disabilities.
          (5) Effective date.--The regulations required by this 
        subsection shall become effective 18 months after the 
        date of enactment of this part.
  (d) 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.
SEC. 250. MARKET ENTRY BARRIERS.

  (a) Elimination of Barriers.--Within 15 months after the date 
of enactment of this part, 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 points of view, 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. 251. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.

  No common 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.

SEC. 252. STUDY.

  At least once every three years, the Commission shall conduct 
a study that--
          (1) reviews the definition of, and the adequacy of 
        support for, universal service, and evaluates the 
        extent to which universal service has been protected 
        and access to advanced services has been facilitated 
        pursuant to this part and the plans and regulations 
        thereunder;
          (2) evaluates the extent to which access to advanced 
        telecommunications services for students in elementary 
        and secondary school classrooms has been attained 
        pursuant to section 247(b)(5); and
          (3) determines whether the regulations established 
        under section 249(c) have ensured that advances in 
        network services by providers of telecommunications 
        services and information services are accessible and 
        usable by individuals with disabilities.
SEC. 253. TERRITORIAL EXEMPTION.

  Until 5 years after the date of enactment of this part, the 
provisions of this part shall not apply to any local exchange 
carrier in any territory of the United States if (1) the local 
exchange carrier is owned by the government of such territory, 
and (2) on the date of enactment of this part, the number of 
households in such territory subscribing to telephone service 
is less than 85 percent of the total households located in such 
territory.
               PART III--SPECIAL AND TEMPORARY PROVISIONS
SEC. 271. MANUFACTURING BY BELL OPERATING COMPANIES.

  (a) Access and Interconnection.--It shall be unlawful for a 
Bell operating company, directly or through an affiliate, to 
manufacture telecommunications equipment or customer premises 
equipment, until the Commission has approved under section 
245(c) verifications that such Bell operating company, and each 
Bell operating company with which it is affiliated, are in 
compliance with the access and interconnection requirements of 
part II of this title.
  (b) 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.
  (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 contiguous common carriers 
        providing telephone exchange service, timely 
        information on the planned deployment of 
        telecommunications equipment.
  (d) Manufacturing Limitations for Standard-Setting 
Organizations.--
          (1) Bell communications research.--The Bell 
        Communications Research Corporation, or any successor 
        entity, shall not engage in manufacturing 
        telecommunications equipment or customer premises 
        equipment so long as--
                  (A) such Corporation or entity is owned, in 
                whole or in part, by one or more Bell operating 
                companies; or
                  (B) such Corporation or entity engages in 
                establishing standards for telecommunications 
                equipment, customer premises equipment, or 
                telecommunications services, or any product 
                certification activities with respect to 
                telecommunications equipment or customer 
                premises equipment.
          (2) Participation in standard setting; protection of 
        proprietary information.--Any entity (including such 
        Corporation) that engages in establishing standards 
        for--
                  (A) telecommunications equipment, customer 
                premises equipment, or telecommunications 
                services, or
                  (B) any product certification activities with 
                respect to telecommunications equipment or 
                customer premises equipment,
        for one or more Bell operating companies shall allow 
        any other person to participate fully in such 
        activities on a nondiscriminatory basis. Any such 
        entity shall protect proprietary information submitted 
        for review in the standards-setting and certification 
        processes from release not specifically authorized by 
        the owner of such information, even after such entity 
        ceases to be so engaged.
  (e) Bell Operating Company Equipment Procurement and Sales.--
          (1) Objective basis.--Each Bell operating company and 
        any entity acting on behalf of a Bell operating company 
        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.
          (2) Sales restrictions.--A Bell operating company 
        engaged in manufacturing may not restrict sales to any 
        local exchange carrier of telecommunications equipment, 
        including software integral to the operation of such 
        equipment and related upgrades.
          (3) 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) Exception for Previously Authorized Activities.--Nothing 
in this section shall prohibit a Bell operating company or 
affiliate from engaging, at any time after the date of the 
enactment of this part, in any activity as authorized by an 
order entered by the United States District Court for the 
District of Columbia pursuant to section VII or VIII(C) of the 
Modification of Final Judgment, if--
          (1) such order was entered on or before the date of 
        the enactment of this part, or
          (2) a request for such authorization was pending 
        before such court on the date of the enactment of this 
        part.
  (h) Antitrust Laws.--Nothing in this section shall be 
construed to modify, impair, or supersede the applicability of 
any of the antitrust laws.
  (i) Definition.--As used in this section, the term 
``manufacturing'' has the same meaning as such term has under 
the Modification of Final Judgment.
SEC. 272. 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 or were used in common with 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;
          (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 any 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) 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.
  (e) 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.
  (f) 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 this section 
        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 June 30, 2000.
  (g) 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 Modification of Final Judgment.
                  (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.
  (h) 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 
        wireline telephone exchange service 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, and
                  (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. 273. ALARM MONITORING AND TELEMESSAGING SERVICES BY BELL OPERATING 
                    COMPANIES.

  (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 6 
        years after the date of enactment of this part.
          (2) Existing activities.--Paragraph (1) shall not 
        apply to any provision of alarm monitoring services in 
        which a Bell operating company or affiliate is lawfully 
        engaged as of January 1, 1995, except that such Bell 
        operating company or any affiliate may not acquire or 
        otherwise obtain control of additional entities 
        providing alarm monitoring services after such date.
  (b) Nondiscrimination.--A common carrier engaged in the 
provision of alarm monitoring services or telemessaging 
services shall--
          (1) provide nonaffiliated entities, upon reasonable 
        request, with the network services it provides to its 
        own alarm monitoring or telemessaging operations, on 
        nondiscriminatory terms and conditions; and
          (2) not subsidize its alarm monitoring services or 
        its telemessaging 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 or 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, as determined by the Commission in 
accordance with such regulations, the Commission shall, within 
60 days after receipt of the complaint, order the common 
carrier and its affiliates to cease engaging in such violation 
pending such final determination.
  (d) Definitions.--As used in this section:
          (1) 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--
                  (A) 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
                  (B) to transmit a signal regarding such 
                threat by means of transmission facilities of a 
                Bell operating company 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.
          (2) Telemessaging services.--The term ``telemessaging 
        services'' means voice mail and voice storage and 
        retrieval services provided over telephone lines for 
        telemessaging customers and any live operator services 
        used to answer, record, transcribe, and relay messages 
        (other than telecommunications relay services) from 
        incoming telephone calls on behalf of the telemessaging 
        customers (other than any service incidental to 
        directory assistance).
SEC. 274. 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 with revenue from its telephone exchange 
        service or its exchange access service; and
          (2) shall not prefer or discriminate in favor of it 
        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 this section, 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 the date of enactment 
                of this section, 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; and
                  (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 
                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, and provide for all payphone service 
                providers to have the right to negotiate with 
                the location provider on 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 the enactment of this Act.
  (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 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.
                [TITLE III--PROVISIONS RELATING TO RADIO

                      [Part I--General Provisions]
                TITLE III--PROVISIONS RELATING TO RADIO

                       PART I--GENERAL PROVISIONS
          * * * * * * *

SEC. 303. GENERAL POWERS OF COMMISSION.

  Except as otherwise provided in this Act, the Commission from 
time to time, as public convenience, interest, or necessity 
requires shall--
  (a)  * * *
          * * * * * * *
  (v) Have exclusive jurisdiction over the regulation of the 
direct broadcast satellite service.
          * * * * * * *

SEC. 307. ALLOCATION OF FACILITIES; TERM OF LICENSES.

  (a)  * * *
          * * * * * * *
  [(c) No license granted for the operation of a television 
broadcasting station shall be for a longer term than five years 
and no license so granted for any other class of station (other 
than a radio broadcasting station) shall be for a longer term 
than ten years, and any license granted may be revoked as 
hereinafter provided. Each license granted for the operation of 
a radio broadcasting station shall be for a term of not to 
exceed seven years. The term of any license for the operation 
of any auxiliary broadcast station or equipment which can be 
used only in conjunction with a primary radio, television, or 
translator station shall be concurrent with the term of the 
license for such primary radio, television, or translator 
station. Upon the expiration of any license, upon application 
therefor, a renewal of such license may be granted from time to 
time for a term of not to exceed five years in the case of 
television broadcasting licenses, for a term of not to exceed 
seven years in the case of radio broadcasting station licenses, 
and for a term of not to exceed ten years in the case of other 
licenses, if the Commission finds that public interest, 
convenience, and necessity would be served thereby. 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. 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. Consistently 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, 
public interest, convenience, or necessity would be served by 
such action.]
  (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 seven years. Upon 
        application therefor, a renewal of such license may be 
        granted from time to time for a term of not to exceed 
        seven 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, 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. 309. ACTION UPON APPLICATIONS; FORM OF AND CONDITIONS ATTACHED TO 
                    LICENSES.

  (a)  * * *
          * * * * * * *
  (d)(1) Any party in interest may file with the Commission a 
petition to deny any application (whether as originally filed 
or as amended) to which subsection (b) of this section applies 
at any time prior to the day of Commission grant thereof 
without hearing or the day of formal designation thereof for 
hearing; except that with respect to any classification of 
applications, the Commission from time to time by rule may 
specify a shorter period (no less than thirty days following 
the issuance of public notice by the Commission of the 
acceptance for filing of such application or of any substantial 
amendment thereof), which shorter period shall be reasonably 
related to the time when the applications would normally be 
reached for processing. The petitioner shall serve a copy of 
such petition on the applicant. The petition shall contain 
specific allegations of fact sufficient to show that the 
petitioner is a party in interest and that a grant of the 
application would be prima facie inconsistent with subsection 
(a) (or subsection (k) in the case of renewal of any broadcast 
station license). Such allegations of fact shall, except for 
those of which official notice may be taken, be supported by 
affidavit of a person or persons with personal knowledge 
thereof. The applicant shall be given the opportunity to file a 
reply in which allegations of fact or denials thereof shall 
similarly be supported by affidavit.
  (2) If the Commission finds on the basis of the application, 
the pleadings filed, or other matters which it may officially 
notice that there are no substantial and material questions of 
fact and that a grant of the application would be consistent 
with subsection (a) (or subsection (k) in the case of renewal 
of any broadcast station license), it shall make the grant, 
deny the petition, and issue a concise statement of the reasons 
for denying the petition, which statement shall dispose of all 
substantial issues raised by the petition. If a substantial and 
material question of fact is presented or if the Commission for 
any reason is unable to find that grant of the application 
would be consistent with subsection (a) (or subsection (k) in 
the case of renewal of any broadcast station license), it shall 
proceed as provided in subsection (e).
          * * * * * * *
  (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.
SEC. 310. LIMITATION ON HOLDING AND TRANSFER OF LICENSES.

  [(a) The station license required under this Act shall not be 
granted to or held by any foreign government or the 
representative thereof.]
  (a) Grant to or Holding by Foreign Government or 
Representative.--No station license required under title III of 
this Act shall be granted to or held by any foreign government 
or any representative thereof. This subsection shall not apply 
to licenses issued under such terms and conditions as the 
Commission may prescribe to mobile earth stations engaged in 
occasional or short-term transmissions via satellite of audio 
or television program material and auxilliary signals if such 
transmissions are not intended for direct reception by the 
general public in the United States.
          * * * * * * *
  (f) Termination of Foreign Ownership Restrictions.--
          (1) Restriction not to apply.--Subsection (b) shall 
        not apply to any common carrier license granted, or for 
        which application is made, after the date of enactment 
        of this subsection with respect to any alien (or 
        representative thereof), corporation, or foreign 
        government (or representative thereof) if--
                  (A) the President determines that the foreign 
                country of which such alien is a citizen, in 
                which such corporation is organized, or in 
                which the foreign government is in control is 
                party to an international agreement which 
                requires the United States to provide national 
                or most-favored-nation treatment in the grant 
                of common carrier licenses; or
                  (B) the Commission determines that not 
                applying subsection (b) would serve the public 
                interest.
          (2) Commission considerations.--In making its 
        determination, under paragraph (1)(B), the Commission 
        may consider, among other public interest factors, 
        whether effective competitive opportunities are 
        available to United States nationals or corporations in 
        the applicant's home market. In evaluating the public 
        interest, the Commission shall exercise great deference 
        to the President with respect to United States national 
        security, law enforcement requirements, foreign policy, 
        the interpretation of international agreements, and 
        trade policy (as well as direct investment as it 
        relates to international trade policy). Upon receipt of 
        an application that requires a finding under this 
        paragraph, the Commission shall cause notice thereof to 
        be given to the President or any agencies designated by 
        the President to receive such notification.
          (3) Further commission review.--Except as otherwise 
        provided in this paragraph, the Commission may 
        determine that any foreign country with respect to 
        which it has made a determination under paragraph (1) 
        has ceased to meet the requirements for that 
        determination. In making this determination, the 
        Commission shall exercise great deference to the 
        President with respect to United States national 
        security, law enforcement requirements, foreign policy, 
        the interpretation of international agreements, and 
        trade policy (as well as direct investment as it 
        relates to international trade policy). If a 
        determination under this paragraph is made then--
                  (A) subsection (b) shall apply with respect 
                to such aliens, corporation, and government (or 
                their representatives) on the date that the 
                Commission publishes notice of its 
                determination under this paragraph; and
                  (B) any license held, or application filed, 
                which could not be held or granted under 
                subsection (b) shall be reviewed by the 
                Commission under the provisions of paragraphs 
                (1)(B) and (2).
          (4) Observance of international obligations.--
        Paragraph (3) shall not apply to the extent the 
        President determines that it is inconsistent with any 
        international agreement to which the United States is a 
        party.
          (5) Notifications to congress.--The President and the 
        Commission shall notify the appropriate committees of 
        the Congress of any determinations made under paragraph 
        (1), (2), or (3).
          * * * * * * *

SEC. 325. FALSE DISTRESS SIGNALS; REBROADCASTING; STUDIOS OF FOREIGN 
                    STATIONS.

  (a)  * * *
  (b)(1)  * * *
  (2) The provisions of this subsection shall not apply to--
          (A)  * * *
          * * * * * * *
          [(D) retransmission by a cable operator or other 
        multichannel video programming distributor of the 
        signal of a superstation if such signal was obtained 
        from a satellite carrier and the originating station 
        was a superstation on May 1, 1991.]
          (D) retransmission by a cable operator or other 
        multichannel video programming distributor of the 
        signal of a superstation if (i) the customers served by 
        the cable operator or other multichannel video 
        programming distributor reside outside the originating 
        station's television market, as defined by the 
        Commission for purposes of section 614(h)(1)(C); (ii) 
        such signal was obtained from a satellite carrier or 
        terrestrial microwave common carrier; and (iii) and the 
        origination station was a superstation on May 1, 1991.
For purposes of this paragraph, the terms ``satellite 
carrier'', ``superstation'', and ``unserved household'' have 
the meanings given those terms, respectively, in section 119(d) 
of title 17, United States Code, as in effect on the date of 
enactment of the Cable Television Consumer Protection and 
Competition Act of 1992.
          * * * * * * *
SEC. 332. MOBILE SERVICES.

  (a)  * * *
          * * * * * * *
  (c) Regulatory Treatment of Mobile Services.--
          (1)  * * *
          * * * * * * *
          (7) Facilities siting policies.--(A) Within 180 days 
        after enactment of this paragraph, the Commission shall 
        prescribe and make effective a policy regarding State 
        and local regulation of the placement, construction, 
        modification, or operation of facilities for the 
        provision of commercial mobile services.
          (B) Pursuant to subchapter III of chapter 5, title 5, 
        United States Code, the Commission shall establish a 
        negotiated rulemaking committee to negotiate and 
        develop a proposed policy to comply with the 
        requirements of this paragraph. Such committee shall 
        include representatives from State and local 
        governments, affected industries, and public safety 
        agencies. In negotiating and developing such a policy, 
        the committee shall take into account--
                  (i) the desirability of enhancing the 
                coverage and quality of commercial mobile 
                services and fostering competition in the 
                provision of such services;
                  (ii) the legitimate interests of State and 
                local governments in matters of exclusively 
                local concern;
                  (iii) the effect of State and local 
                regulation of facilities siting on interstate 
                commerce; and
                  (iv) the administrative costs to State and 
                local governments of reviewing requests for 
                authorization to locate facilities for the 
                provision of commercial mobile services.
          (C) The policy prescribed pursuant to this paragraph 
        shall ensure that--
                  (i) regulation of the placement, 
                construction, and modification of facilities 
                for the provision of commercial mobile services 
                by any State or local government or 
                instrumentality thereof--
                          (I) is reasonable, nondiscriminatory, 
                        and limited to the minimum necessary to 
                        accomplish the State or local 
                        government's legitimate purposes; and
                          (II) does not prohibit or have the 
                        effect of precluding any commercial 
                        mobile service; and
                  (ii) a State or local government or 
                instrumentality thereof shall act on any 
                request for authorization to locate, construct, 
                modify, or operate facilities for the provision 
                of commercial mobile services within a 
                reasonable period of time after the request is 
                fully filed with such government or 
                instrumentality; and
                  (iii) any decision by a State or local 
                government or instrumentality thereof to deny a 
                request for authorization to locate, construct, 
                modify, or operate facilities for the provision 
                of commercial mobile services shall be in 
                writing and shall be supported by substantial 
                evidence contained in a written record.
          (D) The policy prescribed pursuant to this paragraph 
        shall provide that no State or local government or any 
        instrumentality thereof may regulate the placement, 
        construction, modification, or operation of such 
        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.
          (E) In accordance with subchapter III of chapter 5, 
        title 5, United States Code, the Commission shall 
        periodically establish a negotiated rulemaking 
        committee to review the policy prescribed by the 
        Commission under this paragraph and to recommend 
        revisions to such policy.
          (8) Mobile services access.--(A) The Commission shall 
        prescribe regulations to afford subscribers of two-way 
        switched voice commercial mobile radio services access 
        to a provider of telephone toll service of the 
        subscriber's choice, except to the extent that the 
        commercial mobile radio service is provided by 
        satellite. The Commission may exempt carriers or 
        classes of carriers from the requirements of such 
        regulations to the extent the Commission determines 
        such exemption is consistent with the public interest, 
        convenience, and necessity. For purposes of this 
        paragraph, ``access'' shall mean access to a provider 
        of telephone toll service through the use of carrier 
        identification codes assigned to each such provider.
          (B) The regulations prescribed by the Commission 
        pursuant to subparagraph (A) shall supersede any 
        inconsistent requirements imposed by the Modification 
        of Final Judgment or any order in United States v. AT&T; 
        Corp. and McCaw Cellular Communications, Inc., Civil 
        Action No. 94-01555 (United States District Court, 
        District of Columbia).
  (d) Definitions.--For purposes of this section--
          (1) the term ``commercial mobile service'' means any 
        mobile service (as defined in section 3[(n)]) that is 
        provided for profit and makes interconnected service 
        available (A) to the public or (B) to such classes of 
        eligible users as to be effectively available to a 
        substantial portion of the public, as specified by 
        regulation by the Commission;
          (2) the term ``interconnected service'' means service 
        that is interconnected with the public switched network 
        (as such terms are defined by regulation by the 
        Commission) or service for which a request for 
        interconnection is pending pursuant to subsection 
        (c)(1)(B); and
          (3) the term ``private mobile service'' means any 
        mobile service (as defined in section 3[(n)]) that is 
        not a commercial mobile service or the functional 
        equivalent of a commercial mobile service, as specified 
        by regulation by the Commission.
          * * * * * * *
SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.

  (a) Commission Action.--If the Commission determines to issue 
additional licenses for advanced television services, the 
Commission shall--
          (1) 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) adopt regulations that allow such licensees or 
        permittees 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.--
          (1) Conditions required.--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, upon a determination by the Commission 
        pursuant to the regulations prescribed under paragraph 
        (2), either the additional license or the original 
        license held by the licensee be surrendered to the 
        Commission in accordance with such regulations for 
        reallocation or reassignment (or both) pursuant to 
        Commission regulation.
          (2) Criteria.--The Commission shall prescribe 
        criteria for rendering determinations concerning 
        license surrender pursuant to license conditions 
        required by paragraph (1). Such criteria shall--
                  (A) require such determinations to be based, 
                on a market-by-market basis, on whether the 
                substantial majority of the public have 
                obtained television receivers that are capable 
                of receiving advanced television services; and
                  (B) not require the cessation of the 
                broadcasting under either the original or 
                additional license if such cessation would 
                render the television receivers of a 
                substantial portion of the public useless, or 
                otherwise cause undue burdens on the owners of 
                such television receivers.
          (3) Auction of returned spectrum.--Any license 
        surrendered under the requirements of this subsection 
        shall be subject to assignment by use of competitive 
        bidding pursuant to section 309(j), notwithstanding any 
        limitations contained in paragraph (2) of such section.
  (d) 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 the 
        enactment of this section, 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.
  (e) 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.
  (f) 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 this section, as further defined in the 
        proceedings described in paragraph (1) of this 
        subsection.

SEC. 337. BROADCAST OWNERSHIP.

  (a) Limitations on Commission Rulemaking Authority.--Except 
as expressly permitted in this section, the Commission shall 
not prescribe or enforce any regulation--
          (1) prohibiting or limiting, either nationally or 
        within any particular area, a person or entity from 
        holding any form of ownership or other interest in two 
        or more broadcasting stations or in a broadcasting 
        station and any other medium of mass communication; or
          (2) prohibiting a person or entity from owning, 
        operating, or controlling two or more networks of 
        broadcasting stations or from owning, operating, or 
        controlling a network of broadcasting stations and any 
        other medium of mass communications.
  (b) Television Ownership Limitations.--
          (1) National audience reach limitations.--The 
        Commission shall prohibit a person or entity from 
        obtaining any license if such license would result in 
        such person or entity directly or indirectly owning, 
        operating, or controlling, or having a cognizable 
        interest in, television stations which have an 
        aggregate national audience reach exceeding--
                  (A) 35 percent, for any determination made 
                under this paragraph before one year after the 
                date of enactment of this section; or
                  (B) 50 percent, for any determination made 
                under this paragraph on or after one year after 
                such date of enactment.
        Within 3 years after such date of enactment, the 
        Commission shall conduct a study on the operation of 
        this paragraph and submit a report to the Congress on 
        the development of competition in the television 
        marketplace and the need for any revisions to or 
        elimination of this paragraph.
          (2) Multiple licenses in a market.--
                  (A) In general.--The Commission shall 
                prohibit a person or entity from obtaining any 
                license if such license would result in such 
                person or entity directly or indirectly owning, 
                operating, or controlling, or having a 
                cognizable interest in, two or more television 
                stations within the same television market.
                  (B) Exception for multiple uhf stations and 
                for uhf-vhf combinations.--Notwithstanding 
                subparagraph (A), the Commission shall not 
                prohibit a person or entity from directly or 
                indirectly owning, operating, or controlling, 
                or having a cognizable interest in, two 
                television stations within the same television 
                market if at least one of such stations is a 
                UHF television, unless the Commission 
                determines that permitting such ownership, 
                operation, or control will harm competition or 
                will harm the preservation of a diversity of 
                media voices in the local television market.
                  (C) Exception for vhf-vhf combinations.--
                Notwithstanding subparagraph (A), the 
                Commission may permit a person or entity to 
                directly or indirectly own, operate, or 
                control, or have a cognizable interest in, two 
                VHF television stations within the same 
                television market, if the Commission determines 
                that permitting such ownership, operation, or 
                control will not harm competition and will not 
                harm the preservation of a diversity of media 
                voices in the local television market.
  (c) Local Cross-Media Ownership Limits.--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 nonbroadcast media of 
mass communication would result in an undue concentration of 
media voices in the respective local market. In considering any 
such combination, the Commission shall not grant the 
application if all the media of mass communication in such 
local market would be owned, operated, or controlled by two or 
fewer persons or entities. This subsection shall not constitute 
authority for the Commission to prescribe regulations 
containing local cross-media ownership limitations. The 
Commission may not, under the authority of this subsection, 
require any person or entity to divest itself of any portion of 
any combination of stations and other media of mass 
communications that such person or entity owns, operates, or 
controls on the date of enactment of this section unless such 
person or entity acquires another station or other media of 
mass communications after such date in such local market.
  (d) Transition Provisions.--Any provision of any regulation 
prescribed before the date of enactment of this section that is 
inconsistent with the requirements of this section shall cease 
to be effective on such date of enactment. The Commission shall 
complete all actions (including any reconsideration) necessary 
to amend its regulations to conform to the requirements of this 
section not later than 6 months after such date of enactment. 
Nothing in this section shall be construed to prohibit the 
continuation or renewal of any television local marketing 
agreement that is in effect on such date of enactment and that 
is in compliance with Commission regulations on such date.
      [Part II--Radio Equipment and Radio Operators on Board Ship]
       PART II--RADIO EQUIPMENT AND RADIO OPERATORS ON BOARD SHIP
          * * * * * * *

[Part III--Radio Installations on Vessels Carrying Passengers for Hire]
 PART III--RADIO INSTALLATIONS ON VESSELS CARRYING PASSENGERS FOR HIRE
          * * * * * * *

    [Part IV--Assistance for Public Telecommunications Facilities; 
 Telecommunications Demonstrations; Corporation for Public Broadcasting
     PART IV--ASSISTANCE FOR PUBLIC TELECOMMUNICATIONS FACILITIES; 
 TELECOMMUNICATIONS DEMONSTRATIONS; CORPORATION FOR PUBLIC BROADCASTING
          * * * * * * *

          [Title IV--Procedural and Administrative Provisions]
           TITLE IV--PROCEDURAL AND ADMINISTRATIVE PROVISIONS
          * * * * * * *

                [TITLE V--PENAL PROVISIONS--FORFEITURES]
                 TITLE V--PENAL PROVISIONS--FORFEITURES
          * * * * * * *

SEC. 503. FORFEITURES IN CASES OF REBATES AND OFFSETS.

  (a)  * * *
  (b)(1) Any person who is determined by the Commission, in 
accordance with paragraph (3) or (4) of this subsection, to 
have--
          (A)  * * *
          * * * * * * *
          (D) violated any provision of section 1304, 1343, or 
        1464 of title 18, United States Code;
shall be liable to the United States for a forfeiture penalty. 
A forfeiture penalty under this subsection shall be in addition 
to any other penalty provided for by this Act; except that this 
subsection shall not apply to any conduct which is subject to 
forfeiture under part I of title II, part II or III of title 
III, or section 506 of this Act.
          * * * * * * *

SEC. 504. PROVISIONS RELATING TO FORFEITURES.

  (a)  * * *
  (b) The forfeitures imposed by part I of title II, parts II 
and III of title III, and sections 503(b) and 506 of this Act 
shall be subject to remission or mitigation by the Commission, 
under such regulations and methods of ascertaining the facts as 
may seem to it advisable, and, if suit has been instituted, the 
Attorney General, upon request of the Commission, shall direct 
the discontinuance of any prosecution to recover such 
forfeitures: Provided, however, That no forfeiture shall be 
remitted or mitigated after determination by a court of 
competent jurisdiction.
          * * * * * * *

                    [TITLE VI--CABLE COMMUNICATIONS

                      [Part I--General Provisions]
                     TITLE VI--CABLE COMMUNICATIONS

                       PART I--GENERAL PROVISIONS
          * * * * * * *
SEC. 602. DEFINITIONS.

  For purposes of this title--
          (1)  * * *
          * * * * * * *
          (6) the term ``cable service'' means--
                  (A) the one-way transmission to subscribers 
                of (i) video programming, or (ii) other 
                programming service, and
                  (B) subscriber interaction, if any, which is 
                required for the selection or use of such video 
                programming or other programming service;
          * * * * * * *
          (18) 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 provides telephone exchange service 
        as of January 1, 1993, but if any common carrier after 
        such date transfers its 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;
          [(18)] (19) the term ``usable activated channels'' 
        means activated channels of a cable system, except 
        those channels whose use for the distribution of 
        broadcast signals would conflict with technical and 
        safety regulations as determined by the Commission; and
          [(19)] (20) the term ``video programming'' means 
        programming provided by, or generally considered 
        comparable to programming provided by, a television 
        broadcast station.
          * * * * * * *

   [Part II--Use of Cable Channels and Cable Ownership Restrictions]
    PART II--USE OF CABLE CHANNELS AND CABLE OWNERSHIP RESTRICTIONS
          * * * * * * *

SEC. 613. OWNERSHIP RESTRICTIONS.

  [(a)(1) It shall be unlawful for any person to be a cable 
operator if such person, directly or through 1 or more 
affiliates, owns or controls, the licensee of a television 
broadcast station and the predicted grade B contour of such 
station covers any portion of the community served by such 
operator's cable system.
  [(2) It shall be unlawful for a cable operator to hold a 
license for multichannel multipoint distribution service, or to 
offer satellite master antenna television service separate and 
apart from any franchised cable service, in any portion of the 
franchise area served by that cable operator's cable system. 
The Commission--
          [(A) shall waive the requirements of this paragraph 
        for all existing multichannel multipoint distribution 
        services and satellite master antenna television 
        services which are owned by a cable operator on the 
        date of enactment of this paragraph; and
          [(B) may waive the requirements of this paragraph to 
        the extent the Commission determines is necessary to 
        ensure that all significant portions of a franchise 
        area are able to obtain video programming.
  [(b)(1) It shall be unlawful for any common carrier, subject 
in whole or in part to title II of this Act, to provide video 
programming directly to subscribers in its telephone service 
area, either directly or indirectly through an affiliate owned 
by, operated by, controlled by, or under common control with 
the common carrier.
  [(2) It shall be unlawful for any common carrier, subject in 
whole or in part to title II of this Act, to provide channels 
of communications or pole, line, conduit space, or other rental 
arrangements, to any entity which is directly or indirectly 
owned by, operated by, controlled by, or under common control 
with such common carrier, if such facilities or arrangements 
are to be used for, or in connection with, the provision of 
video programming directly to subscribers in the telephone 
service area of the common carrier.
  [(3) This subsection shall not apply to any common carrier to 
the extent such carrier provides telephone exchange service in 
any rural area (as defined by the Commission).
  [(4) In those areas where the provision of video programming 
directly to subscribers through a cable system demonstrably 
could not exist except through a cable system owned by, 
operated by, controlled by, or affiliated with the common 
carrier involved, or upon other showing of good cause, the 
Commission may, on petition for waiver, waive the applicability 
of paragraphs (1) and (2) of this subsection. Any such waiver 
shall be made in accordance with section 63.56 of title 47, 
Code of Federal Regulations (as in effect September 20, 1984) 
and shall be granted by the Commission upon a finding that the 
issuance of such waiver is justified by the particular 
circumstances demonstrated by the petitioner, taking into 
account the policy of this subsection.]
  (b)(1) Subject to the requirements of part V and the other 
provisions of this title, any common carrier subject in whole 
or in part to title II of this Act may, either through its own 
facilities or through an affiliate, provide video programming 
directly to subscribers in its telephone service area.
  (2) Subject to the requirements of part V and the other 
provisions of this title, any common carrier subject in whole 
or in part to title II of this Act may provide channels of 
communications or pole, line, or conduit space, or other rental 
arrangements, to any entity which is directly or indirectly 
owned, operated, or controlled by, or under common control 
with, such common carrier, if such facilities or arrangements 
are to be used for, or in connection with, the provision of 
video programming directly to subscribers in its telephone 
service area.
  (3)(A) Notwithstanding paragraphs (1) and (2), an affiliate 
described in subparagraph (B) shall not be subject to the 
requirements of part V, but--
          (i) if providing video programming as a cable service 
        using a cable system, shall be subject to the 
        requirements of this part and parts III and IV; and
          (ii) if providing such video programming by means of 
        radio communication, shall be subject to the 
        requirements of title III.
  (B) For purposes of subparagraph (A), an affiliate is 
described in this subparagraph if such affiliate--
          (i) is, consistently with section 655, owned, 
        operated, or controlled by, or under common control 
        with, a common carrier subject in whole or in part to 
        title II of this Act;
          (ii) provides video programming to subscribers in the 
        telephone service area of such carrier; and
          (iii) does not utilize the local exchange facilities 
        or services of any affiliated common carrier in 
        distributing such programming.
          * * * * * * *
  (i) Acquisition of Cable Systems.--Except as provided in 
section 655, the Commission may not require divestiture of, or 
restrict or prevent the acquisition of, an ownership interest 
in a cable system by any person based in whole or in part on 
the geographic location of such cable system.
SEC. 614. CARRIAGE OF LOCAL COMMERCIAL TELEVISION SIGNALS.

  (a)  * * *
          * * * * * * *
  (h) Definitions.--
          (1) Local commercial television station.--
                  (A)  * * *
          * * * * * * *
                  (C) Market determinations.--(i) For purposes 
                of this section, a broadcasting station's 
                market shall be determined [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,] by the Commission by 
                regulation or order using, where available, 
                commercial publications which delineate 
                television markets based on viewing patterns, 
                except that, following a written request, the 
                Commission may, with respect to a particular 
                television broadcast station, include 
                additional communities within its television 
                market or exclude communities from such 
                station's television market to better 
                effectuate the purposes of this section. In 
                considering such requests, the Commission may 
                determine that particular communities are part 
                of more than one television market.
          * * * * * * *
                  [(iv) In the rulemaking proceeding required 
                by subsection (f), the Commission shall provide 
                for expedited consideration of requests filed 
                under this subparagraph.]
                  (iv) Within 120 days after the date a request 
                is filed under this subparagraph, the 
                Commission shall grant or deny the request.
          * * * * * * *
                 [Part III--Franchising and Regulation]
                  PART III--FRANCHISING AND REGULATION
SEC. 621. GENERAL FRANCHISE REQUIREMENTS.

  (a)  * * *
  (b)(1)  * * *
          * * * * * * *
  (3)(A) To the extent that 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; and
          (ii) the provisions of this title shall not apply to 
        such cable operator or affiliate.
  (B) A franchising authority may not impose any requirement 
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) A franchising authority may not require a cable operator 
to provide any telecommunications service or facilities as a 
condition of the initial grant of a franchise or a franchise 
renewal.
          * * * * * * *
  (d)(1)  * * *
          * * * * * * *
  (3) For purposes of this subsection, the term ``State'' has 
the meaning given it in section 3[(v)].
          * * * * * * *

SEC. 622. FRANCHISE FEES.

  (a) Subject to the limitation of subsection (b), any cable 
operator may be required under the terms of any franchise to 
pay a franchise fee.
  (b) For any twelve-month period, the franchise fees paid by a 
cable operator with respect to any cable system shall not 
exceed 5 percent of such cable operator's gross revenues 
derived in such period from the operation of the cable system 
to provide cable services. For purposes of this section, the 
12-month period shall be the 12-month period applicable under 
the franchise for accounting purposes. Nothing in this 
subsection shall prohibit a franchising authority and a cable 
operator from agreeing that franchise fees which lawfully could 
be collected for any such 12-month period shall be paid on a 
prepaid or deferred basis; except that the sum of the fees paid 
during the term of the franchise may not exceed the amount, 
including the time value of money, which would have lawfully 
been collected if such fees had been paid per annum.
          * * * * * * *

SEC. 623. REGULATION OF RATES.

  (a) Competition Preference; Local and Federal Regulation.--
          (1)  * * *
          * * * * * * *
          (3) Equipment.--If the Commission finds that a cable 
        system is subject to effective competition under 
        subparagraph (D) of subsection (l)(1), the rates for 
        equipment, installations, and connections for 
        additional television receivers (other than equipment, 
        installations, and connections furnished by such system 
        to subscribers who receive only a rate regulated basic 
        service tier) shall not be subject to regulation by the 
        Commission or by a State or franchising authority. If 
        the Commission finds that a cable system is subject to 
        effective competition under subparagraph (A), (B), or 
        (C) of subsection (l)(1), the rates for any equipment, 
        installations, and connections furnished by such system 
        to any subscriber shall not be subject to regulation by 
        the Commission, or by a State or franchising authority. 
        No Federal agency, State, or franchising authority may 
        establish the price or rate for the installation, sale, 
        or lease of any equipment furnished to any subscriber 
        by a cable system solely in connection with video 
        programming offered on a per channel or per program 
        basis.
          [(3)] (4) Qualification of franchising authority.--A 
        franchising authority that seeks to exercise the 
        regulatory jurisdiction permitted under paragraph 
        (2)(A) shall file with the Commission a written 
        certification that--
                  (A)  * * *
          * * * * * * *
          [(4)] (5) Approval by commission.--A certification 
        filed by a franchising authority under paragraph (3) 
        shall be effective 30 days after the date on which it 
        is filed unless the Commission finds, after notice to 
        the authority and a reasonable opportunity for the 
        authority to comment, that--
                  (A)  * * *
          * * * * * * *
          [(5)] (6) Revocation of jurisdiction.--Upon petition 
        by a cable operator or other interested party, the 
        Commission shall review the regulation of cable system 
        rates by a franchising authority under this subsection. 
        A copy of the petition shall be provided to the 
        franchising authority by the person filing the 
        petition. If the Commission finds that the franchising 
        authority has acted inconsistently with the 
        requirements of this subsection, the Commission shall 
        grant appropriate relief. If the Commission, after the 
        franchising authority has had a reasonable opportunity 
        to comment, determines that the State and local laws 
        and regulations are not in conformance with the 
        regulations prescribed by the Commission under 
        subsection (b), the Commission shall revoke the 
        jurisdiction of such authority.
          [(6)] (7) Exercise of jurisdiction by commission.--If 
        the Commission disapproves a franchising authority's 
        certification under [paragraph (4)] paragraph (5), or 
        revokes such authority's jurisdiction under [paragraph 
        (5)] paragraph (6), the Commission shall exercise the 
        franchising authority's regulatory jurisdiction under 
        paragraph (2)(A) until the franchising authority has 
        qualified to exercise that jurisdiction by filing a new 
        certification that meets the requirements of [paragraph 
        (3)] paragraph (4). Such new certification shall be 
        effective upon approval by the Commission. The 
        Commission shall act to approve or disapprove any such 
        new certification within 90 days after the date it is 
        filed.
          (8) Limitation on basic tier rate increases; scope of 
        review.--A cable operator may not increase its basic 
        service tier rate more than once every 6 months. Such 
        increase may be implemented, using any reasonable 
        billing or proration method, 30 days after providing 
        notice to subscribers and the appropriate regulatory 
        authority. The rate resulting from such increase shall 
        be deemed reasonable and shall not be subject to 
        reduction or refund if the franchising authority or the 
        Commission, as appropriate, does not complete its 
        review and issue a final order within 90 days after 
        implementation of such increase. The review by the 
        franchising authority or the Commission of any future 
        increase in such rate shall be limited to the 
        incremental change in such rate effected by such 
        increase.
          (9) National information infrastructure.--
                  (A) Purpose.--It is the purpose of this 
                paragraph to--
                          (i) promote the development of the 
                        National Information Infrastructure;
                          (ii) enhance the competitiveness of 
                        the National Information Infrastructure 
                        by ensuring that cable operators have 
                        incentives comparable to other 
                        industries to develop such 
                        infrastructure; and
                          (iii) encourage the rapid deployment 
                        of digital technology necessary to the 
                        development of the National Information 
                        Infrastructure.
                  (B) Aggregation of equipment costs.--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.
                  (C) Revision to commission rules; forms.--
                Within 120 days of the date of enactment of 
                this paragraph, the Commission shall issue 
                revisions to the appropriate rules and forms 
                necessary to implement subparagraph (B).
          * * * * * * *
  (c) Regulation of Unreasonable Rates.--
          (1) Commission regulations.--Within 180 days after 
        the date of enactment of the Cable Television Consumer 
        Protection and Competition Act of 1992, the Commission 
        shall, by regulation, establish the following:
                  (A)  * * *
                  (B) fair and expeditious procedures for the 
                receipt, consideration, and resolution of 
                complaints from any subscriber, franchising 
                authority, or other relevant State or local 
                government entity alleging that a rate for 
                cable programming services charged by a cable 
                operator violates the criteria prescribed under 
                subparagraph (A), which procedures shall 
                include the minimum showing that shall be 
                required for a complaint to [obtain Commission 
                consideration and resolution of whether the 
                rate in question is unreasonable] be counted 
                toward the complaint threshold specified in 
                paragraph (3)(A); and
                  (C) the procedures to be used to reduce rates 
                for cable programming services that are 
                determined by the Commission to be unreasonable 
                and to refund such portion of the rates or 
                charges that were paid by subscribers after the 
                filing of [such complaint] the first complaint 
                and that are determined to be unreasonable.
          * * * * * * *
          [(3) Limitation on complaints concerning existing 
        rates.--Except during the 180-day period following the 
        effective date of the regulations prescribed by the 
        Commission under paragraph (1), the procedures 
        established under subparagraph (B) of such paragraph 
        shall be available only with respect to complaints 
        filed within a reasonable period of time following a 
        change in rates that is initiated after that effective 
        date, including a change in rates that results from a 
        change in that system's service tiers.]
          (3) Review of complaints.--
                  (A) Complaint threshold.--The Commission 
                shall have the authority to review any increase 
                in the rates for cable programming services 
                implemented after the date of enactment of the 
                Communications Act of 1995 only if, within 90 
                days after such increase becomes effective, at 
                least 10 subscribers to such services or 5 
                percent of the subscribers to such services, 
                whichever is greater, file separate, individual 
                complaints against such increase with the 
                Commission in accordance with the requirements 
                established under paragraph (1)(B).
                  (B) Time period for commission review.--The 
                Commission shall complete its review of any 
                such increase and issue a final order within 90 
                days after it receives the number of complaints 
                required by subparagraph (A).
          (4) Treatment of pending cable programming services 
        complaints.--Upon enactment of the Communications Act 
        of 1995, the Commission shall suspend the processing of 
        all pending cable programming services rate complaints. 
        These pending complaints shall be counted by the 
        Commission toward the complaint threshold specified in 
        paragraph (3)(A). Parties shall have an additional 90 
        days from the date of enactment of such Act to file 
        complaints about prior increases in cable programming 
        services rates if such rate increases were already 
        subject to a valid, pending complaint on such date of 
        enactment. At the expiration of such 90-day period, the 
        Commission shall dismiss all pending cable programming 
        services rate cases for which the complaint threshold 
        has not been met, and may resume its review of those 
        pending cable programming services rate cases for which 
        the complaint threshold has been met, which review 
        shall be completed within 180 days after the date of 
        enactment of the Communications Act of 1995.
          (5) Scope of commission review.--A cable programming 
        services rate shall be deemed not unreasonable and 
        shall not be subject to reduction or refund if--
                  (A) such rate was not the subject of a 
                pending complaint at the time of enactment of 
                the Communications Act of 1995;
                  (B) such rate was the subject of a complaint 
                that was dismissed pursuant to paragraph (4);
                  (C) such rate resulted from an increase for 
                which the complaint threshold specified in 
                paragraph (3)(A) has not been met;
                  (D) the Commission does not complete its 
                review and issue a final order in the time 
                period specified in paragraph (3)(B) or (4); or
                  (E) the Commission issues an order finding 
                such rate to be not unreasonable.
        The review by the Commission of any future increase in 
        such rate shall be limited to the incremental change in 
        such rate effected by such increase.
  [(d) Uniform Rate Structure Required.--A cable operator shall 
have a rate structure, for the provision of cable service, that 
is uniform throughout the geographic area in which cable 
service is provided over its cable system.]
  (d) Uniform Rate Structure.--A cable operator shall have a 
uniform rate structure throughout its franchise area for the 
provision of cable services that are regulated by the 
Commission or the franchising authority. Bulk discounts to 
multiple dwelling units shall not be subject to this 
requirement.
          * * * * * * *
  (l) Definitions.--As used in this section--
          (1) The term ``effective competition'' means that--
                  (A) fewer than 30 percent of the households 
                in the franchise area subscribe to the cable 
                service of a cable system;
                  (B) the franchise area is--
                          (i) served by at least two 
                        unaffiliated multichannel video 
                        programming distributors each of which 
                        offers comparable video programming to 
                        at least 50 percent of the households 
                        in the franchise area; and
                          (ii) the number of households 
                        subscribing to programming services 
                        offered by all multichannel video 
                        programming distributors other than the 
                        largest multichannel video programming 
                        distributor exceeds 15 percent of the 
                        households in the franchise area; [or]
                  (C) a multichannel video programming 
                distributor operated by the franchising 
                authority for that franchise area offers video 
                programming to at least 50 percent of the 
                households in that franchise area[.]; or
                  (D) with respect to cable programming 
                services and subscriber equipment, 
                installations, and connections for additional 
                television receivers (other than equipment, 
                installations, and connections furnished to 
                subscribers who receive only a rate regulated 
                basic service tier)--
                          (i) a common carrier has been 
                        authorized by the Commission to 
                        construct facilities to provide video 
                        dialtone service in the cable 
                        operator's franchise area;
                          (ii) a common carrier has been 
                        authorized by the Commission or 
                        pursuant to a franchise to provide 
                        video programming directly to 
                        subscribers in the franchise area; or
                          (iii) the Commission has completed 
                        all actions necessary (including any 
                        reconsideration) to prescribe 
                        regulations pursuant to section 
                        653(b)(1) relating to video platforms.
  (m) Small Cable Operators.--
          (1) Small cable operator relief.--A small cable 
        operator shall not be subject to subsections (a), (b), 
        (c), or (d) in any franchise area with respect to the 
        provision of cable programming services, or a basic 
        service tier where such tier was the only tier offered 
        in such area on December 31, 1994.
          (2) Definition of small cable operator.--For purposes 
        of this subsection, ``small cable operator'' means a 
        cable operator that--
                  (A) directly or through an affiliate, serves 
                in the aggregate fewer than 1 percent of all 
                cable subscribers in the United States; and
                  (B) is not affiliated with any entity or 
                entities whose gross annual revenues in the 
                aggregate exceed $250,000,000.
  (n) Treatment of Prior Year Losses.--Notwithstanding any 
other provision of this section or of section 612, losses 
(including losses associated with the acquisitions of such 
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.
          * * * * * * *
SEC. 624. REGULATION OF SERVICES, FACILITIES, AND EQUIPMENT.

  (a)  * * *
  (e) Within one year after the date of enactment of the Cable 
Television Consumer Protection and Competition Act of 1992, the 
Commission shall prescribe regulations which establish minimum 
technical standards relating to cable systems' technical 
operation and signal quality. The Commission shall update such 
standards periodically to reflect improvements in technology. 
[A franchising authority may require as part of a franchise 
(including a modification, renewal, or transfer thereof) 
provisions for the enforcement of the standards prescribed 
under this subsection. A franchising authority may apply to the 
Commission for a waiver to impose standards that are more 
stringent than the standards prescribed by the Commission under 
this subsection.] 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.
          * * * * * * *

SEC. 624A. CONSUMER ELECTRONICS EQUIPMENT COMPATIBILITY.

  (a) Findings.--The Congress finds that--
          (1)  * * *
          (2) if these problems are allowed to persist, 
        consumers will be less likely to purchase, and 
        electronics equipment manufacturers will be less likely 
        to develop, manufacture, or offer for sale, television 
        receivers and video cassette recorders with new and 
        innovative features and functions; [and]
          (3) cable operators should use technologies that will 
        prevent signal thefts while permitting consumers to 
        benefit from such features and functions in such 
        receivers and recorders[.]; and
          (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.
  (b) Compatible Interfaces.--
          (1)  * * *
          [(2) Scrambling and encryption.--In issuing the 
        regulations referred to in paragraph (1), the 
        Commission shall determine whether and, if so, under 
        what circumstances to permit cable systems to scramble 
        or encrypt signals or to restrict cable systems in the 
        manner in which they encrypt or scramble signals, 
        except that the Commission shall not limit the use of 
        scrambling or encryption technology where the use of 
        such technology does not interfere with the functions 
        of subscribers' television receivers or video cassette 
        recorders.]
          (2) Cable security systems.--No Federal agency, 
        State, or franchising authority may prohibit a cable 
        operator's use of any security system (including 
        scrambling, encryption, traps, and interdiction), 
        except that the Commission may prohibit the use of any 
        such system solely with respect to the delivery of a 
        basic service tier that, as of January 1, 1995, 
        contained only the signals and programming specified in 
        section 623(b)(7)(A), unless the use of such system is 
        necessary to prevent the unauthorized reception of such 
        tier.
  (c) Rulemaking Requirements.--
          (1) Factors to be considered.--In prescribing the 
        regulations required by this section, the Commission 
        shall consider--
                  (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;
                  [(A)] (B) the costs and benefits to consumers 
                of imposing compatibility requirements on cable 
                operators and television manufacturers in a 
                manner that, while providing effective 
                protection against theft or unauthorized 
                reception of cable service, will minimize 
                interference with or nullification of the 
                special functions of subscribers' television 
                receivers or video cassette recorders, 
                including functions that permit the 
                subscriber--
                          (i)  * * *
          * * * * * * *
                  [(B)] (C) the need for cable operators to 
                protect the integrity of the signals 
                transmitted by the cable operator against theft 
                or to protect such signals against unauthorized 
                reception.
          (2) Regulations required.--The regulations prescribed 
        by the Commission under this section shall include such 
        regulations as are necessary--
                  (A)  * * *
          * * * * * * *
                  (D) to ensure that any standards or 
                regulations developed under the authority of 
                this section to ensure compatibility between 
                televisions, video casette 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;
                  [(D)] (E) to require a cable operator who 
                offers subscribers the option of renting a 
                remote control unit--
                          (i)  * * *
          * * * * * * *
                  [(E)] (F) to prohibit a cable operator from 
                taking any action that prevents or in any way 
                disables the converter box supplied by the 
                cable operator from operating compatibly with 
                commercially available remote control units.
          * * * * * * *

SEC. 625. MODIFICATION OF FRANCHISE OBLIGATIONS.

  (a)  * * *
          * * * * * * *
  (d) Notwithstanding subsections (a) and (b), a cable operator 
may take such actions to rearrange a particular service from 
one service tier to another, or otherwise offer the service, if 
the rates for all of the service tiers involved in such actions 
are not subject to regulation under section 623. Any signals or 
services carried on the basic service tier but not required 
under section 623(b)(7)(A) may be moved from the basic service 
tier at the operator's sole discretion, provided that the 
removal of such a signal or service from the basic service tier 
is permitted by contract. The movement of such signals or 
services to an unregulated package of services shall not 
subject such package to regulation.
          * * * * * * *

                  [Part IV--Miscellaneous Provisions]
                   PART IV--MISCELLANEOUS PROVISIONS
          * * * * * * *

SEC. 632. CONSUMER PROTECTION AND CUSTOMER SERVICE.

  (a)  * * *
          * * * * * * *
  (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.
  [(c)] (d) Consumer Protection Laws and Customer Service 
Agreements.--
          (1) Consumer protection laws.--Nothing in this title 
        shall be construed to prohibit any State or any 
        franchising authority from enacting or enforcing any 
        consumer protection law, to the extent not specifically 
        preempted by this title.
          * * * * * * *

SEC. 636. COORDINATION OF FEDERAL, STATE, AND LOCAL AUTHORITY.

  (a)  * * *
          * * * * * * *
  (d) For purposes of this section, the term ``State'' has the 
meaning given such term in section 3[(v)].

SEC. 637. EXISTING FRANCHISES.

  (a) The provisions of--
          (1)  * * *
          (2) any law of any State (as defined in section 
        3[(v)]) in effect on the date of the enactment of this 
        section, or any regulation promulgated pursuant to such 
        law, which relates to such designation, use or support 
        of such channel capacity,
shall remain in effect, subject to the express provisions of 
this title, and for not longer than the then current remaining 
term of the franchise as such franchise existed on such 
effective date.
          * * * * * * *
   PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

SEC. 651. DEFINITIONS.

  For purposes of this part--
          (1) the term ``control'' means--
                  (A) an ownership interest in which an entity 
                has the right to vote more than 50 percent of 
                the outstanding common stock or other ownership 
                interest; or
                  (B) if no single entity directly or 
                indirectly has the right to vote more than 50 
                percent of the outstanding common stock or 
                other ownership interest, actual working 
                control, in whatever manner exercised, as 
                defined by the Commission by regulation on the 
                basis of relevant factors and circumstances, 
                which shall include partnership and direct 
                ownership interests, voting stock interests, 
                the interests of officers and directors, and 
                the aggregation of voting interests; and
          (2) the term ``rural area'' means a geographic area 
        that does not include either--
                  (A) any incorporated or unincorporated place 
                of 10,000 inhabitants or more, or any part 
                thereof; or
                  (B) any territory, incorporated or 
                unincorporated, included in an urbanized area, 
                as defined by the Bureau of the Census.

SEC. 652. SEPARATE VIDEO PROGRAMMING AFFILIATE.

  (a) In General.--Except as provided in subsection (d) of this 
section and section 613(b)(3), a common carrier subject to 
title II of this Act shall not provide video programming 
directly to subscribers in its telephone service area unless 
such video programming is provided through a video programming 
affiliate that is separate from such carrier.
  (b) Books and Marketing.--
          (1) In general.--A video programming affiliate of a 
        common carrier shall--
                  (A) maintain books, records, and accounts 
                separate from such carrier which identify all 
                transactions with such carrier;
                  (B) carry out directly (or through any 
                nonaffiliated person) its own promotion, except 
                that institutional advertising carried out by 
                such carrier shall be permitted so long as each 
                party bears its pro rata share of the costs; 
                and
                  (C) not own real or personal property in 
                common with such carrier.
          (2) Inbound telemarketing and referral.--
        Notwithstanding paragraph (1)(B), a common carrier may 
        provide telemarketing or referral services in response 
        to the call of a customer or potential customer related 
        to the provision of video programming by a video 
        programming affiliate of such carrier. If such services 
        are provided to a video programming affiliate, such 
        services shall be made available to any video 
        programmer or cable operator on request, on 
        nondiscriminatory terms, at just and reasonable prices.
          (3) Joint marketing.--Notwithstanding paragraph 
        (1)(B) or section 613(b)(3), a common carrier may 
        market video programming directly upon a showing to the 
        Commission that a cable operator or other entity 
        directly or indirectly provides telecommunications 
        services within the telephone service area of the 
        common carrier, and markets such telecommunications 
        services jointly with video programming services. The 
        common carrier shall specify the geographic region 
        covered by the showing. The Commission shall approve or 
        disapprove such showing within 60 days after the date 
        of its submission.
  (c) Business Transactions With Carrier.--Any contract, 
agreement, arrangement, or other manner of conducting business, 
between a common carrier and its video programming affiliate, 
providing for--
          (1) the sale, exchange, or leasing of property 
        between such affiliate and such carrier,
          (2) the furnishing of goods or services between such 
        affiliate and such carrier, or
          (3) the transfer to or use by such affiliate for its 
        benefit of any asset or resource of such carrier,
shall be on a fully compensatory and auditable basis, shall be 
without cost to the telephone service ratepayers of the 
carrier, and shall be in compliance with regulations 
established by the Commission that will enable the Commission 
to assess the compliance of any transaction.
  (d) Waiver.--
          (1) Criteria for waiver.--The Commission may waive 
        any of the requirements of this section for small 
        telephone companies or telephone companies serving 
        rural areas, if the Commission determines, after notice 
        and comment, that--
                  (A) such waiver will not affect the ability 
                of the Commission to ensure that all video 
                programming activity is carried out without any 
                support from telephone ratepayers;
                  (B) the interests of telephone ratepayers and 
                cable subscribers will not be harmed if such 
                waiver is granted;
                  (C) such waiver will not adversely affect the 
                ability of persons to obtain access to the 
                video platform of such carrier; and
                  (D) such waiver otherwise is in the public 
                interest.
          (2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 
        days after the date it is filed.
          (3) Continued applicability of section 656.--In the 
        case of a common carrier that obtains a waiver under 
        this subsection, any requirement that section 656 
        applies to a video programming affiliate shall instead 
        apply to such carrier.
  (e) Sunset of Requirements.--The provisions of this section 
shall cease to be effective on July 1, 2000.

SEC. 653. ESTABLISHMENT OF VIDEO PLATFORM.

  (a) Video Platform.--
          (1) In general.--Except as provided in section 
        613(b)(3), any common carrier subject to title II of 
        this Act, and that provides video programming directly 
        to subscribers in its telephone service area, shall 
        establish a video platform. This paragraph shall not 
        apply to any carrier to the extent that it provides 
        video programming directly to subscribers in its 
        telephone service area solely through a cable system 
        acquired in accordance with section 655(b).
          (2) Identification of demand for carriage.--Any 
        common carrier subject to the requirements of paragraph 
        (1) shall, prior to establishing a video platform, 
        submit a notice to the Commission of its intention to 
        establish channel capacity for the provision of video 
        programming to meet the bona fide demand for such 
        capacity. Such notice shall--
                  (A) be in such form and contain information 
                concerning the geographic area intended to be 
                served and such information as the Commission 
                may require by regulations pursuant to 
                subsection (b);
                  (B) specify the methods by which any entity 
                seeking to use such channel capacity should 
                submit to such carrier a specification of its 
                channel capacity requirements; and
                  (C) specify the procedures by which such 
                carrier will determine (in accordance with the 
                Commission's regulations under subsection 
                (b)(1)(B)) whether such requests for capacity 
                are bona fide.
        The Commission shall submit any such notice for 
        publication in the Federal Register within 5 working 
        days.
          (3) Response to request for carriage.--After 
        receiving and reviewing the requests for capacity 
        submitted pursuant to such notice, such common carrier 
        shall establish channel capacity that is sufficient to 
        provide carriage for--
                  (A) all bona fide requests submitted pursuant 
                to such notice,
                  (B) any additional channels required pursuant 
                to section 656, and
                  (C) any additional channels required by the 
                Commission's regulations under subsection 
                (b)(1)(C).
          (4) Responses to changes in demand for capacity.--Any 
        common carrier that establishes a video platform under 
        this section shall--
                  (A) immediately notify the Commission and 
                each video programming provider of any delay in 
                or denial of channel capacity or service, and 
                the reasons therefor;
                  (B) continue to receive and grant, to the 
                extent of available capacity, carriage in 
                response to bona fide requests for carriage 
                from existing or additional video programming 
                providers;
                  (C) if at any time the number of channels 
                required for bona fide requests for carriage 
                may reasonably be expected soon to exceed the 
                existing capacity of such video platform, 
                immediately notify the Commission of such 
                expectation and of the manner and date by which 
                such carrier will provide sufficient capacity 
                to meet such excess demand; and
                  (D) construct such additional capacity as may 
                be necessary to meet such excess demand.
          (5) 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 award damages sustained in 
        consequence of any violation of this section to any 
        person denied carriage, or require carriage, or both. 
        Any aggrieved party may seek any other remedy available 
        under this Act.
  (b) Commission Actions.--
          (1) In general.--Within 15 months after the date of 
        the enactment of this section, the Commission shall 
        complete all actions necessary (including any 
        reconsideration) to prescribe regulations that--
                  (A) consistent with the requirements of 
                section 656, prohibit a common carrier from 
                discriminating among video programming 
                providers with regard to carriage on its video 
                platform, and ensure that the rates, terms, and 
                conditions for such carriage are just, 
                reasonable, and nondiscriminatory;
                  (B) prescribe definitions and criteria for 
                the purposes of determining whether a request 
                shall be considered a bona fide request for 
                purposes of this section;
                  (C) permit a common carrier to carry on only 
                one channel any video programming service that 
                is offered by more than one video programming 
                provider (including the common 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 video platforms the 
                Commission's regulations concerning network 
                nonduplication (47 C.F.R. 76.92 et seq.) and 
                syndicated exclusivity (47 C.F.R. 76.151 et 
                seq.);
                  (E) require the video platform to provide 
                service, transmission, and interconnection for 
                unaffiliated or independent video programming 
                providers that is equivalent to that provided 
                to the common carrier's video programming 
                affiliate, except that the video platform shall 
                not discriminate between analog and digital 
                video programming offered by such unaffiliated 
                or independent video programming providers;
                  (F)(i) prohibit a common carrier from 
                unreasonably discriminating in favor of its 
                video programming affiliate with regard to 
                material or information provided by the common 
                carrier to subscribers for the purposes of 
                selecting programming on the video platform, or 
                in the way such material or information is 
                presented to subscribers;
                  (ii) require a common carrier to ensure that 
                video programming providers or copyright 
                holders (or both) are able suitably and 
                uniquely to identify their programming services 
                to subscribers; and
                  (iii) if such identification is transmitted 
                as part of the programming signal, require the 
                carrier to transmit such identification without 
                change or alteration; and
                  (G) prohibit 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 provide for 
                public comments on the adequacy of the proposed 
                service area on the basis of the standards set 
                forth under this subparagraph.
        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.
          (2) Applicability to other high capacity systems.--
        The Commission shall apply the requirements of this 
        section, in lieu of the requirements of section 612, to 
        any cable operator of a cable system that has installed 
        a switched, broadband video programming delivery 
        system, except that the Commission shall not apply the 
        requirements of the regulations prescribed pursuant to 
        subsection (b)(1)(D) or any other requirement that the 
        Commission determines is inappropriate.
  (c) Regulatory Streamlining.--With respect to the 
establishment and operation of a video platform, the 
requirements of this section shall apply in lieu of, and not in 
addition to, the requirements of title II.
  (d) Commission Inquiry.--The Commission shall conduct a study 
of whether it is in the public interest to extend the 
requirements of subsection (a) to any other cable operators in 
lieu of the requirements of section 612. The Commission shall 
submit to the Congress a report on the results of such study 
not later than 2 years after the date of enactment of this 
section.

SEC. 654. AUTHORITY TO PROHIBIT CROSS-SUBSIDIZATION.

  Nothing in this part shall prohibit a State commission that 
regulates the rates for telephone exchange service or exchange 
access based on the cost of providing such service or access 
from--
          (1) prescribing regulations to prohibit a common 
        carrier from engaging in any practice that results in 
        the inclusion in rates for telephone exchange service 
        or exchange access of any operating expenses, costs, 
        depreciation charges, capital investments, or other 
        expenses directly associated with the provision of 
        competing video programming services by the common 
        carrier or affiliate; or
          (2) ensuring such competing video programming 
        services bear a reasonable share of the joint and 
        common costs of facilities used to provide telephone 
        exchange service or exchange access and competing video 
        programming services.

SEC. 655. PROHIBITION ON BUY OUTS.

  (a) General Prohibition.--No common carrier that provides 
telephone exchange service, and no entity owned by or under 
common ownership or control with such carrier, may purchase or 
otherwise obtain control over any cable system that is located 
within its telephone service area and is owned by an 
unaffiliated person.
  (b) Exceptions.--Notwithstanding subsection (a), a common 
carrier may--
          (1) obtain a controlling interest in, or form a joint 
        venture or other partnership with, a cable system that 
        serves a rural area;
          (2) obtain, in addition to any interest, joint 
        venture, or partnership obtained or formed pursuant to 
        paragraph (1), a controlling interest in, or form a 
        joint venture or other partnership with, any cable 
        system or systems if--
                  (A) such systems in the aggregate serve less 
                than 10 percent of the households in the 
                telephone service area of such carrier; and
                  (B) no such system serves a franchise area 
                with more than 35,000 inhabitants, except that 
                a common carrier may obtain such interest or 
                form such joint venture or other partnership 
                with a cable system that serves a franchise 
                area with more than 35,000 but not more than 
                50,000 inhabitants if such system is not 
                affiliated with any other system whose 
                franchise area is contiguous to the franchise 
                area of the acquired system;
          (3) obtain, with the concurrence of the cable 
        operator on the rates, terms, and conditions, the use 
        of that part of the transmission facilities of such 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; or
          (4) 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 that has more than 1 cable system 
                operator, and the subject cable system is not 
                the largest cable system in such television 
                market;
                  (B) the subject cable system and the largest 
                cable system 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 largest cable system operators as 
                existed on May 1, 1995; and
                  (D) the largest system in the television 
                market is owned by or under common ownership or 
                control of any one of the 10 largest cable 
                system operators as existed on May 1, 1995.
  (c) Waiver.--
          (1) Criteria for waiver.--The Commission may waive 
        the restrictions in subsection (a) of this section only 
        upon a showing by the applicant that--
                  (A) because of the nature of the market 
                served by the cable system concerned--
                          (i) the incumbent cable operator 
                        would be subjected to undue economic 
                        distress by the enforcement of such 
                        subsection; or
                          (ii) the cable system would not be 
                        economically viable if such subsection 
                        were enforced; and
                  (B) the local franchising authority approves 
                of such waiver.
          (2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 
        days after the date it is filed.

SEC. 656. APPLICABILITY OF PARTS I THROUGH IV.

  (a) In General.--Any provision that applies to a cable 
operator under--
          (1) sections 613 (other than subsection (a)(2) 
        thereof), 616, 617, 628, 631, 632, and 634 of this 
        title, shall apply,
          (2) sections 611, 612, 614, and 615 of this title, 
        and section 325 of title III, shall apply in accordance 
        with the regulations prescribed under subsection (b), 
        and
          (3) parts III and IV (other than sections 628, 631, 
        632, and 634) of this title shall not apply,
to any video programming affiliate established by a common 
carrier in accordance with the requirements of this part.
  (b) Implementation.--
          (1) Commission action.--The Commission shall 
        prescribe regulations to ensure that a common carrier 
        in the operation of its video platform shall provide 
        (A) capacity, services, facilities, and equipment for 
        public, educational, and governmental use, (B) capacity 
        for commercial use, (C) carriage of commercial and non-
        commercial broadcast television stations, and (D) an 
        opportunity for commercial broadcast stations to choose 
        between mandatory carriage and reimbursement for 
        retransmission of the signal of such station. In 
        prescribing such regulations, the Commission shall, to 
        the extent possible, impose obligations that are no 
        greater or lesser than the obligations contained in the 
        provisions described in subsection (a)(2) of this 
        section.
          (2) Fees.--A video programming affiliate of any 
        common carrier that establishes a video platform under 
        this part, and any multichannel video programming 
        distributor offering a competing service using such 
        video platform (as determined in accordance with 
        regulations of the Commission), shall be subject to the 
        payment of fees imposed by a local franchising 
        authority, in lieu of the fees required 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 same service area.

SEC. 657. RURAL AREA EXEMPTION.

  The provisions of sections 652, 653, and 655 shall not apply 
to video programming provided in a rural area by a common 
carrier that provides telephone exchange service in the same 
area.
                 [TITLE VII--MISCELLANEOUS PROVISIONS]
                  TITLE VII--MISCELLANEOUS PROVISIONS
          * * * * * * *

SEC. 705. UNAUTHORIZED PUBLICATION OF COMMUNICATIONS.

  (a)  * * *
          * * * * * * *
  (e)(1)  * * *
          * * * * * * *
  (4) Any person who manufactures, assembles, modifies, 
imports, exports, sells, or distributes any electronic, 
mechanical, or other device or equipment, knowing or having 
reason to know that the device or equipment is primarily of 
assistance in the unauthorized decryption of satellite cable 
programming or programming of a licensee in the direct 
broadcast satellite service, or is intended for any other 
activity prohibited by subsection (a), shall be fined not more 
than $500,000 for each violation, or imprisoned for not more 
than 5 years for each violation, or both. For purposes of all 
penalties and remedies established for violations of this 
paragraph, the prohibited activity established herein as it 
applies to each such device shall be deemed a separate 
violation.
          * * * * * * *
SEC. 713. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

  (a) Definitions.--As used in this section:
          (1) The term ``telecommunications subscription 
        service'' means the provision directly to subscribers 
        of video, voice, or data services for which a 
        subscriber charge is made.
          (2) The term ``telecommunications system'' or a 
        ``telecommunications system operator'' means a provider 
        of telecommunications subscription service.
  (b) Competitive Consumer Availability of Customer Premises 
Equipment.--The Commission shall adopt regulations to assure 
competitive availability, to consumers of telecommunications 
subscription services, of converter boxes, interactive 
communications devices, and other customer premises equipment 
from manufacturers, retailers, and other vendors not affiliated 
with any telecommunications system operator. Such regulations 
shall take into account the needs of owners and distributors of 
video programming and information services to ensure system and 
signal security and prevent theft of service. Such regulations 
shall not prohibit any telecommunications system operator from 
also offering devices and customer premises equipment to 
consumers, provided that the system operator's charges to 
consumers for such devices and equipment are separately stated 
and not bundled with or subsidized by charges for any 
telecommunications subscription service.
  (c) Waiver for New Network Services.--The Commission may 
waive a regulation adopted pursuant to subsection (b) for a 
limited time upon an appropriate showing by a 
telecommunications system operator that such waiver is 
necessary to the introduction of a new telecommunications 
subscription service.
  (d) Sunset.--The regulations adopted pursuant to this section 
shall cease to apply to any market for the acquisition of 
converter boxes, interactive communications devices, or other 
customer premises equipment when the Commission determines that 
such market is competitive.
                              ----------                              


     SECTION 6002 OF THE OMNIBUS BUDGET RECONCILIATION ACT OF 1993

SEC. 6002. AUTHORITY TO USE COMPETITIVE BIDDING.

  (a)  * * *
          * * * * * * *
  (c) Effective Dates.--
          (1)  * * *
          (2) Effective dates of mobile service amendments.--
        The amendments made by subsection (b)(2) shall be 
        effective on the date of enactment of this Act, except 
        that--
                  (A)  * * *
                  (B) any private land mobile service provided 
                by any person before such date of enactment, 
                and any paging service utilizing frequencies 
                allocated as of January 1, 1993, for private 
                land mobile services, shall, except for 
                purposes of [section 332(c)(6)] paragraphs (6) 
                and (8) of section 332(c) of such Act, be 
                treated as a private mobile service until 3 
                years after such date of enactment.
          * * * * * * *
                            ADDITIONAL VIEWS

                                summary

    H.R. 1555 is a big bill. It contains many provisions that 
are similar to those contained in H.R. 3626 and H.R. 3636, each 
of which passed the House in June 1994 by overwhelming 
majorities. The bill seeks to breakdown statutory and 
regulatory barriers that have impeded the development of 
competition--competition for incumbent cable operators, 
competition to local telephone companies, competition in the 
long distance, and competition in the manufacturing of 
telecommunications equipment.
    Most of us supported the motion to report the bill to the 
full House. It contains much with which we agree. It also 
contains provisions with which we disagree--in some cases 
strongly--and which we will continue to work to improve as the 
bill is considered by the full House and in conference.
    We would like to note that the bill's consideration in both 
the Subcommittee and the full Committee has been, for the most 
part, bipartisan. We would like to express our gratitude to the 
Majority for the manner in which they have worked with us, and 
to express our hope that this is the beginning of a pattern for 
all legislation moving through the Committee.

                                title i

    Title I of H.R. 1555 creates a new Part II of Title II of 
the Communications Act of 1934. This new Part seeks to create a 
regulatory environment that will foster the development of 
competitive markets in the local and long distance 
telecommunications industries. It contains provisions that are 
similar to the provisions of H.R. 3636, which passed the House 
by a vote of 423-4 in June 1994.
    Title I also contains the so-called ``checklist'' of 
market-opening measures that must be implemented by the seven 
Regional Bell Operating Companies (``RBOCs'') before they are 
freed from the constraints of the Consent Decree. This Consent 
Decree keeps the RBOCs out of the long distance business and 
precludes them from engaging in manufacturing activities. Many 
of us disagree with the balance that the majority has struck 
with respect to RBOC entry into the long distance business, and 
intend to file Additional Views to outline the nature of our 
disagreement.
    The adoption of Title I of H.R. 1555 will have a profound 
effect on the architecture of Title II of the Communications 
Act. Title II has its roots in the Interstate Commerce Act of 
1988. Ironically, the railroad industry whose activities were 
governed by that century-old law was largely deregulated in 
1980 by the Staggers Rail Act. The Communications Act of 1934, 
viewed as a railroad statute, has little relevance to a 
competitive telecommunications marketplace.
    Title I of H.R. 1555 preserves existing Title II of the Act 
as Part I. However, and significantly in our view, it also 
includes permissive authority for the Federal Communications 
Commission (FCC) to forebear from regulating when market forces 
are sufficient to protect consumers. A new Part II will create 
the transition to a more competitive marketplace, and, to a 
certain extent, will govern the activities of carriers in a 
competitive marketplace. Finally, Title I of H.R. 1555 creates 
a new Part III of Title II of the Communications Act containing 
Special and Temporary Provisions. These provisions govern, for 
a limited period of time, the manner in which the RBOCs can 
engage in manufacturing activities.
    This architecture preserves existing ``rules of the road'' 
while market forces are permitted to develop, but which cease 
to have effect when those forces have developed to the point 
that they are sufficient to protect consumers.

                                title ii

    Title II of H.R. 1555 repeals the provision of the 
Communications Act that prohibited telephone companies from 
providing cable television service in their telephone operating 
territory. It is very much similar to comparable provisions in 
H.R. 3636 in the 103rd Congress. Title II contains differing 
requirements for telephone companies that provide cable service 
in their own operating territory, depending on whether they 
utilize their local exchange facilities to provide cable 
television service. If they construct and operate stand-alone 
cable systems (in essence, duplicating the networks that cable 
companies operate) they are subjected to the same franchising 
requirements and ``must carry'' requirements as are cable 
operators. To the extent that the telephone company utilizes 
its own local exchange facilities, however, it will then be 
required to build and operate a video platform.
    The video platform is designed to look much like a common 
carrier. The telephone company will be precluded from 
discriminating among video programming providers and will have 
to make services available upon request, on nondiscriminatory 
terms, at just and reasonable prices.
    In the last several years, the FCC has attempted to 
circumvent the statutory prohibition on telephone company 
provision of cable services by encouraging the construction and 
operation of ``video dialtone'' systems. In order to permit 
entry, however, the Commission was forced to define what are 
essentially facilities used for local delivery services as 
``interstate access'' services in order to bring them under 
federal jurisdiction. The result has been to require the 
telephone companies to comply with complex and cumbersome 
regulations that were designed for telephone services.
    These regulations have no relevance to the design, 
construction, and operation of video networks, and have only 
served to complicate and delay the competitive offerings of 
telephone companies. Section 653(c), as added by Title II of 
H.R. 1555, clarifies that telephone company provision of cable 
television services will be regulated according to the 
provisions of Title VI of the Communications Act, freeing the 
companies from the unnecessary common carrier regulation to 
which the Commission has subjected them.
    Section 202 of Title II contains provisions that deregulate 
the cable television business. The FCC has been criticized by 
the cable industry and others for what they believe to be 
overzealous implementation of the 1992 Cable Act, and the 
``effective competition'' test contained in that Act has been 
attacked as regulating the cable industry well past the time 
when consumers would be protected by having access to 
competitive alternatives. However, in our view, the cable 
provisions of H.R. 1555 go too far.
    For example, the bill deregulates rates for all services 
offered by ``small'' cable companies on the date of enactment. 
Yet it defines as ``small'' any unaffiliated cable system with 
fewer than 600,000 subscribers! (This is roughly the size of 
the cable system serving Las Vegas.) According to the FCC, this 
would deregulate, on the date of enactment, rates of all of the 
cable subscribers in Alaska, and the rates for more than half 
of the subscribes in Arkansas (58.3%), Georgia (61.1%), Maine 
(53%), Minnesota (63%), Nevada (69.2%), New Hampshire (50.7%), 
North Dakota (60.6%), and South Dakota (82.9%). As a result of 
this provision, rates would be deregulated immediately for more 
than 16 million households--28.8% of the cable subscribers in 
the United States.
    In addition to the immediate deregulation of these so-
called ``small'' systems, H.R. 1555 deregulates the ``enhanced 
basic'' tier for all cable systems a mere 15 months after the 
date of enactment. This is the date on which the FCC publishes 
its rules for the establishment of the video platform that will 
enable telephone companies to compete for subscribers. As a 
result, cable operators will be able to raise rates at will, 
without facing either competitors in the marketplace or 
government regulation.
    The Administration has targeted these provisions as among 
those which must be changed if the President is going to sign 
this bill into law. Either the date for deregulation must be 
changed so that actual competition will govern the rates that 
cable operators can charge, or some residual authority for the 
FCC must be retained for egregious rate hikes. We intend to 
continue to work to improve these provisions, either on the 
floor or in conference with the Senate.

                               title iii

    Title III of H.R. 1555 contains provisions that will affect 
the future of the broadcast industry. Here again, there are 
provisions we support, and others we believe go too far.
    For example, section 301 contains the so-called ``spectrum 
flexibility'' provisions that will allow broadcasters to 
utilize their advanced television channels to broadcast more 
than just television programming. Given the characteristics of 
digital technology, coupled with the bandwidth that television 
signals require, in the near term there will be many exciting 
new applications for data transmission services that 
broadcasters can offer. Section 301 will make these possible.
    However, section 302 contains the Stearns Amendment that 
was offered, debated and ultimately approved by the Committee. 
It is sweeping in its scope. Section 302 repeals all of the 
Communications Act's, and the FCC's limitations on the 
ownership of mass media properties. The limits on the ownership 
of radio stations are repealed. The newspaper/broadcast cross 
ownership prohibition is repealed. The network/cable cross 
ownership prohibition is repealed. The broadcast/cable cross 
ownership prohibition is repealed. The dual network rule is 
repealed. The rules prohibiting duopolies in local markets are 
repealed and replaced with rules that will permit the 
establishment of many duopolies. The Commission's current 
limitations on the number of local stations that networks can 
own are repealed and replaced with other limits that are 
extremely generous.
    We recognize that the Stearns Amendment was modified to 
include statutory authority for the Commission to disallow 
transactions that would lead to local concentration. This was a 
significant improvement. And this authority extends to license 
renewals, so that the acquisition of unlicensed mass media 
outlets by a licensee can be examined after the fact to ensure 
that undue local concentration has not resulted from such an 
acquisition.
    But the fact remains that the Stearns Amendment goes 
further than it should. Many local broadcasters feel that the 
sweeping scope of the changes embodied in the amendment will 
alter the mass media landscape fundamentally, and leave a 
relatively few network executives in a position to dictate 
programming for all Americans. This is another instance in 
which the Administration has indicated that changes are going 
to have to be made if the President is going to sign this bill. 
We look forward to working with our colleagues to achieve those 
changes.
    The Committee made some significant improvement in the text 
of the Oxley amendment adopted in the Subcommittee. The text of 
that Subcommittee amendment repealed--in their entirety--the 
alien ownership provisions of the Communications Act. The 
result of this repeal would have been to allow foreign 
telephone companies that operate in closed markets to have 
access to the open American market, without any comparable or 
reciprocal opportunities for American firms abroad. It would 
have permitted foreign nationals to buy American television 
networks and program them in any way they wanted. It would have 
allowed drug dealers from the Cali Cartel to acquire and 
operate U.S. common carrier networks, potentially impeding the 
legitimate law enforcement activities of the U.S. Government.
    Fortunately, during the course of the Committee's 
consideration of H.R. 1555, Mr. Oxley, Mr. Brown of Ohio and 
Mr. Klink jointly offered an amendment that scaled back 
significantly the repeal of the alien ownership provisions that 
resulted from the earlier adoption of the Oxley amendment. The 
Oxley-Brown-Klink amendment limited the repeal to the 
acquisition of common carrier licenses by foreign nationals. It 
also included a mechanism that permits the President to 
determine whether reciprocal opportunities exist for American 
firms and requires the FCC to exercise ``great deference'' to 
the President when considering whether to grant a request for 
issuing or transferring a license.
    Although the ``great deference'' language appears 
sufficient to meet the primary concerns about the original 
Oxley language, the brief interlude between the Subcommittee 
and full Committee markups did not allow adequate time to 
ensure that the Commission will not be able to substitute its 
own judgment for that of the President on matters of national 
security, foreign and trade policy, and law enforcement. We 
intend to continue to explore this issue with the 
Administration, to ensure that the President's authority to 
carry out his responsibilities under the Constitution are not 
impeded as a result of the enactment of this provision.

                               conclusion

    As we have noted, H.R. 1555 contains many provisions that 
we support wholeheartedly. It also contains many provisions 
with which we disagree. In this respect, it is something of a 
``work in progress'' that needs fine tuning in some places and 
more work in others.
    The legislative process is a lengthy one. There will be 
additional opportunities--on the floor and in conference with 
the Senate--to continue our efforts to improve a bill that 
already accomplishes many good things. But ultimately, of 
course, unless this bill becomes law, our efforts will have 
been for naught.
    We hope that the Majority will continue to work with us to 
achieve the goal of enacting a good telecommunications statute. 
We again express our willingness to work productively and 
cooperatively to accomplish that goal. Congress has been 
struggling to update the 1934 Act since the late 1970s. We hope 
that, at long last, we will have succeeded in crafting a new 
law that allows competition to determine the type, scope, and 
breadth of services available to the American public.
                                   John D. Dingell.
                                   Edward J. Markey.
                                   W.J. ``Billy'' Tauzin.
                                   Gerry E. Studds.
                                   Frank Pallone, Jr.
                                   Bart Gordon.
                                   Elizabeth Furse.
                                   Bobby L. Rush.
                                   Bart Stupak.
                            ADDITIONAL VIEWS

    In 1783, Lord North was ousted as Prime Minister of England 
under George III. The no-confidence vote that forced him to 
step down occurred on a resolution offered by one Charles James 
Fox. That resolution, known as Fox's ``India Resolution,'' 
reads ``Resolved, that we have seen your work, and it will not 
do.''
    Although we voted to report H.R. 1555 favorably to the 
House because, on balance, the bill improves upon current law 
in some respects, the ``India Resolution'' sums up our feelings 
about the manner in which the Committee has fashioned H.R. 1555 
so as to protect the long distance industry (and 
telecommunications equipment manufacturers) from competition by 
the Bell Companies.
    Many have labeled H.R. 1555 a ``deregulatory'' bill. And it 
indeed deregulates entry into several communications markets 
where competition does not now exist. But insofar as it 
protects the long distance carriers against Bell Company entry, 
the legislation is anything but deregulatory. It imposes 
onerous new regulations that will delay and make extremely 
difficult Bell Company entry into new lines of business, 
thereby protecting incumbents and unreasonably postponing the 
availability of new technologies, new services, and lower 
prices to consumers. In our view, this raising of the bar for a 
select group of companies constitutes an egregious breach of 
faith by the Government.
    The Bell Companies are currently kept out of the long 
distance business as a result of restrictions that were imposed 
as part of the 1982 settlement between the Government of the 
United States and the then-integrated American Telephone and 
Telegraph Company (AT&T;) that resulted in the break-up of AT&T; 
in January, 1984. The restrictions on the Bell Companies are 
embodied in the 1982 Consent Decree. The Decree modifies an 
earlier Consent Decree, or Final Judgment, agreed to in 1956 to 
settle an antitrust lawsuit brought against AT&T; by the 
Government in 1949. It is thus unknown as the Modification of 
Final Judgment, or the MFJ. In the eleven years since 
divestiture, the Decree has been administered by a U.S. 
District Court judge and enforced by the Department of Justice.
    The standard for determining whether the Bell Companies 
should be permitted either to enter the long distance business 
or to engage in manufacturing activities is known as the 
``VIII(C)'' standard, from section VIII(C) of the MFJ. This 
standard is a modified Clayton Act standard, and requires a 
Bell Company to demonstrate that ``there is no substantial 
possibility that it could use its monopoly power to impede 
competition in the market it seeks to enter.''
    As it has been administered by the Judgment Court and the 
Department of Justice, the VIII(C) standard has proven 
extremely difficult for the Bell Companies to meet. This is due 
to a variety of factors, among them an ossified perspective of 
an industry structure, a perspective that may have been valid 
in the late 70s but which has been dramatically overtaken by 
change since then; a lack of expertise and understanding of the 
way telecommunications markets operate; and the lack of an 
orderly procedure to ensure that wavier requests are timely 
processed.\1\
    \1\ With respect to the lack of an orderly procedure, we note with 
approval that the current Assistance Attorney General for Antitrust, 
Anne Bingaman, has improved substantially the processing of waiver 
requests. Nevertheless, there remains a need for procedures that 
guarantee the timely processing of waiver requests, and orderly 
appeals.
---------------------------------------------------------------------------
    The bill passed by the House in June 1994, H.R. 3226, did 
not impose new and onerous regulation on the Bell Companies in 
order for them to enter restricted lines of business. Rather, 
with respect to Bell Company entry into long distance, for 
example, that legislation did three things:
    It codified both the restrictions on providing long 
distance and the VIII(C) standard for determining whether entry 
should be permitted, notwithstanding these restrictions;
    It exempted from the prohibition those services which had a 
long distance component, but in which that component was 
incidental to the delivery of another service, such as cable 
television; and
    It created a process for the orderly review and 
consideration of waiver requests, and for the timely appeal of 
Justice Department decisions regarding entry.
    Both the 1982 Consent Decree and the 1994 legislation used 
a standard that is forward looking: it required an analysis of 
the market that a Bell Company has applied to enter. In stark 
contrast, H.R. 1555 requires that before a Bell Company can 
even apply for entry, it must have implemented a series of 
measures to open up its existing market to competition. This is 
tantamount to requiring that each of the Bell Companies must 
first lose market share as a condition precedent before 
applying to enter new markets.
    Based on the MFJ, current law has flexibility so that if a 
Bell Company decides, on its own, to open up its local exchange 
facilities to competitors, it can use the opening to buttress 
its arguments that it cannot impede competition in the market 
it is seeking to enter. In the alternative, a Bell Company may 
have a greater interest in maintaining its status as a monopoly 
and rely instead on safeguards (such as equal access) to 
protect against impeding competition in the market it is 
seeking to enter. In either case, the Bell Company controls its 
own destiny.
    H.R. 1555, however, strips the Bell Companies of their 
ability, using their own business judgment, to determine how 
best to enter new markets. Instead, H.R. 1555 imposes new and 
burdensome regulatory requirements that must be met before an 
application to remove the restrictions can even be filed. Hence 
the breach of faith.
    The regulatory restrictions imposed by the bill are, 
indeed, onerous. Perhaps most pernicious is the bill's 
requirement that local telephone companies must ``resell'' 
their local services at rates that are ``economically feasible 
to the reseller.'' This requirement is based on the erroneous 
presumption that the provision of local telephone service is 
profitable. In fact, it is sold at prices that are 
substantially below cost. It has long been a matter of federal 
and state policy, and of industry practice, to maintain low, 
affordable local telephone rates. In return, rates for other 
(frequently discretionary) services are often priced above-
cost, creating a pool to help underwrite the cost of providing 
local service.
    Thus, intraLATA toll charges are priced at levels that 
substantially exceed, on a per-mile basis, the charges for 
interLATA toll calls. Business rates are higher than 
residential. Rural service is priced at levels comparable to 
suburban service, despite the disparity in the cost of 
providing the service. Many states permit telephone companies 
to charge for unpublished numbers, even though there is only a 
negligible cost incurred by not listing numbers. So-called 
``vertical services'' such as call waiting, call forwarding and 
caller ID often are priced above cost, and thus they too 
contribute to the pool.
    In short, local telephone service is heavily subsidized. 
Yet as drafted, H.R. 1555 requires that such service be further 
discounted for resale carriers so as to be ``economically 
feasible'' to the reseller. The most likely beneficiaries of 
this provision are the long distance companies, which are 
interested in ``bundling'' local and long distance service. 
They will be allowed to utilize the networks of the local 
telephone companies, without investing a dime in plant and 
equipment of their own. In our view, it is outrageous that 
federal law would give AT&T;, the largest telephone company in 
the world, with gross revenues that dwarf those of any of the 
Bell Companies, and the other long distance carriers a 
guaranteed statutory discount--a subsidy--for an already 
subsidized service.
    Ultimately, local telephone subscribers will pay the price. 
The provision would decrease the revenues of the telephone 
companies. But since the basis for the discount is ``economic 
feasibility for the reseller,'' as opposed to a discount that 
is cost-based, there is no commensurate decrease in the 
telephone companies' costs. The result will be to increase the 
amount of subsidy to make up the shortfall--a subsidy that is 
paid for by consumers. To the extent that Members have 
expressed concern about the potential for growth in the subsidy 
pool, termed the ``Universal Service Fund'' in the bill, the 
resale provision should cause a severe case of heartburn. And 
that is the ``best case'' scenario. The alternative is simply 
to increase local rates by an amount necessary to make up the 
difference. In either event, universal service is threatened.
    It is fair to ensure that those seeking to resell local 
telephone service do not bear the costs of the underlying 
carrier's marketing efforts, nor those costs associated with 
billing and collection. But any discount that exceeds the cost 
of marketing, and of billing and collection, constitutes a 
subsidy.
    We find it particularly ironic that despite the rhetoric 
about ``deregulation'', the resale provision of H.R. 1555 
perverts the Commission's resale policies from their origins as 
deregulatory initiatives, and transforms them into intrusively 
regulatory measures. The FCC adopted its resale policy in the 
early 1970s in order to lessen the Commission's regulatory 
burdens. The Commission determined that if an underlying 
carrier priced or discriminated in favor of a particular 
customer, then others can request the same deal from the 
underlying carrier. The adoption of this policy lessened 
substantially the FCC's oversight of carrier tariff offerings 
under sections 201 and 202 of the Communications Act. Over 
AT&T;'s objections at the time, the courts strongly affirmed the 
FCC's resale policy and attached great weight to the 
Commission's interpretation that the policy was deregulatory.
    However, the Commission's policy has never required that an 
underlying carrier create a resalable product. Instead, the 
Commission has only required that carriers cannot limit the 
resale of the products they create. This is an extremely 
important distinction in light of H.R. 1555's intent to impose, 
for the first time, an affirmative obligation on the local 
carrier to create a product that is ``economically feasible''--
a resalable product. It is particularly ironic that, for almost 
two decades, long distance carriers have relied upon repeated 
FCC statements and decisions that affirm that carriers have no 
obligation to create a resalable product when they are 
defending themselves against charges that particular tariffs 
make the resale of a particular service ``unresalable''.
    We have characterized this provision as ``pernicious.'' For 
the local telephone industry in general, and the Bell Companies 
in particular, that is an accurate description. It requires 
that the local telephone industry subsidize its competitors; 
the very companies with which the local telephone industry 
wishes to compete for long distance business. And in the case 
of the Bell Companies, it forces them to subsidize competitors 
for a substantial period of time when the Bell Companies cannot 
even apply for long distance relief, much less offer long 
distance services.
    The branch of faith to which we referred also extends well 
beyond requiring the Bell Companies to subsidize their 
competitors. As we noted above, before the Bell Companies are 
permitted to ask state and federal regulators to allow them to 
enter the long distance market, they must implement a series of 
market opening measures to permit competition in their home 
market. In order to prove that their local networks have been 
adequately opened to competitors, and in order to obtain 
authority to enter the long distance business, each company 
must demonstrate that it is providing access to and 
interconnection with its network facilities to the facilities 
of a competing carrier. This competing carrier must offer, over 
its own facilities, competitive service that is comparable in 
price, features, and scope to both residential and business 
subscribers.
    It is possible that this requirement can never be met. It 
appears that each of the Bell Companies may have to wait to 
apply for long distance relief until some competitor has 
duplicated the Bell Company's network and offers service of 
comparable ``scope'' throughout the service territory of the 
Bell Company.
    Curiously, H.R. 1555 fails to provide a means by which the 
Bell Companies ever could obtain permission to offer long 
distance services that originate in states (or nations) in 
which they do not provide local telephone service. During the 
course of the Committee's consideration of the bill, a colloquy 
on this point did little to clarify how a Bell Company can 
obtain out-of-region and international relief. In fact, the 
bill's treatment of this issue goes beyond breach of faith to 
pure Catch-22.
    The facts are these. H.R. 1555 adds a new section 245(f)(1) 
to the Communications Act. This section prohibits a Bell 
Company from offering interLATA services with two exceptions, 
neither of which is relevant here. Section 245(f)(2) provides 
that a Bell Company, in any State to which its verification 
under section 245(a) applies, may offer interLATA services 
after the effective date of the Commission's approval of such 
verification. In other words, a Bell Company cannot originate 
interLATA traffic in any state unless the FCC has approved a 
state verification that the company has complied with the 
provisions of section 245(a).
    Section 245(a) requires a Bell Company to provide the FCC 
with a certification from a state public utility commission 
that its local network has been opened and complies with the 
provisions of the section. Certifications are based on facts. 
If a Bell Company does not operate a network in any given 
state, that state's public utility commission cannot in good 
faith certify in fact to the Commission that the company's 
network has been fully opened if the company has no such 
network in that state. And unless the FCC has approved a 
state's certification, the prohibition on Bell Company 
provision of interLATA services remains in force.
    Thus, while there is a mechanism in place that ultimately 
will permit a Bell Company to offer interLATA services for 
traffic that originates within states in which it offers local 
telephone service, there is no way that the Bell Companies can 
obtain relief for interLATA traffic that originates outside of 
their service territories.
    We look forward to the debate in the House on this issue. 
We anticipate with particular interest the discussion of how 
the Bell Companies can obtain relief to carry U.S.-bound 
traffic that originates overseas, where not only are there no 
state public utility commissions, but there are no states at 
all.
    Finally, the Committee adopted an amendment that requires 
the Bell Companies, for three years after enactment, to provide 
interLATA services only through a separate subsidiary. This is 
a burden uniquely imposed on the Bell Companies. Sprint, which 
offers both local and long distance service, is not so 
constrained, nor is AT&T;, nor is any other company, even after 
they enter the local exchange business in direct competition 
with the Bell Companies.
    The lack of parity between the bill's treatment of the Bell 
Companies and all others is striking. It will also lead to some 
rather ludicrous results, particularly since the separate 
subsidiary requirement extends to all long distance services, 
including those previously authorized by the Judgment Court and 
those authorized by section new 245(h) as added by this bill. 
New section 245(h) exempts from the prohibition on Bell Company 
provision of interLATA services a series of services that 
contain a long distance component, which component is 
incidental to the provision of an unrelated service. Among 
these services containing an incidental long distance component 
are cellular and other commercial mobile services, cable 
services, and signalling services.
    The Committee's decision to adopt a separate subsidiary 
requirement will require that when a Bell Company provides 
cable service that includes a long distance component, that 
long distance transmission will have to utilize facilities 
owned by another company.
    It will be interesting to see how this requirement will 
affect, for example, the operation of SWB's (formerly 
Southwestern Bell Telephone Company) cable system in Montgomery 
County, Maryland. Montgomery County is divided into two LATAs; 
SWB serves cable customers in each. Perhaps the company could 
divest itself of inch-long sections of its system each place it 
crosses the LATA line, and then lease the sections back from 
the new owner.
    H.R. 1555 compels the same silly result with respect to the 
Bell Companies' provision of commercial mobile services, 
including cellular telephone and paging services. Presumably, 
the Bell Companies will have to divest themselves of little 
pieces of their existing networks wherever they cross a LATA 
boundary, and then lease the pieces back from the new owners. 
The public interest rationale for this nonsensical requirement 
is difficult to discern.
    In sum, H.R. 1555 is a deregulatory bill except when it 
comes to shielding the long distance industry from competition 
from the Bell Companies. It caters to the long distance 
industry by unilaterally and one-sidedly abrogating the 
agreement into which the U.S. Government entered in 1982. In 
our view, this breach of faith makes it considerably more 
difficult--and in some cases impossible--for the Bell Companies 
to obtain long distance relief. It imposes obligations that 
will mandate that the local telephone industry subsidize its 
local competition, even when the competitors are among the 
largest companies in the world.
    While we support many of the market-opening initiatives 
embodied in this bill, we will continue our efforts to ensure 
that the long distance industry does not succeed in preventing 
competition from its most likely competitors: The Bell 
Companies. The provisions we have discussed here must be 
improved substantially in order to achieve the fairness that is 
essential in a rewrite of the Communications Act and the free 
market principles on which this legislative exercise, we had 
thought, was originally premised.

                                   John D. Dingell.
                                   W.J. ``Billy'' Tauzin.
                                   Rick Boucher.
                                   Bart Stupak.
             ADDITIONAL VIEWS OF REPRESENTATIVE BART GORDON

    I am happy that the House Commerce Subcommittee on 
Telecommunications and Finance unanimously accepted my bill, 
H.R. 1559, the Freedom From Toll Fraud Act, which seeks to 
crack down on abuses in the 1-800 industry, as an amendment to 
H.R. 1555, the Communications Act of 1995.
    Three years ago, Congress passed a piece of legislation 
that I was integrally involved with, the Telephone Disclosure 
and Dispute Resolution Act (TDDRA), which put the brakes in 
abuses in the 1-900 pay-per-call industry by requiring price-
per-minute disclosure and making 1-900 call blocking available 
to parents. Regulations by both the FCC and FTC have since put 
the law into effect.
    Rather than comply with the law, many of the 1-900 abusers 
have simply moved their sex and psychic hotlines to 1-800 
numbers. Now consumers are being charged high prices for making 
calls to 1-800 numbers that they expect to be toll-free.
    Consumers call 1-800 numbers and are unknowingly 
transferred to either 1-900 numbers, numbers offshore, or have 
their charges reversed to the phone line through Automatic 
Number Identification (ANI). Many of these calls are being 
placed by children calling teleporn and psychic hotlines 
without their parents' knowledge.
    While TDDRA gave 1-800 numbers special legal status as free 
to caller to prevent this problem, an exemption was made to 
protect legitimate businesses using 1-800 numbers if they 
obtained a ``preexisting agreement'' with the caller. Scam 
operators are abusing this loophole, and my legislation seeks 
to cease these abuses.
    H.R. 1559 protects unsuspecting callers from being charged 
for calls they expect to be toll-free--thereby preserving the 
toll-free status and integrity of the legitimate $8 billion 1-
800 industry--by requiring stricter 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.
    Information providers (Ips) operating over 1-800 numbers 
must obtain legal, informed consent through either a written 
preathorize contract with the caller, or through the use of a 
preamble at the start of all non-toll-free 1-800 calls.
    The written contract between the IP and the caller must 
include the rates of service, the IP's name, business address 
and phone number, the IP's pledge to notify subscribers of 
future rate changes, and the signature of a legally competent 
subscriber. Importantly, the contract must allow the subscriber 
to choose the method of billing: the phone bill, credit card, 
calling card or pre-paid card.
    In the absence of a written presubscription agreement, 
callers may be given access to information services over 1-800 
numbers only after first hearing an introductory message that 
clearly states that there is a charge for the call and the 
service's total cost per minute. Importantly, it must explain 
that the charges must be billed on either a credit, calling or 
pre-paid card, ask the caller for the card number, explain that 
charges for the call begin at the end of the introductory 
message, and that the caller may hang up at or before the end 
of the message without incurring any charges whatsoever.
    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.
    Finally, the bill clearly states its intent to only apply 
to information services provided over the phone and not to 
goods purchased over 1-800 numbers.
    By requiring that all information providers secure a 
caller's true informed consent, the scam operators will have to 
close up shop. This will stop consumers from being victimized 
by phony toll-free 1-800 numbers and protect the legitimacy of 
the $8 billion unlawful 1-800 toll-free number business.
                                                       Bart Gordon.
                   ADDITIONAL VIEWS OF ANNA G. ESHOO

    During the Committee's consideration of HR 1555, I offered 
an amendment to clarify the roe of the FCC in setting standards 
for cable compatibility. My amendment adds Section 624A of the 
1934 Communications Act, and requires the FCC to set minimal 
technical standards when implementing regulations to ensure the 
compatibility between cable ``set-top'' boxes, televisions, and 
video casette recorders. The amendment I offered simply states 
that on the issue of cable compatibility standards, as provided 
under Subsection (c)1(A), government standards should prescribe 
the minimum degree of common design and operation necessary to 
achieve this end. My amendment also adds language to Section 
624A to remind the FCC that its efforts to ensure cable 
compatability should not result in a preference for one home 
automation production over another.
    I want to underscore that my amendment does not deny FCC a 
role in developing or enforcing standards for telecommunication 
networks. It merely clarifies that when the FCC is considering 
a standard to meet the requirements of Subsection (c)1(A), it 
should not implement a standard which is too broad or attempt 
to solve more than what was required of Subsection (c)1(A).
    Likewise, my amendment does not affect Section 203 H.R. 
1555, which ensures that ``set-top'' boxes will be made 
available to consumers through retail stores. I support the 
effort by the Committee to allow retailers to sell set-top 
boxes, and my amendment does not conflict with the directive 
that the FCC assure the retail commercial availability of cable 
converters.
    In short, I believe the FCC has a role in facilitating 
marketplace solutions for incompatible networks and products. 
But the FCC should intervene in this process only when industry 
efforts have failed, only when it is necessary for the benefit 
of consumers, and only to the extent necessary to achieve basic 
interconnection and interoperability.
    Finally, I believe consumers should be given the freedom to 
decide what technologies they use in their home. My amendment 
will ensure consumers have this freedom by protecting them from 
overbroad technology standards which decrease technology 
innovation, decrease competition, and limit choice.
                            DISSENTING VIEWS

                                overview

    Over a number of years, Congress has sought to update 
antiquated communications laws while remaining true to the 
three core principles of the Communications Act of 1934 that 
have guided communications policy for decades: universal 
service, diversity, and localism. These three principles have 
served our nation well and have helped bring Americans the 
finest communications technology and services in the world. The 
challenge for policymakers is to reform the rules in a way that 
retains these core values as they are impacted by two new 
factors: rapid technological change and fierce competition.
    We believe that H.R. 1555 goes a long way in accomplishing 
this important goal. Indeed, the bill contains many provisions 
that we strongly support. In fact, many of the key policy 
proposals embodied in the legislation trace their roots to the 
Markey-Fields legislation of last year (H.R. 3636), which was 
approved by the House by a 423-4 vote.
    The core provisions of the bill encourage the deployment of 
advanced communications technologies by injecting competition 
into the market for local telephone service and the market for 
delivery of interactive services and video programming. 
Competition will spur technological advance and innovation in 
services offered to the public. We strongly endorse a 
competitive model for our communications marketplace.
    Moreover, H.R. 1555 recognizes that concomitant with 
creating and fostering competition, preserving and enhancing 
the provision of universal telephone service are vital 
components of national telecommunications policy. Accordingly, 
the legislation establishes a mechanism to ensure that 
universal service is preserved and enhanced. We believe that 
there must be a process to ensure that as change and 
competition are introduced into the local telephone market, 
that the long-standing policy of universal service not only 
endures but is updated to evolve with the rapid changes in the 
communications industry. We commend the authors of the 
legislation for embracing this important telecommunications 
policy principle.
    The legislation, however, has two glaring flaws at this 
point. The two fatally flawed areas of the bill, as reported by 
the Committee, are the cable and broadcasting provisions in 
Titles II and III, respectively. These provisions are flawed 
because they fundamentally depart from the competitive model 
upon which the rest of the bill is based. Instead of preserving 
and strengthening the principles of diversity and localism, the 
broadcasting provisions undermine them. We believe these 
provisions are anti-competitive, anti-consumer and contrary to 
the public interest. Instead of looking to the future, these 
provisions return us to the policies and practices of the past.

                        mass media concentration

    The drastic and indiscriminate elimination of mass media 
ownership rules proposed by this bill, in response to pressure 
from special political and corporate interests, would 
eviscerate the public interest of diversity and localism. The 
proposed changes will not create entertainment and information 
sources for consumers. Nor will they enhance the ability of the 
broadcasting medium to meet the informational and civic needs 
of the communities it serves. Instead, H.R. 1555 will 
concentrate great wealth and media power in the hands of a few.
    The mass media provisions of H.R. 1555, which were adopted 
in the form of an amendment offered by Mr. Stearns (R-FL), are 
sweeping in scope. The ``network duopoly'' rule is repealed. 
The broadcast-cable crossownership rule is repealed. The 
network-cable crossownership rule is repealed. The broadcast-
newspaper crossownership rule is repealed. National limits on 
radio station ownership are repealed. Limits on local ownership 
of radio stations are also eliminated. The ``one-to-a-market'' 
rule is repealed, allowing for the creation of television 
duopolies in local markets. Finally, the national audience 
reach limitation for television networks is allowed to double 
from 25 percent of the country to 50 percent.
    Although we will address each of these rule changes 
separately, it is important to note at the outset that their 
aggregate effect is to encourage the rapid consolidation of 
mass media ownership in this country and the elimination of 
diverse sources of opinion and expression. They are a powerful 
toxin to democracy and a death knell for community control of 
its own media.
    H.R. 1555 will intensify control of information and opinion 
in entire cities and regions of the country. Mass media outlets 
will increasingly become beholden to policies and programming 
originating in New York and Hollywood. In this new electronic 
environment, diversity and localism will suffer and large 
segments of the population will enjoy fewer and fewer options.
    H.R. 1555 would encourage a ``communications cannibalism'' 
in mass media properties on both the national and local levels. 
We believe that the inexorable (and rapid, if deregulation in 
the radio industry offers any omen) consolidation of media--
television, radio, cable, and telephone--by a very small 
handful of very large companies will have adverse consequences 
for the nation.
    Our system of democratic self-government relies on an 
informed citizenry. The broadcast deregulation provisions in 
Title III subject mass media outlets to a new ``digital 
Darwinism,'' where only the largest entities will prevail. 
Moreover, because diversity of ownership is our only proxy for 
diversity of viewpoints, elimination of ownership limits 
eliminates the best tool we have to help ensure that the public 
has access to a wide array of viewpoints in local news and 
information.

                           bipartisan concern

    The limits on mass media ownership that this bill would 
sweep away were not created solely by liberals. On the 
contrary, both liberals and conservatives, Democrats and 
Republicans, have insisted on such rules and developed them in 
bipartisan fashion over a number of decades. In fact, the 
broadcast-cable crossownership rule was part of legislation 
sponsored by Democrats and signed by President Reagan in 1984. 
The network-cable and the broadcast-newspaper crossownership 
rules were adopted by the FCC during the Nixon and Ford 
Administrations.

                            the royal flush

    Why were these rules developed? They were borne from 
experience. On the local level, powerful conglomerates in the 
1960's and 1970's were amassing multiple ownership of media 
outlets. At the time, in the top 50 television markets 
(comprising 75 percent of the nation's television homes), 30 
markets had one of the local TV stations owned by a major 
newspaper in the same market. By 1967, some 76 communities had 
only one AM radio station and only one newspaper, with cross-
owning interests between the two. Fourteen communities had one 
AM radio station, one television station, and only one daily 
newspaper, all commonly owned. Moreover, in 1968 it was 
reported that the infant cable industry was already seeing a 
trend toward media concentration, with 30 percent of cable 
systems controlled by broadcasters.
    Across the country, media moguls were assembling what was 
called a ``Royal Flush.'' Atlanta, Georgia, was one example 
where a single company owned:
          A VHF television station;
          a high power AM radio station;
          an FM radio station;
          the cable system; and,
          a newspaper.
    All in one community. Needless to say, if an entity 
obtained a Royal Flush, it was the hand.
    H.R. 1555 would allow local media concentration to take 
root in communities across the nation in a manner that would 
make Citizen Kane look like an underachiever. It would go far 
beyond the Royal Flush--it would rig the game against all but 
the most powerful conglomerate players.
    While H.R. 1555 does allow the FCC to look at ``undue 
concentration'' of media voices within a local community, it 
authorizes it only after the acquisition of a second 
nonbroadcast mass media property. In other words, the FCC is 
powerless to address media concentration issues under H.R. 1555 
if a communications conglomerate aggregates broadcast 
properties and holds only one nonbroadcast property such as a 
newspaper, cable system or phone company. The new Royal Flush 
would allow the following:
          A VHF television station;
          a UHF television station;
          an unlimited number of AM radio stations;
          an unlimited number of FM radio stations;
          a wireless cable system; and
          a daily newspaper.
    Again, in this scenario, the FCC could not address 
concentration issues. The legislation specifically prohibits 
the FCC from looking at mass media concentration issues until a 
broadcast licensee combines with a second nonbroadcast mass 
media property. Only if this new Royal Flush (and we recognize 
we're stretching the card game analogy at this new Royal Flush 
already has more cards than poker would allow) tried to obtain 
a cable system, another newspaper (if another one exists), or 
was bought by the local phone company, could the FCC disallow 
such concentrated ownership.
    We believe the sweeping broadcast deregulation contained in 
Title III is contrary to the public interest because it permits 
an unprecedented and dangerous combination of power in just a 
few individuals at the local level.
    We turn now to a critique of the individual provisions.
Repeal of the ``Network Duopoly Rule''
    The network duopoly rule prohibits anyone from owning 2 TV 
networks. This rule was put in place in 1941 and led to the 
break-up of NBC Red and Blue. NBC Blue became the ABC 
television network. While this rule would allow ABC to go out 
and start a new network, it also permits ABC and NBC to merge 
back together again after a 50-year hiatus. It would allow FOX 
to buy CBS. Yet allowing such buyouts and mergers to take place 
will not inject competition into the marketplace.
    After waiting decades for a viable fourth national 
television network to merge (FOX), and with Paramount and 
Warner Brothers attempting to create a fifth and sixth 
competing network, H.R. 1555 would risk a decrease in the 
number of independently-owned television networks in the 
country by repealing this rule.
    Rather than returning network ownership rules to the 
1930's, this provision should be modified to prevent 
consolidation of television network ownership. The bill should 
stipulate that an entity can own 2 TV networks provided these 
networks are created, and not simply the result of a purchase 
or merger of existing television networks.
Repeal of the TV ``one-to-a-market'' rule

    The bill would allow ownership of 2 TV stations within a 
market. We believe that great care must be taken when the FCC 
allows for ownership of two television stations within a local 
market under this legislation. Even if the dominant VHF 
television station in a locality purchases the weakest UHF 
station, for example, that dominant VHF station will likely 
become more dominant. In general, we do not see the overriding 
need to repeal this rule. Diminution of diversity in local 
markets across the country will be a direct result.

Repeal of the Broadcast-Cable Crossownership Rule

    This rule prevents TV-cable combinations within local 
markets. Adopted by the FCC during the Nixon Administration, 
this rule helps to protect fair completion in the local media 
marketplace and safeguards diversity in mass media outlets 
within local communities. Simply put, this rule prevents a 
cable system from acquiring a local TV station in the same 
city.
    Television broadcasters today rely upon so-called ``must 
carry'' rules to ensure their carriage on local cable systems. 
These rules are currently subject to litigation in the courts.
    If the court invalidates these rules, the broadcast-cable 
crossownership repeal contained in H.R. 1555 could have adverse 
consequences. For example, if a cable company has a financial 
interest in one of the TV stations within the local market (or 
2 TV stations if it is one of the new local duopolies permitted 
by H.R. 1555), some or all of the remaining broadcasters may be 
refused carriage or discriminated against in such carriage. 
Without safeguards, repeal of this rule would allow a local 
cable system-local television combination to utilize the 
bottleneck of cable system access to stifle media voices and 
distort the advertising market.
    Yet even without any judicial decision with respect to the 
status of must carry obligations, repeal of this rule will have 
anti-competitive consequences. H.R. 1555 does not extend must 
carry rights to any new channels offered by broadcasters. In 
developing new section 336 of the Communication Act of 1934, 
the authors of H.R. 1555 stipulate that if the Commission 
decides to award licenses for advanced television services, the 
supplementary services or channels that a broadcaster may 
develop utilizing digital compression are not granted must 
carry right son cable systems.
    Although numerous broadcasters in a locality might be using 
digital compression technology to create 3, 4, or 5 additional 
TV channels each, the cable system is not obligated to carry 
these additional channels. This is a competitively neutral 
provision only if all the local television stations are treated 
by the cable system in similar fashion.
    With repeal of the broadcast-cable crossownership rule, 
however, the local cable system could immediately favor the 
television station in which it had a financial interest. The 
cable system could do this simply by carrying the additional or 
supplementary channels and services of that TV station and 
denying such opportunity to the other broadcasters within the 
same community.

Repeal of the Network-Cable Crossownership Rule

    This rule, which was also adopted by the FCC in 1970 during 
the Nixon Administration, prohibits TV network and cable 
company combinations. Under the bill, TCI and NBC could now 
merge. Time Warner could buy CBS. If a national TV network owns 
a cable system serving a particular locality, it would have 
tremendous incentive to bypass its affiliate and put its 
national programming directly on the cable system. We believe 
repeal of this rule is unwarranted and would have 
anticompetitive effects.

Repeal of the Broadcast-Newspaper Crossownership Rule

    This rule prohibits local television station and local 
newspaper combinations. This rule was adopted in 1975 by the 
FCC during the Ford Administration. We believe that repeal of 
this rule is unwarranted. There is no clamor to repeal it. Many 
communities in this country have become one-newspaper towns. We 
believe it is important to safeguard diversity by retaining 
this rule.

Deregulation of the national TV audience reach limitation

    The bill would lift the current cap limiting television 
networks to 25 percent coverage of the nation to 35 percent 
immediately. It would then lift the cap to 50 percent 1 year 
later.
    We believe that the relationship between networks and 
television affiliates has served our country well. H.R. 1555 
does more than tip the balance between TV networks and their 
affiliates toward the networks. It completely disrupts that 
balance.
    Local broadcasters in communities across the country are 
fighting to remain local broacasters in this legislation. 
Increasing the national audience caps to 50 percent puts 
localism in jeopardy. The doubling of the audience cap will 
hurt diversity.
    The nature of the network-affiliate relationship today is 
that networks must count on their affiliates to air national 
programming while affiliates count on the networks to provide 
national news, sports and entertainment to add to a mix of 
local news and independently-produced programming. Tilting the 
balance too much toward the networks will create a 
concentration of nationally-produced programming and 
corresponding loss of locally-oriented programming.
    If networks can own stations that cover the largest markets 
in the country, we lose the tradition--and the capability--of 
having local affiliates pre-empt network programming to bring 
viewers important local news, public interest programming, and 
local sports. As Ed Reilly, President of McGraw Hill 
Broadcasting Company said in testimony before the Committee: 
``A network-owned station almost never preempts a network 
program to cover a local sports event or to air a local charity 
telethon.''
    Because American society is built upon local community 
expression, the policy favoring localism is fundamental to the 
licensing of broadcast stations. Localism permits broadcasters 
to tailor their programming to the needs and interests of their 
communities. Moreover, as trends toward national homogenization 
of the media grow--for example, cable channels and direct 
broadcast satellite service--localism increases in importance. 
Expansion of national media outlets increases the need for 
local media outlets with the locally ubiquitous reach of 
broadcast television stations.
    In short, relaxation of the national audience caps is an 
anti-competitive proposal. Deregulation of the audience cap 
will intensify concentration in the hands of the vertically-
integrated, national television networks. Once they are 
permitted to gobble up additional local stations, these mega-
networks will have an increased ability to sell national 
advertising by controlling local distribution.
    No one will argue that, in general, it is not more 
efficient to simply make local broadcast stations passive 
conduits for network transmissions from New York. Localism is 
an expensive value. We believe it is a vitally important value, 
however, and like universal service, it is a principle of 
communications policy rooted in the Communications Act of 1934. 
It should be preserved and enhanced as we reform our laws for 
the next century.

Elimination of national and local radio station ownership limits

    In many respects, the complete elimination of ownership 
restrictions in the radio marketplace has received scant 
attention as compared to the other mass media provisions in the 
bill. We feel that radio is an important and vibrant medium of 
mass communication and that local ownership rules to protect 
diversity and localism are needed. The radio industry has 
already been deregulated substantially in the last few years.
    Prior to September 1992, FCC rules permitted an individual 
to own a maximum of 12 AM stations and 12 FM stations. In 
September 1992, the national ownership limits were increased to 
18 AM and 18 FM stations. They were allowed to increase to the 
current rules of two years later. The current FCC rules limit 
national ownership to 40 stations (20 AM/20 FM) and limit local 
ownership to 4 stations (2 AM/2 FM).
    We believe that the rules promulgated by the FCC in 1992 
have had direct and detrimental effects on the ability of some 
stations to compete in both the major metropolitan markets and 
the smaller and medium-sized markets associated with rural 
areas. In some instances this has hindered certain stations' 
ability to continue to provide the diverse array of viewpoints 
and programming choices that the public has learned to enjoy 
and expect.
    The adverse effects of radio deregulation are only now 
coming to light in many localities. We believe it is ill-
advised to eliminate local ownership limitations until a more 
thorough analysis of the consequences such deregulation is 
already having on localism and competition has been completed.
    Some of the downside effects of radio deregulation since 
1992 include the increased number of closings, acquisitions, 
and mergers that resulted in part from the inability of small 
independently-owned radio stations to compete with stations 
owned by capital-rich national broadcasting chains, and a 
corresponding harm to media diversity.
    As a result of loosened ownership restrictions in radio, 
stations are purchased in many situations in order to eliminate 
them as competitors. Typically, the new management then re-
formats the programming for the combined radio stations solely 
to attract the largest combined audience, thus further reducing 
diversity.
    In general, radio duopolies have created enormous pressure 
to cut costs and achieve economies of scale, each time to the 
detriment of the public interest in the fields of news and 
public affairs. The duopolization or consolidation of American 
radio continues at a rapid pace. In March, 22.2 percent of all 
10,121 commercial radio stations in the country were involved 
in a Local Marketing Agreement (LMA) \1\ or duopoly combine. In 
April 1993, the duopoly/LMA percentage stood at just 8.8. The 
top-100 markets, indeed the top-50, have experienced the 
strongest duopoly growth in the months from November 1994 
through March 1995. In Arbitron-rated markets (4,105 stations), 
industry consolidation stands at 44.5%, or 1,826 stations in 
duopolies and LMAs in markets 1-261. In the top-50 markets, the 
percentage is 52.3% (667 of 1,276 stations).\2\
    \1\ An LMA is a type of joint venture that generally involves the 
sale by a licensee of discrete blocks of time to a broker who then 
supplies the programming to fill that time and sells the commercial 
spot announcements to support it. In radio, the FCC requires that a 
licensee's time brokerage of any other radio station for more than 15 
percent of the brokered station's weekly broadcast hours results in 
counting the brokered station toward the brokering licensee's national 
and local ownership limits.
    LMAs, which first showed up in 1990 and until 1993 served as a 
significant forerunner to the industry's consolidation, represent a 
phenomenon well past its peak. Their number has declined significantly 
over the last year as the number of duopolies has increased. The 
duopoly era started with the Fall 1992 Arbitron rankings. See ``Radio 
Business Report'' (hereinafter RBR), April 10, 1995, at 14.
    Television LMAs enable separately owned stations to function 
cooperatively and are currently not subject to FCC guidelines of 
control and attribution. They represent a device to circumvent the 
ownership provisions--and thus the elements of licensee 
responsibility--of the Communications Act. LMAs would be legitimized 
under H.R. 1555.
    According to ``Broadcasting & Cable,'' June 5, 1995, at 8, the 
number of LMAs where one operator manages two TV stations in a market 
now stands at least thirty-six, including 10 in the top-30 markets.
    \2\ See ``RBR,'' April 10, 1995, at 14.
---------------------------------------------------------------------------
    It is clear that the changes enacted by the FCC in 1992 
have spurred a rapid consolidation by a few players in each 
market as well as the growth of a few large chain operators who 
dominate their individual markets both in audience and revenue 
share. For example, in Syracuse, NewCity controls 50.3% of the 
revenue; in Louisville, Clear Channel/Snow controls 46.3%; in 
Cincinnati, Jacor controls 42.8%; while in Modesto, Reno, and 
Spokane, a single company, Citadel, controls, respectively, 
49.6%, 43.9%, and 40.9% of the revenue in these markets.
    At the end of 1994, duopolies controlled 35.1% of the 12+ 
audience shares and 48.5% of the revenue in the 144 major 
markets surveyed by James H. Duncan, Jr., publisher of Duncan's 
American Radio, Inc. Even without further deregulation, Duncan 
predicts that given both a healthy general and radio economy, 
by the end of 1995, duopolies will control about 50% of the 12+ 
audience shares and 64% of revenue. Duncan believes that by the 
end of 1997 the duopolization process will be fairly mature, at 
which time ``. . . about 60% to 65% of 12+ shares will be 
controlled by duopolies, and perhaps 72% to 77% of revenue 
shares.'' \3\
    \3\ See ``RBR,'' September 9, 1994, at 9.
---------------------------------------------------------------------------
    As if to confirm these projections, ``RBR,'' in its issue 
of April 3, 1995, reports that in Buffalo, which it describes 
as one of the most completely duopolized markets in America, 
four (4) owners, all duopolies, controlled 73.9% of the 12+ 
shares in the fall of 1994, whereas in the spring of 1992 seven 
(7) owners, with no duopolies, controlled 75.4%.
    It is clear that the radio deregulation since 1992 has 
already led to a loss of ownership diversity. It has also led 
to a loss of jobs. In a report on radio station ownership 
released in November, the FCC's Mass Media Bureau tentatively 
observed that with some 500 stations changing hands under 
duopoly, an average of 5 people per station lost jobs or a 
total of 2,500 eliminated positions.\4\ We believe that H.R. 
1555 needlessly accelerates this trend and will result in a 
dramatic loss of both diversity and jobs in a historically 
vibrant medium. Finally, the considerable consolidation in the 
radio industry that has occurred under limited deregulation 
provides a useful, if not perfect, parallel for the likely 
effects of deregulation of national and local ownership rules 
in the television broadcast industry.
    \4\ See ``Radio Station Ownership Report,'' Mass Media Bureau, FCC, 
October 20, 1994, at 30.
---------------------------------------------------------------------------

                            PUBLIC INTEREST

    In spite of the manifold benefits bestowed by H.R. 1555 on 
the nation's television industry, the bill fails to elevate the 
public interest obligations of broadcasters to meet the needs 
of parents and children. It is apparent that broadcasters are 
failing to meet the informational and educational needs of the 
child audience as required by the Children's Television Act of 
1990. Moreover, the issue of increasing levels of violence in 
our society has focused attention on the graphic violence and 
other objectionable programming often found on both on 
broadcast and cable programming.

                PARENTS, CHILDREN AND TELEVISED VIOLENCE

    Parents are right to be concerned about the effect of 
violent television programming on children. Many parents are 
aware that children in this country spend more time watching 
television than in school. The American Psychological 
Association reports that by the time a child finishes 
elementary school, the typical American 11-year-old will have 
watched 100,000 acts of violence and 8,000 murders on 
television. This is not a new issue, but the consequences of 
our failure to address it is becoming acute.
    Back in the 1950s, Senator Estes Kefauver denounced the 
rise in ``televiolence''. He linked it to the rise in violent 
crime and took particular note of the ways in which teen 
criminals modeled themselves after television gangs. Then in 
the 1960s, Senator Thomas Dodd held hearings on the topic of 
television violence. The networks responded by promising to 
reduce violence, which they did, for a while. Psychiatrists 
call this a ``flight into health''--a temporary escape from 
therapy that leaves the problem untreated.
    In 1993, the Subcommittee on Telecommunications and Finance 
held five hearings in the last Congress on the subject of 
televised violence (see ``Violence on Television,'' Hearings 
before the Subcommittee on Telecommunications and Finance of 
the Committee on Energy and Commerce, Serial No. 103-79.) 
Twenty-nine witnesses testified. As a result, Congress and much 
of the public is now aware of the cumulative research linking 
television violence to increased aggression and violent 
behavior.
    The Subcommittee received testimony on several negative 
effects from the overload of violent images on children. 
Advertisers spend $30 billion annually using the medium of 
television to influence behavior because they know that it 
works. It should come as no surprise, then, when psychologists 
and researchers document that negative lessons taught by this 
same medium can effectively teach negative behavior.
    For example, Dr. William Dietz, on behalf of The American 
Academy of Pediatrics, testified that epidemiologic and 
experimental studies have demonstrated the association between 
the viewing of televised violence and aggressive behavior. 
``The absence of the consequences of the violence that they 
see, and the rapidity with which difficulties are resolved by 
the use of violence, increase the likelihood that violence will 
be among the first strategies that a child selects, rather than 
the last. Also, the rewards that the heroes receive for their 
violent behavior legitimize and tacitly endorse violence as a 
means of solving problems. Finally, the frequency with which 
children view violence, and the lack of long-term consequences 
for the victims of violence, desensitizes children and makes 
them more passive to acts of violence and less likely to 
intervene when violence occurs.''
    The Surgeon General's Report (1972), the National Institute 
of Mental Health Report (1982), the Carnegie Council on 
Adolescent Development (1992), the American Medical Association 
(1976, 1982, 1993), and the Centers for Disease Control (1993) 
have all confirmed the adverse effects of televised violence on 
the shaping of a child's values and perceptions.
    Despite repeated documentation of what society knows to be 
a serious problem, solutions have proved elusive. And when the 
hot glare of Congressional attention turns elsewhere, violence 
on television begins to increase again.
    That is why we have concluded that parents must be given 
the technological ability to block violent shows when they are 
not in the room to supervise their children. Technology 
exists--called a V-Chip (``v'' for violence) or C-Chip (``c'' 
for children)--that allows parents in their own homes to block, 
in advance, any program rated violent. The decision to block is 
the parent's; the decision to rate is the broadcaster's. In 
this way, we can facilitate the job of parenting in the 
pervasive presence of television without having the government 
deciding which shows are acceptable and which shows are not.
    The V-Chip can be made available in all television sets 
very inexpensively because of previous action taken by Congress 
and by this subcommittee. In 1990, we passed the Decoder 
Circuitry Act requiring all new TV sets to include the 
electronics that make it possible for the deaf and hard-of-
hearing to receive closed-captioning. The same electronics have 
tremendous unused capacity to read any codes sent to the viewer 
embedded in the TV signal itself.
    Polling and reader surveys suggest that the public wants 
this blocking technology. For example, a readers survey by USA 
Today in 1993 found that 68 percent of its readers supported 
the V-Chip; by 1995, this support had risen to 90 percent.
    A trial of the V-Chip in Canada by Shaw Communications has 
already demonstrated the ease with which this technology can 
block shows at varying ratings levels. In the United States, 
the Electronics Industries Association, on behalf of the TV set 
manufacturers, have already settled on a standard for the V-
Chip and some manufacturers are considering including the V-
Chip in some sets. Moreover, the National Cable Television 
Association has come out in support of such blocking 
technology, although with the important condition that they 
will not implement it as long as their broadcast brethren 
refuse to implement it too. And that is the problem--
broadcasters in particular are unwilling to send information to 
parents electronically. Without that signal, the V-Chip won't 
work.
    It is understandable as a business matter that broadcasters 
would resist technology that has the potential to reduce 
viewership. Less viewers means less Nielsen ratings and, 
therefore, lower advertising revenues. However, as a public 
policy matter, the V-Chip facilitates the protection of 
children by concerned parents as we enter the world of 200-
channel TV. The task of parenting in that world will be 
infinitely more difficult than a decade ago when television was 
still dominated by just three big networks.
    Moreover, the audience lost through the V-Chip--children--
is precisely that segment of the audience that programmers say 
they are not trying to reach when they write violent scenes 
into scripts.
    In today's world, where most children have two working 
parents, it is unrealistic to expect that mom or dad will sit 
with their child for hours watching television and be there to 
turn off violent programs. Parents are perfectly willing to 
take responsibility for the programs their children watch--but 
they need the ability to enforce their programming choices. It 
is the least restrictive means of accomplishing the compelling 
governmental purpose of protecting the health and welfare of 
children and increasing the likelihood they will become 
productive, nonviolent citizens.
    This approach strikes a reasonable balance between the 
needs of parents in today's violent society and the business 
concerns of both broadcast and cable executive.
    The V-Chip should be added to this bill.

                         Children's Television

    In addition to its failure to do anything to reduce the 
harm to children from violent television, the legislation does 
nothing to restore positive programming for children.
    The profound influence of television on children and the 
limited number of educational programs for children compelled 
Congress to enact the Children's Television Act in 1990. This 
was the first time that Congress recognized children as a 
special audience that deserved special attention from broadcast 
licensees. Congress concluded that television broadcasters were 
failing to provide positive informational programs for children 
and were increasingly squeezing 14 minutes or more of 
advertising into half-hour shows. Indeed, a recent report by 
Squire Rushnell, former vice president for children's programs 
at ABC-TV, found that the availability of educational programs 
for children had gone from approximately 11 hours per week on 
the three networks combined in 1980, to approximately 1.5 hours 
per week in 1990.
    The Act contained the following two major provisions:
          (1) reinstatement of commercial time limits during 
        children's programming to not more than 10.5 minutes/
        hour on weekends and not more than 12 minutes/hour on 
        weekdays.
          (2) a requirement that commercial television 
        broadcast licensees, as part of their public interest 
        obligations, meet the educational and informational 
        needs of the child audience through their overall 
        programming as well as through programming specifically 
        designed to meet the educational and information needs 
        of children.
    The Act was designed to increase the amount of educational 
and informational television programming available to children 
and to protect children from over-commercialization of 
programming.
    The broadcasting community's failure to do so has led the 
Federal Communications Commission to institute a rulemaking on 
the Children's Television Act. Unfortunately, the rulemaking 
suggests requiring broadcasters to air as little as one hour 
per week on their channel to be in compliance with the Act. 
This laughably low minimum standard is, nevertheless, opposed 
by the National Association of Broadcasters.
    We believe that the failure of H.R. 1555 to address this 
issue, in the context of deregulation that will boost the value 
of broadcast properties by millions of dollars (the licenses 
for which broadcasters receive from the public for free), is an 
abdication of our responsibility and another major deficiency 
in the bill.

                           Cable Deregulation

    H.R. 1555 goes far astray from its premise of ``competition 
before deregulation'' with respect to the provisions in Title 
II of the bill deregulating the cable industry. Much like the 
broadcast deregulation provisions in Title III, these 
provisions look backward not forward and repeat the mistaken 
policies of the past.
    The cable industry was deregulated once before. And when it 
was, in 1984, the industry took advantage of its monopoly 
status and raised rates on subscribers. According to the 
General Accounting Office, average cable rates rose at roughly 
three times the rate of inflation. Residents of Newark, New 
Jersey saw rate increases of more than 130 percent. Residents 
of certain communities in Connecticut saw their rates rise 222 
percent. Cable companies charged $5 per month just to use the 
remote control.
    In response to consumer complaints, Congress passed the 
1992 Cable Act to restrain hyperinflationary monopoly price 
hikes and to help create competition to the industry by making 
access to cable programming available to competitors. Cable 
rates stabilized and costs to consumers for equipment and 
installation went way down.
    The FCC has estimated that the 1992 Cable Act has saved 
consumers approximately $3 billion. H.R. 1555, however, allows 
cable monopolies to strip those savings from consumers by 
permitting the cable industry to return to past practice and 
gouge consumers BEFORE competition arrives.
    The cable rate provisions in the Cable Act are temporary. 
They are specifically designed to protect consumers until 
effective competition offers them an affordable marketplace 
choice. When effective competition arrives, rate restrictions 
on the incumbent cable company cease to exist. It's that 
simple.
    The bill, however, deregulates rates for cable programming 
services for so-called ``small cable systems'' immediately upon 
enactment. These are systems which largely serve rural America. 
As a result, it will be consumers in rural America who see 
their cable rates rise first. This provision deregulates any 
cable system which has less than 1 percent of all cable 
subscribers (approximately 600,000 subscribers) and is not 
affiliated with an entity that earns in excess of $250 million 
in gross annual revenues. According to the National 
Telecommunications and Information Administration (NTIA), this 
provision would deregulate cable systems affecting 28.8 percent 
of all cable subscribers.
    These systems would be deregulated irrespective of the fact 
that they would have no effective competition in the 
marketplace. Nor would the FCC have any residual authority to 
rein in renegade operators who raise rates egregiously. In 
short, almost 30 percent of the country's cable customers would 
be left without any protection with respect to rates charged 
for popular programming such as CNN, ESPN, CSPAN and Discovery.
    For the big cable systems--those affecting the 70 percent 
of cable consumers not served by the ``small systems''--
deregulation comes a mere 15 months after the date of 
enactment. Again, regardless of whether or not there is not 
effective competition to these cable systems, they are 
deregulated. And, as in the case of small cable systems, the 
FCC would have no residual authority to protect consumers when 
monopoly rate gouging reappears.
    To suggest that there will not be some unscrupulous cable 
operators who take advantage of the utter lack of an affordable 
marketplace choice to jack up their rates is pure folly. It is 
imperative, therefore, either to retain consumer protection 
provisions to rein in the industry renegades or to continue 
regulating monopolies until effective competition arrives.
    Deregulation of the cable industry is based on the flawed 
supposition that competition is coming soon and that the 
industry needs to be freed from regulations so as to obtain 
capital to compete against the local phone companies. Implicit 
in the supposition is that the cable industry is suffering 
greatly from rules that prevent it from charging monopoly 
prices and that banks will refuse to lend them money until 
operators can charge monopoly rents.
    Although it vehemently objects to the imposition of rules 
to protect consumers and promote competition, the cable 
industry is not faring poorly under regulation. For example, in 
a recent article in USA Today (5\31\95, at 1B), it was noted 
that the nation's largest cable company, Tele-Communications 
Inc., added 5.4 percent more customers in 1994; the second 
largest cable company, Time Warner, grew by 4 percent; and the 
third largest, Comcast, grew by 4.4 percent. Cable companies 
also saw a 4.8 percent spike in the number of of customers who 
bought premium channels.
    In addition, in the first quarter of 1995, operating cash 
flow for large cable MSO's was up. According to a recent 
article in Cable World (6\19\95), TCI's first-quarter 1995 
operating cash flow was up $14 million to $464 million over 
1994 same-period totals; Time Warner's was up 5 percent to $256 
million, Jones Intercable was up 8 percent; Comcast Corp.'s 
rose to $217.2 million from 141.5 the previous year; and 
Cablevision System's Corp.'s jumped 36 percent. Overall, the 
article also reports, cable stocks (Kagan MSO Average) have 
risen 13 percent in the first 6 months of 1995.
    Finally, the number of cable channels has not dwindled and 
faded under regulation. On the contrary, it has grown, in spite 
of, or perhaps because of, regulation of the industry, from 79 
channels to 128 channels in 1994.

                           cable competition

    According to the FCC, out of the more than 11,000 cable 
systems in the United States, less than 30 communities have 
seen their incumbent cable system deregulated because it met 
the effective competition test by having another competitor 
come to town in head-to-head competition. That's less than one-
half of 1 percent of all systems nationwide and a minuscule 
amount of subscribers. The idea that robust competition is 
going to materialize for the other 99.5 percent of cable 
systems within 15 months is dubious.
    To be sure, the 18-inch direct broadcast satellite (DBS) 
systems are now operational and signing up customers. There are 
about 600,000 DBS subscribers nationwide today, representing 
less than 1 percent of the market. However, as long as DBS 
dishes cost $700 or $800 a piece, DBS will not be an affordable 
alternative for the vast majority of consumers.
    And to be sure, the phone companies are coming. When and 
where? Nobody knows for certain. Their arrival in larger cities 
and towns could be 2 years away or 5 years away. For some rural 
areas it could be much longer. What we do know for certain is 
that there is no city, town, county, village, neighborhood or 
hamlet in the country that currently has the telephone company 
offering effective cable competition to an incumbent cable 
company.
    It is clear that H.R. 1555 deregulates cable systems before 
effective competition arrives to offer consumers an affordable 
alternative. We believe it is obvious that cable rates will 
rise dramatically as a result.

                           predatory pricing

    Not only does H.R. 1555 prematurely deregulate cable 
monopolies, it contains provisions that would snuff out 
fledgling competitors before they can take wing in a community. 
Section 202(g) of the legislation eliminates prohibitions 
against predatory pricing. It would allow cable monopolies to 
target unfairly a new competitor's customers for temporary 
lower prices and special offers. These lower prices and special 
offers to undercut a competitor would not be available to all 
subscribers in the cable systems' franchise areas. Rather, 
other subscribers would subsidize lower rates to undercut 
competitors. In this way, cable monopolies can crush 
competition in its cradle.
    Nascent competitors, such as wireless cable systems and 
direct broadcast satellite (DBS) systems, would suffer greatly 
from this anticompetitive provision. H.R. 1555 would 
significantly thwart the ability of consumers to reap the 
benefits of competition in the form of greater choice, higher 
quality, and lower price, if section 202(g) is retained in the 
bill.
    Not content simply to deregulate monopolies before 
competition arrives, H.R. 1555 also contains provisions that 
frustrate, rather than promote, the emergence of a competitive 
market. Instead of coddling communications monopolies, the 
provisions of Title II deregulating the cable industry should 
be drastically modified to remain consistent with the 
underlying premise of the legislation. The current cable 
provisions constitute a glaring flaw in a bill whose ostensible 
purpose is to promote competition in the telecommunications 
marketplace.

                          complaint threshold

    H.R. 1555 also modifies the complaint threshold that must 
be met to review cable rates charged to ascertain whether they 
exceed legal limitations. Current law allows the admittedly low 
threshold of a single consumer complaint to trigger FCC 
analysis of a cable operator's rates. The legislation requires 
that 10 consumers or 5 percent of all subscribers of a cable 
system, whichever is greater, must complain to the FCC to 
induce a rate proceeding. In other words, H.R. 1555 would 
require that in a cable system of 20,000 subscribers, 1,000 
consumers would have to complain. Increasing the complaint 
threshold merely to 10 subscribers would have a significant 
effect. According to the FCC, some 2,281 communities had a 
single consumer complaint; 1,383 communities had more than one 
but less than five complaints; and only 124 communities had 
more than 5 consumer complaints. Moving the complaint level to 
5 percent of subscribers is a clear attempt to create an 
impossibly high threshold in order to insulate cable companies 
from provisions originally designed in the Cable Act of 1992 
for consumer protection and empowerment.
    Finally, if there was any attempt to make government 
procedures less bureaucratic and FCC procedures more consumer-
friendly, it was not in evidence in the drafting of these 
provisions. The legislation does not allow for the 5 percent 
consumers complaint threshold to be met by having 1,000 
consumers sign a petition. In Section 202(f)(1), the 
legislation requires that consumers ``file separate, individual 
complaints'' against rate increases. It is ironic that when it 
comes to protecting cable giants, the legislation is not only 
bereft of consumer-friendly provisions, but instead endorses 
more bureaucratic forms, more cumbersome regulations. So much 
for getting Washington off the backs of the people.

                               conclusion

    We believe that the final bill should balance the 
introduction of competitive markets with measures designed to 
protect ratepayers, new market entrants and the consuming 
public from potential monopoly abuses. Universal service, 
diversity and localism should remain our guide stars as we 
develop a telecommunications blueprint for the 21st century. We 
look forward to working with all our colleagues on achieving 
the enactment of a comprehensive pro-consumer, pro-competitive 
communications law this year.
    At this point, however, the bill is unbalanced. It favors 
monopolies more than it breaks them down and encourages 
communications consolidation more than it creates new economic 
opportunities for small businesses and entrepreneurs. And in 
legislation that affects multibillion dollar issues and every 
American who owns a telephone or a television, it is woefully 
deficient in protecting consumers from potential monopoly 
abuses, or empowering them with new technology. It is our hope 
that these provisions can be amended and improved during 
further deliberation of the bill in the House.
                                   Edward J. Markey.
                                   Gerry E. Studds.
                                   Ron Klink.