US Telecommunications Act of 1996
S.652

One Hundred Fourth Congress of the United States of America AT THE SECOND SESSION Begun and held at the City of Washington on Wednesday, the third day of January, one thousand nine hundred and ninety-six

An Act

To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCES.

(a) SHORT TITLE- This Act may be cited as the `Telecommunications Act of 1996'.

(b) REFERENCES- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, thereference shall be considered to be made to a section or other provision of the Communications Act of 1934 (47 U.S.C. 151 et seq.).

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title; references.

Sec. 2. Table of contents.

Sec. 3. Definitions.

TITLE I--TELECOMMUNICATION SERVICES

SUBTITLE A--TELECOMMUNICATIONS SERVICES

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

`PART II--DEVELOPMENT OF COMPETITIVE MARKETS

Sec. 102. Eligible telecommunications carriers.

Sec. 103. Exempt telecommunications companies.

Sec. 104. Nondiscrimination principle.

SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

Sec. 151. Bell operating company provisions.

`PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

TITLE II--BROADCAST SERVICES

Sec. 201. Broadcast spectrum flexibility.

Sec. 202. Broadcast ownership.

Sec. 203. Term of licenses.

Sec. 204. Broadcast license renewal procedures.

Sec. 205. Direct broadcast satellite service.

Sec. 206. Automated ship distress and safety systems.

Sec. 207. Restrictions on over-the-air reception devices.

TITLE III--CABLE SERVICES

Sec. 301. Cable Act reform.

Sec. 302. Cable service provided by telephone companies.

`PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

Sec. 303. Preemption of franchising authority regulation of telecommunications services.

Sec. 304. Competitive availability of navigation devices.

Sec. 305. Video programming accessibility.

TITLE IV--REGULATORY REFORM

Sec. 401. Regulatory forbearance.

Sec. 402. Biennial review of regulations; regulatory relief.

Sec. 403. Elimination of unnecessary Commission regulations and functions.

TITLE V--OBSCENITY AND VIOLENCE

SUBTITLE A--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF TELECOMMUNICATIONS FACILITIES

Sec. 501. Short title.

Sec. 502. Obscene or harassing use of telecommunications facilities under the Communications Act of 1934.

Sec. 503. Obscene programming on cable television.

Sec. 504. Scrambling of cable channels for nonsubscribers.

Sec. 505. Scrambling of sexually explicit adult video service programming.

Sec. 506. Cable operator refusal to carry certain programs.

Sec. 507. Clarification of current laws regarding communication of obscene materials through the use of computers.

Sec. 508. Coercion and enticement of minors.

Sec. 509. Online family empowerment.

SUBTITLE B--VIOLENCE

Sec. 551. Parental choice in television programming.

Sec. 552. Technology fund.

SUBTITLE C--JUDICIAL REVIEW

Sec. 561. Expedited review.

TITLE VI--EFFECT ON OTHER LAWS

Sec. 601. Applicability of consent decrees and other law.

Sec. 602. Preemption of local taxation with respect to direct-to-home services.

TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Prevention of unfair billing practices for information or services provided over toll-free telephone calls.

Sec. 702. Privacy of customer information.

Sec. 703. Pole attachments.

Sec. 704. Facilities siting; radio frequency emission standards.

Sec. 705. Mobile services direct access to long distance carriers.

Sec. 706. Advanced telecommunications incentives.

Sec. 707. Telecommunications Development Fund.

Sec. 708. National Education Technology Funding Corporation.

Sec. 709. Report on the use of advanced telecommunications services for medical purposes.

Sec. 710. Authorization of appropriations.

SEC. 3. DEFINITIONS.

(a) ADDITIONAL DEFINITIONS- Section 3 (47 U.S.C. 153) is amended--(1) in subsection (r)--

(A) by inserting `(A)' after `means'; and

(B) by inserting before the period at the end the following: `, or (B) comparable service provided through a system of switches, transmission equipment, or other facilities (or combination thereof) by which a subscriber can originate and terminate a telecommunications service';

and

(2) by adding at the end thereof the following:

`(33) AFFILIATE- The term `affiliate' means a person that

(directly or indirectly) owns or controls, is owned or

controlled by, or is under common ownership or control with,

another person. For purposes of this paragraph, the term `own'

means to own an equity interest (or the equivalent thereof) of

more than 10 percent.

`(34) AT&T CONSENT DECREE- The term `AT&T Consent Decree'

means the order entered August 24, 1982, in the antitrust

action styled United States v. Western Electric, Civil Action

No. 82-0192, in the United States District Court for the

District of Columbia, and includes any judgment or order with

respect to such action entered on or after August 24, 1982.

`(35) BELL OPERATING COMPANY- The term `Bell operating

company'--

`(A) means any of the following companies:

and

`(B) includes any successor or assign of any such company that provides wireline telephone exchange service; but

`(C) does not include an affiliate of any such company, other than an affiliate described in subparagraph (A) or (B).

`(36) CABLE SERVICE- The term `cable service' has the meaning given such term in section 602.

`(37) CABLE SYSTEM- The term `cable system' has the meaning given such term in section 602.

`(38) CUSTOMER PREMISES EQUIPMENT- The term `customer premises equipment' means equipment employed on the premises of a person (other than a carrier) to originate, route, or terminate telecommunications.

`(39) DIALING PARITY- The term `dialing parity' means that a person that is not an affiliate of a local exchange carrier is able to provide telecommunications services in such a manner that customers have the ability to route automatically, without the use of any access code, their telecommunications to the telecommunications services provider of the customer's designation from among 2 or more telecommunications services providers (including such local exchange carrier).

`(40) EXCHANGE ACCESS- The term `exchange access' means the offering of access to telephone exchange services or facilities for the purpose of the origination or termination of telephone toll services.

`(41) INFORMATION SERVICE- The term `information service' means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

`(42) INTERLATA SERVICE- The term `interLATA service' means telecommunications between a point located in a local access and transport area and a point located outside such area.

`(43) LOCAL ACCESS AND TRANSPORT AREA- The term `local access and transport area' or `LATA' means a contiguous geographic area--

`(A) established before the date of enactment of the

Telecommunications Act of 1996 by a Bell operating company

such that no exchange area includes points within more than

1 metropolitan statistical area, consolidated metropolitan

statistical area, or State, except as expressly permitted

under the AT&T Consent Decree; or

`(B) established or modified by a Bell operating company

after such date of enactment and approved by the Commission.

`(44) LOCAL EXCHANGE CARRIER- The term `local exchange

carrier' means any person that is engaged in the provision of

telephone exchange service or exchange access. Such term does

not include a person insofar as such person is engaged in the

provision of a commercial mobile service under section 332(c),

except to the extent that the Commission finds that such

service should be included in the definition of such term.

`(45) NETWORK ELEMENT- The term `network element' means a

facility or equipment used in the provision of a

telecommunications service. Such term also includes features,

functions, and capabilities that are provided by means of such

facility or equipment, including subscriber numbers, databases,

signaling systems, and information sufficient for billing and

collection or used in the transmission, routing, or other

provision of a telecommunications service.

`(46) NUMBER PORTABILITY- The term `number portability' means

the ability of users of telecommunications services to retain,

at the same location, existing telecommunications numbers

without impairment of quality, reliability, or convenience when

switching from one telecommunications carrier to another.

`(47) RURAL TELEPHONE COMPANY- The term `rural telephone

company' means a local exchange carrier operating entity to the

extent that such entity--

`(A) provides common carrier service to any local

exchange carrier study area that does not include either--

`(i) any incorporated place of 10,000 inhabitants or

more, or any part thereof, based on the most recently

available population statistics of the Bureau of the

Census; or

`(ii) any territory, incorporated or unincorporated,

included in an urbanized area, as defined by the Bureau

of the Census as of August 10, 1993;

`(B) provides telephone exchange service, including

exchange access, to fewer than 50,000 access lines;

`(C) provides telephone exchange service to any local

exchange carrier study area with fewer than 100,000 access

lines; or

`(D) has less than 15 percent of its access lines in

communities of more than 50,000 on the date of enactment of

the Telecommunications Act of 1996.

`(48) TELECOMMUNICATIONS- The term `telecommunications' means

the transmission, between or among points specified by the

user, of information of the user's choosing, without change in

the form or content of the information as sent and received.

`(49) TELECOMMUNICATIONS CARRIER- The term

`telecommunications carrier' means any provider of

telecommunications services, except that such term does not

include aggregators of telecommunications services (as defined

in section 226). A telecommunications carrier shall be treated

as a common carrier under this Act only to the extent that it

is engaged in providing telecommunications services, except

that the Commission shall determine whether the provision of

fixed and mobile satellite service shall be treated as common

carriage.

`(50) TELECOMMUNICATIONS EQUIPMENT- The term

`telecommunications equipment' means equipment, other than

customer premises equipment, used by a carrier to provide

telecommunications services, and includes software integral to

such equipment (including upgrades).

`(51) TELECOMMUNICATIONS SERVICE- The term

`telecommunications service' means the offering of

telecommunications for a fee directly to the public, or to such

classes of users as to be effectively available directly to the

public, regardless of the facilities used.'.

(b) COMMON TERMINOLOGY- Except as otherwise provided in this Act,

the terms used in this Act have the meanings provided in section 3

of the Communications Act of 1934 (47 U.S.C. 153), as amended by

this section.

(c) STYLISTIC CONSISTENCY- Section 3 (47 U.S.C. 153) is amended--

(1) in subsections (e) and (n), by redesignating clauses (1),

(2), and (3), as clauses (A), (B), and (C), respectively;

(2) in subsection (w), by redesignating paragraphs (1)

through (5) as subparagraphs (A) through (E), respectively;

(3) in subsections (y) and (z), by redesignating paragraphs

(1) and (2) as subparagraphs (A) and (B), respectively;

(4) by redesignating subsections (a) through (ff) as

paragraphs (1) through (32);

(5) by indenting such paragraphs 2 em spaces;

(6) by inserting after the designation of each such paragraph--

(A) a heading, in a form consistent with the form of the

heading of this subsection, consisting of the term defined

by such paragraph, or the first term so defined if such

paragraph defines more than one term; and

(B) the words `The term';

(7) by changing the first letter of each defined term in such

paragraphs from a capital to a lower case letter (except for

`United States', `State', `State commission', and `Great Lakes

Agreement'); and

(8) by reordering such paragraphs and the additional

paragraphs added by subsection (a) in alphabetical order based

on the headings of such paragraphs and renumbering such

paragraphs as so reordered.

(d) CONFORMING AMENDMENTS- The Act is amended--

(1) in section 225(a)(1), by striking `section 3(h)' and

inserting `section 3';

(2) in section 332(d), by striking `section 3(n)' each place

it appears and inserting `section 3'; and

(3) in sections 621(d)(3), 636(d), and 637(a)(2), by striking

`section 3(v)' and inserting `section 3'.

TITLE I--TELECOMMUNICATION SERVICES

SUBTITLE A--TELECOMMUNICATIONS SERVICES

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

(a) AMENDMENT- Title II is amended by inserting after section 229

(47 U.S.C. 229) the following new part:

`PART II--DEVELOPMENT OF COMPETITIVE MARKETS

`SEC. 251. INTERCONNECTION.

`(a) GENERAL DUTY OF TELECOMMUNICATIONS CARRIERS- Each

telecommunications carrier has the duty--

`(1) to interconnect directly or indirectly with the

facilities and equipment of other telecommunications carriers;

and

`(2) not to install network features, functions, or

capabilities that do not comply with the guidelines and

standards established pursuant to section 255 or 256.

`(b) OBLIGATIONS OF ALL LOCAL EXCHANGE CARRIERS- Each local

exchange carrier has the following duties:

`(1) RESALE- The duty not to prohibit, and not to impose

unreasonable or discriminatory conditions or limitations on,

the resale of its telecommunications services.

`(2) NUMBER PORTABILITY- The duty to provide, to the extent

technically feasible, number portability in accordance with

requirements prescribed by the Commission.

`(3) DIALING PARITY- The duty to provide dialing parity to

competing providers of telephone exchange service and telephone

toll service, and the duty to permit all such providers to have

nondiscriminatory access to telephone numbers, operator

services, directory assistance, and directory listing, with no

unreasonable dialing delays.

`(4) ACCESS TO RIGHTS-OF-WAY- The duty to afford access to

the poles, ducts, conduits, and rights-of-way of such carrier

to competing providers of telecommunications services on rates,

terms, and conditions that are consistent with section 224.

`(5) RECIPROCAL COMPENSATION- The duty to establish

reciprocal compensation arrangements for the transport and

termination of telecommunications.

`(c) ADDITIONAL OBLIGATIONS OF INCUMBENT LOCAL EXCHANGE CARRIERS-

In addition to the duties contained in subsection (b), each

incumbent local exchange carrier has the following duties:

`(1) DUTY TO NEGOTIATE- The duty to negotiate in good faith

in accordance with section 252 the particular terms and

conditions of agreements to fulfill the duties described in

paragraphs (1) through (5) of subsection (b) and this

subsection. The requesting telecommunications carrier also has

the duty to negotiate in good faith the terms and conditions of

such agreements.

`(2) INTERCONNECTION- The duty to provide, for the facilities

and equipment of any requesting telecommunications carrier,

interconnection with the local exchange carrier's network--

`(A) for the transmission and routing of telephone

exchange service and exchange access;

`(B) at any technically feasible point within the

carrier's network;

`(C) that is at least equal in quality to that provided

by the local exchange carrier to itself or to any

subsidiary, affiliate, or any other party to which the

carrier provides interconnection; and

`(D) on rates, terms, and conditions that are just,

reasonable, and nondiscriminatory, in accordance with the

terms and conditions of the agreement and the requirements

of this section and section 252.

`(3) UNBUNDLED ACCESS- The duty to provide, to any requesting

telecommunications carrier for the provision of a

telecommunications service, nondiscriminatory access to network

elements on an unbundled basis at any technically feasible

point on rates, terms, and conditions that are just,

reasonable, and nondiscriminatory in accordance with the terms

and conditions of the agreement and the requirements of this

section and section 252. An incumbent local exchange carrier

shall provide such unbundled network elements in a manner that

allows requesting carriers to combine such elements in order to

provide such telecommunications service.

`(4) RESALE- The duty--

`(A) to offer for resale at wholesale rates any

telecommunications service that the carrier provides at

retail to subscribers who are not telecommunications

carriers; and

`(B) not to prohibit, and not to impose unreasonable or

discriminatory conditions or limitations on, the resale of

such telecommunications service, except that a State

commission may, consistent with regulations prescribed by

the Commission under this section, prohibit a reseller that

obtains at wholesale rates a telecommunications service

that is available at retail only to a category of

subscribers from offering such service to a different

category of subscribers.

`(5) NOTICE OF CHANGES- The duty to provide reasonable public

notice of changes in the information necessary for the

transmission and routing of services using that local exchange

carrier's facilities or networks, as well as of any other

changes that would affect the interoperability of those

facilities and networks.

`(6) COLLOCATION- The duty to provide, on rates, terms, and

conditions that are just, reasonable, and nondiscriminatory,

for physical collocation of equipment necessary for

interconnection or access to unbundled network elements at the

premises of the local exchange carrier, except that the carrier

may provide for virtual collocation if the local exchange

carrier demonstrates to the State commission that physical

collocation is not practical for technical reasons or because

of space limitations.

`(d) IMPLEMENTATION-

`(1) IN GENERAL- Within 6 months after the date of enactment

of the Telecommunications Act of 1996, the Commission shall

complete all actions necessary to establish regulations to

implement the requirements of this section.

`(2) ACCESS STANDARDS- In determining what network elements

should be made available for purposes of subsection (c)(3), the

Commission shall consider, at a minimum, whether--

`(A) access to such network elements as are proprietary

in nature is necessary; and

`(B) the failure to provide access to such network

elements would impair the ability of the telecommunications

carrier seeking access to provide the services that it

seeks to offer.

`(3) PRESERVATION OF STATE ACCESS REGULATIONS- In prescribing

and enforcing regulations to implement the requirements of this

section, the Commission shall not preclude the enforcement of

any regulation, order, or policy of a State commission that--

`(A) establishes access and interconnection obligations

of local exchange carriers;

`(B) is consistent with the requirements of this section;

and

`(C) does not substantially prevent implementation of the

requirements of this section and the purposes of this part.

`(e) NUMBERING ADMINISTRATION-

`(1) COMMISSION AUTHORITY AND JURISDICTION- The Commission

shall create or designate one or more impartial entities to

administer telecommunications numbering and to make such

numbers available on an equitable basis. The Commission shall

have exclusive jurisdiction over those portions of the North

American Numbering Plan that pertain to the United States.

Nothing in this paragraph shall preclude the Commission from

delegating to State commissions or other entities all or any

portion of such jurisdiction.

`(2) COSTS- The cost of establishing telecommunications

numbering administration arrangements and number portability

shall be borne by all telecommunications carriers on a

competitively neutral basis as determined by the Commission.

`(f) EXEMPTIONS, SUSPENSIONS, AND MODIFICATIONS-

`(1) EXEMPTION FOR CERTAIN RURAL TELEPHONE COMPANIES-

`(A) EXEMPTION- Subsection (c) of this section shall not

apply to a rural telephone company until (i) such company

has received a bona fide request for interconnection,

services, or network elements, and (ii) the State

commission determines (under subparagraph (B)) that such

request is not unduly economically burdensome, is

technically feasible, and is consistent with section 254

(other than subsections (b)(7) and (c)(1)(D) thereof).

`(B) STATE TERMINATION OF EXEMPTION AND IMPLEMENTATION

SCHEDULE- The party making a bona fide request of a rural

telephone company for interconnection, services, or network

elements shall submit a notice of its request to the State

commission. The State commission shall conduct an inquiry

for the purpose of determining whether to terminate the

exemption under subparagraph (A). Within 120 days after the

State commission receives notice of the request, the State

commission shall terminate the exemption if the request is

not unduly economically burdensome, is technically

feasible, and is consistent with section 254 (other than

subsections (b)(7) and (c)(1)(D) thereof). Upon termination

of the exemption, a State commission shall establish an

implementation schedule for compliance with the request

that is consistent in time and manner with Commission

regulations.

`(C) LIMITATION ON EXEMPTION- The exemption provided by

this paragraph shall not apply with respect to a request

under subsection (c) from a cable operator providing video

programming, and seeking to provide any telecommunications

service, in the area in which the rural telephone company

provides video programming. The limitation contained in

this subparagraph shall not apply to a rural telephone

company that is providing video programming on the date of

enactment of the Telecommunications Act of 1996.

`(2) SUSPENSIONS AND MODIFICATIONS FOR RURAL CARRIERS- A

local exchange carrier with fewer than 2 percent of the

Nation's subscriber lines installed in the aggregate nationwide

may petition a State commission for a suspension or

modification of the application of a requirement or

requirements of subsection (b) or (c) to telephone exchange

service facilities specified in such petition. The State

commission shall grant such petition to the extent that, and

for such duration as, the State commission determines that such

suspension or modification--

`(A) is necessary--

`(i) to avoid a significant adverse economic impact

on users of telecommunications services generally;

`(ii) to avoid imposing a requirement that is unduly

economically burdensome; or

`(iii) to avoid imposing a requirement that is

technically infeasible; and

`(B) is consistent with the public interest,

convenience, and necessity.

The State commission shall act upon any petition filed under

this paragraph within 180 days after receiving such petition.

Pending such action, the State commission may suspend

enforcement of the requirement or requirements to which the

petition applies with respect to the petitioning carrier or

carriers.

`(g) CONTINUED ENFORCEMENT OF EXCHANGE ACCESS AND INTERCONNECTION

REQUIREMENTS- On and after the date of enactment of the

Telecommunications Act of 1996, each local exchange carrier, to the

extent that it provides wireline services, shall provide exchange

access, information access, and exchange services for such access

to interexchange carriers and information service providers in

accordance with the same equal access and nondiscriminatory

interconnection restrictions and obligations (including receipt of

compensation) that apply to such carrier on the date immediately

preceding the date of enactment of the Telecommunications Act of

1996 under any court order, consent decree, or regulation, order,

or policy of the Commission, until such restrictions and

obligations are explicitly superseded by regulations prescribed by

the Commission after such date of enactment. During the period

beginning on such date of enactment and until such restrictions and

obligations are so superseded, such restrictions and obligations

shall be enforceable in the same manner as regulations of the

Commission.

`(h) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER-

`(1) DEFINITION- For purposes of this section, the term

`incumbent local exchange carrier' means, with respect to an

area, the local exchange carrier that--

`(A) on the date of enactment of the Telecommunications

Act of 1996, provided telephone exchange service in such

area; and

`(B)(i) on such date of enactment, was deemed to be a

member of the exchange carrier association pursuant to

section 69.601(b) of the Commission's regulations (47

C.F.R. 69.601(b)); or

`(ii) is a person or entity that, on or after such date

of enactment, became a successor or assign of a member

described in clause (i).

`(2) TREATMENT OF COMPARABLE CARRIERS AS INCUMBENTS- The

Commission may, by rule, provide for the treatment of a local

exchange carrier (or class or category thereof) as an incumbent

local exchange carrier for purposes of this section if--

`(A) such carrier occupies a position in the market for

telephone exchange service within an area that is

comparable to the position occupied by a carrier described

in paragraph (1);

`(B) such carrier has substantially replaced an incumbent

local exchange carrier described in paragraph (1); and

`(C) such treatment is consistent with the public

interest, convenience, and necessity and the purposes of

this section.

`(i) SAVINGS PROVISION- Nothing in this section shall be

construed to limit or otherwise affect the Commission's authority

under section 201.

`SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND APPROVAL OF

AGREEMENTS.

`(a) AGREEMENTS ARRIVED AT THROUGH NEGOTIATION-

`(1) VOLUNTARY NEGOTIATIONS- Upon receiving a request for

interconnection, services, or network elements pursuant to

section 251, an incumbent local exchange carrier may negotiate

and enter into a binding agreement with the requesting

telecommunications carrier or carriers without regard to the

standards set forth in subsections (b) and (c) of section 251.

The agreement shall include a detailed schedule of itemized

charges for interconnection and each service or network element

included in the agreement. The agreement, including any

interconnection agreement negotiated before the date of

enactment of the Telecommunications Act of 1996, shall be

submitted to the State commission under subsection (e) of this

section.

`(2) MEDIATION- Any party negotiating an agreement under this

section may, at any point in the negotiation, ask a State

commission to participate in the negotiation and to mediate any

differences arising in the course of the negotiation.

`(b) AGREEMENTS ARRIVED AT THROUGH COMPULSORY ARBITRATION-

`(1) ARBITRATION- During the period from the 135th to the

160th day (inclusive) after the date on which an incumbent

local exchange carrier receives a request for negotiation under

this section, the carrier or any other party to the negotiation

may petition a State commission to arbitrate any open issues.

`(2) DUTY OF PETITIONER-

`(A) A party that petitions a State commission under

paragraph (1) shall, at the same time as it submits the

petition, provide the State commission all relevant

documentation concerning--

`(i) the unresolved issues;

`(ii) the position of each of the parties with

respect to those issues; and

`(iii) any other issue discussed and resolved by the

parties.

`(B) A party petitioning a State commission under

paragraph (1) shall provide a copy of the petition and any

documentation to the other party or parties not later than

the day on which the State commission receives the petition.

`(3) OPPORTUNITY TO RESPOND- A non-petitioning party to a

negotiation under this section may respond to the other party's

petition and provide such additional information as it wishes

within 25 days after the State commission receives the petition.

`(4) ACTION BY STATE COMMISSION-

`(A) The State commission shall limit its consideration

of any petition under paragraph (1) (and any response

thereto) to the issues set forth in the petition and in the

response, if any, filed under paragraph (3).

`(B) The State commission may require the petitioning

party and the responding party to provide such information

as may be necessary for the State commission to reach a

decision on the unresolved issues. If any party refuses or

fails unreasonably to respond on a timely basis to any

reasonable request from the State commission, then the

State commission may proceed on the basis of the best

information available to it from whatever source derived.

`(C) The State commission shall resolve each issue set

forth in the petition and the response, if any, by imposing

appropriate conditions as required to implement subsection

(c) upon the parties to the agreement, and shall conclude

the resolution of any unresolved issues not later than 9

months after the date on which the local exchange carrier

received the request under this section.

`(5) REFUSAL TO NEGOTIATE- The refusal of any other party to

the negotiation to participate further in the negotiations, to

cooperate with the State commission in carrying out its

function as an arbitrator, or to continue to negotiate in good

faith in the presence, or with the assistance, of the State

commission shall be considered a failure to negotiate in good

faith.

`(c) STANDARDS FOR ARBITRATION- In resolving by arbitration under

subsection (b) any open issues and imposing conditions upon the

parties to the agreement, a State commission shall--

`(1) ensure that such resolution and conditions meet the

requirements of section 251, including the regulations

prescribed by the Commission pursuant to section 251;

`(2) establish any rates for interconnection, services, or

network elements according to subsection (d); and

`(3) provide a schedule for implementation of the terms and

conditions by the parties to the agreement.

`(d) PRICING STANDARDS-

`(1) INTERCONNECTION AND NETWORK ELEMENT CHARGES-

Determinations by a State commission of the just and reasonable

rate for the interconnection of facilities and equipment for

purposes of subsection (c)(2) of section 251, and the just and

reasonable rate for network elements for purposes of subsection

(c)(3) of such section--

`(A) shall be--

`(i) based on the cost (determined without reference

to a rate-of-return or other rate-based proceeding) of

providing the interconnection or network element

(whichever is applicable), and

`(ii) nondiscriminatory, and

`(B) may include a reasonable profit.

`(2) CHARGES FOR TRANSPORT AND TERMINATION OF TRAFFIC-

`(A) IN GENERAL- For the purposes of compliance by an

incumbent local exchange carrier with section 251(b)(5), a

State commission shall not consider the terms and

conditions for reciprocal compensation to be just and

reasonable unless--

`(i) such terms and conditions provide for the mutual

and reciprocal recovery by each carrier of costs

associated with the transport and termination on each

carrier's network facilities of calls that originate on

the network facilities of the other carrier; and

`(ii) such terms and conditions determine such costs

on the basis of a reasonable approximation of the

additional costs of terminating such calls.

`(B) RULES OF CONSTRUCTION- This paragraph shall not be

construed--

`(i) to preclude arrangements that afford the mutual

recovery of costs through the offsetting of reciprocal

obligations, including arrangements that waive mutual

recovery (such as bill-and-keep arrangements); or

`(ii) to authorize the Commission or any State

commission to engage in any rate regulation proceeding

to establish with particularity the additional costs of

transporting or terminating calls, or to require

carriers to maintain records with respect to the

additional costs of such calls.

`(3) WHOLESALE PRICES FOR TELECOMMUNICATIONS SERVICES- For

the purposes of section 251(c)(4), a State commission shall

determine wholesale rates on the basis of retail rates charged

to subscribers for the telecommunications service requested,

excluding the portion thereof attributable to any marketing,

billing, collection, and other costs that will be avoided by

the local exchange carrier.

`(e) APPROVAL BY STATE COMMISSION-

`(1) APPROVAL REQUIRED- Any interconnection agreement adopted

by negotiation or arbitration shall be submitted for approval

to the State commission. A State commission to which an

agreement is submitted shall approve or reject the agreement,

with written findings as to any deficiencies.

`(2) GROUNDS FOR REJECTION- The State commission may only

reject--

`(A) an agreement (or any portion thereof) adopted by

negotiation under subsection (a) if it finds that--

`(i) the agreement (or portion thereof) discriminates

against a telecommunications carrier not a party to the

agreement; or

`(ii) the implementation of such agreement or portion

is not consistent with the public interest,

convenience, and necessity; or

`(B) an agreement (or any portion thereof) adopted by

arbitration under subsection (b) if it finds that the

agreement does not meet the requirements of section 251,

including the regulations prescribed by the Commission

pursuant to section 251, or the standards set forth in

subsection (d) of this section.

`(3) PRESERVATION OF AUTHORITY- Notwithstanding paragraph

(2), but subject to section 253, nothing in this section shall

prohibit a State commission from establishing or enforcing

other requirements of State law in its review of an agreement,

including requiring compliance with intrastate

telecommunications service quality standards or requirements.

`(4) SCHEDULE FOR DECISION- If the State commission does not

act to approve or reject the agreement within 90 days after

submission by the parties of an agreement adopted by

negotiation under subsection (a), or within 30 days after

submission by the parties of an agreement adopted by

arbitration under subsection (b), the agreement shall be deemed

approved. No State court shall have jurisdiction to review the

action of a State commission in approving or rejecting an

agreement under this section.

`(5) COMMISSION TO ACT IF STATE WILL NOT ACT- If a State

commission fails to act to carry out its responsibility under

this section in any proceeding or other matter under this

section, then the Commission shall issue an order preempting

the State commission's jurisdiction of that proceeding or

matter within 90 days after being notified (or taking notice)

of such failure, and shall assume the responsibility of the

State commission under this section with respect to the

proceeding or matter and act for the State commission.

`(6) REVIEW OF STATE COMMISSION ACTIONS- In a case in which a

State fails to act as described in paragraph (5), the

proceeding by the Commission under such paragraph and any

judicial review of the Commission's actions shall be the

exclusive remedies for a State commission's failure to act. In

any case in which a State commission makes a determination

under this section, any party aggrieved by such determination

may bring an action in an appropriate Federal district court to

determine whether the agreement or statement meets the

requirements of section 251 and this section.

`(f) STATEMENTS OF GENERALLY AVAILABLE TERMS-

`(1) IN GENERAL- A Bell operating company may prepare and

file with a State commission a statement of the terms and

conditions that such company generally offers within that State

to comply with the requirements of section 251 and the

regulations thereunder and the standards applicable under this

section.

`(2) STATE COMMISSION REVIEW- A State commission may not

approve such statement unless such statement complies with

subsection (d) of this section and section 251 and the

regulations thereunder. Except as provided in section 253,

nothing in this section shall prohibit a State commission from

establishing or enforcing other requirements of State law in

its review of such statement, including requiring compliance

with intrastate telecommunications service quality standards or

requirements.

`(3) SCHEDULE FOR REVIEW- The State commission to which a

statement is submitted shall, not later than 60 days after the

date of such submission--

`(A) complete the review of such statement under

paragraph (2) (including any reconsideration thereof),

unless the submitting carrier agrees to an extension of the

period for such review; or

`(B) permit such statement to take effect.

`(4) AUTHORITY TO CONTINUE REVIEW- Paragraph (3) shall not

preclude the State commission from continuing to review a

statement that has been permitted to take effect under

subparagraph (B) of such paragraph or from approving or

disapproving such statement under paragraph (2).

`(5) DUTY TO NEGOTIATE NOT AFFECTED- The submission or

approval of a statement under this subsection shall not relieve

a Bell operating company of its duty to negotiate the terms and

conditions of an agreement under section 251.

`(g) CONSOLIDATION OF STATE PROCEEDINGS- Where not inconsistent

with the requirements of this Act, a State commission may, to the

extent practical, consolidate proceedings under sections 214(e),

251(f), 253, and this section in order to reduce administrative

burdens on telecommunications carriers, other parties to the

proceedings, and the State commission in carrying out its

responsibilities under this Act.

`(h) FILING REQUIRED- A State commission shall make a copy of

each agreement approved under subsection (e) and each statement

approved under subsection (f) available for public inspection and

copying within 10 days after the agreement or statement is

approved. The State commission may charge a reasonable and

nondiscriminatory fee to the parties to the agreement or to the

party filing the statement to cover the costs of approving and

filing such agreement or statement.

`(i) AVAILABILITY TO OTHER TELECOMMUNICATIONS CARRIERS- A local

exchange carrier shall make available any interconnection, service,

or network element provided under an agreement approved under this

section to which it is a party to any other requesting

telecommunications carrier upon the same terms and conditions as

those provided in the agreement.

`(j) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER- For purposes

of this section, the term `incumbent local exchange carrier' has

the meaning provided in section 251(h).

`SEC. 253. REMOVAL OF BARRIERS TO ENTRY.

`(a) IN GENERAL- No State or local statute or regulation, or

other State or local legal requirement, may prohibit or have the

effect of prohibiting the ability of any entity to provide any

interstate or intrastate telecommunications service.

`(b) STATE REGULATORY AUTHORITY- Nothing in this section shall

affect the ability of a State to impose, on a competitively neutral

basis and consistent with section 254, requirements necessary to

preserve and advance universal service, protect the public safety

and welfare, ensure the continued quality of telecommunications

services, and safeguard the rights of consumers.

`(c) STATE AND LOCAL GOVERNMENT AUTHORITY- Nothing in this

section affects the authority of a State or local government to

manage the public rights-of-way or to require fair and reasonable

compensation from telecommunications providers, on a competitively

neutral and nondiscriminatory basis, for use of public

rights-of-way on a nondiscriminatory basis, if the compensation

required is publicly disclosed by such government.

`(d) PREEMPTION- If, after notice and an opportunity for public

comment, the Commission determines that a State or local government

has permitted or imposed any statute, regulation, or legal

requirement that violates subsection (a) or (b), the Commission

shall preempt the enforcement of such statute, regulation, or legal

requirement to the extent necessary to correct such violation or

inconsistency.

`(e) COMMERCIAL MOBILE SERVICE PROVIDERS- Nothing in this section

shall affect the application of section 332(c)(3) to commercial

mobile service providers.

`(f) RURAL MARKETS- It shall not be a violation of this section

for a State to require a telecommunications carrier that seeks to

provide telephone exchange service or exchange access in a service

area served by a rural telephone company to meet the requirements

in section 214(e)(1) for designation as an eligible

telecommunications carrier for that area before being permitted to

provide such service. This subsection shall not apply--

`(1) to a service area served by a rural telephone company

that has obtained an exemption, suspension, or modification of

section 251(c)(4) that effectively prevents a competitor from

meeting the requirements of section 214(e)(1); and

`(2) to a provider of commercial mobile services.

`SEC. 254. UNIVERSAL SERVICE.

`(a) PROCEDURES TO REVIEW UNIVERSAL SERVICE REQUIREMENTS-

`(1) FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE- Within

one month after the date of enactment of the Telecommunications

Act of 1996, the Commission shall institute and refer to a

Federal-State Joint Board under section 410(c) a proceeding to

recommend changes to any of its regulations in order to

implement sections 214(e) and this section, including the

definition of the services that are supported by Federal

universal service support mechanisms and a specific timetable

for completion of such recommendations. In addition to the

members of the Joint Board required under section 410(c), one

member of such Joint Board shall be a State-appointed utility

consumer advocate nominated by a national organization of State

utility consumer advocates. The Joint Board shall, after notice

and opportunity for public comment, make its recommendations to

the Commission 9 months after the date of enactment of the

Telecommunications Act of 1996.

`(2) COMMISSION ACTION- The Commission shall initiate a

single proceeding to implement the recommendations from the

Joint Board required by paragraph (1) and shall complete such

proceeding within 15 months after the date of enactment of the

Telecommunications Act of 1996. The rules established by such

proceeding shall include a definition of the services that are

supported by Federal universal service support mechanisms and a

specific timetable for implementation. Thereafter, the

Commission shall complete any proceeding to implement

subsequent recommendations from any Joint Board on universal

service within one year after receiving such recommendations.

`(b) UNIVERSAL SERVICE PRINCIPLES- The Joint Board and the

Commission shall base policies for the preservation and advancement

of universal service on the following principles:

`(1) QUALITY AND RATES- Quality services should be available

at just, reasonable, and affordable rates.

`(2) ACCESS TO ADVANCED SERVICES- Access to advanced

telecommunications and information services should be provided

in all regions of the Nation.

`(3) ACCESS IN RURAL AND HIGH COST AREAS- Consumers in all

regions of the Nation, including low-income consumers and those

in rural, insular, and high cost areas, should have access to

telecommunications and information services, including

interexchange services and advanced telecommunications and

information services, that are reasonably comparable to those

services provided in urban areas and that are available at

rates that are reasonably comparable to rates charged for

similar services in urban areas.

`(4) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS- All

providers of telecommunications services should make an

equitable and nondiscriminatory contribution to the

preservation and advancement of universal service.

`(5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS- There

should be specific, predictable and sufficient Federal and

State mechanisms to preserve and advance universal service.

`(6) ACCESS TO ADVANCED TELECOMMUNICATIONS SERVICES FOR

SCHOOLS, HEALTH CARE, AND LIBRARIES- Elementary and secondary

schools and classrooms, health care providers, and libraries

should have access to advanced telecommunications services as

described in subsection (h).

`(7) ADDITIONAL PRINCIPLES- Such other principles as the

Joint Board and the Commission determine are necessary and

appropriate for the protection of the public interest,

convenience, and necessity and are consistent with this Act.

`(c) DEFINITION-

`(1) IN GENERAL- Universal service is an evolving level of

telecommunications services that the Commission shall establish

periodically under this section, taking into account advances

in telecommunications and information technologies and

services. The Joint Board in recommending, and the Commission

in establishing, the definition of the services that are

supported by Federal universal service support mechanisms shall

consider the extent to which such telecommunications services--

`(A) are essential to education, public health, or public

safety;

`(B) have, through the operation of market choices by

customers, been subscribed to by a substantial majority of

residential customers;

`(C) are being deployed in public telecommunications

networks by telecommunications carriers; and

`(D) are consistent with the public interest,

convenience, and necessity.

`(2) ALTERATIONS AND MODIFICATIONS- The Joint Board may, from

time to time, recommend to the Commission modifications in the

definition of the services that are supported by Federal

universal service support mechanisms.

`(3) SPECIAL SERVICES- In addition to the services included

in the definition of universal service under paragraph (1), the

Commission may designate additional services for such support

mechanisms for schools, libraries, and health care providers

for the purposes of subsection (h).

`(d) TELECOMMUNICATIONS CARRIER CONTRIBUTION- Every

telecommunications carrier that provides interstate

telecommunications services shall contribute, on an equitable and

nondiscriminatory basis, to the specific, predictable, and

sufficient mechanisms established by the Commission to preserve and

advance universal service. The Commission may exempt a carrier or

class of carriers from this requirement if the carrier's

telecommunications activities are limited to such an extent that

the level of such carrier's contribution to the preservation and

advancement of universal service would be de minimis. Any other

provider of interstate telecommunications may be required to

contribute to the preservation and advancement of universal service

if the public interest so requires.

`(e) UNIVERSAL SERVICE SUPPORT- After the date on which

Commission regulations implementing this section take effect, only

an eligible telecommunications carrier designated under section

214(e) shall be eligible to receive specific Federal universal

service support. A carrier that receives such support shall use

that support only for the provision, maintenance, and upgrading of

facilities and services for which the support is intended. Any

such support should be explicit and sufficient to achieve the

purposes of this section.

`(f) STATE AUTHORITY- A State may adopt regulations not

inconsistent with the Commission's rules to preserve and advance

universal service. Every telecommunications carrier that provides

intrastate telecommunications services shall contribute, on an

equitable and nondiscriminatory basis, in a manner determined by

the State to the preservation and advancement of universal service

in that State. A State may adopt regulations to provide for

additional definitions and standards to preserve and advance

universal service within that State only to the extent that such

regulations adopt additional specific, predictable, and sufficient

mechanisms to support such definitions or standards that do not

rely on or burden Federal universal service support mechanisms.

`(g) INTEREXCHANGE AND INTERSTATE SERVICES- Within 6 months after

the date of enactment of the Telecommunications Act of 1996, the

Commission shall adopt rules to require that the rates charged by

providers of interexchange telecommunications services to

subscribers in rural and high cost areas shall be no higher than

the rates charged by each such provider to its subscribers in urban

areas. Such rules shall also require that a provider of interstate

interexchange telecommunications services shall provide such

services to its subscribers in each State at rates no higher than

the rates charged to its subscribers in any other State.

`(h) TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVIDERS-

`(1) IN GENERAL-

`(A) HEALTH CARE PROVIDERS FOR RURAL AREAS- A

telecommunications carrier shall, upon receiving a bona

fide request, provide telecommunications services which are

necessary for the provision of health care services in a

State, including instruction relating to such services, to

any public or nonprofit health care provider that serves

persons who reside in rural areas in that State at rates

that are reasonably comparable to rates charged for similar

services in urban areas in that State. A telecommunications

carrier providing service under this paragraph shall be

entitled to have an amount equal to the difference, if any,

between the rates for services provided to health care

providers for rural areas in a State and the rates for

similar services provided to other customers in comparable

rural areas in that State treated as a service obligation

as a part of its obligation to participate in the

mechanisms to preserve and advance universal service.

`(B) EDUCATIONAL PROVIDERS AND LIBRARIES- All

telecommunications carriers serving a geographic area

shall, upon a bona fide request for any of its services

that are within the definition of universal service under

subsection (c)(3), provide such services to elementary

schools, secondary schools, and libraries for educational

purposes at rates less than the amounts charged for similar

services to other parties. The discount shall be an amount

that the Commission, with respect to interstate services,

and the States, with respect to intrastate services,

determine is appropriate and necessary to ensure affordable

access to and use of such services by such entities. A

telecommunications carrier providing service under this

paragraph shall--

`(i) have an amount equal to the amount of the

discount treated as an offset to its obligation to

contribute to the mechanisms to preserve and advance

universal service, or

`(ii) notwithstanding the provisions of subsection

(e) of this section, receive reimbursement utilizing

the support mechanisms to preserve and advance

universal service.

`(2) ADVANCED SERVICES- The Commission shall establish

competitively neutral rules--

`(A) to enhance, to the extent technically feasible and

economically reasonable, access to advanced

telecommunications and information services for all public

and nonprofit elementary and secondary school classrooms,

health care providers, and libraries; and

`(B) to define the circumstances under which a

telecommunications carrier may be required to connect its

network to such public institutional telecommunications

users.

`(3) TERMS AND CONDITIONS- Telecommunications services and

network capacity provided to a public institutional

telecommunications user under this subsection may not be sold,

resold, or otherwise transferred by such user in consideration

for money or any other thing of value.

`(4) ELIGIBILITY OF USERS- No entity listed in this

subsection shall be entitled to preferential rates or treatment

as required by this subsection, if such entity operates as a

for-profit business, is a school described in paragraph (5)(A)

with an endowment of more than $50,000,000, or is a library not

eligible for participation in State-based plans for funds under

title III of the Library Services and Construction Act (20

U.S.C. 335c et seq.).

`(5) DEFINITIONS- For purposes of this subsection:

`(A) ELEMENTARY AND SECONDARY SCHOOLS- The term

`elementary and secondary schools' means elementary schools

and secondary schools, as defined in paragraphs (14) and

(25), respectively, of section 14101 of the Elementary and

Secondary Education Act of 1965 (20 U.S.C. 8801).

`(B) HEALTH CARE PROVIDER- The term `health care

provider' means--

`(i) post-secondary educational institutions offering

health care instruction, teaching hospitals, and

medical schools;

`(ii) community health centers or health centers

providing health care to migrants;

`(iii) local health departments or agencies;

`(iv) community mental health centers;

`(v) not-for-profit hospitals;

`(vi) rural health clinics; and

`(vii) consortia of health care providers consisting

of one or more entities described in clauses (i)

through (vi).

`(C) PUBLIC INSTITUTIONAL TELECOMMUNICATIONS USER- The

term `public institutional telecommunications user' means

an elementary or secondary school, a library, or a health

care provider as those terms are defined in this paragraph.

`(i) CONSUMER PROTECTION- The Commission and the States should

ensure that universal service is available at rates that are just,

reasonable, and affordable.

`(j) LIFELINE ASSISTANCE- Nothing in this section shall affect

the collection, distribution, or administration of the Lifeline

Assistance Program provided for by the Commission under regulations

set forth in section 69.117 of title 47, Code of Federal

Regulations, and other related sections of such title.

`(k) SUBSIDY OF COMPETITIVE SERVICES PROHIBITED- A

telecommunications carrier may not use services that are not

competitive to subsidize services that are subject to competition.

The Commission, with respect to interstate services, and the

States, with respect to intrastate services, shall establish any

necessary cost allocation rules, accounting safeguards, and

guidelines to ensure that services included in the definition of

universal service bear no more than a reasonable share of the joint

and common costs of facilities used to provide those services.

`SEC. 255. ACCESS BY PERSONS WITH DISABILITIES.

`(a) DEFINITIONS- As used in this section--

`(1) DISABILITY- The term `disability' has the meaning given

to it by section 3(2)(A) of the Americans with Disabilities Act

of 1990 (42 U.S.C. 12102(2)(A)).

`(2) READILY ACHIEVABLE- The term `readily achievable' has

the meaning given to it by section 301(9) of that Act (42

U.S.C. 12181(9)).

`(b) MANUFACTURING- A manufacturer of telecommunications

equipment or customer premises equipment shall ensure that the

equipment is designed, developed, and fabricated to be accessible

to and usable by individuals with disabilities, if readily

achievable.

`(c) TELECOMMUNICATIONS SERVICES- A provider of

telecommunications service shall ensure that the service is

accessible to and usable by individuals with disabilities, if

readily achievable.

`(d) COMPATIBILITY- Whenever the requirements of subsections (b)

and (c) are not readily achievable, such a manufacturer or provider

shall ensure that the equipment or service is compatible with

existing peripheral devices or specialized customer premises

equipment commonly used by individuals with disabilities to achieve

access, if readily achievable.

`(e) GUIDELINES- Within 18 months after the date of enactment of

the Telecommunications Act of 1996, the Architectural and

Transportation Barriers Compliance Board shall develop guidelines

for accessibility of telecommunications equipment and customer

premises equipment in conjunction with the Commission. The Board

shall review and update the guidelines periodically.

`(f) NO ADDITIONAL PRIVATE RIGHTS AUTHORIZED- Nothing in this

section shall be construed to authorize any private right of action

to enforce any requirement of this section or any regulation

thereunder. The Commission shall have exclusive jurisdiction with

respect to any complaint under this section.

`SEC. 256. COORDINATION FOR INTERCONNECTIVITY.

`(a) PURPOSE- It is the purpose of this section--

`(1) to promote nondiscriminatory accessibility by the

broadest number of users and vendors of communications products

and services to public telecommunications networks used to

provide telecommunications service through--

`(A) coordinated public telecommunications network

planning and design by telecommunications carriers and

other providers of telecommunications service; and

`(B) public telecommunications network interconnectivity,

and interconnectivity of devices with such networks used to

provide telecommunications service; and

`(2) to ensure the ability of users and information providers

to seamlessly and transparently transmit and receive

information between and across telecommunications networks.

`(b) COMMISSION FUNCTIONS- In carrying out the purposes of this

section, the Commission--

`(1) shall establish procedures for Commission oversight of

coordinated network planning by telecommunications carriers and

other providers of telecommunications service for the effective

and efficient interconnection of public telecommunications

networks used to provide telecommunications service; and

`(2) may participate, in a manner consistent with its

authority and practice prior to the date of enactment of this

section, in the development by appropriate industry

standards-setting organizations of public telecommunications

network interconnectivity standards that promote access to--

`(A) public telecommunications networks used to provide

telecommunications service;

`(B) network capabilities and services by individuals

with disabilities; and

`(C) information services by subscribers of rural

telephone companies.

`(c) COMMISSION'S AUTHORITY- Nothing in this section shall be

construed as expanding or limiting any authority that the

Commission may have under law in effect before the date of

enactment of the Telecommunications Act of 1996.

`(d) DEFINITION- As used in this section, the term `public

telecommunications network interconnectivity' means the ability of

two or more public telecommunications networks used to provide

telecommunications service to communicate and exchange information

without degeneration, and to interact in concert with one another.

`SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.

`(a) ELIMINATION OF BARRIERS- Within 15 months after the date of

enactment of the Telecommunications Act of 1996, the Commission

shall complete a proceeding for the purpose of identifying and

eliminating, by regulations pursuant to its authority under this

Act (other than this section), market entry barriers for

entrepreneurs and other small businesses in the provision and

ownership of telecommunications services and information services,

or in the provision of parts or services to providers of

telecommunications services and information services.

`(b) NATIONAL POLICY- In carrying out subsection (a), the

Commission shall seek to promote the policies and purposes of this

Act favoring diversity of media voices, vigorous economic

competition, technological advancement, and promotion of the public

interest, convenience, and necessity.

`(c) PERIODIC REVIEW- Every 3 years following the completion of

the proceeding required by subsection (a), the Commission shall

review and report to Congress on--

`(1) any regulations prescribed to eliminate barriers within

its jurisdiction that are identified under subsection (a) and

that can be prescribed consistent with the public interest,

convenience, and necessity; and

`(2) the statutory barriers identified under subsection (a)

that the Commission recommends be eliminated, consistent with

the public interest, convenience, and necessity.

`SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.

`(a) PROHIBITION- No telecommunications carrier shall submit or

execute a change in a subscriber's selection of a provider of

telephone exchange service or telephone toll service except in

accordance with such verification procedures as the Commission

shall prescribe. Nothing in this section shall preclude any State

commission from enforcing such procedures with respect to

intrastate services.

`(b) LIABILITY FOR CHARGES- Any telecommunications carrier that

violates the verification procedures described in subsection (a)

and that collects charges for telephone exchange service or

telephone toll service from a subscriber shall be liable to the

carrier previously selected by the subscriber in an amount equal to

all charges paid by such subscriber after such violation, in

accordance with such procedures as the Commission may prescribe.

The remedies provided by this subsection are in addition to any

other remedies available by law.

`SEC. 259. INFRASTRUCTURE SHARING.

`(a) REGULATIONS REQUIRED- The Commission shall prescribe, within

one year after the date of enactment of the Telecommunications Act

of 1996, regulations that require incumbent local exchange carriers

(as defined in section 251(h)) to make available to any qualifying

carrier such public switched network infrastructure, technology,

information, and telecommunications facilities and functions as may

be requested by such qualifying carrier for the purpose of enabling

such qualifying carrier to provide telecommunications services, or

to provide access to information services, in the service area in

which such qualifying carrier has requested and obtained

designation as an eligible telecommunications carrier under section

214(e).

`(b) TERMS AND CONDITIONS OF REGULATIONS- The regulations

prescribed by the Commission pursuant to this section shall--

`(1) not require a local exchange carrier to which this

section applies to take any action that is economically

unreasonable or that is contrary to the public interest;

`(2) permit, but shall not require, the joint ownership or

operation of public switched network infrastructure and

services by or among such local exchange carrier and a

qualifying carrier;

`(3) ensure that such local exchange carrier will not be

treated by the Commission or any State as a common carrier for

hire or as offering common carrier services with respect to any

infrastructure, technology, information, facilities, or

functions made available to a qualifying carrier in accordance

with regulations issued pursuant to this section;

`(4) ensure that such local exchange carrier makes such

infrastructure, technology, information, facilities, or

functions available to a qualifying carrier on just and

reasonable terms and conditions that permit such qualifying

carrier to fully benefit from the economies of scale and scope

of such local exchange carrier, as determined in accordance

with guidelines prescribed by the Commission in regulations

issued pursuant to this section;

`(5) establish conditions that promote cooperation between

local exchange carriers to which this section applies and

qualifying carriers;

`(6) not require a local exchange carrier to which this

section applies to engage in any infrastructure sharing

agreement for any services or access which are to be provided

or offered to consumers by the qualifying carrier in such local

exchange carrier's telephone exchange area; and

`(7) require that such local exchange carrier file with the

Commission or State for public inspection, any tariffs,

contracts, or other arrangements showing the rates, terms, and

conditions under which such carrier is making available public

switched network infrastructure and functions under this section.

`(c) INFORMATION CONCERNING DEPLOYMENT OF NEW SERVICES AND

EQUIPMENT- A local exchange carrier to which this section applies

that has entered into an infrastructure sharing agreement under

this section shall provide to each party to such agreement timely

information on the planned deployment of telecommunications

services and equipment, including any software or upgrades of

software integral to the use or operation of such

telecommunications equipment.

`(d) DEFINITION- For purposes of this section, the term

`qualifying carrier' means a telecommunications carrier that--

`(1) lacks economies of scale or scope, as determined in

accordance with regulations prescribed by the Commission

pursuant to this section; and

`(2) offers telephone exchange service, exchange access, and

any other service that is included in universal service, to all

consumers without preference throughout the service area for

which such carrier has been designated as an eligible

telecommunications carrier under section 214(e).

`SEC. 260. PROVISION OF TELEMESSAGING SERVICE.

`(a) NONDISCRIMINATION SAFEGUARDS- Any local exchange carrier

subject to the requirements of section 251(c) that provides

telemessaging service--

`(1) shall not subsidize its telemessaging service directly

or indirectly from its telephone exchange service or its

exchange access; and

`(2) shall not prefer or discriminate in favor of its

telemessaging service operations in its provision of

telecommunications services.

`(b) EXPEDITED CONSIDERATION OF COMPLAINTS- The Commission shall

establish procedures for the receipt and review of complaints

concerning violations of subsection (a) or the regulations

thereunder that result in material financial harm to a provider of

telemessaging service. Such procedures shall ensure that the

Commission will make a final determination with respect to any such

complaint within 120 days after receipt of the complaint. If the

complaint contains an appropriate showing that the alleged

violation occurred, the Commission shall, within 60 days after

receipt of the complaint, order the local exchange carrier and any

affiliates to cease engaging in such violation pending such final

determination.

`(c) DEFINITION- As used in this section, the term `telemessaging

service' means voice mail and voice storage and retrieval services,

any live operator services used to record, transcribe, or relay

messages (other than telecommunications relay services), and any

ancillary services offered in combination with these services.

`SEC. 261. EFFECT ON OTHER REQUIREMENTS.

`(a) COMMISSION REGULATIONS- Nothing in this part shall be

construed to prohibit the Commission from enforcing regulations

prescribed prior to the date of enactment of the Telecommunications

Act of 1996 in fulfilling the requirements of this part, to the

extent that such regulations are not inconsistent with the

provisions of this part.

`(b) EXISTING STATE REGULATIONS- Nothing in this part shall be

construed to prohibit any State commission from enforcing

regulations prescribed prior to the date of enactment of the

Telecommunications Act of 1996, or from prescribing regulations

after such date of enactment, in fulfilling the requirements of

this part, if such regulations are not inconsistent with the

provisions of this part.

`(c) ADDITIONAL STATE REQUIREMENTS- Nothing in this part

precludes a State from imposing requirements on a

telecommunications carrier for intrastate services that are

necessary to further competition in the provision of telephone

exchange service or exchange access, as long as the State's

requirements are not inconsistent with this part or the

Commission's regulations to implement this part.'.

(b) DESIGNATION OF PART I- Title II of the Act is further amended

by inserting before the heading of section 201 the following new

heading:

`PART I--COMMON CARRIER REGULATION'.

(c) STYLISTIC CONSISTENCY- The Act is amended so that--

(1) the designation and heading of each title of the Act

shall be in the form and typeface of the designation and

heading of this title of this Act; and

(2) the designation and heading of each part of each title of

the Act shall be in the form and typeface of the designation

and heading of part I of title II of the Act, as amended by

subsection (a).

SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

(a) IN GENERAL- Section 214 (47 U.S.C. 214) is amended by adding

at the end thereof the following new subsection:

`(e) PROVISION OF UNIVERSAL SERVICE-

`(1) ELIGIBLE TELECOMMUNICATIONS CARRIERS- A common carrier

designated as an eligible telecommunications carrier under

paragraph (2) or (3) shall be eligible to receive universal

service support in accordance with section 254 and shall,

throughout the service area for which the designation is

received--

`(A) offer the services that are supported by Federal

universal service support mechanisms under section 254(c),

either using its own facilities or a combination of its own

facilities and resale of another carrier's services

(including the services offered by another eligible

telecommunications carrier); and

`(B) advertise the availability of such services and the

charges therefor using media of general distribution.

`(2) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS- A

State commission shall upon its own motion or upon request

designate a common carrier that meets the requirements of

paragraph (1) as an eligible telecommunications carrier for a

service area designated by the State commission. Upon request

and consistent with the public interest, convenience, and

necessity, the State commission may, in the case of an area

served by a rural telephone company, and shall, in the case of

all other areas, designate more than one common carrier as an

eligible telecommunications carrier for a service area

designated by the State commission, so long as each additional

requesting carrier meets the requirements of paragraph (1).

Before designating an additional eligible telecommunications

carrier for an area served by a rural telephone company, the

State commission shall find that the designation is in the

public interest.

`(3) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS FOR

UNSERVED AREAS- If no common carrier will provide the services

that are supported by Federal universal service support

mechanisms under section 254(c) to an unserved community or any

portion thereof that requests such service, the Commission,

with respect to interstate services, or a State commission,

with respect to intrastate services, shall determine which

common carrier or carriers are best able to provide such

service to the requesting unserved community or portion thereof

and shall order such carrier or carriers to provide such

service for that unserved community or portion thereof. Any

carrier or carriers ordered to provide such service under this

paragraph shall meet the requirements of paragraph (1) and

shall be designated as an eligible telecommunications carrier

for that community or portion thereof.

`(4) RELINQUISHMENT OF UNIVERSAL SERVICE- A State commission

shall permit an eligible telecommunications carrier to

relinquish its designation as such a carrier in any area served

by more than one eligible telecommunications carrier. An

eligible telecommunications carrier that seeks to relinquish

its eligible telecommunications carrier designation for an area

served by more than one eligible telecommunications carrier

shall give advance notice to the State commission of such

relinquishment. Prior to permitting a telecommunications

carrier designated as an eligible telecommunications carrier to

cease providing universal service in an area served by more

than one eligible telecommunications carrier, the State

commission shall require the remaining eligible

telecommunications carrier or carriers to ensure that all

customers served by the relinquishing carrier will continue to

be served, and shall require sufficient notice to permit the

purchase or construction of adequate facilities by any

remaining eligible telecommunications carrier. The State

commission shall establish a time, not to exceed one year after

the State commission approves such relinquishment under this

paragraph, within which such purchase or construction shall be

completed.

`(5) SERVICE AREA DEFINED- The term `service area' means a

geographic area established by a State commission for the

purpose of determining universal service obligations and

support mechanisms. In the case of an area served by a rural

telephone company, `service area' means such company's `study

area' unless and until the Commission and the States, after

taking into account recommendations of a Federal-State Joint

Board instituted under section 410(c), establish a different

definition of service area for such company.'.

SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 and

following) is amended by redesignating sections 34 and 35 as

sections 35 and 36, respectively, and by inserting the following

new section after section 33:

`SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

`(a) DEFINITIONS- For purposes of this section--

`(1) EXEMPT TELECOMMUNICATIONS COMPANY- The term `exempt

telecommunications company' means any person determined by the

Federal Communications Commission to be engaged directly or

indirectly, wherever located, through one or more affiliates

(as defined in section 2(a)(11)(B)), and exclusively in the

business of providing---

`(A) telecommunications services;

`(B) information services;

`(C) other services or products subject to the

jurisdiction of the Federal Communications Commission; or

`(D) products or services that are related or incidental

to the provision of a product or service described in

subparagraph (A), (B), or (C).

No person shall be deemed to be an exempt telecommunications

company under this section unless such person has applied to

the Federal Communications Commission for a determination under

this paragraph. A person applying in good faith for such a

determination shall be deemed an exempt telecommunications

company under this section, with all of the exemptions provided

by this section, until the Federal Communications Commission

makes such determination. The Federal Communications Commission

shall make such determination within 60 days of its receipt of

any such application filed after the enactment of this section

and shall notify the Commission whenever a determination is

made under this paragraph that any person is an exempt

telecommunications company. Not later than 12 months after the

date of enactment of this section, the Federal Communications

Commission shall promulgate rules implementing the provisions

of this paragraph which shall be applicable to applications

filed under this paragraph after the effective date of such

rules.

`(2) OTHER TERMS- For purposes of this section, the terms

`telecommunications services' and `information services' shall

have the same meanings as provided in the Communications Act of

1934.

`(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILITIES- If

a rate or charge for the sale of electric energy or natural gas

(other than any portion of a rate or charge which represents

recovery of the cost of a wholesale rate or charge) for, or in

connection with, assets of a public utility company that is an

associate company or affiliate of a registered holding company was

in effect under the laws of any State as of December 19, 1995, the

public utility company owning such assets may not sell such assets

to an exempt telecommunications company that is an associate

company or affiliate unless State commissions having jurisdiction

over such public utility company approve such sale. Nothing in

this subsection shall preempt the otherwise applicable authority of

any State to approve or disapprove the sale of such assets. The

approval of the Commission under this Act shall not be required for

the sale of assets as provided in this subsection.

`(c) OWNERSHIP OF ETCS BY EXEMPT HOLDING COMPANIES-

Notwithstanding any provision of this Act, a holding company that

is exempt under section 3 of this Act shall be permitted, without

condition or limitation under this Act, to acquire and maintain an

interest in the business of one or more exempt telecommunications

companies.

`(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPANIES-

Notwithstanding any provision of this Act, a registered holding

company shall be permitted (without the need to apply for, or

receive, approval from the Commission, and otherwise without

condition under this Act) to acquire and hold the securities, or an

interest in the business, of one or more exempt telecommunications

companies.

`(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS AND

REGISTERED HOLDING COMPANIES- The relationship between an exempt

telecommunications company and a registered holding company, its

affiliates and associate companies, shall remain subject to the

jurisdiction of the Commission under this Act: [Italic->]

Provided, [<-Italic] That--

`(1) section 11 of this Act shall not prohibit the ownership

of an interest in the business of one or more exempt

telecommunications companies by a registered holding company

(regardless of activities engaged in or where facilities owned

or operated by such exempt telecommunications companies are

located), and such ownership by a registered holding company

shall be deemed consistent with the operation of an integrated

public utility system;

`(2) the ownership of an interest in the business of one or

more exempt telecommunications companies by a registered

holding company (regardless of activities engaged in or where

facilities owned or operated by such exempt telecommunications

companies are located) shall be considered as reasonably

incidental, or economically necessary or appropriate, to the

operations of an integrated public utility system;

`(3) the Commission shall have no jurisdiction under this Act

over, and there shall be no restriction or approval required

under this Act with respect to (A) the issue or sale of a

security by a registered holding company for purposes of

financing the acquisition of an exempt telecommunications

company, or (B) the guarantee of a security of an exempt

telecommunications company by a registered holding company; and

`(4) except for costs that should be fairly and equitably

allocated among companies that are associate companies of a

registered holding company, the Commission shall have no

jurisdiction under this Act over the sales, service, and

construction contracts between an exempt telecommunications

company and a registered holding company, its affiliates and

associate companies.

`(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND ACTIVITIES

OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYSTEMS-

`(1) OBLIGATIONS TO REPORT INFORMATION- Any registered

holding company or subsidiary thereof that acquires or holds

the securities, or an interest in the business, of an exempt

telecommunications company shall file with the Commission such

information as the Commission, by rule, may prescribe

concerning--

`(A) investments and activities by the registered holding

company, or any subsidiary thereof, with respect to exempt

telecommunications companies, and

`(B) any activities of an exempt telecommunications

company within the holding company system,

that are reasonably likely to have a material impact on the

financial or operational condition of the holding company system.

`(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION- If, based

on reports provided to the Commission pursuant to paragraph (1)

of this subsection or other available information, the

Commission reasonably concludes that it has concerns regarding

the financial or operational condition of any registered

holding company or any subsidiary thereof (including an exempt

telecommunications company), the Commission may require such

registered holding company to make additional reports and

provide additional information.

`(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION-

Notwithstanding any other provision of law, the Commission

shall not be compelled to disclose any information required to

be reported under this subsection. Nothing in this subsection

shall authorize the Commission to withhold the information from

Congress, or prevent the Commission from complying with a

request for information from any other Federal or State

department or agency requesting the information for purposes

within the scope of its jurisdiction. For purposes of section

552 of title 5, United States Code, this subsection shall be

considered a statute described in subsection (b)(3)(B) of such

section 552.

`(g) ASSUMPTION OF LIABILITIES- Any public utility company that

is an associate company, or an affiliate, of a registered holding

company and that is subject to the jurisdiction of a State

commission with respect to its retail electric or gas rates shall

not issue any security for the purpose of financing the

acquisition, ownership, or operation of an exempt

telecommunications company. Any public utility company that is an

associate company, or an affiliate, of a registered holding company

and that is subject to the jurisdiction of a State commission with

respect to its retail electric or gas rates shall not assume any

obligation or liability as guarantor, endorser, surety, or

otherwise by the public utility company in respect of any security

of an exempt telecommunications company.

`(h) PLEDGING OR MORTGAGING OF ASSETS- Any public utility company

that is an associate company, or affiliate, of a registered holding

company and that is subject to the jurisdiction of a State

commission with respect to its retail electric or gas rates shall

not pledge, mortgage, or otherwise use as collateral any assets of

the public utility company or assets of any subsidiary company

thereof for the benefit of an exempt telecommunications company.

`(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS- A public

utility company may enter into a contract to purchase services or

products described in subsection (a)(1) from an exempt

telecommunications company that is an affiliate or associate

company of the public utility company only if--

`(1) every State commission having jurisdiction over the

retail rates of such public utility company approves such

contract; or

`(2) such public utility company is not subject to State

commission retail rate regulation and the purchased services or

products--

`(A) would not be resold to any affiliate or associate

company; or

`(B) would be resold to an affiliate or associate company

and every State commission having jurisdiction over the

retail rates of such affiliate or associate company makes

the determination required by subparagraph (A).

The requirements of this subsection shall not apply in any case in

which the State or the State commission concerned publishes a

notice that the State or State commission waives its authority

under this subsection.

`(j) NONPREEMPTION OF RATE AUTHORITY- Nothing in this Act shall

preclude the Federal Energy Regulatory Commission or a State

commission from exercising its jurisdiction under otherwise

applicable law to determine whether a public utility company may

recover in rates the costs of products or services purchased from

or sold to an associate company or affiliate that is an exempt

telecommunications company, regardless of whether such costs are

incurred through the direct or indirect purchase or sale of

products or services from such associate company or affiliate.

`(k) RECIPROCAL ARRANGEMENTS PROHIBITED- Reciprocal arrangements

among companies that are not affiliates or associate companies of

each other that are entered into in order to avoid the provisions

of this section are prohibited.

`(l) BOOKS AND RECORDS- (1) Upon written order of a State

commission, a State commission may examine the books, accounts,

memoranda, contracts, and records of--

`(A) a public utility company subject to its regulatory

authority under State law;

`(B) any exempt telecommunications company selling products

or services to such public utility company or to an associate

company of such public utility company; and

`(C) any associate company or affiliate of an exempt

telecommunications company which sells products or services to

a public utility company referred to in subparagraph (A),

wherever located, if such examination is required for the effective

discharge of the State commission's regulatory responsibilities

affecting the provision of electric or gas service in connection

with the activities of such exempt telecommunications company.

`(2) Where a State commission issues an order pursuant to

paragraph (1), the State commission shall not publicly disclose

trade secrets or sensitive commercial information.

`(3) Any United States district court located in the State in

which the State commission referred to in paragraph (1) is located

shall have jurisdiction to enforce compliance with this subsection.

`(4) Nothing in this section shall--

`(A) preempt applicable State law concerning the provision of

records and other information; or

`(B) in any way limit rights to obtain records and other

information under Federal law, contracts, or otherwise.

`(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS-

`(1) STATE MAY ORDER AUDIT- Any State commission with

jurisdiction over a public utility company that--

`(A) is an associate company of a registered holding

company; and

`(B) transacts business, directly or indirectly, with a

subsidiary company, an affiliate or an associate company

that is an exempt telecommunications company,

may order an independent audit to be performed, no more

frequently than on an annual basis, of all matters deemed

relevant by the selected auditor that reasonably relate to

retail rates: [Italic->] Provided [<-Italic] , That such

matters relate, directly or indirectly, to transactions or

transfers between the public utility company subject to its

jurisdiction and such exempt telecommunications company.

`(2) SELECTION OF FIRM TO CONDUCT AUDIT- (A) If a State

commission orders an audit in accordance with paragraph (1),

the public utility company and the State commission shall

jointly select, within 60 days, a firm to perform the audit.

The firm selected to perform the audit shall possess

demonstrated qualifications relating to--

`(i) competency, including adequate technical training

and professional proficiency in each discipline necessary

to carry out the audit; and

`(ii) independence and objectivity, including that the

firm be free from personal or external impairments to

independence, and should assume an independent position

with the State commission and auditee, making certain that

the audit is based upon an impartial consideration of all

pertinent facts and responsible opinions.

`(B) The public utility company and the exempt

telecommunications company shall cooperate fully with all

reasonable requests necessary to perform the audit and the

public utility company shall bear all costs of having the audit

performed.

`(3) AVAILABILITY OF AUDITOR'S REPORT- The auditor's report

shall be provided to the State commission not later than 6

months after the selection of the auditor, and provided to the

public utility company not later than 60 days thereafter.

`(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION- Nothing in

this section shall affect the authority of the Federal

Communications Commission under the Communications Act of 1934, or

the authority of State commissions under State laws concerning the

provision of telecommunications services, to regulate the

activities of an exempt telecommunications company.'.

SEC. 104. NONDISCRIMINATION PRINCIPLE.

Section 1 (47 U.S.C. 151) is amended by inserting after `to all

the people of the United States' the following: `, without

discrimination on the basis of race, color, religion, national

origin, or sex,'.

SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

SEC. 151. BELL OPERATING COMPANY PROVISIONS.

(a) ESTABLISHMENT OF PART III OF TITLE II- Title II is amended by

adding at the end of part II (as added by section 101) the

following new part:

`PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

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

`(a) GENERAL LIMITATION- Neither a Bell operating company, nor

any affiliate of a Bell operating company, may provide interLATA

services except as provided in this section.

`(b) INTERLATA SERVICES TO WHICH THIS SECTION APPLIES-

`(1) IN-REGION SERVICES- A Bell operating company, or any

affiliate of that Bell operating company, may provide interLATA

services originating in any of its in-region States (as defined

in subsection (i)) if the Commission approves the application

of such company for such State under subsection (d)(3).

`(2) OUT-OF-REGION SERVICES- A Bell operating company, or any

affiliate of that Bell operating company, may provide interLATA

services originating outside its in-region States after the

date of enactment of the Telecommunications Act of 1996,

subject to subsection (j).

`(3) INCIDENTAL INTERLATA SERVICES- A Bell operating company,

or any affiliate of a Bell operating company, may provide

incidental interLATA services (as defined in subsection (g))

originating in any State after the date of enactment of the

Telecommunications Act of 1996.

`(4) TERMINATION- Nothing in this section prohibits a Bell

operating company or any of its affiliates from providing

termination for interLATA services, subject to subsection (j).

`(c) REQUIREMENTS FOR PROVIDING CERTAIN IN-REGION INTERLATA

SERVICES-

`(1) AGREEMENT OR STATEMENT- A Bell operating company meets

the requirements of this paragraph if it meets the requirements

of subparagraph (A) or subparagraph (B) of this paragraph for

each State for which the authorization is sought.

`(A) PRESENCE OF A FACILITIES-BASED COMPETITOR- A Bell

operating company meets the requirements of this

subparagraph if it has entered into one or more binding

agreements that have been approved under section 252

specifying the terms and conditions under which the Bell

operating company is providing access and interconnection

to its network facilities for the network facilities of one

or more unaffiliated competing providers of telephone

exchange service (as defined in section 3(47)(A), but

excluding exchange access) to residential and business

subscribers. For the purpose of this subparagraph, such

telephone exchange service may be offered by such competing

providers either exclusively over their own telephone

exchange service facilities or predominantly over their own

telephone exchange service facilities in combination with

the resale of the telecommunications services of another

carrier. For the purpose of this subparagraph, services

provided pursuant to subpart K of part 22 of the

Commission's regulations (47 C.F.R. 22.901 et seq.) shall

not be considered to be telephone exchange services.

`(B) FAILURE TO REQUEST ACCESS- A Bell operating company

meets the requirements of this subparagraph if, after 10

months after the date of enactment of the

Telecommunications Act of 1996, no such provider has

requested the access and interconnection described in

subparagraph (A) before the date which is 3 months before

the date the company makes its application under subsection

(d)(1), and a statement of the terms and conditions that

the company generally offers to provide such access and

interconnection has been approved or permitted to take

effect by the State commission under section 252(f). For

purposes of this subparagraph, a Bell operating company

shall be considered not to have received any request for

access and interconnection if the State commission of such

State certifies that the only provider or providers making

such a request have (i) failed to negotiate in good faith

as required by section 252, or (ii) violated the terms of

an agreement approved under section 252 by the provider's

failure to comply, within a reasonable period of time, with

the implementation schedule contained in such agreement.

`(2) SPECIFIC INTERCONNECTION REQUIREMENTS-

`(A) AGREEMENT REQUIRED- A Bell operating company meets

the requirements of this paragraph if, within the State for

which the authorization is sought--

`(i)(I) such company is providing access and

interconnection pursuant to one or more agreements

described in paragraph (1)(A), or

`(II) such company is generally offering access and

interconnection pursuant to a statement described in

paragraph (1)(B), and

`(ii) such access and interconnection meets the

requirements of subparagraph (B) of this paragraph.

`(B) COMPETITIVE CHECKLIST- Access or interconnection

provided or generally offered by a Bell operating company

to other telecommunications carriers meets the requirements

of this subparagraph if such access and interconnection

includes each of the following:

`(i) Interconnection in accordance with the

requirements of sections 251(c)(2) and 252(d)(1).

`(ii) Nondiscriminatory access to network elements in

accordance with the requirements of sections 251(c)(3)

and 252(d)(1).

`(iii) Nondiscriminatory access to the poles, ducts,

conduits, and rights-of-way owned or controlled by the

Bell operating company at just and reasonable rates in

accordance with the requirements of section 224.

`(iv) Local loop transmission from the central office

to the customer's premises, unbundled from local

switching or other services.

`(v) Local transport from the trunk side of a

wireline local exchange carrier switch unbundled from

switching or other services.

`(vi) Local switching unbundled from transport, local

loop transmission, or other services.

`(vii) Nondiscriminatory access to--

`(I) 911 and E911 services;

`(II) directory assistance services to allow the other carrier's

customers to obtain telephone numbers; and

`(III) operator call completion services.

`(viii) White pages directory listings for customers

of the other carrier's telephone exchange service.

`(ix) Until the date by which telecommunications

numbering administration guidelines, plan, or rules are

established, nondiscriminatory access to telephone

numbers for assignment to the other carrier's telephone

exchange service customers. After that date, compliance

with such guidelines, plan, or rules.

`(x) Nondiscriminatory access to databases and

associated signaling necessary for call routing and

completion.

`(xi) Until the date by which the Commission issues

regulations pursuant to section 251 to require number

portability, interim telecommunications number

portability through remote call forwarding, direct

inward dialing trunks, or other comparable

arrangements, with as little impairment of functioning,

quality, reliability, and convenience as possible.

After that date, full compliance with such regulations.

`(xii) Nondiscriminatory access to such services or

information as are necessary to allow the requesting

carrier to implement local dialing parity in accordance

with the requirements of section 251(b)(3).

`(xiii) Reciprocal compensation arrangements in

accordance with the requirements of section 252(d)(2).

`(xiv) Telecommunications services are available for

resale in accordance with the requirements of sections

251(c)(4) and 252(d)(3).

`(d) ADMINISTRATIVE PROVISIONS-

`(1) APPLICATION TO COMMISSION- On and after the date of

enactment of the Telecommunications Act of 1996, a Bell

operating company or its affiliate may apply to the Commission

for authorization to provide interLATA services originating in

any in-region State. The application shall identify each State

for which the authorization is sought.

`(2) CONSULTATION-

`(A) CONSULTATION WITH THE ATTORNEY GENERAL- The

Commission shall notify the Attorney General promptly of

any application under paragraph (1). Before making any

determination under this subsection, the Commission shall

consult with the Attorney General, and if the Attorney

General submits any comments in writing, such comments

shall be included in the record of the Commission's

decision. In consulting with and submitting comments to the

Commission under this paragraph, the Attorney General shall

provide to the Commission an evaluation of the application

using any standard the Attorney General considers

appropriate. The Commission shall give substantial weight

to the Attorney General's evaluation, but such evaluation

shall not have any preclusive effect on any Commission

decision under paragraph (3).

`(B) CONSULTATION WITH STATE COMMISSIONS- Before making

any determination under this subsection, the Commission

shall consult with the State commission of any State that

is the subject of the application in order to verify the

compliance of the Bell operating company with the

requirements of subsection (c).

`(3) DETERMINATION- Not later than 90 days after receiving an

application under paragraph (1), the Commission shall issue a

written determination approving or denying the authorization

requested in the application for each State. The Commission

shall not approve the authorization requested in an application

submitted under paragraph (1) unless it finds that--

`(A) the petitioning Bell operating company has met the

requirements of subsection (c)(1) and--

`(i) with respect to access and interconnection

provided pursuant to subsection (c)(1)(A), has fully

implemented the competitive checklist in subsection

(c)(2)(B); or

`(ii) with respect to access and interconnection

generally offered pursuant to a statement under

subsection (c)(1)(B), such statement offers all of the

items included in the competitive checklist in

subsection (c)(2)(B);

`(B) the requested authorization will be carried out in

accordance with the requirements of section 272; and

`(C) the requested authorization is consistent with the

public interest, convenience, and necessity.

The Commission shall state the basis for its approval or denial

of the application.

`(4) LIMITATION ON COMMISSION- The Commission may not, by

rule or otherwise, limit or extend the terms used in the

competitive checklist set forth in subsection (c)(2)(B).

`(5) PUBLICATION- Not later than 10 days after issuing a

determination under paragraph (3), the Commission shall publish

in the Federal Register a brief description of the determination.

`(6) ENFORCEMENT OF CONDITIONS-

`(A) COMMISSION AUTHORITY- If at any time after the

approval of an application under paragraph (3), the

Commission determines that a Bell operating company has

ceased to meet any of the conditions required for such

approval, the Commission may, after notice and opportunity

for a hearing--

`(i) issue an order to such company to correct the

deficiency;

`(ii) impose a penalty on such company pursuant to

title V; or

`(iii) suspend or revoke such approval.

`(B) RECEIPT AND REVIEW OF COMPLAINTS- The Commission

shall establish procedures for the review of complaints

concerning failures by Bell operating companies to meet

conditions required for approval under paragraph (3).

Unless the parties otherwise agree, the Commission shall

act on such complaint within 90 days.

`(e) LIMITATIONS-

`(1) JOINT MARKETING OF LOCAL AND LONG DISTANCE SERVICES-

Until a Bell operating company is authorized pursuant to

subsection (d) to provide interLATA services in an in-region

State, or until 36 months have passed since the date of

enactment of the Telecommunications Act of 1996, whichever is

earlier, a telecommunications carrier that serves greater than

5 percent of the Nation's presubscribed access lines may not

jointly market in such State telephone exchange service

obtained from such company pursuant to section 251(c)(4) with

interLATA services offered by that telecommunications carrier.

`(2) INTRALATA TOLL DIALING PARITY-

`(A) PROVISION REQUIRED- A Bell operating company granted

authority to provide interLATA services under subsection

(d) shall provide intraLATA toll dialing parity throughout

that State coincident with its exercise of that authority.

`(B) LIMITATION- Except for single-LATA States and States

that have issued an order by December 19, 1995, requiring a

Bell operating company to implement intraLATA toll dialing

parity, a State may not require a Bell operating company to

implement intraLATA toll dialing parity in that State

before a Bell operating company has been granted authority

under this section to provide interLATA services

originating in that State or before 3 years after the date

of enactment of the Telecommunications Act of 1996,

whichever is earlier. Nothing in this subparagraph

precludes a State from issuing an order requiring intraLATA

toll dialing parity in that State prior to either such date

so long as such order does not take effect until after the

earlier of either such dates.

`(f) EXCEPTION FOR PREVIOUSLY AUTHORIZED ACTIVITIES- Neither

subsection (a) nor section 273 shall prohibit a Bell operating

company or affiliate from engaging, at any time after the date of

enactment of the Telecommunications Act of 1996, in any activity to

the extent authorized by, and subject to the terms and conditions

contained in, an order entered by the United States District Court

for the District of Columbia pursuant to section VII or VIII(C) of

the AT&T Consent Decree if such order was entered on or before such

date of enactment, to the extent such order is not reversed or

vacated on appeal. Nothing in this subsection shall be construed to

limit, or to impose terms or conditions on, an activity in which a

Bell operating company is otherwise authorized to engage under any

other provision of this section.

`(g) DEFINITION OF INCIDENTAL INTERLATA SERVICES- For purposes of

this section, the term `incidental interLATA services' means the

interLATA provision by a Bell operating company or its affiliate--

`(1)(A) of audio programming, video programming, or other

programming services to subscribers to such services of such

company or affiliate;

`(B) of the capability for interaction by such subscribers to

select or respond to such audio programming, video programming,

or other programming services;

`(C) to distributors of audio programming or video

programming that such company or affiliate owns or controls, or

is licensed by the copyright owner of such programming (or by

an assignee of such owner) to distribute; or

`(D) of alarm monitoring services;

`(2) of two-way interactive video services or Internet

services over dedicated facilities to or for elementary and

secondary schools as defined in section 254(h)(5);

`(3) of commercial mobile services in accordance with section

332(c) of this Act and with the regulations prescribed by the

Commission pursuant to paragraph (8) of such section;

`(4) of a service that permits a customer that is located in

one LATA to retrieve stored information from, or file

information for storage in, information storage facilities of

such company that are located in another LATA;

`(5) of signaling information used in connection with the

provision of telephone exchange services or exchange access by

a local exchange carrier; or

`(6) of network control signaling information to, and receipt

of such signaling information from, common carriers offering

interLATA services at any location within the area in which

such Bell operating company provides telephone exchange

services or exchange access.

`(h) LIMITATIONS- The provisions of subsection (g) are intended

to be narrowly construed. The interLATA services provided under

subparagraph (A), (B), or (C) of subsection (g)(1) are limited to

those interLATA transmissions incidental to the provision by a Bell

operating company or its affiliate of video, audio, and other

programming services that the company or its affiliate is engaged

in providing to the public. The Commission shall ensure that the

provision of services authorized under subsection (g) by a Bell

operating company or its affiliate will not adversely affect

telephone exchange service ratepayers or competition in any

telecommunications market.

`(i) ADDITIONAL DEFINITIONS- As used in this section--

`(1) IN-REGION STATE- The term `in-region State' means a

State in which a Bell operating company or any of its

affiliates was authorized to provide wireline telephone

exchange service pursuant to the reorganization plan approved

under the AT&T Consent Decree, as in effect on the day before

the date of enactment of the Telecommunications Act of 1996.

`(2) AUDIO PROGRAMMING SERVICES- The term `audio programming

services' means programming provided by, or generally

considered to be comparable to programming provided by, a radio

broadcast station.

`(3) VIDEO PROGRAMMING SERVICES; OTHER PROGRAMMING SERVICES-

The terms `video programming service' and `other programming

services' have the same meanings as such terms have under

section 602 of this Act.

`(j) CERTAIN SERVICE APPLICATIONS TREATED AS IN-REGION SERVICE

APPLICATIONS- For purposes of this section, a Bell operating

company application to provide 800 service, private line service,

or their equivalents that--

`(1) terminate in an in-region State of that Bell operating

company, and

`(2) allow the called party to determine the interLATA carrier,

shall be considered an in-region service subject to the

requirements of subsection (b)(1).

`SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.

`(a) SEPARATE AFFILIATE REQUIRED FOR COMPETITIVE ACTIVITIES-

`(1) IN GENERAL- A Bell operating company (including any

affiliate) which is a local exchange carrier that is subject to

the requirements of section 251(c) may not provide any service

described in paragraph (2) unless it provides that service

through one or more affiliates that--

`(A) are separate from any operating company entity that

is subject to the requirements of section 251(c); and

`(B) meet the requirements of subsection (b).

`(2) SERVICES FOR WHICH A SEPARATE AFFILIATE IS REQUIRED- The

services for which a separate affiliate is required by

paragraph (1) are:

`(A) Manufacturing activities (as defined in section

273(h)).

`(B) Origination of interLATA telecommunications

services, other than--

`(i) incidental interLATA services described in

paragraphs (1), (2), (3), (5), and (6) of section 271(g);

`(ii) out-of-region services described in section

271(b)(2); or

`(iii) previously authorized activities described in

section 271(f).

`(C) InterLATA information services, other than

electronic publishing (as defined in section 274(h)) and

alarm monitoring services (as defined in section 275(e)).

`(b) STRUCTURAL AND TRANSACTIONAL REQUIREMENTS- The separate

affiliate required by this section--

`(1) shall operate independently from the Bell operating

company;

`(2) shall maintain books, records, and accounts in the

manner prescribed by the Commission which shall be separate

from the books, records, and accounts maintained by the Bell

operating company of which it is an affiliate;

`(3) shall have separate officers, directors, and employees

from the Bell operating company of which it is an affiliate;

`(4) may not obtain credit under any arrangement that would

permit a creditor, upon default, to have recourse to the assets

of the Bell operating company; and

`(5) shall conduct all transactions with the Bell operating

company of which it is an affiliate on an arm's length basis

with any such transactions reduced to writing and available for

public inspection.

`(c) NONDISCRIMINATION SAFEGUARDS- In its dealings with its

affiliate described in subsection (a), a Bell operating company--

`(1) may not discriminate between that company or affiliate

and any other entity in the provision or procurement of goods,

services, facilities, and information, or in the establishment

of standards; and

`(2) shall account for all transactions with an affiliate

described in subsection (a) in accordance with accounting

principles designated or approved by the Commission.

`(d) BIENNIAL AUDIT-

`(1) GENERAL REQUIREMENT- A company required to operate a

separate affiliate under this section shall obtain and pay for

a joint Federal/State audit every 2 years conducted by an

independent auditor to determine whether such company has

complied with this section and the regulations promulgated

under this section, and particularly whether such company has

complied with the separate accounting requirements under

subsection (b).

`(2) RESULTS SUBMITTED TO COMMISSION; STATE COMMISSIONS- The

auditor described in paragraph (1) shall submit the results of

the audit to the Commission and to the State commission of each

State in which the company audited provides service, which

shall make such results available for public inspection. Any

party may submit comments on the final audit report.

`(3) ACCESS TO DOCUMENTS- For purposes of conducting audits

and reviews under this subsection--

`(A) the independent auditor, the Commission, and the

State commission shall have access to the financial

accounts and records of each company and of its affiliates

necessary to verify transactions conducted with that

company that are relevant to the specific activities

permitted under this section and that are necessary for the

regulation of rates;

`(B) the Commission and the State commission shall have

access to the working papers and supporting materials of

any auditor who performs an audit under this section; and

`(C) the State commission shall implement appropriate

procedures to ensure the protection of any proprietary

information submitted to it under this section.

`(e) FULFILLMENT OF CERTAIN REQUESTS- A Bell operating company

and an affiliate that is subject to the requirements of section

251(c)--

`(1) shall fulfill any requests from an unaffiliated entity

for telephone exchange service and exchange access within a

period no longer than the period in which it provides such

telephone exchange service and exchange access to itself or to

its affiliates;

`(2) shall not provide any facilities, services, or

information concerning its provision of exchange access to the

affiliate described in subsection (a) unless such facilities,

services, or information are made available to other providers

of interLATA services in that market on the same terms and

conditions;

`(3) shall charge the affiliate described in subsection (a),

or impute to itself (if using the access for its provision of

its own services), an amount for access to its telephone

exchange service and exchange access that is no less than the

amount charged to any unaffiliated interexchange carriers for

such service; and

`(4) may provide any interLATA or intraLATA facilities or

services to its interLATA affiliate if such services or

facilities are made available to all carriers at the same rates

and on the same terms and conditions, and so long as the costs

are appropriately allocated.

`(f) SUNSET-

`(1) MANUFACTURING AND LONG DISTANCE- The provisions of this

section (other than subsection (e)) shall cease to apply with

respect to the manufacturing activities or the interLATA

telecommunications services of a Bell operating company 3 years

after the date such Bell operating company or any Bell

operating company affiliate is authorized to provide interLATA

telecommunications services under section 271(d), unless the

Commission extends such 3-year period by rule or order.

`(2) INTERLATA INFORMATION SERVICES- The provisions of this

section (other than subsection (e)) shall cease to apply with

respect to the interLATA information services of a Bell

operating company 4 years after the date of enactment of the

Telecommunications Act of 1996, unless the Commission extends

such 4-year period by rule or order.

`(3) PRESERVATION OF EXISTING AUTHORITY- Nothing in this

subsection shall be construed to limit the authority of the

Commission under any other section of this Act to prescribe

safeguards consistent with the public interest, convenience,

and necessity.

`(g) JOINT MARKETING-

`(1) AFFILIATE SALES OF TELEPHONE EXCHANGE SERVICES- A Bell

operating company affiliate required by this section may not

market or sell telephone exchange services provided by the Bell

operating company unless that company permits other entities

offering the same or similar service to market and sell its

telephone exchange services.

`(2) BELL OPERATING COMPANY SALES OF AFFILIATE SERVICES- A

Bell operating company may not market or sell interLATA service

provided by an affiliate required by this section within any of

its in-region States until such company is authorized to

provide interLATA services in such State under section 271(d).

`(3) RULE OF CONSTRUCTION- The joint marketing and sale of

services permitted under this subsection shall not be

considered to violate the nondiscrimination provisions of

subsection (c).

`(h) TRANSITION- With respect to any activity in which a Bell

operating company is engaged on the date of enactment of the

Telecommunications Act of 1996, such company shall have one year

from such date of enactment to comply with the requirements of this

section.

`SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.

`(a) AUTHORIZATION- A Bell operating company may manufacture and

provide telecommunications equipment, and manufacture customer

premises equipment, if the Commission authorizes that Bell

operating company or any Bell operating company affiliate to

provide interLATA services under section 271(d), subject to the

requirements of this section and the regulations prescribed

thereunder, except that neither a Bell operating company nor any of

its affiliates may engage in such manufacturing in conjunction with

a Bell operating company not so affiliated or any of its affiliates.

`(b) COLLABORATION; RESEARCH AND ROYALTY AGREEMENTS-

`(1) COLLABORATION- Subsection (a) shall not prohibit a Bell

operating company from engaging in close collaboration with any

manufacturer of customer premises equipment or

telecommunications equipment during the design and development

of hardware, software, or combinations thereof related to such

equipment.

`(2) CERTAIN RESEARCH ARRANGEMENTS; ROYALTY AGREEMENTS-

Subsection (a) shall not prohibit a Bell operating company from--

`(A) engaging in research activities related to

manufacturing, and

`(B) entering into royalty agreements with manufacturers

of telecommunications equipment.

`(c) INFORMATION REQUIREMENTS-

`(1) INFORMATION ON PROTOCOLS AND TECHNICAL REQUIREMENTS-

Each Bell operating company shall, in accordance with

regulations prescribed by the Commission, maintain and file

with the Commission full and complete information with respect

to the protocols and technical requirements for connection with

and use of its telephone exchange service facilities. Each

such company shall report promptly to the Commission any

material changes or planned changes to such protocols and

requirements, and the schedule for implementation of such

changes or planned changes.

`(2) DISCLOSURE OF INFORMATION- A Bell operating company

shall not disclose any information required to be filed under

paragraph (1) unless that information has been filed promptly,

as required by regulation by the Commission.

`(3) ACCESS BY COMPETITORS TO INFORMATION- The Commission may

prescribe such additional regulations under this subsection as

may be necessary to ensure that manufacturers have access to

the information with respect to the protocols and technical

requirements for connection with and use of telephone exchange

service facilities that a Bell operating company makes

available to any manufacturing affiliate or any unaffiliated

manufacturer.

`(4) PLANNING INFORMATION- Each Bell operating company shall

provide, to interconnecting carriers providing telephone

exchange service, timely information on the planned deployment

of telecommunications equipment.

`(d) MANUFACTURING LIMITATIONS FOR STANDARD-SETTING ORGANIZATIONS-

`(1) APPLICATION TO BELL COMMUNICATIONS RESEARCH OR

MANUFACTURERS- Bell Communications Research, Inc., or any

successor entity or affiliate--

`(A) shall not be considered a Bell operating company or

a successor or assign of a Bell operating company at such

time as it is no longer an affiliate of any Bell operating

company; and

`(B) notwithstanding paragraph (3), shall not engage in

manufacturing telecommunications equipment or customer

premises equipment as long as it is an affiliate of more

than 1 otherwise unaffiliated Bell operating company or

successor or assign of any such company.

Nothing in this subsection prohibits Bell Communications

Research, Inc., or any successor entity, from engaging in any

activity in which it is lawfully engaged on the date of

enactment of the Telecommunications Act of 1996. Nothing

provided in this subsection shall render Bell Communications

Research, Inc., or any successor entity, a common carrier under

title II of this Act. Nothing in this subsection restricts any

manufacturer from engaging in any activity in which it is

lawfully engaged on the date of enactment of the

Telecommunications Act of 1996.

`(2) PROPRIETARY INFORMATION- Any entity which establishes

standards for telecommunications equipment or customer premises

equipment, or generic network requirements for such equipment,

or certifies telecommunications equipment or customer premises

equipment, shall be prohibited from releasing or otherwise

using any proprietary information, designated as such by its

owner, in its possession as a result of such activity, for any

purpose other than purposes authorized in writing by the owner

of such information, even after such entity ceases to be so

engaged.

`(3) MANUFACTURING SAFEGUARDS- (A) Except as prohibited in

paragraph (1), and subject to paragraph (6), any entity which

certifies telecommunications equipment or customer premises

equipment manufactured by an unaffiliated entity shall only

manufacture a particular class of telecommunications equipment

or customer premises equipment for which it is undertaking or

has undertaken, during the previous 18 months, certification

activity for such class of equipment through a separate

affiliate.

`(B) Such separate affiliate shall--

`(i) maintain books, records, and accounts separate from

those of the entity that certifies such equipment,

consistent with generally acceptable accounting principles;

`(ii) not engage in any joint manufacturing activities

with such entity; and

`(iii) have segregated facilities and separate employees

with such entity.

`(C) Such entity that certifies such equipment shall--

`(i) not discriminate in favor of its manufacturing

affiliate in the establishment of standards, generic

requirements, or product certification;

`(ii) not disclose to the manufacturing affiliate any

proprietary information that has been received at any time

from an unaffiliated manufacturer, unless authorized in

writing by the owner of the information; and

`(iii) not permit any employee engaged in product

certification for telecommunications equipment or customer

premises equipment to engage jointly in sales or marketing

of any such equipment with the affiliated manufacturer.

`(4) STANDARD-SETTING ENTITIES- Any entity that is not an

accredited standards development organization and that

establishes industry-wide standards for telecommunications

equipment or customer premises equipment, or industry-wide

generic network requirements for such equipment, or that

certifies telecommunications equipment or customer premises

equipment manufactured by an unaffiliated entity, shall--

`(A) establish and publish any industry-wide standard

for, industry-wide generic requirement for, or any

substantial modification of an existing industry-wide

standard or industry-wide generic requirement for,

telecommunications equipment or customer premises equipment

only in compliance with the following procedure--

`(i) such entity shall issue a public notice of its

consideration of a proposed industry-wide standard or

industry-wide generic requirement;

`(ii) such entity shall issue a public invitation to

interested industry parties to fund and participate in

such efforts on a reasonable and nondiscriminatory

basis, administered in such a manner as not to

unreasonably exclude any interested industry party;

`(iii) such entity shall publish a text for comment

by such parties as have agreed to participate in the

process pursuant to clause (ii), provide such parties a

full opportunity to submit comments, and respond to

comments from such parties;

`(iv) such entity shall publish a final text of the

industry-wide standard or industry-wide generic

requirement, including the comments in their entirety,

of any funding party which requests to have its

comments so published; and

`(v) such entity shall attempt, prior to publishing a

text for comment, to agree with the funding parties as

a group on a mutually satisfactory dispute resolution

process which such parties shall utilize as their sole

recourse in the event of a dispute on technical issues

as to which there is disagreement between any funding

party and the entity conducting such activities, except

that if no dispute resolution process is agreed to by

all the parties, a funding party may utilize the

dispute resolution procedures established pursuant to

paragraph (5) of this subsection;

`(B) engage in product certification for

telecommunications equipment or customer premises equipment

manufactured by unaffiliated entities only if--

`(i) such activity is performed pursuant to published

criteria;

`(ii) such activity is performed pursuant to

auditable criteria; and

`(iii) such activity is performed pursuant to

available industry-accepted testing methods and

standards, where applicable, unless otherwise agreed

upon by the parties funding and performing such activity;

`(C) not undertake any actions to monopolize or attempt

to monopolize the market for such services; and

`(D) not preferentially treat its own telecommunications

equipment or customer premises equipment, or that of its

affiliate, over that of any other entity in establishing

and publishing industry-wide standards or industry-wide

generic requirements for, and in certification of,

telecommunications equipment and customer premises equipment.

`(5) ALTERNATE DISPUTE RESOLUTION- Within 90 days after the

date of enactment of the Telecommunications Act of 1996, the

Commission shall prescribe a dispute resolution process to be

utilized in the event that a dispute resolution process is not

agreed upon by all the parties when establishing and publishing

any industry-wide standard or industry-wide generic requirement

for telecommunications equipment or customer premises

equipment, pursuant to paragraph (4)(A)(v). The Commission

shall not establish itself as a party to the dispute resolution

process. Such dispute resolution process shall permit any

funding party to resolve a dispute with the entity conducting

the activity that significantly affects such funding party's

interests, in an open, nondiscriminatory, and unbiased fashion,

within 30 days after the filing of such dispute. Such disputes

may be filed within 15 days after the date the funding party

receives a response to its comments from the entity conducting

the activity. The Commission shall establish penalties to be

assessed for delays caused by referral of frivolous disputes to

the dispute resolution process.

`(6) SUNSET- The requirements of paragraphs (3) and (4) shall

terminate for the particular relevant activity when the

Commission determines that there are alternative sources of

industry-wide standards, industry-wide generic requirements, or

product certification for a particular class of

telecommunications equipment or customer premises equipment

available in the United States. Alternative sources shall be

deemed to exist when such sources provide commercially viable

alternatives that are providing such services to customers. The

Commission shall act on any application for such a

determination within 90 days after receipt of such application,

and shall receive public comment on such application.

`(7) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the

purposes of administering this subsection and the regulations

prescribed thereunder, the Commission shall have the same

remedial authority as the Commission has in administering and

enforcing the provisions of this title with respect to any

common carrier subject to this Act.

`(8) DEFINITIONS- For purposes of this subsection:

`(A) The term `affiliate' shall have the same meaning as

in section 3 of this Act, except that, for purposes of

paragraph (1)(B)--

`(i) an aggregate voting equity interest in Bell

Communications Research, Inc., of at least 5 percent of

its total voting equity, owned directly or indirectly

by more than 1 otherwise unaffiliated Bell operating

company, shall constitute an affiliate relationship; and

`(ii) a voting equity interest in Bell Communications

Research, Inc., by any otherwise unaffiliated Bell

operating company of less than 1 percent of Bell

Communications Research's total voting equity shall not

be considered to be an equity interest under this

paragraph.

`(B) The term `generic requirement' means a description

of acceptable product attributes for use by local exchange

carriers in establishing product specifications for the

purchase of telecommunications equipment, customer premises

equipment, and software integral thereto.

`(C) The term `industry-wide' means activities funded by

or performed on behalf of local exchange carriers for use

in providing wireline telephone exchange service whose

combined total of deployed access lines in the United

States constitutes at least 30 percent of all access lines

deployed by telecommunications carriers in the United

States as of the date of enactment of the

Telecommunications Act of 1996.

`(D) The term `certification' means any technical process

whereby a party determines whether a product, for use by

more than one local exchange carrier, conforms with the

specified requirements pertaining to such product.

`(E) The term `accredited standards development

organization' means an entity composed of industry members

which has been accredited by an institution vested with the

responsibility for standards accreditation by the industry.

`(e) BELL OPERATING COMPANY EQUIPMENT PROCUREMENT AND SALES-

`(1) NONDISCRIMINATION STANDARDS FOR MANUFACTURING- In the

procurement or awarding of supply contracts for

telecommunications equipment, a Bell operating company, or any

entity acting on its behalf, for the duration of the

requirement for a separate subsidiary including manufacturing

under this Act--

`(A) shall consider such equipment, produced or supplied

by unrelated persons; and

`(B) may not discriminate in favor of equipment produced

or supplied by an affiliate or related person.

`(2) PROCUREMENT STANDARDS- Each Bell operating company or

any entity acting on its behalf shall make procurement

decisions and award all supply contracts for equipment,

services, and software on the basis of an objective assessment

of price, quality, delivery, and other commercial factors.

`(3) NETWORK PLANNING AND DESIGN- A Bell operating company

shall, to the extent consistent with the antitrust laws, engage

in joint network planning and design with local exchange

carriers operating in the same area of interest. No

participant in such planning shall be allowed to delay the

introduction of new technology or the deployment of facilities

to provide telecommunications services, and agreement with such

other carriers shall not be required as a prerequisite for such

introduction or deployment.

`(4) SALES RESTRICTIONS- Neither a Bell operating company

engaged in manufacturing nor a manufacturing affiliate of such

a company shall restrict sales to any local exchange carrier of

telecommunications equipment, including software integral to

the operation of such equipment and related upgrades.

`(5) PROTECTION OF PROPRIETARY INFORMATION- A Bell operating

company and any entity it owns or otherwise controls shall

protect the proprietary information submitted for procurement

decisions from release not specifically authorized by the owner

of such information.

`(f) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the purposes

of administering and enforcing the provisions of this section and

the regulations prescribed thereunder, the Commission shall have

the same authority, power, and functions with respect to any Bell

operating company or any affiliate thereof as the Commission has in

administering and enforcing the provisions of this title with

respect to any common carrier subject to this Act.

`(g) ADDITIONAL RULES AND REGULATIONS- The Commission may

prescribe such additional rules and regulations as the Commission

determines are necessary to carry out the provisions of this

section, and otherwise to prevent discrimination and

cross-subsidization in a Bell operating company's dealings with its

affiliate and with third parties.

`(h) DEFINITION- As used in this section, the term

`manufacturing' has the same meaning as such term has under the

AT&T Consent Decree.

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

`(a) LIMITATIONS- No Bell operating company or any affiliate may

engage in the provision of electronic publishing that is

disseminated by means of such Bell operating company's or any of

its affiliates' basic telephone service, except that nothing in

this section shall prohibit a separated affiliate or electronic

publishing joint venture operated in accordance with this section

from engaging in the provision of electronic publishing.

`(b) SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING JOINT VENTURE

REQUIREMENTS- A separated affiliate or electronic publishing joint

venture shall be operated independently from the Bell operating

company. Such separated affiliate or joint venture and the Bell

operating company with which it is affiliated shall--

`(1) maintain separate books, records, and accounts and

prepare separate financial statements;

`(2) not incur debt in a manner that would permit a creditor

of the separated affiliate or joint venture upon default to

have recourse to the assets of the Bell operating company;

`(3) carry out transactions (A) in a manner consistent with

such independence, (B) pursuant to written contracts or tariffs

that are filed with the Commission and made publicly available,

and (C) in a manner that is auditable in accordance with

generally accepted auditing standards;

`(4) value any assets that are transferred directly or

indirectly from the Bell operating company to a separated

affiliate or joint venture, and record any transactions by

which such assets are transferred, in accordance with such

regulations as may be prescribed by the Commission or a State

commission to prevent improper cross subsidies;

`(5) between a separated affiliate and a Bell operating

company--

`(A) have no officers, directors, and employees in common

after the effective date of this section; and

`(B) own no property in common;

`(6) not use for the marketing of any product or service of

the separated affiliate or joint venture, the name, trademarks,

or service marks of an existing Bell operating company except

for names, trademarks, or service marks that are owned by the

entity that owns or controls the Bell operating company;

`(7) not permit the Bell operating company--

`(A) to perform hiring or training of personnel on behalf

of a separated affiliate;

`(B) to perform the purchasing, installation, or

maintenance of equipment on behalf of a separated

affiliate, except for telephone service that it provides

under tariff or contract subject to the provisions of this

section; or

`(C) to perform research and development on behalf of a

separated affiliate;

`(8) each have performed annually a compliance review--

`(A) that is conducted by an independent entity for the

purpose of determining compliance during the preceding

calendar year with any provision of this section; and

`(B) the results of which are maintained by the separated

affiliate or joint venture and the Bell operating company

for a period of 5 years subject to review by any lawful

authority; and

`(9) within 90 days of receiving a review described in

paragraph (8), file a report of any exceptions and corrective

action with the Commission and allow any person to inspect and

copy such report subject to reasonable safeguards to protect

any proprietary information contained in such report from being

used for purposes other than to enforce or pursue remedies

under this section.

`(c) JOINT MARKETING-

`(1) IN GENERAL- Except as provided in paragraph (2)--

`(A) a Bell operating company shall not carry out any

promotion, marketing, sales, or advertising for or in

conjunction with a separated affiliate; and

`(B) a Bell operating company shall not carry out any

promotion, marketing, sales, or advertising for or in

conjunction with an affiliate that is related to the

provision of electronic publishing.

`(2) PERMISSIBLE JOINT ACTIVITIES-

`(A) JOINT TELEMARKETING- A Bell operating company may

provide inbound telemarketing or referral services related

to the provision of electronic publishing for a separated

affiliate, electronic publishing joint venture, affiliate,

or unaffiliated electronic publisher: [Italic->] P

rovided, [<-Italic] That if such services are provided to

a separated affiliate, electronic publishing joint venture,

or affiliate, such services shall be made available to all

electronic publishers on request, on nondiscriminatory terms.

`(B) TEAMING ARRANGEMENTS- A Bell operating company may

engage in nondiscriminatory teaming or business

arrangements to engage in electronic publishing with any

separated affiliate or with any other electronic publisher

if (i) the Bell operating company only provides facilities,

services, and basic telephone service information as

authorized by this section, and (ii) the Bell operating

company does not own such teaming or business arrangement.

`(C) ELECTRONIC PUBLISHING JOINT VENTURES- A Bell

operating company or affiliate may participate on a

nonexclusive basis in electronic publishing joint ventures

with entities that are not a Bell operating company,

affiliate, or separated affiliate to provide electronic

publishing services, if the Bell operating company or

affiliate has not more than a 50 percent direct or indirect

equity interest (or the equivalent thereof) or the right to

more than 50 percent of the gross revenues under a revenue

sharing or royalty agreement in any electronic publishing

joint venture. Officers and employees of a Bell operating

company or affiliate participating in an electronic

publishing joint venture may not have more than 50 percent

of the voting control over the electronic publishing joint

venture. In the case of joint ventures with small, local

electronic publishers, the Commission for good cause shown

may authorize the Bell operating company or affiliate to

have a larger equity interest, revenue share, or voting

control but not to exceed 80 percent. A Bell operating

company participating in an electronic publishing joint

venture may provide promotion, marketing, sales, or

advertising personnel and services to such joint venture.

`(d) BELL OPERATING COMPANY REQUIREMENT- A Bell operating company

under common ownership or control with a separated affiliate or

electronic publishing joint venture shall provide network access

and interconnections for basic telephone service to electronic

publishers at just and reasonable rates that are tariffed (so long

as rates for such services are subject to regulation) and that are

not higher on a per-unit basis than those charged for such services

to any other electronic publisher or any separated affiliate

engaged in electronic publishing.

`(e) PRIVATE RIGHT OF ACTION-

`(1) DAMAGES- Any person claiming that any act or practice of

any Bell operating company, affiliate, or separated affiliate

constitutes a violation of this section may file a complaint

with the Commission or bring suit as provided in section 207 of

this Act, and such Bell operating company, affiliate, or

separated affiliate shall be liable as provided in section 206

of this Act; except that damages may not be awarded for a

violation that is discovered by a compliance review as required

by subsection (b)(7) of this section and corrected within 90

days.

`(2) CEASE AND DESIST ORDERS- In addition to the provisions

of paragraph (1), any person claiming that any act or practice

of any Bell operating company, affiliate, or separated

affiliate constitutes a violation of this section may make

application to the Commission for an order to cease and desist

such violation or may make application in any district court of

the United States of competent jurisdiction for an order

enjoining such acts or practices or for an order compelling

compliance with such requirement.

`(f) SEPARATED AFFILIATE REPORTING REQUIREMENT- Any separated

affiliate under this section shall file with the Commission annual

reports in a form substantially equivalent to the Form 10-K

required by regulations of the Securities and Exchange Commission.

`(g) EFFECTIVE DATES-

`(1) TRANSITION- Any electronic publishing service being

offered to the public by a Bell operating company or affiliate

on the date of enactment of the Telecommunications Act of 1996

shall have one year from such date of enactment to comply with

the requirements of this section.

`(2) SUNSET- The provisions of this section shall not apply

to conduct occurring after 4 years after the date of enactment

of the Telecommunications Act of 1996.

`(h) DEFINITION OF ELECTRONIC PUBLISHING-

`(1) IN GENERAL- The term `electronic publishing' means the

dissemination, provision, publication, or sale to an

unaffiliated entity or person, of any one or more of the

following: news (including sports); entertainment (other than

interactive games); business, financial, legal, consumer, or

credit materials; editorials, columns, or features;

advertising; photos or images; archival or research material;

legal notices or public records; scientific, educational,

instructional, technical, professional, trade, or other

literary materials; or other like or similar information.

`(2) EXCEPTIONS- The term `electronic publishing' shall not

include the following services:

`(A) Information access, as that term is defined by the

AT&T Consent Decree.

`(B) The transmission of information as a common carrier.

`(C) The transmission of information as part of a gateway

to an information service that does not involve the

generation or alteration of the content of information,

including data transmission, address translation, protocol

conversion, billing management, introductory information

content, and navigational systems that enable users to

access electronic publishing services, which do not affect

the presentation of such electronic publishing services to

users.

`(D) Voice storage and retrieval services, including

voice messaging and electronic mail services.

`(E) Data processing or transaction processing services

that do not involve the generation or alteration of the

content of information.

`(F) Electronic billing or advertising of a Bell

operating company's regulated telecommunications services.

`(G) Language translation or data format conversion.

`(H) The provision of information necessary for the

management, control, or operation of a telephone company

telecommunications system.

`(I) The provision of directory assistance that provides

names, addresses, and telephone numbers and does not

include advertising.

`(J) Caller identification services.

`(K) Repair and provisioning databases and credit card

and billing validation for telephone company operations.

`(L) 911-E and other emergency assistance databases.

`(M) Any other network service of a type that is like or

similar to these network services and that does not involve

the generation or alteration of the content of information.

`(N) Any upgrades to these network services that do not

involve the generation or alteration of the content of

information.

`(O) Video programming or full motion video entertainment

on demand.

`(i) ADDITIONAL DEFINITIONS- As used in this section--

`(1) The term `affiliate' means any entity that, directly or

indirectly, owns or controls, is owned or controlled by, or is

under common ownership or control with, a Bell operating

company. Such term shall not include a separated affiliate.

`(2) The term `basic telephone service' means any wireline

telephone exchange service, or wireline telephone exchange

service facility, provided by a Bell operating company in a

telephone exchange area, except that such term does not include--

`(A) a competitive wireline telephone exchange service

provided in a telephone exchange area where another entity

provides a wireline telephone exchange service that was

provided on January 1, 1984, or

`(B) a commercial mobile service.

`(3) The term `basic telephone service information' means

network and customer information of a Bell operating company

and other information acquired by a Bell operating company as a

result of its engaging in the provision of basic telephone

service.

`(4) The term `control' has the meaning that it has in 17

C.F.R. 240.12b-2, the regulations promulgated by the Securities

and Exchange Commission pursuant to the Securities Exchange Act

of 1934 (15 U.S.C. 78a et seq.) or any successor provision to

such section.

`(5) The term `electronic publishing joint venture' means a

joint venture owned by a Bell operating company or affiliate

that engages in the provision of electronic publishing which is

disseminated by means of such Bell operating company's or any

of its affiliates' basic telephone service.

`(6) The term `entity' means any organization, and includes

corporations, partnerships, sole proprietorships, associations,

and joint ventures.

`(7) The term `inbound telemarketing' means the marketing of

property, goods, or services by telephone to a customer or

potential customer who initiated the call.

`(8) The term `own' with respect to an entity means to have a

direct or indirect equity interest (or the equivalent thereof)

of more than 10 percent of an entity, or the right to more than

10 percent of the gross revenues of an entity under a revenue

sharing or royalty agreement.

`(9) The term `separated affiliate' means a corporation under

common ownership or control with a Bell operating company that

does not own or control a Bell operating company and is not

owned or controlled by a Bell operating company and that

engages in the provision of electronic publishing which is

disseminated by means of such Bell operating company's or any

of its affiliates' basic telephone service.

`(10) The term `Bell operating company' has the meaning

provided in section 3, except that such term includes any

entity or corporation that is owned or controlled by such a

company (as so defined) but does not include an electronic

publishing joint venture owned by such an entity or corporation.

`SEC. 275. ALARM MONITORING SERVICES.

`(a) DELAYED ENTRY INTO ALARM MONITORING-

`(1) PROHIBITION- No Bell operating company or affiliate

thereof shall engage in the provision of alarm monitoring

services before the date which is 5 years after the date of

enactment of the Telecommunications Act of 1996.

`(2) EXISTING ACTIVITIES- Paragraph (1) does not prohibit or

limit the provision, directly or through an affiliate, of alarm

monitoring services by a Bell operating company that was

engaged in providing alarm monitoring services as of November

30, 1995, directly or through an affiliate. Such Bell operating

company or affiliate may not acquire any equity interest in, or

obtain financial control of, any unaffiliated alarm monitoring

service entity after November 30, 1995, and until 5 years after

the date of enactment of the Telecommunications Act of 1996,

except that this sentence shall not prohibit an exchange of

customers for the customers of an unaffiliated alarm monitoring

service entity.

`(b) NONDISCRIMINATION- An incumbent local exchange carrier (as

defined in section 251(h)) engaged in the provision of alarm

monitoring services shall--

`(1) provide nonaffiliated entities, upon reasonable request,

with the network services it provides to its own alarm

monitoring operations, on nondiscriminatory terms and

conditions; and

`(2) not subsidize its alarm monitoring services either

directly or indirectly from telephone exchange service

operations.

`(c) EXPEDITED CONSIDERATION OF COMPLAINTS- The Commission shall

establish procedures for the receipt and review of complaints

concerning violations of subsection (b) or the regulations

thereunder that result in material financial harm to a provider of

alarm monitoring service. Such procedures shall ensure that the

Commission will make a final determination with respect to any such

complaint within 120 days after receipt of the complaint. If the

complaint contains an appropriate showing that the alleged

violation occurred, as determined by the Commission in accordance

with such regulations, the Commission shall, within 60 days after

receipt of the complaint, order the incumbent local exchange

carrier (as defined in section 251(h)) and its affiliates to cease

engaging in such violation pending such final determination.

`(d) USE OF DATA- A local exchange carrier may not record or use

in any fashion the occurrence or contents of calls received by

providers of alarm monitoring services for the purposes of

marketing such services on behalf of such local exchange carrier,

or any other entity. Any regulations necessary to enforce this

subsection shall be issued initially within 6 months after the date

of enactment of the Telecommunications Act of 1996.

`(e) DEFINITION OF ALARM MONITORING SERVICE- The term `alarm

monitoring service' means a service that uses a device located at a

residence, place of business, or other fixed premises--

`(1) to receive signals from other devices located at or

about such premises regarding a possible threat at such

premises to life, safety, or property, from burglary, fire,

vandalism, bodily injury, or other emergency, and

`(2) to transmit a signal regarding such threat by means of

transmission facilities of a local exchange carrier or one of

its affiliates to a remote monitoring center to alert a person

at such center of the need to inform the customer or another

person or police, fire, rescue, security, or public safety

personnel of such threat,

but does not include a service that uses a medical monitoring

device attached to an individual for the automatic surveillance of

an ongoing medical condition.

`SEC. 276. PROVISION OF PAYPHONE SERVICE.

`(a) NONDISCRIMINATION SAFEGUARDS- After the effective date of

the rules prescribed pursuant to subsection (b), any Bell operating

company that provides payphone service--

`(1) shall not subsidize its payphone service directly or

indirectly from its telephone exchange service operations or

its exchange access operations; and

`(2) shall not prefer or discriminate in favor of its

payphone service.

`(b) REGULATIONS-

`(1) CONTENTS OF REGULATIONS- In order to promote competition

among payphone service providers and promote the widespread

deployment of payphone services to the benefit of the general

public, within 9 months after the date of enactment of the

Telecommunications Act of 1996, the Commission shall take all

actions necessary (including any reconsideration) to prescribe

regulations that--

`(A) establish a per call compensation plan to ensure

that all payphone service providers are fairly compensated

for each and every completed intrastate and interstate call

using their payphone, except that emergency calls and

telecommunications relay service calls for hearing disabled

individuals shall not be subject to such compensation;

`(B) discontinue the intrastate and interstate carrier

access charge payphone service elements and payments in

effect on such date of enactment, and all intrastate and

interstate payphone subsidies from basic exchange and

exchange access revenues, in favor of a compensation plan

as specified in subparagraph (A);

`(C) prescribe a set of nonstructural safeguards for Bell

operating company payphone service to implement the

provisions of paragraphs (1) and (2) of subsection (a),

which safeguards shall, at a minimum, include the

nonstructural safeguards equal to those adopted in the

Computer Inquiry-III (CC Docket No. 90-623) proceeding;

`(D) provide for Bell operating company payphone service

providers to have the same right that independent payphone

providers have to negotiate with the location provider on

the location provider's selecting and contracting with,

and, subject to the terms of any agreement with the

location provider, to select and contract with, the

carriers that carry interLATA calls from their payphones,

unless the Commission determines in the rulemaking pursuant

to this section that it is not in the public interest; and

`(E) provide for all payphone service providers to have

the right to negotiate with the location provider on the

location provider's selecting and contracting with, and,

subject to the terms of any agreement with the location

provider, to select and contract with, the carriers that

carry intraLATA calls from their payphones.

`(2) PUBLIC INTEREST TELEPHONES- In the rulemaking conducted

pursuant to paragraph (1), the Commission shall determine

whether public interest payphones, which are provided in the

interest of public health, safety, and welfare, in locations

where there would otherwise not be a payphone, should be

maintained, and if so, ensure that such public interest

payphones are supported fairly and equitably.

`(3) EXISTING CONTRACTS- Nothing in this section shall affect

any existing contracts between location providers and payphone

service providers or interLATA or intraLATA carriers that are

in force and effect as of the date of enactment of the

Telecommunications Act of 1996.

`(c) STATE PREEMPTION- To the extent that any State requirements

are inconsistent with the Commission's regulations, the

Commission's regulations on such matters shall preempt such State

requirements.

`(d) DEFINITION- As used in this section, the term `payphone

service' means the provision of public or semi-public pay

telephones, the provision of inmate telephone service in

correctional institutions, and any ancillary services.'.

(b) REVIEW OF ENTRY DECISIONS- Section 402(b) (47 U.S.C. 402(b))

is amended--

(1) in paragraph (6), by striking `(3), and (4)' and

inserting `(3), (4), and (9)'; and

(2) by adding at the end the following new paragraph:

`(9) By any applicant for authority to provide interLATA services

under section 271 of this Act whose application is denied by the

Commission.'.

TITLE II--BROADCAST SERVICES

SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.

Title III is amended by inserting after section 335 (47 U.S.C.

335) the following new section:

`SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.

`(a) COMMISSION ACTION- If the Commission determines to issue

additional licenses for advanced television services, the

Commission--

`(1) should limit the initial eligibility for such licenses

to persons that, as of the date of such issuance, are licensed

to operate a television broadcast station or hold a permit to

construct such a station (or both); and

`(2) shall adopt regulations that allow the holders of such

licenses to offer such ancillary or supplementary services on

designated frequencies as may be consistent with the public

interest, convenience, and necessity.

`(b) CONTENTS OF REGULATIONS- In prescribing the regulations

required by subsection (a), the Commission shall--

`(1) only permit such licensee or permittee to offer

ancillary or supplementary services if the use of a designated

frequency for such services is consistent with the technology

or method designated by the Commission for the provision of

advanced television services;

`(2) limit the broadcasting of ancillary or supplementary

services on designated frequencies so as to avoid derogation of

any advanced television services, including high definition

television broadcasts, that the Commission may require using

such frequencies;

`(3) apply to any other ancillary or supplementary service

such of the Commission's regulations as are applicable to the

offering of analogous services by any other person, except that

no ancillary or supplementary service shall have any rights to

carriage under section 614 or 615 or be deemed a multichannel

video programming distributor for purposes of section 628;

`(4) adopt such technical and other requirements as may be

necessary or appropriate to assure the quality of the signal

used to provide advanced television services, and may adopt

regulations that stipulate the minimum number of hours per day

that such signal must be transmitted; and

`(5) prescribe such other regulations as may be necessary for

the protection of the public interest, convenience, and

necessity.

`(c) RECOVERY OF LICENSE- If the Commission grants a license for

advanced television services to a person that, as of the date of

such issuance, is licensed to operate a television broadcast

station or holds a permit to construct such a station (or both),

the Commission shall, as a condition of such license, require that

either the additional license or the original license held by the

licensee be surrendered to the Commission for reallocation or

reassignment (or both) pursuant to Commission regulation.

`(d) PUBLIC INTEREST REQUIREMENT- Nothing in this section shall

be construed as relieving a television broadcasting station from

its obligation to serve the public interest, convenience, and

necessity. In the Commission's review of any application for

renewal of a broadcast license for a television station that

provides ancillary or supplementary services, the television

licensee shall establish that all of its program services on the

existing or advanced television spectrum are in the public

interest. Any violation of the Commission rules applicable to

ancillary or supplementary services shall reflect upon the

licensee's qualifications for renewal of its license.

`(e) FEES-

`(1) SERVICES TO WHICH FEES APPLY- If the regulations

prescribed pursuant to subsection (a) permit a licensee to

offer ancillary or supplementary services on a designated

frequency--

`(A) for which the payment of a subscription fee is

required in order to receive such services, or

`(B) for which the licensee directly or indirectly

receives compensation from a third party in return for

transmitting material furnished by such third party (other

than commercial advertisements used to support broadcasting

for which a subscription fee is not required),

the Commission shall establish a program to assess and collect

from the licensee for such designated frequency an annual fee

or other schedule or method of payment that promotes the

objectives described in subparagraphs (A) and (B) of paragraph

(2).

`(2) COLLECTION OF FEES- The program required by paragraph

(1) shall--

`(A) be designed (i) to recover for the public a portion

of the value of the public spectrum resource made available

for such commercial use, and (ii) to avoid unjust

enrichment through the method employed to permit such uses

of that resource;

`(B) recover for the public an amount that, to the extent

feasible, equals but does not exceed (over the term of the

license) the amount that would have been recovered had such

services been licensed pursuant to the provisions of

section 309(j) of this Act and the Commission's regulations

thereunder; and

`(C) be adjusted by the Commission from time to time in

order to continue to comply with the requirements of this

paragraph.

`(3) TREATMENT OF REVENUES-

`(A) GENERAL RULE- Except as provided in subparagraph

(B), all proceeds obtained pursuant to the regulations

required by this subsection shall be deposited in the

Treasury in accordance with chapter 33 of title 31, United

States Code.

`(B) RETENTION OF REVENUES- Notwithstanding subparagraph

(A), the salaries and expenses account of the Commission

shall retain as an offsetting collection such sums as may

be necessary from such proceeds for the costs of developing

and implementing the program required by this section and

regulating and supervising advanced television services.

Such offsetting collections shall be available for

obligation subject to the terms and conditions of the

receiving appropriations account, and shall be deposited in

such accounts on a quarterly basis.

`(4) REPORT- Within 5 years after the date of enactment of

the Telecommunications Act of 1996, the Commission shall report

to the Congress on the implementation of the program required

by this subsection, and shall annually thereafter advise the

Congress on the amounts collected pursuant to such program.

`(f) EVALUATION- Within 10 years after the date the Commission

first issues additional licenses for advanced television services,

the Commission shall conduct an evaluation of the advanced

television services program. Such evaluation shall include--

`(1) an assessment of the willingness of consumers to

purchase the television receivers necessary to receive

broadcasts of advanced television services;

`(2) an assessment of alternative uses, including public

safety use, of the frequencies used for such broadcasts; and

`(3) the extent to which the Commission has been or will be

able to reduce the amount of spectrum assigned to licensees.

`(g) DEFINITIONS- As used in this section:

`(1) ADVANCED TELEVISION SERVICES- The term `advanced

television services' means television services provided using

digital or other advanced technology as further defined in the

opinion, report, and order of the Commission entitled `Advanced

Television Systems and Their Impact Upon the Existing

Television Broadcast Service', MM Docket 87-268, adopted

September 17, 1992, and successor proceedings.

`(2) DESIGNATED FREQUENCIES- The term `designated frequency'

means each of the frequencies designated by the Commission for

licenses for advanced television services.

`(3) HIGH DEFINITION TELEVISION- The term `high definition

television' refers to systems that offer approximately twice

the vertical and horizontal resolution of receivers generally

available on the date of enactment of the Telecommunications

Act of 1996, as further defined in the proceedings described in

paragraph (1) of this subsection.'.

SEC. 202. BROADCAST OWNERSHIP.

(a) NATIONAL RADIO STATION OWNERSHIP RULE CHANGES REQUIRED- The

Commission shall modify section 73.3555 of its regulations (47

C.F.R. 73.3555) by eliminating any provisions limiting the number

of AM or FM broadcast stations which may be owned or controlled by

one entity nationally.

(b) LOCAL RADIO DIVERSITY-

(1) APPLICABLE CAPS- The Commission shall revise section

73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide

that--

(A) in a radio market with 45 or more commercial radio

stations, a party may own, operate, or control up to 8

commercial radio stations, not more than 5 of which are in

the same service (AM or FM);

(B) in a radio market with between 30 and 44 (inclusive)

commercial radio stations, a party may own, operate, or

control up to 7 commercial radio stations, not more than 4

of which are in the same service (AM or FM);

(C) in a radio market with between 15 and 29 (inclusive)

commercial radio stations, a party may own, operate, or

control up to 6 commercial radio stations, not more than 4

of which are in the same service (AM or FM); and

(D) in a radio market with 14 or fewer commercial radio

stations, a party may own, operate, or control up to 5

commercial radio stations, not more than 3 of which are in

the same service (AM or FM), except that a party may not

own, operate, or control more than 50 percent of the

stations in such market.

(2) EXCEPTION- Notwithstanding any limitation authorized by

this subsection, the Commission may permit a person or entity

to own, operate, or control, or have a cognizable interest in,

radio broadcast stations if the Commission determines that such

ownership, operation, control, or interest will result in an

increase in the number of radio broadcast stations in operation.

(c) TELEVISION OWNERSHIP LIMITATIONS-

(1) NATIONAL OWNERSHIP LIMITATIONS- The Commission shall

modify its rules for multiple ownership set forth in section

73.3555 of its regulations (47 C.F.R. 73.3555)--

(A) by eliminating the restrictions on the number of

television stations that a person or entity may directly or

indirectly own, operate, or control, or have a cognizable

interest in, nationwide; and

(B) by increasing the national audience reach limitation

for television stations to 35 percent.

(2) LOCAL OWNERSHIP LIMITATIONS- The Commission shall conduct

a rulemaking proceeding to determine whether to retain, modify,

or eliminate its limitations on the number of television

stations that a person or entity may own, operate, or control,

or have a cognizable interest in, within the same television

market.

(d) RELAXATION OF ONE-TO-A-MARKET- With respect to its

enforcement of its one-to-a-market ownership rules under section

73.3555 of its regulations, the Commission shall extend its waiver

policy to any of the top 50 markets, consistent with the public

interest, convenience, and necessity.

(e) DUAL NETWORK CHANGES- The Commission shall revise section

73.658(g) of its regulations (47 C.F.R. 658(g)) to permit a

television broadcast station to affiliate with a person or entity

that maintains 2 or more networks of television broadcast stations

unless such dual or multiple networks are composed of--

(1) two or more persons or entities that, on the date of

enactment of the Telecommunications Act of 1996, are `networks'

as defined in section 73.3613(a)(1) of the Commission's

regulations (47 C.F.R. 73.3613(a)(1)); or

(2) any network described in paragraph (1) and an

English-language program distribution service that, on such

date, provides 4 or more hours of programming per week on a

national basis pursuant to network affiliation arrangements

with local television broadcast stations in markets reaching

more than 75 percent of television homes (as measured by a

national ratings service).

(f) CABLE CROSS OWNERSHIP-

(1) ELIMINATION OF RESTRICTIONS- The Commission shall revise

section 76.501 of its regulations (47 C.F.R. 76.501) to permit

a person or entity to own or control a network of broadcast

stations and a cable system.

(2) SAFEGUARDS AGAINST DISCRIMINATION- The Commission shall

revise such regulations if necessary to ensure carriage,

channel positioning, and nondiscriminatory treatment of

nonaffiliated broadcast stations by a cable system described in

paragraph (1).

(g) LOCAL MARKETING AGREEMENTS- Nothing in this section shall be

construed to prohibit the origination, continuation, or renewal of

any television local marketing agreement that is in compliance with

the regulations of the Commission.

(h) FURTHER COMMISSION REVIEW- The Commission shall review its

rules adopted pursuant to this section and all of its ownership

rules biennially as part of its regulatory reform review under

section 11 of the Communications Act of 1934 and shall determine

whether any of such rules are necessary in the public interest as

the result of competition. The Commission shall repeal or modify

any regulation it determines to be no longer in the public interest.

(i) ELIMINATION OF STATUTORY RESTRICTION- Section 613(a) (47

U.S.C. 533(a)) is amended--

(1) by striking paragraph (1);

(2) by redesignating paragraph (2) as subsection (a);

(3) by redesignating subparagraphs (A) and (B) as paragraphs

(1) and (2), respectively;

(4) by striking `and' at the end of paragraph (1) (as so

redesignated);

(5) by striking the period at the end of paragraph (2) (as so

redesignated) and inserting `; and'; and

(6) by adding at the end the following new paragraph:

`(3) shall not apply the requirements of this subsection to

any cable operator in any franchise area in which a cable

operator is subject to effective competition as determined

under section 623(l).'.

SEC. 203. TERM OF LICENSES.

Section 307(c) (47 U.S.C. 307(c)) is amended to read as follows:

`(c) TERMS OF LICENSES-

`(1) INITIAL AND RENEWAL LICENSES- Each license granted for

the operation of a broadcasting station shall be for a term of

not to exceed 8 years. Upon application therefor, a renewal of

such license may be granted from time to time for a term of not

to exceed 8 years from the date of expiration of the preceding

license, if the Commission finds that public interest,

convenience, and necessity would be served thereby. Consistent

with the foregoing provisions of this subsection, the

Commission may by rule prescribe the period or periods for

which licenses shall be granted and renewed for particular

classes of stations, but the Commission may not adopt or follow

any rule which would preclude it, in any case involving a

station of a particular class, from granting or renewing a

license for a shorter period than that prescribed for stations

of such class if, in its judgment, the public interest,

convenience, or necessity would be served by such action.

`(2) MATERIALS IN APPLICATION- In order to expedite action on

applications for renewal of broadcasting station licenses and

in order to avoid needless expense to applicants for such

renewals, the Commission shall not require any such applicant

to file any information which previously has been furnished to

the Commission or which is not directly material to the

considerations that affect the granting or denial of such

application, but the Commission may require any new or

additional facts it deems necessary to make its findings.

`(3) CONTINUATION PENDING DECISION- Pending any hearing and

final decision on such an application and the disposition of

any petition for rehearing pursuant to section 405, the

Commission shall continue such license in effect.'.

SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.

(a) RENEWAL PROCEDURES-

(1) AMENDMENT- Section 309 (47 U.S.C. 309) is amended by

adding at the end thereof the following new subsection:

`(k) BROADCAST STATION RENEWAL PROCEDURES-

`(1) STANDARDS FOR RENEWAL- If the licensee of a broadcast

station submits an application to the Commission for renewal of

such license, the Commission shall grant the application if it

finds, with respect to that station, during the preceding term

of its license--

`(A) the station has served the public interest,

convenience, and necessity;

`(B) there have been no serious violations by the

licensee of this Act or the rules and regulations of the

Commission; and

`(C) there have been no other violations by the licensee

of this Act or the rules and regulations of the Commission

which, taken together, would constitute a pattern of abuse.

`(2) CONSEQUENCE OF FAILURE TO MEET STANDARD- If any licensee

of a broadcast station fails to meet the requirements of this

subsection, the Commission may deny the application for renewal

in accordance with paragraph (3), or grant such application on

terms and conditions as are appropriate, including renewal for

a term less than the maximum otherwise permitted.

`(3) STANDARDS FOR DENIAL- If the Commission determines,

after notice and opportunity for a hearing as provided in

subsection (e), that a licensee has failed to meet the

requirements specified in paragraph (1) and that no mitigating

factors justify the imposition of lesser sanctions, the

Commission shall--

`(A) issue an order denying the renewal application filed

by such licensee under section 308; and

`(B) only thereafter accept and consider such

applications for a construction permit as may be filed

under section 308 specifying the channel or broadcasting

facilities of the former licensee.

`(4) COMPETITOR CONSIDERATION PROHIBITED- In making the

determinations specified in paragraph (1) or (2), the

Commission shall not consider whether the public interest,

convenience, and necessity might be served by the grant of a

license to a person other than the renewal applicant.'.

(2) CONFORMING AMENDMENT- Section 309(d) (47 U.S.C. 309(d))

is amended by inserting after `with subsection (a)' each place

it appears the following: `(or subsection (k) in the case of

renewal of any broadcast station license)'.

(b) SUMMARY OF COMPLAINTS ON VIOLENT PROGRAMMING- Section 308 (47

U.S.C. 308) is amended by adding at the end the following new

subsection:

`(d) SUMMARY OF COMPLAINTS- Each applicant for the renewal of a

commercial or noncommercial television license shall attach as an

exhibit to the application a summary of written comments and

suggestions received from the public and maintained by the licensee

(in accordance with Commission regulations) that comment on the

applicant's programming, if any, and that are characterized by the

commentor as constituting violent programming.'.

(c) EFFECTIVE DATE- The amendments made by this section apply to

applications filed after May 1, 1995.

SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.

(a) DBS SIGNAL SECURITY- Section 705(e)(4) (47 U.S.C. 605(e)(4))

is amended by inserting `or direct-to-home satellite services,'

after `programming,'.

(b) FCC JURISDICTION OVER DIRECT-TO-HOME SATELLITE SERVICES-

Section 303 (47 U.S.C. 303) is amended by adding at the end thereof

the following new subsection:

`(v) Have exclusive jurisdiction to regulate the provision of

direct-to-home satellite services. As used in this subsection, the

term `direct-to-home satellite services' means the distribution or

broadcasting of programming or services by satellite directly to

the subscriber's premises without the use of ground receiving or

distribution equipment, except at the subscriber's premises or in

the uplink process to the satellite.'.

SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

Part II of title III is amended by inserting after section 364

(47 U.S.C. 362) the following new section:

`SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

`Notwithstanding any provision of this Act or any other provision

of law or regulation, a ship documented under the laws of the

United States operating in accordance with the Global Maritime

Distress and Safety System provisions of the Safety of Life at Sea

Convention shall not be required to be equipped with a radio

telegraphy station operated by one or more radio officers or

operators. This section shall take effect for each vessel upon a

determination by the United States Coast Guard that such vessel has

the equipment required to implement the Global Maritime Distress

and Safety System installed and operating in good working

condition.'.

SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.

Within 180 days after the date of enactment of this Act, the

Commission shall, pursuant to section 303 of the Communications Act

of 1934, promulgate regulations to prohibit restrictions that

impair a viewer's ability to receive video programming services

through devices designed for over-the-air reception of television

broadcast signals, multichannel multipoint distribution service, or

direct broadcast satellite services.

TITLE III--CABLE SERVICES

SEC. 301. CABLE ACT REFORM.

(a) DEFINITIONS-

(1) DEFINITION OF CABLE SERVICE- Section 602(6)(B) (47 U.S.C.

522(6)(B)) is amended by inserting `or use' after `the

selection'.

(2) CHANGE IN DEFINITION OF CABLE SYSTEM- Section 602(7) (47

U.S.C. 522(7)) is amended by striking `(B) a facility that

serves only subscribers in 1 or more multiple unit dwellings

under common ownership, control, or management, unless such

facility or facilities uses any public right-of-way;' and

inserting `(B) a facility that serves subscribers without using

any public right-of-way;'.

(b) RATE DEREGULATION-

(1) UPPER TIER REGULATION- Section 623(c) (47 U.S.C. 543(c))

is amended--

(A) in paragraph (1)(B), by striking `subscriber,

franchising authority, or other relevant State or local

government entity' and inserting `franchising authority (in

accordance with paragraph (3))';

(B) in paragraph (1)(C), by striking `such complaint' and

inserting `the first complaint filed with the franchising

authority under paragraph (3)'; and

(C) by striking paragraph (3) and inserting the following:

`(3) REVIEW OF RATE CHANGES- The Commission shall review any

complaint submitted by a franchising authority after the date

of enactment of the Telecommunications Act of 1996 concerning

an increase in rates for cable programming services and issue a

final order within 90 days after it receives such a complaint,

unless the parties agree to extend the period for such review.

A franchising authority may not file a complaint under this

paragraph unless, within 90 days after such increase becomes

effective it receives subscriber complaints.

`(4) SUNSET OF UPPER TIER RATE REGULATION- This subsection

shall not apply to cable programming services provided after

March 31, 1999.'.

(2) SUNSET OF UNIFORM RATE STRUCTURE IN MARKETS WITH

EFFECTIVE COMPETITION- Section 623(d) (47 U.S.C. 543(d)) is

amended by adding at the end thereof the following: `This

subsection does not apply to (1) a cable operator with respect

to the provision of cable service over its cable system in any

geographic area in which the video programming services offered

by the operator in that area are subject to effective

competition, or (2) any video programming offered on a per

channel or per program basis. Bulk discounts to multiple

dwelling units shall not be subject to this subsection, except

that a cable operator of a cable system that is not subject to

effective competition may not charge predatory prices to a

multiple dwelling unit. Upon a prima facie showing by a

complainant that there are reasonable grounds to believe that

the discounted price is predatory, the cable system shall have

the burden of showing that its discounted price is not

predatory.'.

(3) EFFECTIVE COMPETITION- Section 623(l)(1) (47 U.S.C.

543(l)(1)) is amended--

(A) by striking `or' at the end of subparagraph (B);

(B) by striking the period at the end of subparagraph (C)

and inserting `; or'; and

(C) by adding at the end the following:

`(D) a local exchange carrier or its affiliate (or any

multichannel video programming distributor using the

facilities of such carrier or its affiliate) offers video

programming services directly to subscribers by any means

(other than direct-to-home satellite services) in the

franchise area of an unaffiliated cable operator which is

providing cable service in that franchise area, but only if

the video programming services so offered in that area are

comparable to the video programming services provided by

the unaffiliated cable operator in that area.'.

(c) GREATER DEREGULATION FOR SMALLER CABLE COMPANIES- Section 623

(47 U.S.C 543) is amended by adding at the end thereof the following:

`(m) SPECIAL RULES FOR SMALL COMPANIES-

`(1) IN GENERAL- Subsections (a), (b), and (c) do not apply

to a small cable operator with respect to--

`(A) cable programming services, or

`(B) a basic service tier that was the only service tier

subject to regulation as of December 31, 1994,

in any franchise area in which that operator services 50,000 or

fewer subscribers.

`(2) DEFINITION OF SMALL CABLE OPERATOR- For purposes of this

subsection, the term `small cable operator' means a cable

operator that, directly or through an affiliate, serves in the

aggregate fewer than 1 percent of all subscribers in the United

States and is not affiliated with any entity or entities whose

gross annual revenues in the aggregate exceed $250,000,000.'.

(d) MARKET DETERMINATIONS-

(1) MARKET DETERMINATIONS; EXPEDITED DECISIONMAKING- Section

614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--

(A) by striking `in the manner provided in section

73.3555(d)(3)(i) of title 47, Code of Federal Regulations,

as in effect on May 1, 1991,' in clause (i) and inserting

`by the Commission by regulation or order using, where

available, commercial publications which delineate

television markets based on viewing patterns,'; and

(B) by striking clause (iv) and inserting the following:

`(iv) Within 120 days after the date on which a

request is filed under this subparagraph (or 120 days

after the date of enactment of the Telecommunications

Act of 1996, if later), the Commission shall grant or

deny the request.'.

(2) APPLICATION TO PENDING REQUESTS- The amendment made by

paragraph (1) shall apply to--

(A) any request pending under section 614(h)(1)(C) of the

Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the

date of enactment of this Act; and

(B) any request filed under that section after that date.

(e) TECHNICAL STANDARDS- Section 624(e) (47 U.S.C. 544(e)) is

amended by striking the last two sentences and inserting the

following: `No State or franchising authority may prohibit,

condition, or restrict a cable system's use of any type of

subscriber equipment or any transmission technology.'.

(f) CABLE EQUIPMENT COMPATIBILITY- Section 624A (47 U.S.C. 544A)

is amended--

(1) in subsection (a) by striking `and' at the end of

paragraph (2), by striking the period at the end of paragraph

(3) and inserting `; and'; and by adding at the end the

following new paragraph:

`(4) compatibility among televisions, video cassette

recorders, and cable systems can be assured with narrow

technical standards that mandate a minimum degree of common

design and operation, leaving all features, functions,

protocols, and other product and service options for selection

through open competition in the market.';

(2) in subsection (c)(1)--

(A) by redesignating subparagraphs (A) and (B) as

subparagraphs (B) and (C), respectively; and

(B) by inserting before such redesignated subparagraph

(B) the following new subparagraph:

`(A) the need to maximize open competition in the market

for all features, functions, protocols, and other product

and service options of converter boxes and other cable

converters unrelated to the descrambling or decryption of

cable television signals;'; and

(3) in subsection (c)(2)--

(A) by redesignating subparagraphs (D) and (E) as

subparagraphs (E) and (F), respectively; and

(B) by inserting after subparagraph (C) the following new

subparagraph:

`(D) to ensure that any standards or regulations

developed under the authority of this section to ensure

compatibility between televisions, video cassette

recorders, and cable systems do not affect features,

functions, protocols, and other product and service options

other than those specified in paragraph (1)(B), including

telecommunications interface equipment, home automation

communications, and computer network services;'.

(g) SUBSCRIBER NOTICE- Section 632 (47 U.S.C. 552) is amended--

(1) by redesignating subsection (c) as subsection (d); and

(2) by inserting after subsection (b) the following new

subsection:

`(c) SUBSCRIBER NOTICE- A cable operator may provide notice of

service and rate changes to subscribers using any reasonable

written means at its sole discretion. Notwithstanding section

623(b)(6) or any other provision of this Act, a cable operator

shall not be required to provide prior notice of any rate change

that is the result of a regulatory fee, franchise fee, or any other

fee, tax, assessment, or charge of any kind imposed by any Federal

agency, State, or franchising authority on the transaction between

the operator and the subscriber.'.

(h) PROGRAM ACCESS- Section 628 (47 U.S.C. 548) is amended by

adding at the end the following:

`(j) COMMON CARRIERS- Any provision that applies to a cable

operator under this section shall apply to a common carrier or its

affiliate that provides video programming by any means directly to

subscribers. Any such provision that applies to a satellite cable

programming vendor in which a cable operator has an attributable

interest shall apply to any satellite cable programming vendor in

which such common carrier has an attributable interest. For the

purposes of this subsection, two or fewer common officers or

directors shall not by itself establish an attributable interest by

a common carrier in a satellite cable programming vendor (or its

parent company).'.

(i) ANTITRAFFICKING- Section 617 (47 U.S.C. 537) is amended--

(1) by striking subsections (a) through (d); and

(2) in subsection (e), by striking `(e)' and all that follows

through `a franchising authority' and inserting `A franchising

authority'.

(j) AGGREGATION OF EQUIPMENT COSTS- Section 623(a) (47 U.S.C.

543(a)) is amended by adding at the end the following new paragraph:

`(7) AGGREGATION OF EQUIPMENT COSTS-

`(A) IN GENERAL- The Commission shall allow cable

operators, pursuant to any rules promulgated under

subsection (b)(3), to aggregate, on a franchise, system,

regional, or company level, their equipment costs into

broad categories, such as converter boxes, regardless of

the varying levels of functionality of the equipment within

each such broad category. Such aggregation shall not be

permitted with respect to equipment used by subscribers who

receive only a rate regulated basic service tier.

`(B) REVISION TO COMMISSION RULES; FORMS- Within 120 days

of the date of enactment of the Telecommunications Act of

1996, the Commission shall issue revisions to the

appropriate rules and forms necessary to implement

subparagraph (A).'.

(k) TREATMENT OF PRIOR YEAR LOSSES-

(1) AMENDMENT- Section 623 (48 U.S.C. 543) is amended by

adding at the end thereof the following:

`(n) TREATMENT OF PRIOR YEAR LOSSES- Notwithstanding any other

provision of this section or of section 612, losses associated with

a cable system (including losses associated with the grant or award

of a franchise) that were incurred prior to September 4, 1992, with

respect to a cable system that is owned and operated by the

original franchisee of such system shall not be disallowed, in

whole or in part, in the determination of whether the rates for any

tier of service or any type of equipment that is subject to

regulation under this section are lawful.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall

take effect on the date of enactment of this Act and shall be

applicable to any rate proposal filed on or after September 4,

1993, upon which no final action has been taken by December 1,

1995.

SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

(a) PROVISIONS FOR REGULATION OF CABLE SERVICE PROVIDED BY

TELEPHONE COMPANIES- Title VI (47 U.S.C. 521 et seq.) is amended by

adding at the end the following new part:

`PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

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

`(a) LIMITATIONS ON CABLE REGULATION-

`(1) RADIO-BASED SYSTEMS- To the extent that a common carrier

(or any other person) is providing video programming to

subscribers using radio communication, such carrier (or other

person) shall be subject to the requirements of title III and

section 652, but shall not otherwise be subject to the

requirements of this title.

`(2) COMMON CARRIAGE OF VIDEO TRAFFIC- To the extent that a

common carrier is providing transmission of video programming

on a common carrier basis, such carrier shall be subject to the

requirements of title II and section 652, but shall not

otherwise be subject to the requirements of this title. This

paragraph shall not affect the treatment under section

602(7)(C) of a facility of a common carrier as a cable system.

`(3) CABLE SYSTEMS AND OPEN VIDEO SYSTEMS- To the extent that

a common carrier is providing video programming to its

subscribers in any manner other than that described in

paragraphs (1) and (2)--

`(A) such carrier shall be subject to the requirements of

this title, unless such programming is provided by means of

an open video system for which the Commission has approved

a certification under section 653; or

`(B) if such programming is provided by means of an open

video system for which the Commission has approved a

certification under section 653, such carrier shall be

subject to the requirements of this part, but shall be

subject to parts I through IV of this title only as

provided in 653(c).

`(4) ELECTION TO OPERATE AS OPEN VIDEO SYSTEM- A common

carrier that is providing video programming in a manner

described in paragraph (1) or (2), or a combination thereof,

may elect to provide such programming by means of an open video

system that complies with section 653. If the Commission

approves such carrier's certification under section 653, such

carrier shall be subject to the requirements of this part, but

shall be subject to parts I through IV of this title only as

provided in 653(c).

`(b) LIMITATIONS ON INTERCONNECTION OBLIGATIONS- A local exchange

carrier that provides cable service through an open video system or

a cable system shall not be required, pursuant to title II of this

Act, to make capacity available on a nondiscriminatory basis to any

other person for the provision of cable service directly to

subscribers.

`(c) ADDITIONAL REGULATORY RELIEF- A common carrier shall not be

required to obtain a certificate under section 214 with respect to

the establishment or operation of a system for the delivery of

video programming.

`SEC. 652. PROHIBITION ON BUY OUTS.

`(a) ACQUISITIONS BY CARRIERS- No local exchange carrier or any

affiliate of such carrier owned by, operated by, controlled by, or

under common control with such carrier may purchase or otherwise

acquire directly or indirectly more than a 10 percent financial

interest, or any management interest, in any cable operator

providing cable service within the local exchange carrier's

telephone service area.

`(b) ACQUISITIONS BY CABLE OPERATORS- No cable operator or

affiliate of a cable operator that is owned by, operated by,

controlled by, or under common ownership with such cable operator

may purchase or otherwise acquire, directly or indirectly, more

than a 10 percent financial interest, or any management interest,

in any local exchange carrier providing telephone exchange service

within such cable operator's franchise area.

`(c) JOINT VENTURES- A local exchange carrier and a cable

operator whose telephone service area and cable franchise area,

respectively, are in the same market may not enter into any joint

venture or partnership to provide video programming directly to

subscribers or to provide telecommunications services within such

market.

`(d) EXCEPTIONS-

`(1) RURAL SYSTEMS- Notwithstanding subsections (a), (b), and

(c) of this section, a local exchange carrier (with respect to

a cable system located in its telephone service area) and a

cable operator (with respect to the facilities of a local

exchange carrier used to provide telephone exchange service in

its cable franchise area) may obtain a controlling interest in,

management interest in, or enter into a joint venture or

partnership with the operator of such system or facilities for

the use of such system or facilities to the extent that--

`(A) such system or facilities only serve incorporated or

unincorporated--

`(i) places or territories that have fewer than

35,000 inhabitants; and

`(ii) are outside an urbanized area, as defined by

the Bureau of the Census; and

`(B) in the case of a local exchange carrier, such

system, in the aggregate with any other system in which

such carrier has an interest, serves less than 10 percent

of the households in the telephone service area of such

carrier.

`(2) JOINT USE- Notwithstanding subsection (c), a local

exchange carrier may obtain, with the concurrence of the cable

operator on the rates, terms, and conditions, the use of that

part of the transmission facilities of a cable system extending

from the last multi-user terminal to the premises of the end

user, if such use is reasonably limited in scope and duration,

as determined by the Commission.

`(3) ACQUISITIONS IN COMPETITIVE MARKETS- Notwithstanding

subsections (a) and (c), a local exchange carrier may obtain a

controlling interest in, or form a joint venture or other

partnership with, or provide financing to, a cable system

(hereinafter in this paragraph referred to as `the subject

cable system'), if--

`(A) the subject cable system operates in a television

market that is not in the top 25 markets, and such market

has more than 1 cable system operator, and the subject

cable system is not the cable system with the most

subscribers in such television market;

`(B) the subject cable system and the cable system with

the most subscribers in such television market held on May

1, 1995, cable television franchises from the largest

municipality in the television market and the boundaries of

such franchises were identical on such date;

`(C) the subject cable system is not owned by or under

common ownership or control of any one of the 50 cable

system operators with the most subscribers as such

operators existed on May 1, 1995; and

`(D) the system with the most subscribers in the

television market is owned by or under common ownership or

control of any one of the 10 largest cable system operators

as such operators existed on May 1, 1995.

`(4) EXEMPT CABLE SYSTEMS- Subsection (a) does not apply to

any cable system if--

`(A) the cable system serves no more than 17,000 cable

subscribers, of which no less than 8,000 live within an

urban area, and no less than 6,000 live within a

nonurbanized area as of June 1, 1995;

`(B) the cable system is not owned by, or under common

ownership or control with, any of the 50 largest cable

system operators in existence on June 1, 1995; and

`(C) the cable system operates in a television market

that was not in the top 100 television markets as of June

1, 1995.

`(5) SMALL CABLE SYSTEMS IN NONURBAN AREAS- Notwithstanding

subsections (a) and (c), a local exchange carrier with less

than $100,000,000 in annual operating revenues (or any

affiliate of such carrier owned by, operated by, controlled by,

or under common control with such carrier) may purchase or

otherwise acquire more than a 10 percent financial interest in,

or any management interest in, or enter into a joint venture or

partnership with, any cable system within the local exchange

carrier's telephone service area that serves no more than

20,000 cable subscribers, if no more than 12,000 of those

subscribers live within an urbanized area, as defined by the

Bureau of the Census.

`(6) WAIVERS- The Commission may waive the restrictions of

subsections (a), (b), or (c) only if--

`(A) the Commission determines that, because of the

nature of the market served by the affected cable system or

facilities used to provide telephone exchange service--

`(i) the affected cable operator or local exchange

carrier would be subjected to undue economic distress

by the enforcement of such provisions;

`(ii) the system or facilities would not be

economically viable if such provisions were enforced; or

`(iii) the anticompetitive effects of the proposed

transaction are clearly outweighed in the public

interest by the probable effect of the transaction in

meeting the convenience and needs of the community to

be served; and

`(B) the local franchising authority approves of such

waiver.

`(e) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this

section, the term `telephone service area' when used in connection

with a common carrier subject in whole or in part to title II of

this Act means the area within which such carrier provided

telephone exchange service as of January 1, 1993, but if any common

carrier after such date transfers its telephone exchange service

facilities to another common carrier, the area to which such

facilities provide telephone exchange service shall be treated as

part of the telephone service area of the acquiring common carrier

and not of the selling common carrier.

`SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.

`(a) OPEN VIDEO SYSTEMS-

`(1) CERTIFICATES OF COMPLIANCE- A local exchange carrier may

provide cable service to its cable service subscribers in its

telephone service area through an open video system that

complies with this section. To the extent permitted by such

regulations as the Commission may prescribe consistent with the

public interest, convenience, and necessity, an operator of a

cable system or any other person may provide video programming

through an open video system that complies with this section.

An operator of an open video system shall qualify for reduced

regulatory burdens under subsection (c) of this section if the

operator of such system certifies to the Commission that such

carrier complies with the Commission's regulations under

subsection (b) and the Commission approves such certification.

The Commission shall publish notice of the receipt of any such

certification and shall act to approve or disapprove any such

certification within 10 days after receipt of such certification.

`(2) DISPUTE RESOLUTION- The Commission shall have the

authority to resolve disputes under this section and the

regulations prescribed thereunder. Any such dispute shall be

resolved within 180 days after notice of such dispute is

submitted to the Commission. At that time or subsequently in a

separate damages proceeding, the Commission may, in the case of

any violation of this section, require carriage, award damages

to any person denied carriage, or any combination of such

sanctions. Any aggrieved party may seek any other remedy

available under this Act.

`(b) COMMISSION ACTIONS-

`(1) REGULATIONS REQUIRED- Within 6 months after the date of

enactment of the Telecommunications Act of 1996, the Commission

shall complete all actions necessary (including any

reconsideration) to prescribe regulations that--

`(A) except as required pursuant to section 611, 614, or

615, prohibit an operator of an open video system from

discriminating among video programming providers with

regard to carriage on its open video system, and ensure

that the rates, terms, and conditions for such carriage are

just and reasonable, and are not unjustly or unreasonably

discriminatory;

`(B) if demand exceeds the channel capacity of the open

video system, prohibit an operator of an open video system

and its affiliates from selecting the video programming

services for carriage on more than one-third of the

activated channel capacity on such system, but nothing in

this subparagraph shall be construed to limit the number of

channels that the carrier and its affiliates may offer to

provide directly to subscribers;

`(C) permit an operator of an open video system to carry

on only one channel any video programming service that is

offered by more than one video programming provider

(including the local exchange carrier's video programming

affiliate): [Italic->] Provided, [<-Italic] That

subscribers have ready and immediate access to any such

video programming service;

`(D) extend to the distribution of video programming over

open video systems the Commission's regulations concerning

sports exclusivity (47 C.F.R. 76.67), network

nonduplication (47 C.F.R. 76.92 et seq.), and syndicated

exclusivity (47 C.F.R. 76.151 et seq.); and

`(E)(i) prohibit an operator of an open video system from

unreasonably discriminating in favor of the operator or its

affiliates with regard to material or information

(including advertising) provided by the operator to

subscribers for the purposes of selecting programming on

the open video system, or in the way such material or

information is presented to subscribers;

`(ii) require an operator of an open video system to

ensure that video programming providers or copyright

holders (or both) are able suitably and uniquely to

identify their programming services to subscribers;

`(iii) if such identification is transmitted as part of

the programming signal, require the carrier to transmit

such identification without change or alteration; and

`(iv) prohibit an operator of an open video system from

omitting television broadcast stations or other

unaffiliated video programming services carried on such

system from any navigational device, guide, or menu.

`(2) CONSUMER ACCESS- Subject to the requirements of

paragraph (1) and the regulations thereunder, nothing in this

section prohibits a common carrier or its affiliate from

negotiating mutually agreeable terms and conditions with

over-the-air broadcast stations and other unaffiliated video

programming providers to allow consumer access to their signals

on any level or screen of any gateway, menu, or other program

guide, whether provided by the carrier or its affiliate.

`(c) REDUCED REGULATORY BURDENS FOR OPEN VIDEO SYSTEMS-

`(1) IN GENERAL- Any provision that applies to a cable

operator under--

`(A) sections 613 (other than subsection (a) thereof),

616, 623(f), 628, 631, and 634 of this title, shall apply,

`(B) sections 611, 614, and 615 of this title, and

section 325 of title III, shall apply in accordance with

the regulations prescribed under paragraph (2), and

`(C) sections 612 and 617, and parts III and IV (other

than sections 623(f), 628, 631, and 634), of this title

shall not apply,

to any operator of an open video system for which the

Commission has approved a certification under this section.

`(2) IMPLEMENTATION-

`(A) COMMISSION ACTION- In the rulemaking proceeding to

prescribe the regulations required by subsection (b)(1),

the Commission shall, to the extent possible, impose

obligations that are no greater or lesser than the

obligations contained in the provisions described in

paragraph (1)(B) of this subsection. The Commission shall

complete all action (including any reconsideration) to

prescribe such regulations no later than 6 months after the

date of enactment of the Telecommunications Act of 1996.

`(B) FEES- An operator of an open video system under this

part may be subject to the payment of fees on the gross

revenues of the operator for the provision of cable service

imposed by a local franchising authority or other

governmental entity, in lieu of the franchise fees

permitted under section 622. The rate at which such fees

are imposed shall not exceed the rate at which franchise

fees are imposed on any cable operator transmitting video

programming in the franchise area, as determined in

accordance with regulations prescribed by the Commission.

An operator of an open video system may designate that

portion of a subscriber's bill attributable to the fee

under this subparagraph as a separate item on the bill.

`(3) REGULATORY STREAMLINING- With respect to the

establishment and operation of an open video system, the

requirements of this section shall apply in lieu of, and not in

addition to, the requirements of title II.

`(4) TREATMENT AS CABLE OPERATOR- Nothing in this Act

precludes a video programming provider making use of an open

video system from being treated as an operator of a cable

system for purposes of section 111 of title 17, United States

Code.

`(d) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this

section, the term `telephone service area' when used in connection

with a common carrier subject in whole or in part to title II of

this Act means the area within which such carrier is offering

telephone exchange service.'.

(b) CONFORMING AND TECHNICAL AMENDMENTS-

(1) REPEAL- Subsection (b) of section 613 (47 U.S.C. 533(b))

is repealed.

(2) DEFINITIONS- Section 602 (47 U.S.C. 531) is amended--

(A) in paragraph (7), by striking `, or (D)' and

inserting the following: `, unless the extent of such use

is solely to provide interactive on-demand services; (D) an

open video system that complies with section 653 of this

title; or (E)';

(B) by redesignating paragraphs (12) through (19) as

paragraphs (13) through (20), respectively; and

(C) by inserting after paragraph (11) the following new

paragraph:

`(12) the term `interactive on-demand services' means a

service providing video programming to subscribers over

switched networks on an on-demand, point-to-point basis, but

does not include services providing video programming

prescheduled by the programming provider;'.

(3) TERMINATION OF VIDEO-DIALTONE REGULATIONS- The

Commission's regulations and policies with respect to video

dialtone requirements issued in CC Docket No. 87-266 shall

cease to be effective on the date of enactment of this Act.

This paragraph shall not be construed to require the

termination of any video-dialtone system that the Commission

has approved before the date of enactment of this Act.

SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF

TELECOMMUNICATIONS SERVICES.

(a) PROVISION OF TELECOMMUNICATIONS SERVICES BY A CABLE OPERATOR-

Section 621(b) (47 U.S.C. 541(b)) is amended by adding at the end

thereof the following new paragraph:

`(3)(A) If a cable operator or affiliate thereof is engaged in

the provision of telecommunications services--

`(i) such cable operator or affiliate shall not be required

to obtain a franchise under this title for the provision of

telecommunications services; and

`(ii) the provisions of this title shall not apply to such

cable operator or affiliate for the provision of

telecommunications services.

`(B) A franchising authority may not impose any requirement under

this title that has the purpose or effect of prohibiting, limiting,

restricting, or conditioning the provision of a telecommunications

service by a cable operator or an affiliate thereof.

`(C) A franchising authority may not order a cable operator or

affiliate thereof--

`(i) to discontinue the provision of a telecommunications

service, or

`(ii) to discontinue the operation of a cable system, to the

extent such cable system is used for the provision of a

telecommunications service, by reason of the failure of such

cable operator or affiliate thereof to obtain a franchise or

franchise renewal under this title with respect to the

provision of such telecommunications service.

`(D) Except as otherwise permitted by sections 611 and 612, a

franchising authority may not require a cable operator to provide

any telecommunications service or facilities, other than

institutional networks, as a condition of the initial grant of a

franchise, a franchise renewal, or a transfer of a franchise.'.

(b) FRANCHISE FEES- Section 622(b) (47 U.S.C. 542(b)) is amended

by inserting `to provide cable services' immediately before the

period at the end of the first sentence thereof.

SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

Part III of title VI is amended by inserting after section 628

(47 U.S.C. 548) the following new section:

`SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

`(a) COMMERCIAL CONSUMER AVAILABILITY OF EQUIPMENT USED TO ACCESS

SERVICES PROVIDED BY MULTICHANNEL VIDEO PROGRAMMING DISTRIBUTORS-

The Commission shall, in consultation with appropriate industry

standard-setting organizations, adopt regulations to assure the

commercial availability, to consumers of multichannel video

programming and other services offered over multichannel video

programming systems, of converter boxes, interactive communications

equipment, and other equipment used by consumers to access

multichannel video programming and other services offered over

multichannel video programming systems, from manufacturers,

retailers, and other vendors not affiliated with any multichannel

video programming distributor. Such regulations shall not prohibit

any multichannel video programming distributor from also offering

converter boxes, interactive communications equipment, and other

equipment used by consumers to access multichannel video

programming and other services offered over multichannel video

programming systems, to consumers, if the system operator's charges

to consumers for such devices and equipment are separately stated

and not subsidized by charges for any such service.

`(b) PROTECTION OF SYSTEM SECURITY- The Commission shall not

prescribe regulations under subsection (a) which would jeopardize

security of multichannel video programming and other services

offered over multichannel video programming systems, or impede the

legal rights of a provider of such services to prevent theft of

service.

`(c) WAIVER- The Commission shall waive a regulation adopted

under subsection (a) for a limited time upon an appropriate showing

by a provider of multichannel video programming and other services

offered over multichannel video programming systems, or an

equipment provider, that such waiver is necessary to assist the

development or introduction of a new or improved multichannel video

programming or other service offered over multichannel video

programming systems, technology, or products. Upon an appropriate

showing, the Commission shall grant any such waiver request within

90 days of any application filed under this subsection, and such

waiver shall be effective for all service providers and products in

that category and for all providers of services and products.

`(d) AVOIDANCE OF REDUNDANT REGULATIONS-

`(1) COMMERCIAL AVAILABILITY DETERMINATIONS- Determinations

made or regulations prescribed by the Commission with respect

to commercial availability to consumers of converter boxes,

interactive communications equipment, and other equipment used

by consumers to access multichannel video programming and other

services offered over multichannel video programming systems,

before the date of enactment of the Telecommunications Act of

1996 shall fulfill the requirements of this section.

`(2) REGULATIONS- Nothing in this section affects section

64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e))

or other Commission regulations governing interconnection and

competitive provision of customer premises equipment used in

connection with basic common carrier communications services.

`(e) SUNSET- The regulations adopted under this section shall

cease to apply when the Commission determines that--

`(1) the market for the multichannel video programming

distributors is fully competitive;

`(2) the market for converter boxes, and interactive

communications equipment, used in conjunction with that service

is fully competitive; and

`(3) elimination of the regulations would promote competition

and the public interest.

`(f) COMMISSION'S AUTHORITY- Nothing in this section shall be

construed as expanding or limiting any authority that the

Commission may have under law in effect before the date of

enactment of the Telecommunications Act of 1996.'.

SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.

Title VII is amended by inserting after section 712 (47 U.S.C.

612) the following new section:

`SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.

`(a) COMMISSION INQUIRY- Within 180 days after the date of

enactment of the Telecommunications Act of 1996, the Federal

Communications Commission shall complete an inquiry to ascertain

the level at which video programming is closed captioned. Such

inquiry shall examine the extent to which existing or previously

published programming is closed captioned, the size of the video

programming provider or programming owner providing closed

captioning, the size of the market served, the relative audience

shares achieved, or any other related factors. The Commission shall

submit to the Congress a report on the results of such inquiry.

`(b) ACCOUNTABILITY CRITERIA- Within 18 months after such date of

enactment, the Commission shall prescribe such regulations as are

necessary to implement this section. Such regulations shall ensure

that--

`(1) video programming first published or exhibited after the

effective date of such regulations is fully accessible through

the provision of closed captions, except as provided in

subsection (d); and

`(2) video programming providers or owners maximize the

accessibility of video programming first published or exhibited

prior to the effective date of such regulations through the

provision of closed captions, except as provided in subsection

(d).

`(c) DEADLINES FOR CAPTIONING- Such regulations shall include an

appropriate schedule of deadlines for the provision of closed

captioning of video programming.

`(d) EXEMPTIONS- Notwithstanding subsection (b)--

`(1) the Commission may exempt by regulation programs,

classes of programs, or services for which the Commission has

determined that the provision of closed captioning would be

economically burdensome to the provider or owner of such

programming;

`(2) a provider of video programming or the owner of any

program carried by the provider shall not be obligated to

supply closed captions if such action would be inconsistent

with contracts in effect on the date of enactment of the

Telecommunications Act of 1996, except that nothing in this

section shall be construed to relieve a video programming

provider of its obligations to provide services required by

Federal law; and

`(3) a provider of video programming or program owner may

petition the Commission for an exemption from the requirements

of this section, and the Commission may grant such petition

upon a showing that the requirements contained in this section

would result in an undue burden.

`(e) UNDUE BURDEN- The term `undue burden' means significant

difficulty or expense. In determining whether the closed captions

necessary to comply with the requirements of this paragraph would

result in an undue economic burden, the factors to be considered

include--

`(1) the nature and cost of the closed captions for the

programming;

`(2) the impact on the operation of the provider or program

owner;

`(3) the financial resources of the provider or program

owner; and

`(4) the type of operations of the provider or program owner.

`(f) VIDEO DESCRIPTIONS INQUIRY- Within 6 months after the date

of enactment of the Telecommunications Act of 1996, the Commission

shall commence an inquiry to examine the use of video descriptions

on video programming in order to ensure the accessibility of video

programming to persons with visual impairments, and report to

Congress on its findings. The Commission's report shall assess

appropriate methods and schedules for phasing video descriptions

into the marketplace, technical and quality standards for video

descriptions, a definition of programming for which video

descriptions would apply, and other technical and legal issues that

the Commission deems appropriate.

`(g) VIDEO DESCRIPTION- For purposes of this section, `video

description' means the insertion of audio narrated descriptions of

a television program's key visual elements into natural pauses

between the program's dialogue.

`(h) PRIVATE RIGHTS OF ACTIONS PROHIBITED- Nothing in this

section shall be construed to authorize any private right of action

to enforce any requirement of this section or any regulation

thereunder. The Commission shall have exclusive jurisdiction with

respect to any complaint under this section.'.

TITLE IV--REGULATORY REFORM

SEC. 401. REGULATORY FORBEARANCE.

Title I is amended by inserting after section 9 (47 U.S.C. 159)

the following new section:

`SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.

`(a) REGULATORY FLEXIBILITY- Notwithstanding section 332(c)(1)(A)

of this Act, the Commission shall forbear from applying any

regulation or any provision of this Act to a telecommunications

carrier or telecommunications service, or class of

telecommunications carriers or telecommunications services, in any

or some of its or their geographic markets, if the Commission

determines that--

`(1) enforcement of such regulation or provision is not

necessary to ensure that the charges, practices,

classifications, or regulations by, for, or in connection with

that telecommunications carrier or telecommunications service

are just and reasonable and are not unjustly or unreasonably

discriminatory;

`(2) enforcement of such regulation or provision is not

necessary for the protection of consumers; and

`(3) forbearance from applying such provision or regulation

is consistent with the public interest.

`(b) COMPETITIVE EFFECT TO BE WEIGHED- In making the

determination under subsection (a)(3), the Commission shall

consider whether forbearance from enforcing the provision or

regulation will promote competitive market conditions, including

the extent to which such forbearance will enhance competition among

providers of telecommunications services. If the Commission

determines that such forbearance will promote competition among

providers of telecommunications services, that determination may be

the basis for a Commission finding that forbearance is in the

public interest.

`(c) PETITION FOR FORBEARANCE- Any telecommunications carrier, or

class of telecommunications carriers, may submit a petition to the

Commission requesting that the Commission exercise the authority

granted under this section with respect to that carrier or those

carriers, or any service offered by that carrier or carriers. Any

such petition shall be deemed granted if the Commission does not

deny the petition for failure to meet the requirements for

forbearance under subsection (a) within one year after the

Commission receives it, unless the one-year period is extended by

the Commission. The Commission may extend the initial one-year

period by an additional 90 days if the Commission finds that an

extension is necessary to meet the requirements of subsection (a).

The Commission may grant or deny a petition in whole or in part and

shall explain its decision in writing.

`(d) LIMITATION- Except as provided in section 251(f), the

Commission may not forbear from applying the requirements of

section 251(c) or 271 under subsection (a) of this section until it

determines that those requirements have been fully implemented.

`(e) STATE ENFORCEMENT AFTER COMMISSION FORBEARANCE- A State

commission may not continue to apply or enforce any provision of

this Act that the Commission has determined to forbear from

applying under subsection (a).'.

SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.

(a) BIENNIAL REVIEW- Title I is amended by inserting after

section 10 (as added by section 401) the following new section:

`SEC. 11. REGULATORY REFORM.

`(a) BIENNIAL REVIEW OF REGULATIONS- In every even-numbered year

(beginning with 1998), the Commission--

`(1) shall review all regulations issued under this Act in

effect at the time of the review that apply to the operations

or activities of any provider of telecommunications service; and

`(2) shall determine whether any such regulation is no longer

necessary in the public interest as the result of meaningful

economic competition between providers of such service.

`(b) EFFECT OF DETERMINATION- The Commission shall repeal or

modify any regulation it determines to be no longer necessary in

the public interest.'.

(b) REGULATORY RELIEF-

(1) Streamlined procedures for changes in charges,

classifications, regulations, or practices-

(A) Section 204(a) (47 U.S.C. 204(a)) is amended--

(i) by striking `12 months' the first place it

appears in paragraph (2)(A) and inserting `5 months';

(ii) by striking `effective,' and all that follows in

paragraph (2)(A) and inserting `effective.'; and

(iii) by adding at the end thereof the following:

`(3) A local exchange carrier may file with the Commission a

new or revised charge, classification, regulation, or practice

on a streamlined basis. Any such charge, classification,

regulation, or practice shall be deemed lawful and shall be

effective 7 days (in the case of a reduction in rates) or 15

days (in the case of an increase in rates) after the date on

which it is filed with the Commission unless the Commission

takes action under paragraph (1) before the end of that 7-day

or 15-day period, as is appropriate.'.

(B) Section 208(b) (47 U.S.C. 208(b)) is amended--

(i) by striking `12 months' the first place it

appears in paragraph (1) and inserting `5 months'; and

(ii) by striking `filed,' and all that follows in

paragraph (1) and inserting `filed.'.

(2) EXTENSIONS OF LINES UNDER SECTION 214; ARMIS REPORTS- The

Commission shall permit any common carrier--

(A) to be exempt from the requirements of section 214 of

the Communications Act of 1934 for the extension of any

line; and

(B) to file cost allocation manuals and ARMIS reports

annually, to the extent such carrier is required to file

such manuals or reports.

(3) FORBEARANCE AUTHORITY NOT LIMITED- Nothing in this

subsection shall be construed to limit the authority of the

Commission to waive, modify, or forbear from applying any of

the requirements to which reference is made in paragraph (1)

under any other provision of this Act or other law.

(4) EFFECTIVE DATE OF AMENDMENTS- The amendments made by

paragraph (1) of this subsection shall apply with respect to

any charge, classification, regulation, or practice filed on or

after one year after the date of enactment of this Act.

(c) CLASSIFICATION OF CARRIERS- In classifying carriers according

to section 32.11 of its regulations (47 C.F.R. 32.11) and in

establishing reporting requirements pursuant to part 43 of its

regulations (47 C.F.R. part 43) and section 64.903 of its

regulations (47 C.F.R. 64.903), the Commission shall adjust the

revenue requirements to account for inflation as of the release

date of the Commission's Report and Order in CC Docket No. 91-141,

and annually thereafter. This subsection shall take effect on the

date of enactment of this Act.

SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS AND

FUNCTIONS.

(a) MODIFICATION OF AMATEUR RADIO EXAMINATION PROCEDURES- Section

4(f)(4) (47 U.S.C. 154(f)(4)) is amended--

(1) in subparagraph (A)--

(A) by inserting `or administering' after `for purposes

of preparing';

(B) by inserting `of' after `than the class'; and

(C) by inserting `or administered' after `for which the

examination is being prepared';

(2) by striking subparagraph (B);

(3) in subparagraph (H), by striking `(A), (B), and (C)' and

inserting `(A) and (B)';

(4) in subparagraph (J)--

(A) by striking `or (B)'; and

(B) by striking the last sentence; and

(5) by redesignating subparagraphs (C) through (J) as

subparagraphs (B) through (I), respectively.

(b) AUTHORITY TO DESIGNATE ENTITIES TO INSPECT- Section 4(f)(3)

(47 U.S.C. 154(f)(3)) is amended by inserting before the period at

the end the following: `: and [Italic->] Provided further,

[<-Italic] That, in the alternative, an entity designated by the

Commission may make the inspections referred to in this paragraph'.

(c) EXPEDITING INSTRUCTIONAL TELEVISION FIXED SERVICE PROCESSING-

Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by striking the

last sentence and inserting the following: `Except for cases

involving the authorization of service in the instructional

television fixed service, or as otherwise provided in this Act,

nothing in this paragraph shall authorize the Commission to provide

for the conduct, by any person or persons other than persons

referred to in paragraph (2) or (3) of section 556(b) of title 5,

United States Code, of any hearing to which such section applies.'.

(d) REPEAL SETTING OF DEPRECIATION RATES- The first sentence of

section 220(b) (47 U.S.C. 220(b)) is amended by striking `shall

prescribe for such carriers' and inserting `may prescribe, for such

carriers as it determines to be appropriate,'.

(e) USE OF INDEPENDENT AUDITORS- Section 220(c) (47 U.S.C.

220(c)) is amended by adding at the end thereof the following: `The

Commission may obtain the services of any person licensed to

provide public accounting services under the law of any State to

assist with, or conduct, audits under this section. While so

employed or engaged in conducting an audit for the Commission under

this section, any such person shall have the powers granted the

Commission under this subsection and shall be subject to subsection

(f) in the same manner as if that person were an employee of the

Commission.'.

(f) DELEGATION OF EQUIPMENT TESTING AND CERTIFICATION TO PRIVATE

LABORATORIES- Section 302 (47 U.S.C. 302) is amended by adding at

the end the following:

`(e) The Commission may--

`(1) authorize the use of private organizations for testing

and certifying the compliance of devices or home electronic

equipment and systems with regulations promulgated under this

section;

`(2) accept as prima facie evidence of such compliance the

certification by any such organization; and

`(3) establish such qualifications and standards as it deems

appropriate for such private organizations, testing, and

certification.'.

(g) MAKING LICENSE MODIFICATION UNIFORM- Section 303(f) (47

U.S.C. 303(f)) is amended by striking `unless, after a public

hearing,' and inserting `unless'.

(h) ELIMINATE FCC JURISDICTION OVER GOVERNMENT-OWNED SHIP RADIO

STATIONS-

(1) Section 305 (47 U.S.C. 305) is amended by striking

subsection (b) and redesignating subsections (c) and (d) as (b)

and (c), respectively.

(2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking

`except a vessel of the United States Maritime Administration,

the Inland and Coastwise Waterways Service, or the Panama Canal

Company,'.

(i) PERMIT OPERATION OF DOMESTIC SHIP AND AIRCRAFT RADIOS WITHOUT

LICENSE- Section 307(e) (47 U.S.C. 307(e)) is amended to read as

follows:

`(e)(1) Notwithstanding any license requirement established in

this Act, if the Commission determines that such authorization

serves the public interest, convenience, and necessity, the

Commission may by rule authorize the operation of radio stations

without individual licenses in the following radio services: (A)

the citizens band radio service; (B) the radio control service; (C)

the aviation radio service for aircraft stations operated on

domestic flights when such aircraft are not otherwise required to

carry a radio station; and (D) the maritime radio service for ship

stations navigated on domestic voyages when such ships are not

otherwise required to carry a radio station.

`(2) Any radio station operator who is authorized by the

Commission to operate without an individual license shall comply

with all other provisions of this Act and with rules prescribed by

the Commission under this Act.

`(3) For purposes of this subsection, the terms `citizens band

radio service', `radio control service', `aircraft station' and

`ship station' shall have the meanings given them by the Commission

by rule.'.

(j) EXPEDITED LICENSING FOR FIXED MICROWAVE SERVICE- Section

309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking subparagraph

(A) and redesignating subparagraphs (B) through (G) as

subparagraphs (A) through (F), respectively.

(k) FOREIGN DIRECTORS- Section 310(b) (47 U.S.C. 310(b)) is

amended--

(1) in paragraph (3), by striking `of which any officer or

director is an alien or'; and

(2) in paragraph (4), by striking `of which any officer or

more than one-fourth of the directors are aliens, or'.

(l) LIMITATION ON SILENT STATION AUTHORIZATIONS- Section 312 (47

U.S.C. 312) is amended by adding at the end the following:

`(g) If a broadcasting station fails to transmit broadcast

signals for any consecutive 12-month period, then the station

license granted for the operation of that broadcast station expires

at the end of that period, notwithstanding any provision, term, or

condition of the license to the contrary.'.

(m) MODIFICATION OF CONSTRUCTION PERMIT REQUIREMENT- Section

319(d) is amended by striking the last two sentences and inserting

the following: `With respect to any broadcasting station, the

Commission shall not have any authority to waive the requirement of

a permit for construction, except that the Commission may by

regulation determine that a permit shall not be required for minor

changes in the facilities of authorized broadcast stations. With

respect to any other station or class of stations, the Commission

shall not waive the requirement for a construction permit unless

the Commission determines that the public interest, convenience,

and necessity would be served by such a waiver.'.

(n) CONDUCT OF INSPECTIONS- Section 362(b) (47 U.S.C. 362(b)) is

amended to read as follows:

`(b) Every ship of the United States that is subject to this part

shall have the equipment and apparatus prescribed therein inspected

at least once each year by the Commission or an entity designated

by the Commission. If, after such inspection, the Commission is

satisfied that all relevant provisions of this Act and the station

license have been complied with, the fact shall be so certified on

the station license by the Commission. The Commission shall make

such additional inspections at frequent intervals as the Commission

determines may be necessary to ensure compliance with the

requirements of this Act. The Commission may, upon a finding that

the public interest could be served thereby--

`(1) waive the annual inspection required under this section

for a period of up to 90 days for the sole purpose of enabling

a vessel to complete its voyage and proceed to a port in the

United States where an inspection can be held; or

`(2) waive the annual inspection required under this section

for a vessel that is in compliance with the radio provisions of

the Safety Convention and that is operating solely in waters

beyond the jurisdiction of the United States: [Italic->]

Provided, [<-Italic] That such inspection shall be performed

within 30 days of such vessel's return to the United States.'.

(o) INSPECTION BY OTHER ENTITIES- Section 385 (47 U.S.C. 385) is

amended--

(1) by inserting `or an entity designated by the Commission'

after `The Commission'; and

(2) by adding at the end thereof the following: `In

accordance with such other provisions of law as apply to

Government contracts, the Commission may enter into contracts

with any person for the purpose of carrying out such

inspections and certifying compliance with those requirements,

and may, as part of any such contract, allow any such person to

accept reimbursement from the license holder for travel and

expense costs of any employee conducting an inspection or

certification.'.

TITLE V--OBSCENITY AND VIOLENCE

SUBTITLE A--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF

TELECOMMUNICATIONS FACILITIES

SEC. 501. SHORT TITLE.

This title may be cited as the `Communications Decency Act of

1996'.

SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES

UNDER THE COMMUNICATIONS ACT OF 1934.

Section 223 (47 U.S.C. 223) is amended--

(1) by striking subsection (a) and inserting in lieu thereof:

`(a) Whoever--

`(1) in interstate or foreign communications--

`(A) by means of a telecommunications device knowingly--

`(i) makes, creates, or solicits, and

`(ii) initiates the transmission of,

any comment, request, suggestion, proposal, image, or other

communication which is obscene, lewd, lascivious, filthy,

or indecent, with intent to annoy, abuse, threaten, or

harass another person;

`(B) by means of a telecommunications device knowingly--

`(i) makes, creates, or solicits, and

`(ii) initiates the transmission of,

any comment, request, suggestion, proposal, image, or other

communication which is obscene or indecent, knowing that

the recipient of the communication is under 18 years of

age, regardless of whether the maker of such communication

placed the call or initiated the communication;

`(C) makes a telephone call or utilizes a

telecommunications device, whether or not conversation or

communication ensues, without disclosing his identity and

with intent to annoy, abuse, threaten, or harass any person

at the called number or who receives the communications;

`(D) makes or causes the telephone of another repeatedly

or continuously to ring, with intent to harass any person

at the called number; or

`(E) makes repeated telephone calls or repeatedly

initiates communication with a telecommunications device,

during which conversation or communication ensues, solely

to harass any person at the called number or who receives

the communication; or

`(2) knowingly permits any telecommunications facility under

his control to be used for any activity prohibited by paragraph

(1) with the intent that it be used for such activity,

shall be fined under title 18, United States Code, or imprisoned

not more than two years, or both.'; and

(2) by adding at the end the following new subsections:

`(d) Whoever--

`(1) in interstate or foreign communications knowingly--

`(A) uses an interactive computer service to send to a

specific person or persons under 18 years of age, or

`(B) uses any interactive computer service to display in

a manner available to a person under 18 years of age,

any comment, request, suggestion, proposal, image, or other

communication that, in context, depicts or describes, in terms

patently offensive as measured by contemporary community

standards, sexual or excretory activities or organs, regardless

of whether the user of such service placed the call or

initiated the communication; or

`(2) knowingly permits any telecommunications facility under

such person's control to be used for an activity prohibited by

paragraph (1) with the intent that it be used for such activity,

shall be fined under title 18, United States Code, or imprisoned

not more than two years, or both.

`(e) In addition to any other defenses available by law:

`(1) No person shall be held to have violated subsection (a)

or (d) solely for providing access or connection to or from a

facility, system, or network not under that person's control,

including transmission, downloading, intermediate storage,

access software, or other related capabilities that are

incidental to providing such access or connection that does not

include the creation of the content of the communication.

`(2) The defenses provided by paragraph (1) of this

subsection shall not be applicable to a person who is a

conspirator with an entity actively involved in the creation or

knowing distribution of communications that violate this

section, or who knowingly advertises the availability of such

communications.

`(3) The defenses provided in paragraph (1) of this

subsection shall not be applicable to a person who provides

access or connection to a facility, system, or network engaged

in the violation of this section that is owned or controlled by

such person.

`(4) No employer shall be held liable under this section for

the actions of an employee or agent unless the employee's or

agent's conduct is within the scope of his or her employment or

agency and the employer (A) having knowledge of such conduct,

authorizes or ratifies such conduct, or (B) recklessly

disregards such conduct.

`(5) It is a defense to a prosecution under subsection

(a)(1)(B) or (d), or under subsection (a)(2) with respect to

the use of a facility for an activity under subsection

(a)(1)(B) that a person--

`(A) has taken, in good faith, reasonable, effective, and

appropriate actions under the circumstances to restrict or

prevent access by minors to a communication specified in

such subsections, which may involve any appropriate

measures to restrict minors from such communications,

including any method which is feasible under available

technology; or

`(B) has restricted access to such communication by

requiring use of a verified credit card, debit account,

adult access code, or adult personal identification number.

`(6) The Commission may describe measures which are

reasonable, effective, and appropriate to restrict access to

prohibited communications under subsection (d). Nothing in this

section authorizes the Commission to enforce, or is intended to

provide the Commission with the authority to approve, sanction,

or permit, the use of such measures. The Commission shall have

no enforcement authority over the failure to utilize such

measures. The Commission shall not endorse specific products

relating to such measures. The use of such measures shall be

admitted as evidence of good faith efforts for purposes of

paragraph (5) in any action arising under subsection (d).

Nothing in this section shall be construed to treat interactive

computer services as common carriers or telecommunications

carriers.

`(f)(1) No cause of action may be brought in any court or

administrative agency against any person on account of any activity

that is not in violation of any law punishable by criminal or civil

penalty, and that the person has taken in good faith to implement a

defense authorized under this section or otherwise to restrict or

prevent the transmission of, or access to, a communication

specified in this section.

`(2) No State or local government may impose any liability for

commercial activities or actions by commercial entities, nonprofit

libraries, or institutions of higher education in connection with

an activity or action described in subsection (a)(2) or (d) that is

inconsistent with the treatment of those activities or actions

under this section: [Italic->] Provided, however [<-Italic] , That

nothing herein shall preclude any State or local government from

enacting and enforcing complementary oversight, liability, and

regulatory systems, procedures, and requirements, so long as such

systems, procedures, and requirements govern only intrastate

services and do not result in the imposition of inconsistent

rights, duties or obligations on the provision of interstate

services. Nothing in this subsection shall preclude any State or

local government from governing conduct not covered by this section.

`(g) Nothing in subsection (a), (d), (e), or (f) or in the

defenses to prosecution under subsection (a) or (d) shall be

construed to affect or limit the application or enforcement of any

other Federal law.

`(h) For purposes of this section--

`(1) The use of the term `telecommunications device' in this

section--

`(A) shall not impose new obligations on broadcasting

station licensees and cable operators covered by obscenity

and indecency provisions elsewhere in this Act; and

`(B) does not include an interactive computer service.

`(2) The term `interactive computer service' has the meaning

provided in section 230(e)(2).

`(3) The term `access software' means software (including

client or server software) or enabling tools that do not create

or provide the content of the communication but that allow a

user to do any one or more of the following:

`(A) filter, screen, allow, or disallow content;

`(B) pick, choose, analyze, or digest content; or

`(C) transmit, receive, display, forward, cache, search,

subset, organize, reorganize, or translate content.

`(4) The term `institution of higher education' has the

meaning provided in section 1201 of the Higher Education Act of

1965 (20 U.S.C. 1141).

`(5) The term `library' means a library eligible for

participation in State-based plans for funds under title III of

the Library Services and Construction Act (20 U.S.C. 355e et

seq.).'.

SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.

Section 639 (47 U.S.C. 559) is amended by striking `not more than

$10,000' and inserting `under title 18, United States Code,'.

SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

Part IV of title VI (47 U.S.C. 551 et seq.) is amended by adding

at the end the following:

`SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

`(a) SUBSCRIBER REQUEST- Upon request by a cable service

subscriber, a cable operator shall, without charge, fully scramble

or otherwise fully block the audio and video programming of each

channel carrying such programming so that one not a subscriber does

not receive it.

`(b) DEFINITION- As used in this section, the term `scramble'

means to rearrange the content of the signal of the programming so

that the programming cannot be viewed or heard in an understandable

manner.'.

SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE

PROGRAMMING.

(a) REQUIREMENT- Part IV of title VI (47 U.S.C. 551 et seq.), as

amended by this Act, is further amended by adding at the end the

following:

`SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE

PROGRAMMING.

`(a) REQUIREMENT- In providing sexually explicit adult

programming or other programming that is indecent on any channel of

its service primarily dedicated to sexually-oriented programming, a

multichannel video programming distributor shall fully scramble or

otherwise fully block the video and audio portion of such channel

so that one not a subscriber to such channel or programming does

not receive it.

`(b) IMPLEMENTATION- Until a multichannel video programming

distributor complies with the requirement set forth in subsection

(a), the distributor shall limit the access of children to the

programming referred to in that subsection by not providing such

programming during the hours of the day (as determined by the

Commission) when a significant number of children are likely to

view it.

`(c) DEFINITION- As used in this section, the term `scramble'

means to rearrange the content of the signal of the programming so

that the programming cannot be viewed or heard in an understandable

manner.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall

take effect 30 days after the date of enactment of this Act.

SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.

(a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL CHANNELS- Section

611(e) (47 U.S.C. 531(e)) is amended by inserting before the period

the following: `, except a cable operator may refuse to transmit

any public access program or portion of a public access program

which contains obscenity, indecency, or nudity'.

(b) CABLE CHANNELS FOR COMMERCIAL USE- Section 612(c)(2) (47

U.S.C. 532(c)(2)) is amended by striking `an operator' and

inserting `a cable operator may refuse to transmit any leased

access program or portion of a leased access program which contains

obscenity, indecency, or nudity and'.

SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMUNICATION OF

OBSCENE MATERIALS THROUGH THE USE OF COMPUTERS.

(a) IMPORTATION OR TRANSPORTATION- Section 1462 of title 18,

United States Code, is amended--

(1) in the first undesignated paragraph, by inserting `or

interactive computer service (as defined in section 230(e)(2)

of the Communications Act of 1934)' after `carrier'; and

(2) in the second undesignated paragraph--

(A) by inserting `or receives,' after `takes';

(B) by inserting `or interactive computer service (as

defined in section 230(e)(2) of the Communications Act of

1934)' after `common carrier'; and

(C) by inserting `or importation' after `carriage'.

(b) TRANSPORTATION FOR PURPOSES OF SALE OR DISTRIBUTION- The

first undesignated paragraph of section 1465 of title 18, United

States Code, is amended--

(1) by striking `transports in' and inserting `transports or

travels in, or uses a facility or means of,';

(2) by inserting `or an interactive computer service (as

defined in section 230(e)(2) of the Communications Act of 1934)

in or affecting such commerce' after `foreign commerce' the

first place it appears;

(3) by striking `, or knowingly travels in' and all that

follows through `obscene material in interstate or foreign

commerce,' and inserting `of'.

(c) INTERPRETATION- The amendments made by this section are

clarifying and shall not be interpreted to limit or repeal any

prohibition contained in sections 1462 and 1465 of title 18, United

States Code, before such amendment, under the rule established in

United States v. Alpers, 338 U.S. 680 (1950).

SEC. 508. COERCION AND ENTICEMENT OF MINORS.

Section 2422 of title 18, United States Code, is amended--

(1) by inserting `(a)' before `Whoever knowingly'; and

(2) by adding at the end the following:

`(b) Whoever, using any facility or means of interstate or

foreign commerce, including the mail, or within the special

maritime and territorial jurisdiction of the United States,

knowingly persuades, induces, entices, or coerces any individual

who has not attained the age of 18 years to engage in prostitution

or any sexual act for which any person may be criminally

prosecuted, or attempts to do so, shall be fined under this title

or imprisoned not more than 10 years, or both.'.

SEC. 509. ONLINE FAMILY EMPOWERMENT.

Title II of the Communications Act of 1934 (47 U.S.C. 201 et

seq.) is amended by adding at the end the following new section:

`SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF

OFFENSIVE MATERIAL.

`(a) FINDINGS- The Congress finds the following:

`(1) The rapidly developing array of Internet and other

interactive computer services available to individual Americans

represent an extraordinary advance in the availability of

educational and informational resources to our citizens.

`(2) These services offer users a great degree of control

over the information that they receive, as well as the

potential for even greater control in the future as technology

develops.

`(3) The Internet and other interactive computer services

offer a forum for a true diversity of political discourse,

unique opportunities for cultural development, and myriad

avenues for intellectual activity.

`(4) The Internet and other interactive computer services

have flourished, to the benefit of all Americans, with a

minimum of government regulation.

`(5) Increasingly Americans are relying on interactive media

for a variety of political, educational, cultural, and

entertainment services.

`(b) POLICY- It is the policy of the United States--

`(1) to promote the continued development of the Internet and

other interactive computer services and other interactive media;

`(2) to preserve the vibrant and competitive free market that

presently exists for the Internet and other interactive

computer services, unfettered by Federal or State regulation;

`(3) to encourage the development of technologies which

maximize user control over what information is received by

individuals, families, and schools who use the Internet and

other interactive computer services;

`(4) to remove disincentives for the development and

utilization of blocking and filtering technologies that empower

parents to restrict their children's access to objectionable or

inappropriate online material; and

`(5) to ensure vigorous enforcement of Federal criminal laws

to deter and punish trafficking in obscenity, stalking, and

harassment by means of computer.

`(c) PROTECTION FOR `GOOD SAMARITAN' BLOCKING AND SCREENING OF

OFFENSIVE MATERIAL-

`(1) TREATMENT OF PUBLISHER OR SPEAKER- No provider or user

of an interactive computer service shall be treated as the

publisher or speaker of any information provided by another

information content provider.

`(2) CIVIL LIABILITY- No provider or user of an interactive

computer service shall be held liable on account of--

`(A) any action voluntarily taken in good faith to

restrict access to or availability of material that the

provider or user considers to be obscene, lewd, lascivious,

filthy, excessively violent, harassing, or otherwise

objectionable, whether or not such material is

constitutionally protected; or

`(B) any action taken to enable or make available to

information content providers or others the technical means

to restrict access to material described in paragraph (1).

`(d) EFFECT ON OTHER LAWS-

`(1) NO EFFECT ON CRIMINAL LAW- Nothing in this section shall

be construed to impair the enforcement of section 223 of this

Act, chapter 71 (relating to obscenity) or 110 (relating to

sexual exploitation of children) of title 18, United States

Code, or any other Federal criminal statute.

`(2) NO EFFECT ON INTELLECTUAL PROPERTY LAW- Nothing in this

section shall be construed to limit or expand any law

pertaining to intellectual property.

`(3) STATE LAW- Nothing in this section shall be construed to

prevent any State from enforcing any State law that is

consistent with this section. No cause of action may be brought

and no liability may be imposed under any State or local law

that is inconsistent with this section.

`(4) NO EFFECT ON COMMUNICATIONS PRIVACY LAW- Nothing in this

section shall be construed to limit the application of the

Electronic Communications Privacy Act of 1986 or any of the

amendments made by such Act, or any similar State law.

`(e) DEFINITIONS- As used in this section:

`(1) INTERNET- The term `Internet' means the international

computer network of both Federal and non-Federal interoperable

packet switched data networks.

`(2) INTERACTIVE COMPUTER SERVICE- The term `interactive

computer service' means any information service, system, or

access software provider that provides or enables computer

access by multiple users to a computer server, including

specifically a service or system that provides access to the

Internet and such systems operated or services offered by

libraries or educational institutions.

`(3) INFORMATION CONTENT PROVIDER- The term `information

content provider' means any person or entity that is

responsible, in whole or in part, for the creation or

development of information provided through the Internet or any

other interactive computer service.

`(4) ACCESS SOFTWARE PROVIDER- The term `access software

provider' means a provider of software (including client or

server software), or enabling tools that do any one or more of

the following:

`(A) filter, screen, allow, or disallow content;

`(B) pick, choose, analyze, or digest content; or

`(C) transmit, receive, display, forward, cache, search,

subset, organize, reorganize, or translate content.'.

SUBTITLE B--VIOLENCE

SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.

(a) FINDINGS- The Congress makes the following findings:

(1) Television influences children's perception of the values

and behavior that are common and acceptable in society.

(2) Television station operators, cable television system

operators, and video programmers should follow practices in

connection with video programming that take into consideration

that television broadcast and cable programming has established

a uniquely pervasive presence in the lives of American children.

(3) The average American child is exposed to 25 hours of

television each week and some children are exposed to as much

as 11 hours of television a day.

(4) Studies have shown that children exposed to violent video

programming at a young age have a higher tendency for violent

and aggressive behavior later in life than children not so

exposed, and that children exposed to violent video programming

are prone to assume that acts of violence are acceptable

behavior.

(5) Children in the United States are, on average, exposed to

an estimated 8,000 murders and 100,000 acts of violence on

television by the time the child completes elementary school.

(6) Studies indicate that children are affected by the

pervasiveness and casual treatment of sexual material on

television, eroding the ability of parents to develop

responsible attitudes and behavior in their children.

(7) Parents express grave concern over violent and sexual

video programming and strongly support technology that would

give them greater control to block video programming in the

home that they consider harmful to their children.

(8) There is a compelling governmental interest in empowering

parents to limit the negative influences of video programming

that is harmful to children.

(9) Providing parents with timely information about the

nature of upcoming video programming and with the technological

tools that allow them easily to block violent, sexual, or other

programming that they believe harmful to their children is a

nonintrusive and narrowly tailored means of achieving that

compelling governmental interest.

(b) ESTABLISHMENT OF TELEVISION RATING CODE-

(1) AMENDMENT- Section 303 (47 U.S.C. 303) is amended by

adding at the end the following:

`(w) Prescribe--

`(1) on the basis of recommendations from an advisory

committee established by the Commission in accordance with

section 551(b)(2) of the Telecommunications Act of 1996,

guidelines and recommended procedures for the identification

and rating of video programming that contains sexual, violent,

or other indecent material about which parents should be

informed before it is displayed to children: [Italic->]

Provided, [<-Italic] That nothing in this paragraph shall be

construed to authorize any rating of video programming on the

basis of its political or religious content; and

`(2) with respect to any video programming that has been

rated, and in consultation with the television industry, rules

requiring distributors of such video programming to transmit

such rating to permit parents to block the display of video

programming that they have determined is inappropriate for

their children.'.

(2) ADVISORY COMMITTEE REQUIREMENTS- In establishing an

advisory committee for purposes of the amendment made by

paragraph (1) of this subsection, the Commission shall--

(A) ensure that such committee is composed of parents,

television broadcasters, television programming producers,

cable operators, appropriate public interest groups, and

other interested individuals from the private sector and is

fairly balanced in terms of political affiliation, the

points of view represented, and the functions to be

performed by the committee;

(B) provide to the committee such staff and resources as

may be necessary to permit it to perform its functions

efficiently and promptly; and

(C) require the committee to submit a final report of its

recommendations within one year after the date of the

appointment of the initial members.

(c) REQUIREMENT FOR MANUFACTURE OF TELEVISIONS THAT BLOCK

PROGRAMS- Section 303 (47 U.S.C. 303), as amended by subsection

(a), is further amended by adding at the end the following:

`(x) Require, in the case of an apparatus designed to receive

television signals that are shipped in interstate commerce or

manufactured in the United States and that have a picture screen 13

inches or greater in size (measured diagonally), that such

apparatus be equipped with a feature designed to enable viewers to

block display of all programs with a common rating, except as

otherwise permitted by regulations pursuant to section 330(c)(4).'.

(d) SHIPPING OF TELEVISIONS THAT BLOCK PROGRAMS-

(1) REGULATIONS- Section 330 (47 U.S.C. 330) is amended--

(A) by redesignating subsection (c) as subsection (d); and

(B) by adding after subsection (b) the following new

subsection (c):

`(c)(1) Except as provided in paragraph (2), no person shall ship

in interstate commerce or manufacture in the United States any

apparatus described in section 303(x) of this Act except in

accordance with rules prescribed by the Commission pursuant to the

authority granted by that section.

`(2) This subsection shall not apply to carriers transporting

apparatus referred to in paragraph (1) without trading in it.

`(3) The rules prescribed by the Commission under this subsection

shall provide for the oversight by the Commission of the adoption

of standards by industry for blocking technology. Such rules shall

require that all such apparatus be able to receive the rating

signals which have been transmitted by way of line 21 of the

vertical blanking interval and which conform to the signal and

blocking specifications established by industry under the

supervision of the Commission.

`(4) As new video technology is developed, the Commission shall

take such action as the Commission determines appropriate to ensure

that blocking service continues to be available to consumers. If

the Commission determines that an alternative blocking technology

exists that--

`(A) enables parents to block programming based on

identifying programs without ratings,

`(B) is available to consumers at a cost which is comparable

to the cost of technology that allows parents to block

programming based on common ratings, and

`(C) will allow parents to block a broad range of programs on

a multichannel system as effectively and as easily as

technology that allows parents to block programming based on

common ratings,

the Commission shall amend the rules prescribed pursuant to section

303(x) to require that the apparatus described in such section be

equipped with either the blocking technology described in such

section or the alternative blocking technology described in this

paragraph.'.

(2) CONFORMING AMENDMENT- Section 330(d), as redesignated by

subsection (d)(1)(A), is amended by striking `section 303(s),

and section 303(u)' and inserting in lieu thereof `and sections

303(s), 303(u), and 303(x)'.

(e) APPLICABILITY AND EFFECTIVE DATES-

(1) APPLICABILITY OF RATING PROVISION- The amendment made by

subsection (b) of this section shall take effect 1 year after

the date of enactment of this Act, but only if the Commission

determines, in consultation with appropriate public interest

groups and interested individuals from the private sector, that

distributors of video programming have not, by such date--

(A) established voluntary rules for rating video

programming that contains sexual, violent, or other

indecent material about which parents should be informed

before it is displayed to children, and such rules are

acceptable to the Commission; and

(B) agreed voluntarily to broadcast signals that contain

ratings of such programming.

(2) EFFECTIVE DATE OF MANUFACTURING PROVISION- In prescribing

regulations to implement the amendment made by subsection (c),

the Federal Communications Commission shall, after consultation

with the television manufacturing industry, specify the

effective date for the applicability of the requirement to the

apparatus covered by such amendment, which date shall not be

less than two years after the date of enactment of this Act.

SEC. 552. TECHNOLOGY FUND.

It is the policy of the United States to encourage broadcast

television, cable, satellite, syndication, other video programming

distributors, and relevant related industries (in consultation with

appropriate public interest groups and interested individuals from

the private sector) to--

(1) establish a technology fund to encourage television and

electronics equipment manufacturers to facilitate the

development of technology which would empower parents to block

programming they deem inappropriate for their children and to

encourage the availability thereof to low income parents;

(2) report to the viewing public on the status of the

development of affordable, easy to use blocking technology; and

(3) establish and promote effective procedures, standards,

systems, advisories, or other mechanisms for ensuring that

users have easy and complete access to the information

necessary to effectively utilize blocking technology and to

encourage the availability thereof to low income parents.

SUBTITLE C--JUDICIAL REVIEW

SEC. 561. EXPEDITED REVIEW.

(a) THREE-JUDGE DISTRICT COURT HEARING- Notwithstanding any other

provision of law, any civil action challenging the

constitutionality, on its face, of this title or any amendment made

by this title, or any provision thereof, shall be heard by a

district court of 3 judges convened pursuant to the provisions of

section 2284 of title 28, United States Code.

(b) APPELLATE REVIEW- Notwithstanding any other provision of law,

an interlocutory or final judgment, decree, or order of the court

of 3 judges in an action under subsection (a) holding this title or

an amendment made by this title, or any provision thereof,

unconstitutional shall be reviewable as a matter of right by direct

appeal to the Supreme Court. Any such appeal shall be filed not

more than 20 days after entry of such judgment, decree, or order.

TITLE VI--EFFECT ON OTHER LAWS

SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.

(a) APPLICABILITY OF AMENDMENTS TO FUTURE CONDUCT-

(1) AT&T CONSENT DECREE- Any conduct or activity that was,

before the date of enactment of this Act, subject to any

restriction or obligation imposed by the AT&T Consent Decree

shall, on and after such date, be subject to the restrictions

and obligations imposed by the Communications Act of 1934 as

amended by this Act and shall not be subject to the

restrictions and the obligations imposed by such Consent Decree.

(2) GTE CONSENT DECREE- Any conduct or activity that was,

before the date of enactment of this Act, subject to any

restriction or obligation imposed by the GTE Consent Decree

shall, on and after such date, be subject to the restrictions

and obligations imposed by the Communications Act of 1934 as

amended by this Act and shall not be subject to the

restrictions and the obligations imposed by such Consent Decree.

(3) MCCAW CONSENT DECREE- Any conduct or activity that was,

before the date of enactment of this Act, subject to any

restriction or obligation imposed by the McCaw Consent Decree

shall, on and after such date, be subject to the restrictions

and obligations imposed by the Communications Act of 1934 as

amended by this Act and subsection (d) of this section and

shall not be subject to the restrictions and the obligations

imposed by such Consent Decree.

(b) ANTITRUST LAWS-

(1) SAVINGS CLAUSE- Except as provided in paragraphs (2) and

(3), nothing in this Act or the amendments made by this Act

shall be construed to modify, impair, or supersede the

applicability of any of the antitrust laws.

(2) REPEAL- Subsection (a) of section 221 (47 U.S.C. 221(a))

is repealed.

(3) CLAYTON ACT- Section 7 of the Clayton Act (15 U.S.C. 18)

is amended in the last paragraph by striking `Federal

Communications Commission,'.

(c) FEDERAL, STATE, AND LOCAL LAW-

(1) NO IMPLIED EFFECT- This Act and the amendments made by

this Act shall not be construed to modify, impair, or supersede

Federal, State, or local law unless expressly so provided in

such Act or amendments.

(2) STATE TAX SAVINGS PROVISION- Notwithstanding paragraph

(1), nothing in this Act or the amendments made by this Act

shall be construed to modify, impair, or supersede, or

authorize the modification, impairment, or supersession of, any

State or local law pertaining to taxation, except as provided

in sections 622 and 653(c) of the Communications Act of 1934

and section 602 of this Act.

(d) COMMERCIAL MOBILE SERVICE JOINT MARKETING- Notwithstanding

section 22.903 of the Commission's regulations (47 C.F.R. 22.903)

or any other Commission regulation, a Bell operating company or any

other company may, except as provided in sections 271(e)(1) and 272

of the Communications Act of 1934 as amended by this Act as they

relate to wireline service, jointly market and sell commercial

mobile services in conjunction with telephone exchange service,

exchange access, intraLATA telecommunications service, interLATA

telecommunications service, and information services.

(e) DEFINITIONS- As used in this section:

(1) AT&T CONSENT DECREE- The term `AT&T Consent Decree' means

the order entered August 24, 1982, in the antitrust action

styled United States v. Western Electric, Civil Action No.

82-0192, in the United States District Court for the District

of Columbia, and includes any judgment or order with respect to

such action entered on or after August 24, 1982.

(2) GTE CONSENT DECREE- The term `GTE Consent Decree' means

the order entered December 21, 1984, as restated January 11,

1985, in the action styled United States v. GTE Corp., Civil

Action No. 83-1298, in the United States District Court for the

District of Columbia, and any judgment or order with respect to

such action entered on or after December 21, 1984.

(3) MCCAW CONSENT DECREE- The term `McCaw Consent Decree'

means the proposed consent decree filed on July 15, 1994, in

the antitrust action styled United States v. AT&T Corp. and

McCaw Cellular Communications, Inc., Civil Action No. 94-01555,

in the United States District Court for the District of

Columbia. Such term includes any stipulation that the parties

will abide by the terms of such proposed consent decree until

it is entered and any order entering such proposed consent

decree.

(4) ANTITRUST LAWS- The term `antitrust laws' has the meaning

given it in subsection (a) of the first section of the Clayton

Act (15 U.S.C. 12(a)), except that such term includes the Act

of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.),

commonly known as the Robinson-Patman Act, and section 5 of the

Federal Trade Commission Act (15 U.S.C. 45) to the extent that

such section 5 applies to unfair methods of competition.

SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO

DIRECT-TO-HOME SERVICES.

(a) PREEMPTION- A provider of direct-to-home satellite service

shall be exempt from the collection or remittance, or both, of any

tax or fee imposed by any local taxing jurisdiction on

direct-to-home satellite service.

(b) DEFINITIONS- For the purposes of this section--

(1) DIRECT-TO-HOME SATELLITE SERVICE- The term

`direct-to-home satellite service' means only programming

transmitted or broadcast by satellite directly to the

subscribers' premises without the use of ground receiving or

distribution equipment, except at the subscribers' premises or

in the uplink process to the satellite.

(2) PROVIDER OF DIRECT-TO-HOME SATELLITE SERVICE- For

purposes of this section, a `provider of direct-to-home

satellite service' means a person who transmits, broadcasts,

sells, or distributes direct-to-home satellite service.

(3) LOCAL TAXING JURISDICTION- The term `local taxing

jurisdiction' means any municipality, city, county, township,

parish, transportation district, or assessment jurisdiction, or

any other local jurisdiction in the territorial jurisdiction of

the United States with the authority to impose a tax or fee,

but does not include a State.

(4) STATE- The term `State' means any of the several States,

the District of Columbia, or any territory or possession of the

United States.

(5) TAX OR FEE- The terms `tax' and `fee' mean any local

sales tax, local use tax, local intangible tax, local income

tax, business license tax, utility tax, privilege tax, gross

receipts tax, excise tax, franchise fees, local

telecommunications tax, or any other tax, license, or fee that

is imposed for the privilege of doing business, regulating, or

raising revenue for a local taxing jurisdiction.

(c) PRESERVATION OF STATE AUTHORITY- This section shall not be

construed to prevent taxation of a provider of direct-to-home

satellite service by a State or to prevent a local taxing

jurisdiction from receiving revenue derived from a tax or fee

imposed and collected by a State.

TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMATION OR

SERVICES PROVIDED OVER TOLL-FREE TELEPHONE CALLS.

(a) PREVENTION OF UNFAIR BILLING PRACTICES-

(1) IN GENERAL- Section 228(c) (47 U.S.C. 228(c)) is amended--

(A) by striking out subparagraph (C) of paragraph (7) and

inserting in lieu thereof the following:

`(C) the calling party being charged for information

conveyed during the call unless--

`(i) the calling party has a written agreement

(including an agreement transmitted through electronic

medium) that meets the requirements of paragraph (8); or

`(ii) the calling party is charged for the

information in accordance with paragraph (9); or';

(B)(i) by striking `or' at the end of subparagraph (C) of

such paragraph;

(ii) by striking the period at the end of subparagraph

(D) of such paragraph and inserting a semicolon and `or'; and

(iii) by adding at the end thereof the following:

`(E) the calling party being assessed, by virtue of being

asked to connect or otherwise transfer to a pay-per-call

service, a charge for the call.'; and

(C) by adding at the end the following new paragraphs:

`(8) SUBSCRIPTION AGREEMENTS FOR BILLING FOR INFORMATION

PROVIDED VIA TOLL-FREE CALLS-

`(A) IN GENERAL- For purposes of paragraph (7)(C)(i), a

written subscription does not meet the requirements of this

paragraph unless the agreement specifies the material terms

and conditions under which the information is offered and

includes--

`(i) the rate at which charges are assessed for the

information;

`(ii) the information provider's name;

`(iii) the information provider's business address;

`(iv) the information provider's regular business

telephone number;

`(v) the information provider's agreement to notify

the subscriber at least one billing cycle in advance of

all future changes in the rates charged for the

information; and

`(vi) the subscriber's choice of payment method,

which may be by direct remit, debit, prepaid account,

phone bill, or credit or calling card.

`(B) BILLING ARRANGEMENTS- If a subscriber elects,

pursuant to subparagraph (A)(vi), to pay by means of a

phone bill--

`(i) the agreement shall clearly explain that the

subscriber will be assessed for calls made to the

information service from the subscriber's phone line;

`(ii) the phone bill shall include, in prominent

type, the following disclaimer:

`Common carriers may not disconnect local or long distance

telephone service for failure to pay disputed charges for

information services.'; and

`(iii) the phone bill shall clearly list the 800

number dialed.

`(C) USE OF PINS TO PREVENT UNAUTHORIZED USE- A written

agreement does not meet the requirements of this paragraph

unless it--

`(i) includes a unique personal identification number

or other subscriber-specific identifier and requires a

subscriber to use this number or identifier to obtain

access to the information provided and includes

instructions on its use; and

`(ii) assures that any charges for services accessed

by use of the subscriber's personal identification

number or subscriber-specific identifier be assessed to

subscriber's source of payment elected pursuant to

subparagraph (A)(vi).

`(D) EXCEPTIONS- Notwithstanding paragraph (7)(C), a

written agreement that meets the requirements of this

paragraph is not required--

`(i) for calls utilizing telecommunications devices

for the deaf;

`(ii) for directory services provided by a common

carrier or its affiliate or by a local exchange carrier

or its affiliate; or

`(iii) for any purchase of goods or of services that

are not information services.

`(E) TERMINATION OF SERVICE- On receipt by a common

carrier of a complaint by any person that an information

provider is in violation of the provisions of this section,

a carrier shall--

`(i) promptly investigate the complaint; and

`(ii) if the carrier reasonably determines that the

complaint is valid, it may terminate the provision of

service to an information provider unless the provider

supplies evidence of a written agreement that meets the

requirements of this section.

`(F) TREATMENT OF REMEDIES- The remedies provided in this

paragraph are in addition to any other remedies that are

available under title V of this Act.

`(9) CHARGES BY CREDIT, PREPAID, DEBIT, CHARGE, OR CALLING

CARD IN ABSENCE OF AGREEMENT- For purposes of paragraph

(7)(C)(ii), a calling party is not charged in accordance with

this paragraph unless the calling party is charged by means of

a credit, prepaid, debit, charge, or calling card and the

information service provider includes in response to each call

an introductory disclosure message that--

`(A) clearly states that there is a charge for the call;

`(B) clearly states the service's total cost per minute

and any other fees for the service or for any service to

which the caller may be transferred;

`(C) explains that the charges must be billed on either a

credit, prepaid, debit, charge, or calling card;

`(D) asks the caller for the card number;

`(E) clearly states that charges for the call begin at

the end of the introductory message; and

`(F) clearly states that the caller can hang up at or

before the end of the introductory message without

incurring any charge whatsoever.

`(10) BYPASS OF INTRODUCTORY DISCLOSURE MESSAGE- The

requirements of paragraph (9) shall not apply to calls from

repeat callers using a bypass mechanism to avoid listening to

the introductory message: [Italic->] Provided, [<-Italic]

That information providers shall disable such a bypass

mechanism after the institution of any price increase and for a

period of time determined to be sufficient by the Federal Trade

Commission to give callers adequate and sufficient notice of a

price increase.

`(11) DEFINITION OF CALLING CARD- As used in this subsection,

the term `calling card' means an identifying number or code

unique to the individual, that is issued to the individual by a

common carrier and enables the individual to be charged by

means of a phone bill for charges incurred independent of where

the call originates.'.

(2) REGULATIONS- The Federal Communications Commission shall

revise its regulations to comply with the amendment made by

paragraph (1) not later than 180 days after the date of

enactment of this Act.

(3) EFFECTIVE DATE- The amendments made by paragraph (1)

shall take effect on the date of enactment of this Act.

(b) CLARIFICATION OF `PAY-PER-CALL SERVICES'-

(1) TELEPHONE DISCLOSURE AND DISPUTE RESOLUTION ACT- Section

204(1) of the Telephone Disclosure and Dispute Resolution Act

(15 U.S.C. 5714(1)) is amended to read as follows:

`(1) The term `pay-per-call services' has the meaning

provided in section 228(i) of the Communications Act of 1934,

except that the Commission by rule may, notwithstanding

subparagraphs (B) and (C) of section 228(i)(1) of such Act,

extend such definition to other similar services providing

audio information or audio entertainment if the Commission

determines that such services are susceptible to the unfair and

deceptive practices that are prohibited by the rules prescribed

pursuant to section 201(a).'.

(2) COMMUNICATIONS ACT- Section 228(i)(2) (47 U.S.C.

228(i)(2)) is amended by striking `or any service the charge

for which is tariffed,'.

SEC. 702. PRIVACY OF CUSTOMER INFORMATION.

Title II is amended by inserting after section 221 (47 U.S.C.

221) the following new section:

`SEC. 222. PRIVACY OF CUSTOMER INFORMATION.

`(a) IN GENERAL- Every telecommunications carrier has a duty to

protect the confidentiality of proprietary information of, and

relating to, other telecommunication carriers, equipment

manufacturers, and customers, including telecommunication carriers

reselling telecommunications services provided by a

telecommunications carrier.

`(b) CONFIDENTIALITY OF CARRIER INFORMATION- A telecommunications

carrier that receives or obtains proprietary information from

another carrier for purposes of providing any telecommunications

service shall use such information only for such purpose, and shall

not use such information for its own marketing efforts.

`(c) CONFIDENTIALITY OF CUSTOMER PROPRIETARY NETWORK INFORMATION-

`(1) PRIVACY REQUIREMENTS FOR TELECOMMUNICATIONS CARRIERS-

Except as required by law or with the approval of the customer,

a telecommunications carrier that receives or obtains customer

proprietary network information by virtue of its provision of a

telecommunications service shall only use, disclose, or permit

access to individually identifiable customer proprietary

network information in its provision of (A) the

telecommunications service from which such information is

derived, or (B) services necessary to, or used in, the

provision of such telecommunications service, including the

publishing of directories.

`(2) DISCLOSURE ON REQUEST BY CUSTOMERS- A telecommunications

carrier shall disclose customer proprietary network

information, upon affirmative written request by the customer,

to any person designated by the customer.

`(3) AGGREGATE CUSTOMER INFORMATION- A telecommunications

carrier that receives or obtains customer proprietary network

information by virtue of its provision of a telecommunications

service may use, disclose, or permit access to aggregate

customer information other than for the purposes described in

paragraph (1). A local exchange carrier may use, disclose, or

permit access to aggregate customer information other than for

purposes described in paragraph (1) only if it provides such

aggregate information to other carriers or persons on

reasonable and nondiscriminatory terms and conditions upon

reasonable request therefor.

`(d) EXCEPTIONS- Nothing in this section prohibits a

telecommunications carrier from using, disclosing, or permitting

access to customer proprietary network information obtained from

its customers, either directly or indirectly through its agents--

`(1) to initiate, render, bill, and collect for

telecommunications services;

`(2) to protect the rights or property of the carrier, or to

protect users of those services and other carriers from

fraudulent, abusive, or unlawful use of, or subscription to,

such services; or

`(3) to provide any inbound telemarketing, referral, or

administrative services to the customer for the duration of the

call, if such call was initiated by the customer and the

customer approves of the use of such information to provide

such service.

`(e) SUBSCRIBER LIST INFORMATION- Notwithstanding subsections

(b), (c), and (d), a telecommunications carrier that provides

telephone exchange service shall provide subscriber list

information gathered in its capacity as a provider of such service

on a timely and unbundled basis, under nondiscriminatory and

reasonable rates, terms, and conditions, to any person upon request

for the purpose of publishing directories in any format.

`(f) DEFINITIONS- As used in this section:

`(1) CUSTOMER PROPRIETARY NETWORK INFORMATION- The term

`customer proprietary network information' means--

`(A) information that relates to the quantity, technical

configuration, type, destination, and amount of use of a

telecommunications service subscribed to by any customer of

a telecommunications carrier, and that is made available to

the carrier by the customer solely by virtue of the

carrier-customer relationship; and

`(B) information contained in the bills pertaining to

telephone exchange service or telephone toll service

received by a customer of a carrier;

except that such term does not include subscriber list

information.

`(2) AGGREGATE INFORMATION- The term `aggregate customer

information' means collective data that relates to a group or

category of services or customers, from which individual

customer identities and characteristics have been removed.

`(3) SUBSCRIBER LIST INFORMATION- The term `subscriber list

information' means any information--

`(A) identifying the listed names of subscribers of a

carrier and such subscribers' telephone numbers, addresses,

or primary advertising classifications (as such

classifications are assigned at the time of the

establishment of such service), or any combination of such

listed names, numbers, addresses, or classifications; and

`(B) that the carrier or an affiliate has published,

caused to be published, or accepted for publication in any

directory format.'.

SEC. 703. POLE ATTACHMENTS.

Section 224 (47 U.S.C. 224) is amended--

(1) in subsection (a)(1), by striking the first sentence and

inserting the following: `The term `utility' means any person

who is a local exchange carrier or an electric, gas, water,

steam, or other public utility, and who owns or controls poles,

ducts, conduits, or rights-of-way used, in whole or in part,

for any wire communications.';

(2) in subsection (a)(4), by inserting after `system' the

following: `or provider of telecommunications service';

(3) by inserting after subsection (a)(4) the following:

`(5) For purposes of this section, the term

`telecommunications carrier' (as defined in section 3 of this

Act) does not include any incumbent local exchange carrier as

defined in section 251(h).';

(4) by inserting after `conditions' in subsection (c)(1) a

comma and the following: `or access to poles, ducts, conduits,

and rights-of-way as provided in subsection (f),';

(5) in subsection (c)(2)(B), by striking `cable television

services' and inserting `the services offered via such

attachments';

(6) by inserting after subsection (d)(2) the following:

`(3) This subsection shall apply to the rate for any pole

attachment used by a cable television system solely to provide

cable service. Until the effective date of the regulations required

under subsection (e), this subsection shall also apply to the rate

for any pole attachment used by a cable system or any

telecommunications carrier (to the extent such carrier is not a

party to a pole attachment agreement) to provide any

telecommunications service.'; and

(7) by adding at the end thereof the following:

`(e)(1) The Commission shall, no later than 2 years after the

date of enactment of the Telecommunications Act of 1996, prescribe

regulations in accordance with this subsection to govern the

charges for pole attachments used by telecommunications carriers to

provide telecommunications services, when the parties fail to

resolve a dispute over such charges. Such regulations shall ensure

that a utility charges just, reasonable, and nondiscriminatory

rates for pole attachments.

`(2) A utility shall apportion the cost of providing space on a

pole, duct, conduit, or right-of-way other than the usable space

among entities so that such apportionment equals two-thirds of the

costs of providing space other than the usable space that would be

allocated to such entity under an equal apportionment of such costs

among all attaching entities.

`(3) A utility shall apportion the cost of providing usable space

among all entities according to the percentage of usable space

required for each entity.

`(4) The regulations required under paragraph (1) shall become

effective 5 years after the date of enactment of the

Telecommunications Act of 1996. Any increase in the rates for pole

attachments that result from the adoption of the regulations

required by this subsection shall be phased in equal annual

increments over a period of 5 years beginning on the effective date

of such regulations.

`(f)(1) A utility shall provide a cable television system or any

telecommunications carrier with nondiscriminatory access to any

pole, duct, conduit, or right-of-way owned or controlled by it.

`(2) Notwithstanding paragraph (1), a utility providing electric

service may deny a cable television system or any

telecommunications carrier access to its poles, ducts, conduits, or

rights-of-way, on a non-discriminatory basis where there is

insufficient capacity and for reasons of safety, reliability and

generally applicable engineering purposes.

`(g) A utility that engages in the provision of

telecommunications services or cable services shall impute to its

costs of providing such services (and charge any affiliate,

subsidiary, or associate company engaged in the provision of such

services) an equal amount to the pole attachment rate for which

such company would be liable under this section.

`(h) Whenever the owner of a pole, duct, conduit, or right-of-way

intends to modify or alter such pole, duct, conduit, or

right-of-way, the owner shall provide written notification of such

action to any entity that has obtained an attachment to such

conduit or right-of-way so that such entity may have a reasonable

opportunity to add to or modify its existing attachment. Any entity

that adds to or modifies its existing attachment after receiving

such notification shall bear a proportionate share of the costs

incurred by the owner in making such pole, duct, conduit, or

right-of-way accessible.

`(i) An entity that obtains an attachment to a pole, conduit, or

right-of-way shall not be required to bear any of the costs of

rearranging or replacing its attachment, if such rearrangement or

replacement is required as a result of an additional attachment or

the modification of an existing attachment sought by any other

entity (including the owner of such pole, duct, conduit, or

right-of-way).'.

SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.

(a) NATIONAL WIRELESS TELECOMMUNICATIONS SITING POLICY- Section

332(c) (47 U.S.C. 332(c)) is amended by adding at the end the

following new paragraph:

`(7) PRESERVATION OF LOCAL ZONING AUTHORITY-

`(A) GENERAL AUTHORITY- Except as provided in this

paragraph, nothing in this Act shall limit or affect the

authority of a State or local government or instrumentality

thereof over decisions regarding the placement,

construction, and modification of personal wireless service

facilities.

`(B) LIMITATIONS-

`(i) The regulation of the placement, construction,

and modification of personal wireless service

facilities by any State or local government or

instrumentality thereof--

`(I) shall not unreasonably discriminate among providers of

functionally equivalent services; and

`(II) shall not prohibit or have the effect of prohibiting the

provision of personal wireless services.

`(ii) A State or local government or instrumentality

thereof shall act on any request for authorization to

place, construct, or modify personal wireless service

facilities within a reasonable period of time after the

request is duly filed with such government or

instrumentality, taking into account the nature and

scope of such request.

`(iii) Any decision by a State or local government or

instrumentality thereof to deny a request to place,

construct, or modify personal wireless service

facilities shall be in writing and supported by

substantial evidence contained in a written record.

`(iv) No State or local government or instrumentality

thereof may regulate the placement, construction, and

modification of personal wireless service facilities on

the basis of the environmental effects of radio

frequency emissions to the extent that such facilities

comply with the Commission's regulations concerning

such emissions.

`(v) Any person adversely affected by any final

action or failure to act by a State or local government

or any instrumentality thereof that is inconsistent

with this subparagraph may, within 30 days after such

action or failure to act, commence an action in any

court of competent jurisdiction. The court shall hear

and decide such action on an expedited basis. Any

person adversely affected by an act or failure to act

by a State or local government or any instrumentality

thereof that is inconsistent with clause (iv) may

petition the Commission for relief.

`(C) DEFINITIONS- For purposes of this paragraph--

`(i) the term `personal wireless services' means

commercial mobile services, unlicensed wireless

services, and common carrier wireless exchange access

services;

`(ii) the term `personal wireless service facilities'

means facilities for the provision of personal wireless

services; and

`(iii) the term `unlicensed wireless service' means

the offering of telecommunications services using duly

authorized devices which do not require individual

licenses, but does not mean the provision of

direct-to-home satellite services (as defined in

section 303(v)).'.

(b) RADIO FREQUENCY EMISSIONS- Within 180 days after the

enactment of this Act, the Commission shall complete action in ET

Docket 93-62 to prescribe and make effective rules regarding the

environmental effects of radio frequency emissions.

(c) AVAILABILITY OF PROPERTY- Within 180 days of the enactment of

this Act, the President or his designee shall prescribe procedures

by which Federal departments and agencies may make available on a

fair, reasonable, and nondiscriminatory basis, property,

rights-of-way, and easements under their control for the placement

of new telecommunications services that are dependent, in whole or

in part, upon the utilization of Federal spectrum rights for the

transmission or reception of such services. These procedures may

establish a presumption that requests for the use of property,

rights-of-way, and easements by duly authorized providers should be

granted absent unavoidable direct conflict with the department or

agency's mission, or the current or planned use of the property,

rights-of-way, and easements in question. Reasonable fees may be

charged to providers of such telecommunications services for use of

property, rights-of-way, and easements. The Commission shall

provide technical support to States to encourage them to make

property, rights-of-way, and easements under their jurisdiction

available for such purposes.

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

Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the end

the following new paragraph:

`(8) MOBILE SERVICES ACCESS- A person engaged in the

provision of commercial mobile services, insofar as such person

is so engaged, shall not be required to provide equal access to

common carriers for the provision of telephone toll services.

If the Commission determines that subscribers to such services

are denied access to the provider of telephone toll services of

the subscribers' choice, and that such denial is contrary to

the public interest, convenience, and necessity, then the

Commission shall prescribe regulations to afford subscribers

unblocked access to the provider of telephone toll services of

the subscribers' choice through the use of a carrier

identification code assigned to such provider or other

mechanism. The requirements for unblocking shall not apply to

mobile satellite services unless the Commission finds it to be

in the public interest to apply such requirements to such

services.'.

SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.

(a) IN GENERAL- The Commission and each State commission with

regulatory jurisdiction over telecommunications services shall

encourage the deployment on a reasonable and timely basis of

advanced telecommunications capability to all Americans (including,

in particular, elementary and secondary schools and classrooms) by

utilizing, in a manner consistent with the public interest,

convenience, and necessity, price cap regulation, regulatory

forbearance, measures that promote competition in the local

telecommunications market, or other regulating methods that remove

barriers to infrastructure investment.

(b) INQUIRY- The Commission shall, within 30 months after the

date of enactment of this Act, and regularly thereafter, initiate a

notice of inquiry concerning the availability of advanced

telecommunications capability to all Americans (including, in

particular, elementary and secondary schools and classrooms) and

shall complete the inquiry within 180 days after its initiation. In

the inquiry, the Commission shall determine whether advanced

telecommunications capability is being deployed to all Americans in

a reasonable and timely fashion. If the Commission's determination

is negative, it shall take immediate action to accelerate

deployment of such capability by removing barriers to

infrastructure investment and by promoting competition in the

telecommunications market.

(c) DEFINITIONS- For purposes of this subsection:

(1) ADVANCED TELECOMMUNICATIONS CAPABILITY- The term

`advanced telecommunications capability' is defined, without

regard to any transmission media or technology, as high-speed,

switched, broadband telecommunications capability that enables

users to originate and receive high-quality voice, data,

graphics, and video telecommunications using any technology.

(2) ELEMENTARY AND SECONDARY SCHOOLS- The term `elementary

and secondary schools' means elementary and secondary schools,

as defined in paragraphs (14) and (25), respectively, of

section 14101 of the Elementary and Secondary Education Act of

1965 (20 U.S.C. 8801).

SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.

(a) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Section 309(j)(8)

(47 U.S.C. 309(j)(8)) is amended by adding at the end the following

new subparagraph:

`(C) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Any

deposits the Commission may require for the qualification

of any person to bid in a system of competitive bidding

pursuant to this subsection shall be deposited in an

interest bearing account at a financial institution

designated for purposes of this subsection by the

Commission (after consultation with the Secretary of the

Treasury). Within 45 days following the conclusion of the

competitive bidding--

`(i) the deposits of successful bidders shall be paid

to the Treasury;

`(ii) the deposits of unsuccessful bidders shall be

returned to such bidders; and

`(iii) the interest accrued to the account shall be

transferred to the Telecommunications Development Fund

established pursuant to section 714 of this Act.'.

(b) ESTABLISHMENT AND OPERATION OF FUND- Title VII is amended by

inserting after section 713 (as added by section 305) the following

new section:

`SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.

`(a) PURPOSE OF SECTION- It is the purpose of this section--

`(1) to promote access to capital for small businesses in

order to enhance competition in the telecommunications industry;

`(2) to stimulate new technology development, and promote

employment and training; and

`(3) to support universal service and promote delivery of

telecommunications services to underserved rural and urban areas.

`(b) ESTABLISHMENT OF FUND- There is hereby established a body

corporate to be known as the Telecommunications Development Fund,

which shall have succession until dissolved. The Fund shall

maintain its principal office in the District of Columbia and shall

be deemed, for purposes of venue and jurisdiction in civil actions,

to be a resident and citizen thereof.

`(c) BOARD OF DIRECTORS-

`(1) COMPOSITION OF BOARD; CHAIRMAN- The Fund shall have a

Board of Directors which shall consist of 7 persons appointed

by the Chairman of the Commission. Four of such directors shall

be representative of the private sector and three of such

directors shall be representative of the Commission, the Small

Business Administration, and the Department of the Treasury,

respectively. The Chairman of the Commission shall appoint one

of the representatives of the private sector to serve as

chairman of the Fund within 30 days after the date of enactment

of this section, in order to facilitate rapid creation and

implementation of the Fund. The directors shall include members

with experience in a number of the following areas: finance,

investment banking, government banking, communications law and

administrative practice, and public policy.

`(2) TERMS OF APPOINTED AND ELECTED MEMBERS- The directors

shall be eligible to serve for terms of 5 years, except of the

initial members, as designated at the time of their appointment--

`(A) 1 shall be eligible to service for a term of 1 year;

`(B) 1 shall be eligible to service for a term of 2 years;

`(C) 1 shall be eligible to service for a term of 3 years;

`(D) 2 shall be eligible to service for a term of 4

years; and

`(E) 2 shall be eligible to service for a term of 5 years

(1 of whom shall be the Chairman).

Directors may continue to serve until their successors have

been appointed and have qualified.

`(3) MEETINGS AND FUNCTIONS OF THE BOARD- The Board of

Directors shall meet at the call of its Chairman, but at least

quarterly. The Board shall determine the general policies which

shall govern the operations of the Fund. The Chairman of the

Board shall, with the approval of the Board, select, appoint,

and compensate qualified persons to fill the offices as may be

provided for in the bylaws, with such functions, powers, and

duties as may be prescribed by the bylaws or by the Board of

Directors, and such persons shall be the officers of the Fund

and shall discharge all such functions, powers, and duties.

`(d) ACCOUNTS OF THE FUND- The Fund shall maintain its accounts

at a financial institution designated for purposes of this section

by the Chairman of the Board (after consultation with the

Commission and the Secretary of the Treasury). The accounts of the

Fund shall consist of--

`(1) interest transferred pursuant to section 309(j)(8)(C) of

this Act;

`(2) such sums as may be appropriated to the Commission for

advances to the Fund;

`(3) any contributions or donations to the Fund that are

accepted by the Fund; and

`(4) any repayment of, or other payment made with respect to,

loans, equity, or other extensions of credit made from the Fund.

`(e) USE OF THE FUND- All moneys deposited into the accounts of

the Fund shall be used solely for--

`(1) the making of loans, investments, or other extensions of

credits to eligible small businesses in accordance with

subsection (f);

`(2) the provision of financial advice to eligible small

businesses;

`(3) expenses for the administration and management of the

Fund (including salaries, expenses, and the rental or purchase

of office space for the fund);

`(4) preparation of research, studies, or financial analyses;

and

`(5) other services consistent with the purposes of this

section.

`(f) LENDING AND CREDIT OPERATIONS- Loans or other extensions of

credit from the Fund shall be made available in accordance with the

requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661

et seq.) and any other applicable law to an eligible small business

on the basis of--

`(1) the analysis of the business plan of the eligible small

business;

`(2) the reasonable availability of collateral to secure the

loan or credit extension;

`(3) the extent to which the loan or credit extension

promotes the purposes of this section; and

`(4) other lending policies as defined by the Board.

`(g) RETURN OF ADVANCES- Any advances appropriated pursuant to

subsection (d)(2) shall be disbursed upon such terms and conditions

(including conditions relating to the time or times of repayment)

as are specified in any appropriations Act providing such advances.

`(h) GENERAL CORPORATE POWERS- The Fund shall have power--

`(1) to sue and be sued, complain and defend, in its

corporate name and through its own counsel;

`(2) to adopt, alter, and use the corporate seal, which shall

be judicially noticed;

`(3) to adopt, amend, and repeal by its Board of Directors,

bylaws, rules, and regulations as may be necessary for the

conduct of its business;

`(4) to conduct its business, carry on its operations, and

have officers and exercise the power granted by this section in

any State without regard to any qualification or similar

statute in any State;

`(5) to lease, purchase, or otherwise acquire, own, hold,

improve, use, or otherwise deal in and with any property, real,

personal, or mixed, or any interest therein, wherever situated,

for the purposes of the Fund;

`(6) to accept gifts or donations of services, or of

property, real, personal, or mixed, tangible or intangible, in

aid of any of the purposes of the Fund;

`(7) to sell, convey, mortgage, pledge, lease, exchange, and

otherwise dispose of its property and assets;

`(8) to appoint such officers, attorneys, employees, and

agents as may be required, to determine their qualifications,

to define their duties, to fix their salaries, require bonds

for them, and fix the penalty thereof; and

`(9) to enter into contracts, to execute instruments, to

incur liabilities, to make loans and equity investment, and to

do all things as are necessary or incidental to the proper

management of its affairs and the proper conduct of its business.

`(i) ACCOUNTING, AUDITING, AND REPORTING- The accounts of the

Fund shall be audited annually. Such audits shall be conducted in

accordance with generally accepted auditing standards by

independent certified public accountants. A report of each such

audit shall be furnished to the Secretary of the Treasury and the

Commission. The representatives of the Secretary and the Commission

shall have access to all books, accounts, financial records,

reports, files, and all other papers, things, or property belonging

to or in use by the Fund and necessary to facilitate the audit.

`(j) REPORT ON AUDITS BY TREASURY- A report of each such audit

for a fiscal year shall be made by the Secretary of the Treasury to

the President and to the Congress not later than 6 months following

the close of such fiscal year. The report shall set forth the scope

of the audit and shall include a statement of assets and

liabilities, capital and surplus or deficit; a statement of surplus

or deficit analysis; a statement of income and expense; a statement

of sources and application of funds; and such comments and

information as may be deemed necessary to keep the President and

the Congress informed of the operations and financial condition of

the Fund, together with such recommendations with respect thereto

as the Secretary may deem advisable.

`(k) DEFINITIONS- As used in this section:

`(1) ELIGIBLE SMALL BUSINESS- The term `eligible small

business' means business enterprises engaged in the

telecommunications industry that have $50,000,000 or less in

annual revenues, on average over the past 3 years prior to

submitting the application under this section.

`(2) FUND- The term `Fund' means the Telecommunications

Development Fund established pursuant to this section.

`(3) TELECOMMUNICATIONS INDUSTRY- The term

`telecommunications industry' means communications businesses

using regulated or unregulated facilities or services and

includes broadcasting, telecommunications, cable, computer,

data transmission, software, programming, advanced messaging,

and electronics businesses.'.

SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

(a) FINDINGS; PURPOSE-

(1) FINDINGS- The Congress finds as follows:

(A) CORPORATION- There has been established in the

District of Columbia a private, nonprofit corporation known

as the National Education Technology Funding Corporation

which is not an agency or independent establishment of the

Federal Government.

(B) BOARD OF DIRECTORS- The Corporation is governed by a

Board of Directors, as prescribed in the Corporation's

articles of incorporation, consisting of 15 members, of

which--

(i) five members are representative of public

agencies representative of schools and public libraries;

(ii) five members are representative of State

government, including persons knowledgeable about State

finance, technology and education; and

(iii) five members are representative of the private

sector, with expertise in network technology, finance

and management.

(C) CORPORATE PURPOSES- The purposes of the Corporation,

as set forth in its articles of incorporation, are--

(i) to leverage resources and stimulate private

investment in education technology infrastructure;

(ii) to designate State education technology agencies

to receive loans, grants or other forms of assistance

from the Corporation;

(iii) to establish criteria for encouraging States to--

(I) create, maintain, utilize and upgrade interactive high

capacity networks capable of providing audio, visual and data

communications for elementary schools, secondary schools and public

libraries;

(II) distribute resources to assure equitable aid to all

elementary schools and secondary schools in the State and achieve

universal access to network technology; and

(III) upgrade the delivery and development of learning through

innovative technology-based instructional tools and applications;

(iv) to provide loans, grants and other forms of

assistance to State education technology agencies, with

due regard for providing a fair balance among types of

school districts and public libraries assisted and the

disparate needs of such districts and libraries;

(v) to leverage resources to provide maximum aid to

elementary schools, secondary schools and public

libraries; and

(vi) to encourage the development of education

telecommunications and information technologies through

public-private ventures, by serving as a clearinghouse

for information on new education technologies, and by

providing technical assistance, including assistance to

States, if needed, to establish State education

technology agencies.

(2) PURPOSE- The purpose of this section is to recognize the

Corporation as a nonprofit corporation operating under the laws

of the District of Columbia, and to provide authority for

Federal departments and agencies to provide assistance to the

Corporation.

(b) DEFINITIONS- For the purpose of this section--

(1) the term `Corporation' means the National Education

Technology Funding Corporation described in subsection (a)(1)(A);

(2) the terms `elementary school' and `secondary school' have

the same meanings given such terms in section 14101 of the

Elementary and Secondary Education Act of 1965; and

(3) the term `public library' has the same meaning given such

term in section 3 of the Library Services and Construction Act.

(c) ASSISTANCE FOR EDUCATION TECHNOLOGY PURPOSES-

(1) RECEIPT BY CORPORATION- Notwithstanding any other

provision of law, in order to carry out the corporate purposes

described in subsection (a)(1)(C), the Corporation shall be

eligible to receive discretionary grants, contracts, gifts,

contributions, or technical assistance from any Federal

department or agency, to the extent otherwise permitted by law.

(2) AGREEMENT- In order to receive any assistance described

in paragraph (1) the Corporation shall enter into an agreement

with the Federal department or agency providing such

assistance, under which the Corporation agrees--

(A) to use such assistance to provide funding and

technical assistance only for activities which the Board of

Directors of the Corporation determines are consistent with

the corporate purposes described in subsection (a)(1)(C);

(B) to review the activities of State education

technology agencies and other entities receiving assistance

from the Corporation to assure that the corporate purposes

described in subsection (a)(1)(C) are carried out;

(C) that no part of the assets of the Corporation shall

accrue to the benefit of any member of the Board of

Directors of the Corporation, any officer or employee of

the Corporation, or any other individual, except as salary

or reasonable compensation for services;

(D) that the Board of Directors of the Corporation will

adopt policies and procedures to prevent conflicts of

interest;

(E) to maintain a Board of Directors of the Corporation

consistent with subsection (a)(1)(B);

(F) that the Corporation, and any entity receiving the

assistance from the Corporation, are subject to the

appropriate oversight procedures of the Congress; and

(G) to comply with--

(i) the audit requirements described in subsection

(d); and

(ii) the reporting and testimony requirements

described in subsection (e).

(3) CONSTRUCTION- Nothing in this section shall be construed

to establish the Corporation as an agency or independent

establishment of the Federal Government, or to establish the

members of the Board of Directors of the Corporation, or the

officers and employees of the Corporation, as officers or

employees of the Federal Government.

(d) AUDITS-

(1) AUDITS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS-

(A) IN GENERAL- The Corporation's financial statements

shall be audited annually in accordance with generally

accepted auditing standards by independent certified public

accountants who are certified by a regulatory authority of

a State or other political subdivision of the United

States. The audits shall be conducted at the place or

places where the accounts of the Corporation are normally

kept. All books, accounts, financial records, reports,

files, and all other papers, things, or property belonging

to or in use by the Corporation and necessary to facilitate

the audit shall be made available to the person or persons

conducting the audits, and full facilities for verifying

transactions with the balances or securities held by

depositories, fiscal agents, and custodians shall be

afforded to such person or persons.

(B) REPORTING REQUIREMENTS- The report of each annual

audit described in subparagraph (A) shall be included in

the annual report required by subsection (e)(1).

(2) RECORDKEEPING REQUIREMENTS; AUDIT AND EXAMINATION OF

BOOKS-

(A) RECORDKEEPING REQUIREMENTS- The Corporation shall

ensure that each recipient of assistance from the

Corporation keeps--

(i) separate accounts with respect to such assistance;

(ii) such records as may be reasonably necessary to

fully disclose--

(I) the amount and the disposition by such recipient of the

proceeds of such assistance;

(II) the total cost of the project or undertaking in connection

with which such assistance is given or used; and

(III) the amount and nature of that portion of the cost of the

project or undertaking supplied by other sources; and

(iii) such other records as will facilitate an

effective audit.

(B) AUDIT AND EXAMINATION OF BOOKS- The Corporation shall

ensure that the Corporation, or any of the Corporation's

duly authorized representatives, shall have access for the

purpose of audit and examination to any books, documents,

papers, and records of any recipient of assistance from the

Corporation that are pertinent to such assistance.

Representatives of the Comptroller General shall also have

such access for such purpose.

(e) ANNUAL REPORT; TESTIMONY TO THE CONGRESS-

(1) ANNUAL REPORT- Not later than April 30 of each year, the

Corporation shall publish an annual report for the preceding

fiscal year and submit that report to the President and the

Congress. The report shall include a comprehensive and detailed

evaluation of the Corporation's operations, activities,

financial condition, and accomplishments under this section and

may include such recommendations as the Corporation deems

appropriate.

(2) TESTIMONY BEFORE CONGRESS- The members of the Board of

Directors, and officers, of the Corporation shall be available

to testify before appropriate committees of the Congress with

respect to the report described in paragraph (1), the report of

any audit made by the Comptroller General pursuant to this

section, or any other matter which any such committee may

determine appropriate.

SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS SERVICES

FOR MEDICAL PURPOSES.

The Secretary of Commerce, in consultation with the Secretary of

Health and Human Services and other appropriate departments and

agencies, shall submit a report to the Committee on Commerce of the

House of Representatives and the Committee on Commerce, Science,

and Transportation of the Senate concerning the activities of the

Joint Working Group on Telemedicine, together with any findings

reached in the studies and demonstrations on telemedicine funded by

the Public Health Service or other Federal agencies. The report

shall examine questions related to patient safety, the efficacy and

quality of the services provided, and other legal, medical, and

economic issues related to the utilization of advanced

telecommunications services for medical purposes. The report shall

be submitted to the respective committees by January 31, 1997.

SEC. 710. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL- In addition to any other sums authorized by law,

there are authorized to be appropriated to the Federal

Communications Commission such sums as may be necessary to carry

out this Act and the amendments made by this Act.

(b) EFFECT ON FEES- For the purposes of section 9(b)(2) (47

U.S.C. 159(b)(2)), additional amounts appropriated pursuant to

subsection (a) shall be construed to be changes in the amounts

appropriated for the performance of activities described in section

9(a) of the Communications Act of 1934.

(c) FUNDING AVAILABILITY- Section 309(j)(8)(B) (47 U.S.C.

309(j)(8)(B)) is amended by adding at the end the following new

sentence: `Such offsetting collections are authorized to remain

available until expended.'.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.