TITLE I--TELECOMMUNICATION SERVICES
SUBTITLE A--TELECOMMUNICATIONS SERVICES
SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.
(a) AMENDMENT.--Title II is amended by inserting after section
229 (47 U.S.C. 229) the following new part:
"PART II--DEVELOPMENT OF COMPETITIVE MARKETS
"SEC. 251. INTERCONNECTION.
"(a) GENERAL DUTY OF TELECOMMUNICATIONS CARRIERS.--Each
telecommunications carrier has the duty--
"(1) to interconnect directly or indirectly with the
facilities and equipment of other telecommunications carriers;
and
"(2) not to install network features, functions, or
capabilities that do not comply with the guidelines and
standards established pursuant to section 255 or 256.
"(b) OBLIGATIONS OF ALL LOCAL EXCHANGE CARRIERS.--Each local
exchange carrier has the following duties:
"(1) RESALE.--The duty not to prohibit, and not to impose
unreasonable or discriminatory conditions or limitations on, the
resale of its telecommunications services.
"(2) NUMBER PORTABILITY.--The duty to provide, to the
extent technically feasible, number portability in accordance
with requirements prescribed by the Commission.
"(3) DIALING PARITY.--The duty to provide dialing parity to
competing providers of telephone exchange service and telephone
toll service, and the duty to permit all such providers to have
nondiscriminatory access to telephone numbers, operator services,
directory assistance, and directory listing, with no
unreasonable dialing delays.
"(4) ACCESS TO RIGHTS-OF-WAY.--The duty to afford access to
the poles, ducts, conduits, and rights-of-way of such carrier to
competing providers of telecommunications services on rates,
terms, and conditions that are consistent with section 224.
"(5) RECIPROCAL COMPENSATION.--The duty to establish
reciprocal compensation arrangements for the transport and
termination of telecommunications.
"(c) ADDITIONAL OBLIGATIONS OF INCUMBENT LOCAL EXCHANGE
CARRIERS.--In addition to the duties contained in subsection (b),
each incumbent local exchange carrier has the following duties:
"(1) DUTY TO NEGOTIATE.--The duty to negotiate in good
faith in accordance with section 252 the particular terms and
conditions of agreements to fulfill the duties described in
paragraphs (1) through (5) of subsection (b) and this subsection.
The requesting telecommunications carrier also has the duty to
negotiate in good faith the terms and conditions of such
agreements.
"(2) INTERCONNECTION.--The duty to provide, for the
facilities and equipment of any requesting telecommunications
carrier, interconnection with the local exchange carrier's
network--
"(A) for the transmission and routing of telephone
exchange service and exchange access;
"(B) at any technically feasible point within the
carrier's network;
"(C) that is at least equal in quality to that provided
by the local exchange carrier to itself or to any subsidiary,
affiliate, or any other party to which the carrier provides
interconnection; and
"(D) on rates, terms, and conditions that are just,
reasonable, and nondiscriminatory, in accordance with the
terms and conditions of the agreement and the requirements
of this section and section 252.
"(3) UNBUNDLED ACCESS.--The duty to provide, to any
requesting telecommunications carrier for the provision of a
telecommunications service, nondiscriminatory access to network
elements on an unbundled basis at any technically feasible point
on rates, terms, and conditions that are just, reasonable, and
nondiscriminatory in accordance with the terms and conditions of
the agreement and the requirements of this section and section
252. An incumbent local exchange carrier shall provide such
unbundled network elements in a manner that allows requesting
carriers to combine such elements in order to provide such
telecommunications service.
"(4) RESALE.--The duty--
"(A) to offer for resale at wholesale rates any
telecommunications service that the carrier provides at
retail to subscribers who are not telecommunications
carriers; and
"(B) not to prohibit, and not to impose unreasonable or
discriminatory conditions or limitations on, the resale of
such telecommunications service, except that a State
commission may, consistent with regulations prescribed by
the Commission under this section, prohibit a reseller that
obtains at wholesale rates a telecommunications service that
is available at retail only to a category of subscribers
from offering such service to a different category of
subscribers.
"(5) NOTICE OF CHANGES.--The duty to provide reasonable
public notice of changes in the information necessary for the
transmission and routing of services using that local exchange
carrier's facilities or networks, as well as of any other
changes that would affect the interoperability of those
facilities and networks.
"(6) COLLOCATION.--The duty to provide, on rates, terms,
and conditions that are just, reasonable, and nondiscriminatory,
for physical collocation of equipment necessary for
interconnection or access to unbundled network elements at the
premises of the local exchange carrier, except that the carrier
may provide for virtual collocation if the local exchange
carrier demonstrates to the State commission that physical
collocation is not practical for technical reasons or because of
space limitations.
"(d) IMPLEMENTATION.--
"(1) IN GENERAL.--Within 6 months after the date of
enactment of the Telecommunications Act of 1996, the Commission
shall complete all actions necessary to establish regulations to
implement the requirements of this section.
"(2) ACCESS STANDARDS.--In determining what network
elements should be made available for purposes of subsection
(c)(3), the Commission shall consider, at a minimum, whether--
"(A) access to such network elements as are proprietary
in nature is necessary; and
"(B) the failure to provide access to such network
elements would impair the ability of the telecommunications
carrier seeking access to provide the services that it seeks
to offer.
"(3) PRESERVATION OF STATE ACCESS REGULATIONS.--In
prescribing and enforcing regulations to implement the
requirements of this section, the Commission shall not preclude
the enforcement of any regulation, order, or policy of a State
commission that--
"(A) establishes access and interconnection obligations
of local exchange carriers;
"(B) is consistent with the requirements of this
section; and
"(C) does not substantially prevent implementation of
the requirements of this section and the purposes of this
part.
"(e) NUMBERING ADMINISTRATION.--
"(1) COMMISSION AUTHORITY AND JURISDICTION.--The Commission
shall create or designate one or more impartial entities to
administer telecommunications numbering and to make such numbers
available on an equitable basis. The Commission shall have
exclusive jurisdiction over those portions of the North American
Numbering Plan that pertain to the United States. Nothing in
this paragraph shall preclude the Commission from delegating to
State commissions or other entities all or any portion of such
jurisdiction.
"(2) COSTS.--The cost of establishing telecommunications
numbering administration arrangements and number portability
shall be borne by all telecommunications carriers on a
competitively neutral basis as determined by the Commission.
"(f) EXEMPTIONS, SUSPENSIONS, AND MODIFICATIONS.--
"(1) EXEMPTION FOR CERTAIN RURAL TELEPHONE COMPANIES.--
"(A) EXEMPTION.--Subsection (c) of this section shall
not apply to a rural telephone company until (i) such
company has received a bona fide request for interconnection,
services, or network elements, and (ii) the State commission
determines (under subparagraph (B)) that such request is not
unduly economically burdensome, is technically feasible, and
is consistent with section 254 (other than subsections
(b)(7) and (c)(1)(D) thereof).
"(B) STATE TERMINATION OF EXEMPTION AND IMPLEMENTATION
SCHEDULE.--The party making a bona fide request of a rural
telephone company for interconnection, services, or network
elements shall submit a notice of its request to the State
commission. The State commission shall conduct an inquiry
for the purpose of determining whether to terminate the
exemption under subparagraph (A). Within 120 days after the
State commission receives notice of the request, the State
commission shall terminate the exemption if the request is
not unduly economically burdensome, is technically feasible,
and is consistent with section 254 (other than subsections
(b)(7) and (c)(1)(D) thereof). Upon termination of the
exemption, a State commission shall establish an
implementation schedule for compliance with the request that
is consistent in time and manner with Commission
regulations.
"(C) LIMITATION ON EXEMPTION.--The exemption provided
by this paragraph shall not apply with respect to a request
under subsection (c) from a cable operator providing video
programming, and seeking to provide any telecommunications
service, in the area in which the rural telephone company
provides video programming. The limitation contained in this
subparagraph shall not apply to a rural telephone company
that is providing video programming on the date of enactment
of the Telecommunications Act of 1996.
"(2) SUSPENSIONS AND MODIFICATIONS FOR RURAL CARRIERS.--A
local exchange carrier with fewer than 2 percent of the Nation's
subscriber lines installed in the aggregate nationwide may
petition a State commission for a suspension or modification of
the application of a requirement or requirements of subsection
(b) or (c) to telephone exchange service facilities specified in
such petition. The State commission shall grant such petition to
the extent that, and for such duration as, the State commission
determines that such suspension or modification--
"(A) is necessary--
"(i) to avoid a significant adverse economic impact
on users of telecommunications services generally;
"(ii) to avoid imposing a requirement that is
unduly economically burdensome; or
"(iii) to avoid imposing a requirement that is
technically infeasible; and
"(B) is consistent with the public interest,
convenience, and necessity.
The State commission shall act upon any petition filed
under this paragraph within 180 days after receiving such
petition. Pending such action, the State commission may suspend
enforcement of the requirement or requirements to which the
petition applies with respect to the petitioning carrier or
carriers.
"(g) CONTINUED ENFORCEMENT OF EXCHANGE ACCESS AND
INTERCONNECTION REQUIREMENTS.--On and after the date of enactment of
the Telecommunications Act of 1996, each local exchange carrier, to
the extent that it provides wireline services, shall provide
exchange access, information access, and exchange services for such
access to interexchange carriers and information service providers
in accordance with the same equal access and nondiscriminatory
interconnection restrictions and obligations (including receipt of
compensation) that apply to such carrier on the date immediately
preceding the date of enactment of the Telecommunications Act of
1996 under any court order, consent decree, or regulation, order, or
policy of the Commission, until such restrictions and obligations
are explicitly superseded by regulations prescribed by the
Commission after such date of enactment. During the period beginning
on such date of enactment and until such restrictions and
obligations are so superseded, such restrictions and obligations
shall be enforceable in the same manner as regulations of the
Commission.
"(h) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER.--
"(1) DEFINITION.--For purposes of this section, the term
`incumbent local exchange carrier' means, with respect to an
area, the local exchange carrier that--
"(A) on the date of enactment of the Telecommunications
Act of 1996, provided telephone exchange service in such
area; and
"(B)(i) on such date of enactment, was deemed to be a
member of the exchange carrier association pursuant to
section 69.601(b) of the Commission's regulations (47 C.F.R.
69.601(b)); or
"(ii) is a person or entity that, on or after such date
of enactment, became a successor or assign of a member
described in clause (i).
"(2) TREATMENT OF COMPARABLE CARRIERS AS INCUMBENTS.--The
Commission may, by rule, provide for the treatment of a local
exchange carrier (or class or category thereof) as an incumbent
local exchange carrier for purposes of this section if--
"(A) such carrier occupies a position in the market for
telephone exchange service within an area that is comparable
to the position occupied by a carrier described in paragraph
(1);
"(B) such carrier has substantially replaced an
incumbent local exchange carrier described in paragraph (1);
and
"(C) such treatment is consistent with the public
interest, convenience, and necessity and the purposes of
this section.
"(i) SAVINGS PROVISION.--Nothing in this section shall be
construed to limit or otherwise affect the Commission's authority
under section 201.
"SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND APPROVAL OF
AGREEMENTS.
"(a) AGREEMENTS ARRIVED AT THROUGH NEGOTIATION.--
"(1) VOLUNTARY NEGOTIATIONS.--Upon receiving a request for
interconnection, services, or network elements pursuant to
section 251, an incumbent local exchange carrier may negotiate
and enter into a binding agreement with the requesting
telecommunications carrier or carriers without regard to the
standards set forth in subsections (b) and (c) of section 251.
The agreement shall include a detailed schedule of itemized
charges for interconnection and each service or network element
included in the agreement. The agreement, including any
interconnection agreement negotiated before the date of
enactment of the Telecommunications Act of 1996, shall be
submitted to the State commission under subsection (e) of this
section.
"(2) MEDIATION.--Any party negotiating an agreement under
this section may, at any point in the negotiation, ask a State
commission to participate in the negotiation and to mediate any
differences arising in the course of the negotiation.
"(b) AGREEMENTS ARRIVED AT THROUGH COMPULSORY ARBITRATION.--
"(1) ARBITRATION.--During the period from the 135th to the
160th day (inclusive) after the date on which an incumbent local
exchange carrier receives a request for negotiation under this
section, the carrier or any other party to the negotiation may
petition a State commission to arbitrate any open issues.
"(2) DUTY OF PETITIONER.--
"(A) A party that petitions a State commission under
paragraph (1) shall, at the same time as it submits the
petition, provide the State commission all relevant
documentation concerning--
"(i) the unresolved issues;
"(ii) the position of each of the parties with
respect to those issues; and
"(iii) any other issue discussed and resolved by
the parties.
"(B) A party petitioning a State commission under
paragraph (1) shall provide a copy of the petition and any
documentation to the other party or parties not later than
the day on which the State commission receives the petition.
"(3) OPPORTUNITY TO RESPOND.--A non-petitioning party to a
negotiation under this section may respond to the other party's
petition and provide such additional information as it wishes
within 25 days after the State commission receives the petition.
"(4) ACTION BY STATE COMMISSION.--
"(A) The State commission shall limit its consideration
of any petition under paragraph (1) (and any response
thereto) to the issues set forth in the petition and in the
response, if any, filed under paragraph (3).
"(B) The State commission may require the petitioning
party and the responding party to provide such information
as may be necessary for the State commission to reach a
decision on the unresolved issues. If any party refuses or
fails unreasonably to respond on a timely basis to any
reasonable request from the State commission, then the State
commission may proceed on the basis of the best information
available to it from whatever source derived.
"(C) The State commission shall resolve each issue set
forth in the petition and the response, if any, by imposing
appropriate conditions as required to implement subsection
(c) upon the parties to the agreement, and shall conclude
the resolution of any unresolved issues not later than 9
months after the date on which the local exchange carrier
received the request under this section.
"(5) REFUSAL TO NEGOTIATE.--The refusal of any other party
to the negotiation to participate further in the negotiations,
to cooperate with the State commission in carrying out its
function as an arbitrator, or to continue to negotiate in good
faith in the presence, or with the assistance, of the State
commission shall be considered a failure to negotiate in good
faith.
"(c) STANDARDS FOR ARBITRATION.--In resolving by arbitration
under subsection (b) any open issues and imposing conditions upon
the parties to the agreement, a State commission shall--
"(1) ensure that such resolution and conditions meet the
requirements of section 251, including the regulations
prescribed by the Commission pursuant to section 251;
"(2) establish any rates for interconnection, services, or
network elements according to subsection (d); and
"(3) provide a schedule for implementation of the terms and
conditions by the parties to the agreement.
"(d) PRICING STANDARDS.--
"(1) INTERCONNECTION AND NETWORK ELEMENT CHARGES.--
Determinations by a State commission of the just and reasonable
rate for the interconnection of facilities and equipment for
purposes of subsection (c)(2) of section 251, and the just and
reasonable rate for network elements for purposes of subsection
(c)(3) of such section--
"(A) shall be--
"(i) based on the cost (determined without
reference to a rate-of-return or other rate-based
proceeding) of providing the interconnection or network
element (whichever is applicable), and
"(ii) nondiscriminatory, and
"(B) may include a reasonable profit.
"(2) CHARGES FOR TRANSPORT AND TERMINATION OF TRAFFIC.--
"(A) IN GENERAL.--For the purposes of compliance by an
incumbent local exchange carrier with section 251(b)(5), a
State commission shall not consider the terms and conditions
for reciprocal compensation to be just and reasonable unless-
"(i) such terms and conditions provide for the
mutual and reciprocal recovery by each carrier of costs
associated with the transport and termination on each
carrier's network facilities of calls that originate on
the network facilities of the other carrier; and
"(ii) such terms and conditions determine such
costs on the basis of a reasonable approximation of the
additional costs of terminating such calls.
"(B) RULES OF CONSTRUCTION.--This paragraph shall not
be construed--
"(i) to preclude arrangements that afford the
mutual recovery of costs through the offsetting of
reciprocal obligations, including arrangements that
waive mutual recovery (such as bill-and-keep
arrangements); or
"(ii) to authorize the Commission or any State
commission to engage in any rate regulation proceeding
to establish with particularity the additional costs of
transporting or terminating calls, or to require
carriers to maintain records with respect to the
additional costs of such calls.
"(3) WHOLESALE PRICES FOR TELECOMMUNICATIONS SERVICES.--For
the purposes of section 251(c)(4), a State commission shall
determine wholesale rates on the basis of retail rates charged
to subscribers for the telecommunications service requested,
excluding the portion thereof attributable to any marketing,
billing, collection, and other costs that will be avoided by the
local exchange carrier.
"(e) APPROVAL BY STATE COMMISSION.--
"(1) APPROVAL REQUIRED.--Any interconnection agreement
adopted by negotiation or arbitration shall be submitted for
approval to the State commission. A State commission to which an
agreement is submitted shall approve or reject the agreement,
with written findings as to any deficiencies.
"(2) GROUNDS FOR REJECTION.--The State commission may only
reject--
"(A) an agreement (or any portion thereof) adopted by
negotiation under subsection (a) if it finds that--
"(i) the agreement (or portion thereof)
discriminates against a telecommunications carrier not a
party to the agreement; or
"(ii) the implementation of such agreement or
portion is not consistent with the public interest,
convenience, and necessity; or
"(B) an agreement (or any portion thereof) adopted by
arbitration under subsection (b) if it finds that the
agreement does not meet the requirements of section 251,
including the regulations prescribed by the Commission
pursuant to section 251, or the standards set forth in
subsection (d) of this section.
"(3) PRESERVATION OF AUTHORITY.--Notwithstanding paragraph
(2), but subject to section 253, nothing in this section shall
prohibit a State commission from establishing or enforcing other
requirements of State law in its review of an agreement,
including requiring compliance with intrastate
telecommunications service quality standards or requirements.
"(4) SCHEDULE FOR DECISION.--If the State commission does
not act to approve or reject the agreement within 90 days after
submission by the parties of an agreement adopted by negotiation
under subsection (a), or within 30 days after submission by the
parties of an agreement adopted by arbitration under subsection
(b), the agreement shall be deemed approved. No State court
shall have jurisdiction to review the action of a State
commission in approving or rejecting an agreement under this
section.
"(5) COMMISSION TO ACT IF STATE WILL NOT ACT.--If a State
commission fails to act to carry out its responsibility under
this section in any proceeding or other matter under this
section, then the Commission shall issue an order preempting the
State commission's jurisdiction of that proceeding or matter
within 90 days after being notified (or taking notice) of such
failure, and shall assume the responsibility of the State
commission under this section with respect to the proceeding or
matter and act for the State commission.
"(6) REVIEW OF STATE COMMISSION ACTIONS.--In a case in
which a State fails to act as described in paragraph (5), the
proceeding by the Commission under such paragraph and any
judicial review of the Commission's actions shall be the
exclusive remedies for a State commission's failure to act. In
any case in which a State commission makes a determination under
this section, any party aggrieved by such determination may
bring an action in an appropriate Federal district court to
determine whether the agreement or statement meets the
requirements of section 251 and this section.
"(f) STATEMENTS OF GENERALLY AVAILABLE TERMS.--
"(1) IN GENERAL.--A Bell operating company may prepare and
file with a State commission a statement of the terms and
conditions that such company generally offers within that State
to comply with the requirements of section 251 and the
regulations thereunder and the standards applicable under this
section.
"(2) STATE COMMISSION REVIEW.--A State commission may not
approve such statement unless such statement complies with
subsection (d) of this section and section 251 and the
regulations thereunder. Except as provided in section 253,
nothing in this section shall prohibit a State commission from
establishing or enforcing other requirements of State law in its
review of such statement, including requiring compliance with
intrastate telecommunications service quality standards or
requirements.
"(3) SCHEDULE FOR REVIEW.--The State commission to which a
statement is submitted shall, not later than 60 days after the
date of such submission--
"(A) complete the review of such statement under
paragraph (2) (including any reconsideration thereof),
unless the submitting carrier agrees to an extension of the
period for such review; or
"(B) permit such statement to take effect.
"(4) AUTHORITY TO CONTINUE REVIEW.--Paragraph (3) shall not
preclude the State commission from continuing to review a
statement that has been permitted to take effect under
subparagraph (B) of such paragraph or from approving or
disapproving such statement under paragraph (2).
"(5) DUTY TO NEGOTIATE NOT AFFECTED.--The submission or
approval of a statement under this subsection shall not relieve
a Bell operating company of its duty to negotiate the terms and
conditions of an agreement under section 251.
"(g) CONSOLIDATION OF STATE PROCEEDINGS.--Where not
inconsistent with the requirements of this Act, a State commission
may, to the extent practical, consolidate proceedings under sections
214(e), 251(f), 253, and this section in order to reduce
administrative burdens on telecommunications carriers, other parties
to the proceedings, and the State commission in carrying out its
responsibilities under this Act.
"(h) FILING REQUIRED.--A State commission shall make a copy of
each agreement approved under subsection (e) and each statement
approved under subsection (f) available for public inspection and
copying within 10 days after the agreement or statement is approved.
The State commission may charge a reasonable and nondiscriminatory
fee to the parties to the agreement or to the party filing the
statement to cover the costs of approving and filing such agreement
or statement.
"(i) AVAILABILITY TO OTHER TELECOMMUNICATIONS CARRIERS.--A
local exchange carrier shall make available any interconnection,
service, or network element provided under an agreement approved
under this section to which it is a party to any other requesting
telecommunications carrier upon the same terms and conditions as
those provided in the agreement.
"(j) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER.--For
purposes of this section, the term `incumbent local exchange
carrier' has the meaning provided in section 251(h).
"SEC. 253. REMOVAL OF BARRIERS TO ENTRY.
"(a) IN GENERAL.--No State or local statute or regulation, or
other State or local legal requirement, may prohibit or have the
effect of prohibiting the ability of any entity to provide any
interstate or intrastate telecommunications service.
"(b) STATE REGULATORY AUTHORITY.--Nothing in this section shall
affect the ability of a State to impose, on a competitively neutral
basis and consistent with section 254, requirements necessary to
preserve and advance universal service, protect the public safety
and welfare, ensure the continued quality of telecommunications
services, and safeguard the rights of consumers.
"(c) STATE AND LOCAL GOVERNMENT AUTHORITY.--Nothing in this
section affects the authority of a State or local government to
manage the public rights-of-way or to require fair and reasonable
compensation from telecommunications providers, on a competitively
neutral and nondiscriminatory basis, for use of public rights-of-way
on a nondiscriminatory basis, if the compensation required is
publicly disclosed by such government.
"(d) PREEMPTION.--If, after notice and an opportunity for
public comment, the Commission determines that a State or local
government has permitted or imposed any statute, regulation, or
legal requirement that violates subsection (a) or (b), the
Commission shall preempt the enforcement of such statute, regulation,
or legal requirement to the extent necessary to correct such
violation or inconsistency.
"(e) COMMERCIAL MOBILE SERVICE PROVIDERS.--Nothing in this
section shall affect the application of section 332(c)(3) to
commercial mobile service providers.
"(f) RURAL MARKETS.--It shall not be a violation of this
section for a State to require a telecommunications carrier that
seeks to provide telephone exchange service or exchange access in a
service area served by a rural telephone company to meet the
requirements in section 214(e)(1) for designation as an eligible
telecommunications carrier for that area before being permitted to
provide such service. This subsection shall not apply--
"(1) to a service area served by a rural telephone company
that has obtained an exemption, suspension, or modification of
section 251(c)(4) that effectively prevents a competitor from
meeting the requirements of section 214(e)(1); and
"(2) to a provider of commercial mobile services.
"SEC. 254. UNIVERSAL SERVICE.
"(a) PROCEDURES TO REVIEW UNIVERSAL SERVICE REQUIREMENTS.--
"(1) FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE.--
Within one month after the date of enactment of the
Telecommunications Act of 1996, the Commission shall institute
and refer to a Federal-State Joint Board under section 410(c) a
proceeding to recommend changes to any of its regulations in
order to implement sections 214(e) and this section, including
the definition of the services that are supported by Federal
universal service support mechanisms and a specific timetable
for completion of such recommendations. In addition to the
members of the Joint Board required under section 410(c), one
member of such Joint Board shall be a State-appointed utility
consumer advocate nominated by a national organization of State
utility consumer advocates. The Joint Board shall, after notice
and opportunity for public comment, make its recommendations to
the Commission 9 months after the date of enactment of the
Telecommunications Act of 1996.
"(2) COMMISSION ACTION.--The Commission shall initiate a
single proceeding to implement the recommendations from the
Joint Board required by paragraph (1) and shall complete such
proceeding within 15 months after the date of enactment of the
Telecommunications Act of 1996. The rules established by such
proceeding shall include a definition of the services that are
supported by Federal universal service support mechanisms and a
specific timetable for implementation. Thereafter, the
Commission shall complete any proceeding to implement subsequent
recommendations from any Joint Board on universal service within
one year after receiving such recommendations.
"(b) UNIVERSAL SERVICE PRINCIPLES.--The Joint Board and the
Commission shall base policies for the preservation and advancement
of universal service on the following principles:
"(1) QUALITY AND RATES.--Quality services should be
available at just, reasonable, and affordable rates.
"(2) ACCESS TO ADVANCED SERVICES.--Access to advanced
telecommunications and information services should be provided
in all regions of the Nation.
"(3) ACCESS IN RURAL AND HIGH COST AREAS.--Consumers in all
regions of the Nation, including low-income consumers and those
in rural, insular, and high cost areas, should have access to
telecommunications and information services, including
interexchange services and advanced telecommunications and
information services, that are reasonably comparable to those
services provided in urban areas and that are available at rates
that are reasonably comparable to rates charged for similar
services in urban areas.
"(4) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS.--All
providers of telecommunications services should make an
equitable and nondiscriminatory contribution to the preservation
and advancement of universal service.
"(5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS.--There
should be specific, predictable and sufficient Federal and State
mechanisms to preserve and advance universal service.
"(6) ACCESS TO ADVANCED TELECOMMUNICATIONS SERVICES FOR
SCHOOLS, HEALTH CARE, AND LIBRARIES.--Elementary and secondary
schools and classrooms, health care providers, and libraries
should have access to advanced telecommunications services as
described in subsection (h).
"(7) ADDITIONAL PRINCIPLES.--Such other principles as the
Joint Board and the Commission determine are necessary and
appropriate for the protection of the public interest,
convenience, and necessity and are consistent with this Act.
"(c) DEFINITION.--
"(1) IN GENERAL.--Universal service is an evolving level of
telecommunications services that the Commission shall establish
periodically under this section, taking into account advances in
telecommunications and information technologies and services.
The Joint Board in recommending, and the Commission in
establishing, the definition of the services that are supported
by Federal universal service support mechanisms shall consider
the extent to which such telecommunications services--
"(A) are essential to education, public health, or
public safety;
"(B) have, through the operation of market choices by
customers, been subscribed to by a substantial majority of
residential customers;
"(C) are being deployed in public telecommunications
networks by telecommunications carriers; and
"(D) are consistent with the public interest,
convenience, and necessity.
"(2) ALTERATIONS AND MODIFICATIONS.--The Joint Board may,
from time to time, recommend to the Commission modifications in
the definition of the services that are supported by Federal
universal service support mechanisms.
"(3) SPECIAL SERVICES.--In addition to the services
included in the definition of universal service under paragraph
(1), the Commission may designate additional services for such
support mechanisms for schools, libraries, and health care
providers for the purposes of subsection (h).
"(d) TELECOMMUNICATIONS CARRIER CONTRIBUTION.--Every
telecommunications carrier that provides interstate
telecommunications services shall contribute, on an equitable and
nondiscriminatory basis, to the specific, predictable, and
sufficient mechanisms established by the Commission to preserve and
advance universal service. The Commission may exempt a carrier or
class of carriers from this requirement if the carrier's
telecommunications activities are limited to such an extent that the
level of such carrier's contribution to the preservation and
advancement of universal service would be de minimis. Any other
provider of interstate telecommunications may be required to
contribute to the preservation and advancement of universal service
if the public interest so requires.
"(e) UNIVERSAL SERVICE SUPPORT.--After the date on which
Commission regulations implementing this section take effect, only
an eligible telecommunications carrier designated under section
214(e) shall be eligible to receive specific Federal universal
service support. A carrier that receives such support shall use that
support only for the provision, maintenance, and upgrading of
facilities and services for which the support is intended. Any such
support should be explicit and sufficient to achieve the purposes of
this section.
"(f) STATE AUTHORITY.--A State may adopt regulations not
inconsistent with the Commission's rules to preserve and advance
universal service. Every telecommunications carrier that provides
intrastate telecommunications services shall contribute, on an
equitable and nondiscriminatory basis, in a manner determined by the
State to the preservation and advancement of universal service in
that State. A State may adopt regulations to provide for additional
definitions and standards to preserve and advance universal service
within that State only to the extent that such regulations adopt
additional specific, predictable, and sufficient mechanisms to
support such definitions or standards that do not rely on or burden
Federal universal service support mechanisms.
"(g) INTEREXCHANGE AND INTERSTATE SERVICES.--Within 6 months
after the date of enactment of the Telecommunications Act of 1996,
the Commission shall adopt rules to require that the rates charged
by providers of interexchange telecommunications services to
subscribers in rural and high cost areas shall be no higher than the
rates charged by each such provider to its subscribers in urban
areas. Such rules shall also require that a provider of interstate
interexchange telecommunications services shall provide such
services to its subscribers in each State at rates no higher than
the rates charged to its subscribers in any other State.
"(h) TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVIDERS.--
"(1) IN GENERAL.--
"(A) HEALTH CARE PROVIDERS FOR RURAL AREAS.--A
telecommunications carrier shall, upon receiving a bona fide
request, provide telecommunications services which are
necessary for the provision of health care services in a
State, including instruction relating to such services, to
any public or nonprofit health care provider that serves
persons who reside in rural areas in that State at rates
that are reasonably comparable to rates charged for similar
services in urban areas in that State. A telecommunications
carrier providing service under this paragraph shall be
entitled to have an amount equal to the difference, if any,
between the rates for services provided to health care
providers for rural areas in a State and the rates for
similar services provided to other customers in comparable
rural areas in that State treated as a service obligation as
a part of its obligation to participate in the mechanisms to
preserve and advance universal service.
"(B) EDUCATIONAL PROVIDERS AND LIBRARIES.--All
telecommunications carriers serving a geographic area shall,
upon a bona fide request for any of its services that are
within the definition of universal service under subsection
(c)(3), provide such services to elementary schools,
secondary schools, and libraries for educational purposes at
rates less than the amounts charged for similar services to
other parties. The discount shall be an amount that the
Commission, with respect to interstate services, and the
States, with respect to intrastate services, determine is
appropriate and necessary to ensure affordable access to and
use of such services by such entities. A telecommunications
carrier providing service under this paragraph shall--
"(i) have an amount equal to the amount of the
discount treated as an offset to its obligation to
contribute to the mechanisms to preserve and advance
universal service, or
"(ii) notwithstanding the provisions of subsection
(e) of this section, receive reimbursement utilizing the
support mechanisms to preserve and advance universal
service.
"(2) ADVANCED SERVICES.--The Commission shall establish
competitively neutral rules--
"(A) to enhance, to the extent technically feasible and
economically reasonable, access to advanced
telecommunications and information services for all public
and nonprofit elementary and secondary school classrooms,
health care providers, and libraries; and
"(B) to define the circumstances under which a
telecommunications carrier may be required to connect its
network to such public institutional telecommunications
users.
"(3) TERMS AND CONDITIONS.--Telecommunications services and
network capacity provided to a public institutional
telecommunications user under this subsection may not be sold,
resold, or otherwise transferred by such user in consideration
for money or any other thing of value.
"(4) ELIGIBILITY OF USERS.--No entity listed in this
subsection shall be entitled to preferential rates or treatment
as required by this subsection, if such entity operates as a for-
profit business, is a school described in paragraph (5)(A) with
an endowment of more than $50,000,000, or is a library not
eligible for participation in State-based plans for funds under
title III of the Library Services and Construction Act (20 U.S.C.
335c et seq.).
"(5) DEFINITIONS.--For purposes of this subsection:
"(A) ELEMENTARY AND SECONDARY SCHOOLS.--The term
`elementary and secondary schools' means elementary schools
and secondary schools, as defined in paragraphs (14) and
(25), respectively, of section 14101 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8801).
"(B) HEALTH CARE PROVIDER.--The term `health care
provider' means--
"(i) post-secondary educational institutions
offering health care instruction, teaching hospitals,
and medical schools;
"(ii) community health centers or health centers
providing health care to migrants;
"(iii) local health departments or agencies;
"(iv) community mental health centers;
"(v) not-for-profit hospitals;
"(vi) rural health clinics; and
"(vii) consortia of health care providers
consisting of one or more entities described in clauses
(i) through (vi).
"(C) PUBLIC INSTITUTIONAL TELECOMMUNICATIONS USER.--The
term `public institutional telecommunications user' means an
elementary or secondary school, a library, or a health care
provider as those terms are defined in this paragraph.
"(i) CONSUMER PROTECTION.--The Commission and the States should
ensure that universal service is available at rates that are just,
reasonable, and affordable.
"(j) LIFELINE ASSISTANCE.--Nothing in this section shall affect
the collection, distribution, or administration of the Lifeline
Assistance Program provided for by the Commission under regulations
set forth in section 69.117 of title 47, Code of Federal Regulations,
and other related sections of such title.
"(k) SUBSIDY OF COMPETITIVE SERVICES PROHIBITED.--A
telecommunications carrier may not use services that are not
competitive to subsidize services that are subject to competition.
The Commission, with respect to interstate services, and the States,
with respect to intrastate services, shall establish any necessary
cost allocation rules, accounting safeguards, and guidelines to
ensure that services included in the definition of universal service
bear no more than a reasonable share of the joint and common costs
of facilities used to provide those services.
"SEC. 255. ACCESS BY PERSONS WITH DISABILITIES.
"(a) DEFINITIONS.--As used in this section--
"(1) DISABILITY.--The term `disability' has the meaning
given to it by section 3(2)(A) of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12102(2)(A)).
"(2) READILY ACHIEVABLE.--The term `readily achievable' has
the meaning given to it by section 301(9) of that Act (42 U.S.C.
12181(9)).
"(b) MANUFACTURING.--A manufacturer of telecommunications
equipment or customer premises equipment shall ensure that the
equipment is designed, developed, and fabricated to be accessible to
and usable by individuals with disabilities, if readily achievable.
"(c) TELECOMMUNICATIONS SERVICES.--A provider of
telecommunications service shall ensure that the service is
accessible to and usable by individuals with disabilities, if
readily achievable.
"(d) COMPATIBILITY.--Whenever the requirements of subsections
(b) and (c) are not readily achievable, such a manufacturer or
provider shall ensure that the equipment or service is compatible
with existing peripheral devices or specialized customer premises
equipment commonly used by individuals with disabilities to achieve
access, if readily achievable.
"(e) GUIDELINES.--Within 18 months after the date of enactment
of the Telecommunications Act of 1996, the Architectural and
Transportation Barriers Compliance Board shall develop guidelines
for accessibility of telecommunications equipment and customer
premises equipment in conjunction with the Commission. The Board
shall review and update the guidelines periodically.
"(f) NO ADDITIONAL PRIVATE RIGHTS AUTHORIZED.--Nothing in this
section shall be construed to authorize any private right of action
to enforce any requirement of this section or any regulation
thereunder. The Commission shall have exclusive jurisdiction with
respect to any complaint under this section.
"SEC. 256. COORDINATION FOR INTERCONNECTIVITY.
"(a) PURPOSE.--It is the purpose of this section--
"(1) to promote nondiscriminatory accessibility by the
broadest number of users and vendors of communications products
and services to public telecommunications networks used to
provide telecommunications service through--
"(A) coordinated public telecommunications network
planning and design by telecommunications carriers and other
providers of telecommunications service; and
"(B) public telecommunications network
interconnectivity, and interconnectivity of devices with
such networks used to provide telecommunications service;
and
"(2) to ensure the ability of users and information
providers to seamlessly and transparently transmit and receive
information between and across telecommunications networks.
"(b) COMMISSION FUNCTIONS.--In carrying out the purposes of
this section, the Commission--
"(1) shall establish procedures for Commission oversight of
coordinated network planning by telecommunications carriers and
other providers of telecommunications service for the effective
and efficient interconnection of public telecommunications
networks used to provide telecommunications service; and
"(2) may participate, in a manner consistent with its
authority and practice prior to the date of enactment of this
section, in the development by appropriate industry standards-
setting organizations of public telecommunications network
interconnectivity standards that promote access to--
"(A) public telecommunications networks used to provide
telecommunications service;
"(B) network capabilities and services by individuals
with disabilities; and
"(C) information services by subscribers of rural
telephone companies.
"(c) COMMISSION'S AUTHORITY.--Nothing in this section shall be
construed as expanding or limiting any authority that the Commission
may have under law in effect before the date of enactment of the
Telecommunications Act of 1996.
"(d) DEFINITION.--As used in this section, the term `public
telecommunications network interconnectivity' means the ability of
two or more public telecommunications networks used to provide
telecommunications service to communicate and exchange information
without degeneration, and to interact in concert with one another.
"SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.
"(a) ELIMINATION OF BARRIERS.--Within 15 months after the date
of enactment of the Telecommunications Act of 1996, the Commission
shall complete a proceeding for the purpose of identifying and
eliminating, by regulations pursuant to its authority under this Act
(other than this section), market entry barriers for entrepreneurs
and other small businesses in the provision and ownership of
telecommunications services and information services, or in the
provision of parts or services to providers of telecommunications
services and information services.
"(b) NATIONAL POLICY.--In carrying out subsection (a), the
Commission shall seek to promote the policies and purposes of this
Act favoring diversity of media voices, vigorous economic
competition, technological advancement, and promotion of the public
interest, convenience, and necessity.
"(c) PERIODIC REVIEW.--Every 3 years following the completion
of the proceeding required by subsection (a), the Commission shall
review and report to Congress on--
"(1) any regulations prescribed to eliminate barriers
within its jurisdiction that are identified under subsection (a)
and that can be prescribed consistent with the public interest,
convenience, and necessity; and
"(2) the statutory barriers identified under subsection (a)
that the Commission recommends be eliminated, consistent with
the public interest, convenience, and necessity.
"SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.
"(a) PROHIBITION.--No telecommunications carrier shall submit
or execute a change in a subscriber's selection of a provider of
telephone exchange service or telephone toll service except in
accordance with such verification procedures as the Commission shall
prescribe. Nothing in this section shall preclude any State
commission from enforcing such procedures with respect to intrastate
services.
"(b) LIABILITY FOR CHARGES.--Any telecommunications carrier
that violates the verification procedures described in subsection
(a) and that collects charges for telephone exchange service or
telephone toll service from a subscriber shall be liable to the
carrier previously selected by the subscriber in an amount equal to
all charges paid by such subscriber after such violation, in
accordance with such procedures as the Commission may prescribe. The
remedies provided by this subsection are in addition to any other
remedies available by law.
"SEC. 259. INFRASTRUCTURE SHARING.
"(a) REGULATIONS REQUIRED.--The Commission shall prescribe,
within one year after the date of enactment of the
Telecommunications Act of 1996, regulations that require incumbent
local exchange carriers (as defined in section 251(h)) to make
available to any qualifying carrier such public switched network
infrastructure, technology, information, and telecommunications
facilities and functions as may be requested by such qualifying
carrier for the purpose of enabling such qualifying carrier to
provide telecommunications services, or to provide access to
information services, in the service area in which such qualifying
carrier has requested and obtained designation as an eligible
telecommunications carrier under section 214(e).
"(b) TERMS AND CONDITIONS OF REGULATIONS.--The regulations
prescribed by the Commission pursuant to this section shall--
"(1) not require a local exchange carrier to which this
section applies to take any action that is economically
unreasonable or that is contrary to the public interest;
"(2) permit, but shall not require, the joint ownership or
operation of public switched network infrastructure and services
by or among such local exchange carrier and a qualifying
carrier;
"(3) ensure that such local exchange carrier will not be
treated by the Commission or any State as a common carrier for
hire or as offering common carrier services with respect to any
infrastructure, technology, information, facilities, or
functions made available to a qualifying carrier in accordance
with regulations issued pursuant to this section;
"(4) ensure that such local exchange carrier makes such
infrastructure, technology, information, facilities, or
functions available to a qualifying carrier on just and
reasonable terms and conditions that permit such qualifying
carrier to fully benefit from the economies of scale and scope
of such local exchange carrier, as determined in accordance with
guidelines prescribed by the Commission in regulations issued
pursuant to this section;
"(5) establish conditions that promote cooperation between
local exchange carriers to which this section applies and
qualifying carriers;
"(6) not require a local exchange carrier to which this
section applies to engage in any infrastructure sharing
agreement for any services or access which are to be provided or
offered to consumers by the qualifying carrier in such local
exchange carrier's telephone exchange area; and
"(7) require that such local exchange carrier file with the
Commission or State for public inspection, any tariffs,
contracts, or other arrangements showing the rates, terms, and
conditions under which such carrier is making available public
switched network infrastructure and functions under this
section.
"(c) INFORMATION CONCERNING DEPLOYMENT OF NEW SERVICES AND
EQUIPMENT.--A local exchange carrier to which this section applies
that has entered into an infrastructure sharing agreement under this
section shall provide to each party to such agreement timely
information on the planned deployment of telecommunications services
and equipment, including any software or upgrades of software
integral to the use or operation of such telecommunications
equipment.
"(d) DEFINITION.--For purposes of this section, the term
`qualifying carrier' means a telecommunications carrier that--
"(1) lacks economies of scale or scope, as determined in
accordance with regulations prescribed by the Commission
pursuant to this section; and
"(2) offers telephone exchange service, exchange access,
and any other service that is included in universal service, to
all consumers without preference throughout the service area for
which such carrier has been designated as an eligible
telecommunications carrier under section 214(e).
"SEC. 260. PROVISION OF TELEMESSAGING SERVICE.
"(a) NONDISCRIMINATION SAFEGUARDS.--Any local exchange carrier
subject to the requirements of section 251(c) that provides
telemessaging service--
"(1) shall not subsidize its telemessaging service directly
or indirectly from its telephone exchange service or its
exchange access; and
"(2) shall not prefer or discriminate in favor of its
telemessaging service operations in its provision of
telecommunications services.
"(b) EXPEDITED CONSIDERATION OF COMPLAINTS.--The Commission
shall establish procedures for the receipt and review of complaints
concerning violations of subsection (a) or the regulations
thereunder that result in material financial harm to a provider of
telemessaging service. Such procedures shall ensure that the
Commission will make a final determination with respect to any such
complaint within 120 days after receipt of the complaint. If the
complaint contains an appropriate showing that the alleged violation
occurred, the Commission shall, within 60 days after receipt of the
complaint, order the local exchange carrier and any affiliates to
cease engaging in such violation pending such final determination.
"(c) DEFINITION.--As used in this section, the term
`telemessaging service' means voice mail and voice storage and
retrieval services, any live operator services used to record,
transcribe, or relay messages (other than telecommunications relay
services), and any ancillary services offered in combination with
these services.
"SEC. 261. EFFECT ON OTHER REQUIREMENTS.
"(a) COMMISSION REGULATIONS.--Nothing in this part shall be
construed to prohibit the Commission from enforcing regulations
prescribed prior to the date of enactment of the Telecommunications
Act of 1996 in fulfilling the requirements of this part, to the
extent that such regulations are not inconsistent with the
provisions of this part.
"(b) EXISTING STATE REGULATIONS.--Nothing in this part shall be
construed to prohibit any State commission from enforcing
regulations prescribed prior to the date of enactment of the
Telecommunications Act of 1996, or from prescribing regulations
after such date of enactment, in fulfilling the requirements of this
part, if such regulations are not inconsistent with the provisions
of this part.
"(c) ADDITIONAL STATE REQUIREMENTS.--Nothing in this part
precludes a State from imposing requirements on a telecommunications
carrier for intrastate services that are necessary to further
competition in the provision of telephone exchange service or
exchange access, as long as the State's requirements are not
inconsistent with this part or the Commission's regulations to
implement this part.".
(b) DESIGNATION OF PART I.--Title II of the Act is further
amended by inserting before the heading of section 201 the following
new heading:
"PART I--COMMON CARRIER REGULATION".
(c) STYLISTIC CONSISTENCY.--The Act is amended so that--
(1) the designation and heading of each title of the Act
shall be in the form and typeface of the designation and heading
of this title of this Act; and
(2) the designation and heading of each part of each title
of the Act shall be in the form and typeface of the designation
and heading of part I of title II of the Act, as amended by
subsection (a).
SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.
(a) IN GENERAL.--Section 214 (47 U.S.C. 214) is amended by
adding at the end thereof the following new subsection:
"(e) PROVISION OF UNIVERSAL SERVICE.--
"(1) ELIGIBLE TELECOMMUNICATIONS CARRIERS.--A common
carrier designated as an eligible telecommunications carrier
under paragraph (2) or (3) shall be eligible to receive
universal service support in accordance with section 254 and
shall, throughout the service area for which the designation is
received--
"(A) offer the services that are supported by Federal
universal service support mechanisms under section 254(c),
either using its own facilities or a combination of its own
facilities and resale of another carrier's services
(including the services offered by another eligible
telecommunications carrier); and
"(B) advertise the availability of such services and
the charges therefor using media of general distribution.
"(2) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS.--
A State commission shall upon its own motion or upon request
designate a common carrier that meets the requirements of
paragraph (1) as an eligible telecommunications carrier for a
service area designated by the State commission. Upon request
and consistent with the public interest, convenience, and
necessity, the State commission may, in the case of an area
served by a rural telephone company, and shall, in the case of
all other areas, designate more than one common carrier as an
eligible telecommunications carrier for a service area
designated by the State commission, so long as each additional
requesting carrier meets the requirements of paragraph (1).
Before designating an additional eligible telecommunications
carrier for an area served by a rural telephone company, the
State commission shall find that the designation is in the
public interest.
"(3) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS
FOR UNSERVED AREAS.--If no common carrier will provide the
services that are supported by Federal universal service support
mechanisms under section 254(c) to an unserved community or any
portion thereof that requests such service, the Commission, with
respect to interstate services, or a State commission, with
respect to intrastate services, shall determine which common
carrier or carriers are best able to provide such service to the
requesting unserved community or portion thereof and shall order
such carrier or carriers to provide such service for that
unserved community or portion thereof. Any carrier or carriers
ordered to provide such service under this paragraph shall meet
the requirements of paragraph (1) and shall be designated as an
eligible telecommunications carrier for that community or
portion thereof.
"(4) RELINQUISHMENT OF UNIVERSAL SERVICE.--A State
commission shall permit an eligible telecommunications carrier
to relinquish its designation as such a carrier in any area
served by more than one eligible telecommunications carrier. An
eligible telecommunications carrier that seeks to relinquish its
eligible telecommunications carrier designation for an area
served by more than one eligible telecommunications carrier
shall give advance notice to the State commission of such
relinquishment. Prior to permitting a telecommunications carrier
designated as an eligible telecommunications carrier to cease
providing universal service in an area served by more than one
eligible telecommunications carrier, the State commission shall
require the remaining eligible telecommunications carrier or
carriers to ensure that all customers served by the
relinquishing carrier will continue to be served, and shall
require sufficient notice to permit the purchase or construction
of adequate facilities by any remaining eligible
telecommunications carrier. The State commission shall establish
a time, not to exceed one year after the State commission
approves such relinquishment under this paragraph, within which
such purchase or construction shall be completed.
"(5) SERVICE AREA DEFINED.--The term `service area' means a
geographic area established by a State commission for the
purpose of determining universal service obligations and support
mechanisms. In the case of an area served by a rural telephone
company, `service area' means such company's `study area' unless
and until the Commission and the States, after taking into
account recommendations of a Federal-State Joint Board
instituted under section 410(c), establish a different
definition of service area for such company.".
SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.
The Public Utility Holding Company Act of 1935 (15 U.S.C. 79
and following) is amended by redesignating sections 34 and 35 as
sections 35 and 36, respectively, and by inserting the following new
section after section 33:
"SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.
"(a) DEFINITIONS.--For purposes of this section--
"(1) EXEMPT TELECOMMUNICATIONS COMPANY.--The term `exempt
telecommunications company' means any person determined by the
Federal Communications Commission to be engaged directly or
indirectly, wherever located, through one or more affiliates (as
defined in section 2(a)(11)(B)), and exclusively in the business
of providing---
"(A) telecommunications services;
"(B) information services;
"(C) other services or products subject to the
jurisdiction of the Federal Communications Commission; or
"(D) products or services that are related or
incidental to the provision of a product or service
described in subparagraph (A), (B), or (C).
No person shall be deemed to be an exempt
telecommunications company under this section unless such person
has applied to the Federal Communications Commission for a
determination under this paragraph. A person applying in good
faith for such a determination shall be deemed an exempt
telecommunications company under this section, with all of the
exemptions provided by this section, until the Federal
Communications Commission makes such determination. The Federal
Communications Commission shall make such determination within
60 days of its receipt of any such application filed after the
enactment of this section and shall notify the Commission
whenever a determination is made under this paragraph that any
person is an exempt telecommunications company. Not later than
12 months after the date of enactment of this section, the
Federal Communications Commission shall promulgate rules
implementing the provisions of this paragraph which shall be
applicable to applications filed under this paragraph after the
effective date of such rules.
"(2) OTHER TERMS.--For purposes of this section, the terms
`telecommunications services' and `information services' shall
have the same meanings as provided in the Communications Act of
1934.
"(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILITIES.--
If a rate or charge for the sale of electric energy or natural gas
(other than any portion of a rate or charge which represents
recovery of the cost of a wholesale rate or charge) for, or in
connection with, assets of a public utility company that is an
associate company or affiliate of a registered holding company was
in effect under the laws of any State as of December 19, 1995, the
public utility company owning such assets may not sell such assets
to an exempt telecommunications company that is an associate company
or affiliate unless State commissions having jurisdiction over such
public utility company approve such sale. Nothing in this
subsection shall preempt the otherwise applicable authority of any
State to approve or disapprove the sale of such assets. The approval
of the Commission under this Act shall not be required for the sale
of assets as provided in this subsection.
"(c) OWNERSHIP OF ETCS BY EXEMPT HOLDING COMPANIES.--
Notwithstanding any provision of this Act, a holding company that is
exempt under section 3 of this Act shall be permitted, without
condition or limitation under this Act, to acquire and maintain an
interest in the business of one or more exempt telecommunications
companies.
"(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPANIES.--
Notwithstanding any provision of this Act, a registered holding
company shall be permitted (without the need to apply for, or
receive, approval from the Commission, and otherwise without
condition under this Act) to acquire and hold the securities, or an
interest in the business, of one or more exempt telecommunications
companies.
"(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS AND
REGISTERED HOLDING COMPANIES.--The relationship between an exempt
telecommunications company and a registered holding company, its
affiliates and associate companies, shall remain subject to the
jurisdiction of the Commission under this Act: Provided, That--
"(1) section 11 of this Act shall not prohibit the
ownership of an interest in the business of one or more exempt
telecommunications companies by a registered holding company
(regardless of activities engaged in or where facilities owned
or operated by such exempt telecommunications companies are
located), and such ownership by a registered holding company
shall be deemed consistent with the operation of an integrated
public utility system;
"(2) the ownership of an interest in the business of one or
more exempt telecommunications companies by a registered holding
company (regardless of activities engaged in or where facilities
owned or operated by such exempt telecommunications companies
are located) shall be considered as reasonably incidental, or
economically necessary or appropriate, to the operations of an
integrated public utility system;
"(3) the Commission shall have no jurisdiction under this
Act over, and there shall be no restriction or approval required
under this Act with respect to (A) the issue or sale of a
security by a registered holding company for purposes of
financing the acquisition of an exempt telecommunications
company, or (B) the guarantee of a security of an exempt
telecommunications company by a registered holding company; and
"(4) except for costs that should be fairly and equitably
allocated among companies that are associate companies of a
registered holding company, the Commission shall have no
jurisdiction under this Act over the sales, service, and
construction contracts between an exempt telecommunications
company and a registered holding company, its affiliates and
associate companies.
"(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND
ACTIVITIES OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYSTEMS.--
"(1) OBLIGATIONS TO REPORT INFORMATION.--Any registered
holding company or subsidiary thereof that acquires or holds the
securities, or an interest in the business, of an exempt
telecommunications company shall file with the Commission such
information as the Commission, by rule, may prescribe concerning-
"(A) investments and activities by the registered
holding company, or any subsidiary thereof, with respect to
exempt telecommunications companies, and
"(B) any activities of an exempt telecommunications
company within the holding company system,
that are reasonably likely to have a material impact on the
financial or operational condition of the holding company
system.
"(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION.--If,
based on reports provided to the Commission pursuant to
paragraph (1) of this subsection or other available information,
the Commission reasonably concludes that it has concerns
regarding the financial or operational condition of any
registered holding company or any subsidiary thereof (including
an exempt telecommunications company), the Commission may
require such registered holding company to make additional
reports and provide additional information.
"(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION.--
Notwithstanding any other provision of law, the Commission shall
not be compelled to disclose any information required to be
reported under this subsection. Nothing in this subsection shall
authorize the Commission to withhold the information from
Congress, or prevent the Commission from complying with a
request for information from any other Federal or State
department or agency requesting the information for purposes
within the scope of its jurisdiction. For purposes of section
552 of title 5, United States Code, this subsection shall be
considered a statute described in subsection (b)(3)(B) of such
section 552.
"(g) ASSUMPTION OF LIABILITIES.--Any public utility company
that is an associate company, or an affiliate, of a registered
holding company and that is subject to the jurisdiction of a State
commission with respect to its retail electric or gas rates shall
not issue any security for the purpose of financing the acquisition,
ownership, or operation of an exempt telecommunications company. Any
public utility company that is an associate company, or an affiliate,
of a registered holding company and that is subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates shall not assume any obligation or liability
as guarantor, endorser, surety, or otherwise by the public utility
company in respect of any security of an exempt telecommunications
company.
"(h) PLEDGING OR MORTGAGING OF ASSETS.--Any public utility
company that is an associate company, or affiliate, of a registered
holding company and that is subject to the jurisdiction of a State
commission with respect to its retail electric or gas rates shall
not pledge, mortgage, or otherwise use as collateral any assets of
the public utility company or assets of any subsidiary company
thereof for the benefit of an exempt telecommunications company.
"(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS.--A
public utility company may enter into a contract to purchase
services or products described in subsection (a)(1) from an exempt
telecommunications company that is an affiliate or associate company
of the public utility company only if--
"(1) every State commission having jurisdiction over the
retail rates of such public utility company approves such
contract; or
"(2) such public utility company is not subject to State
commission retail rate regulation and the purchased services or
products--
"(A) would not be resold to any affiliate or associate
company; or
"(B) would be resold to an affiliate or associate
company and every State commission having jurisdiction over
the retail rates of such affiliate or associate company
makes the determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case
in which the State or the State commission concerned publishes a
notice that the State or State commission waives its authority under
this subsection.
"(j) NONPREEMPTION OF RATE AUTHORITY.--Nothing in this Act
shall preclude the Federal Energy Regulatory Commission or a State
commission from exercising its jurisdiction under otherwise
applicable law to determine whether a public utility company may
recover in rates the costs of products or services purchased from or
sold to an associate company or affiliate that is an exempt
telecommunications company, regardless of whether such costs are
incurred through the direct or indirect purchase or sale of products
or services from such associate company or affiliate.
"(k) RECIPROCAL ARRANGEMENTS PROHIBITED.--Reciprocal
arrangements among companies that are not affiliates or associate
companies of each other that are entered into in order to avoid the
provisions of this section are prohibited.
"(l) BOOKS AND RECORDS.--(1) Upon written order of a State
commission, a State commission may examine the books, accounts,
memoranda, contracts, and records of--
"(A) a public utility company subject to its regulatory
authority under State law;
"(B) any exempt telecommunications company selling products
or services to such public utility company or to an associate
company of such public utility company; and
"(C) any associate company or affiliate of an exempt
telecommunications company which sells products or services to a
public utility company referred to in subparagraph (A),
wherever located, if such examination is required for the
effective discharge of the State commission's regulatory
responsibilities affecting the provision of electric or gas service
in connection with the activities of such exempt telecommunications
company.
"(2) Where a State commission issues an order pursuant to
paragraph (1), the State commission shall not publicly disclose
trade secrets or sensitive commercial information.
"(3) Any United States district court located in the State in
which the State commission referred to in paragraph (1) is located
shall have jurisdiction to enforce compliance with this subsection.
"(4) Nothing in this section shall--
"(A) preempt applicable State law concerning the provision
of records and other information; or
"(B) in any way limit rights to obtain records and other
information under Federal law, contracts, or otherwise.
"(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS.--
"(1) STATE MAY ORDER AUDIT.--Any State commission with
jurisdiction over a public utility company that--
"(A) is an associate company of a registered holding
company; and
"(B) transacts business, directly or indirectly, with a
subsidiary company, an affiliate or an associate company
that is an exempt telecommunications company,
may order an independent audit to be performed, no more
frequently than on an annual basis, of all matters deemed
relevant by the selected auditor that reasonably relate to
retail rates: Provided, That such matters relate, directly or
indirectly, to transactions or transfers between the public
utility company subject to its jurisdiction and such exempt
telecommunications company.
"(2) SELECTION OF FIRM TO CONDUCT AUDIT.--(A) If a State
commission orders an audit in accordance with paragraph (1), the
public utility company and the State commission shall jointly
select, within 60 days, a firm to perform the audit. The firm
selected to perform the audit shall possess demonstrated
qualifications relating to--
"(i) competency, including adequate technical training
and professional proficiency in each discipline necessary to
carry out the audit; and
"(ii) independence and objectivity, including that the
firm be free from personal or external impairments to
independence, and should assume an independent position with
the State commission and auditee, making certain that the
audit is based upon an impartial consideration of all
pertinent facts and responsible opinions.
"(B) The public utility company and the exempt
telecommunications company shall cooperate fully with all
reasonable requests necessary to perform the audit and the
public utility company shall bear all costs of having the audit
performed.
"(3) AVAILABILITY OF AUDITOR'S REPORT.--The auditor's
report shall be provided to the State commission not later than
6 months after the selection of the auditor, and provided to the
public utility company not later than 60 days thereafter.
"(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION.--Nothing
in this section shall affect the authority of the Federal
Communications Commission under the Communications Act of 1934, or
the authority of State commissions under State laws concerning the
provision of telecommunications services, to regulate the activities
of an exempt telecommunications company.".
SEC. 104. NONDISCRIMINATION PRINCIPLE.
Section 1 (47 U.S.C. 151) is amended by inserting after "to
all the people of the United States" the following: ", without
discrimination on the basis of race, color, religion, national
origin, or sex,".
S 652 Continued >
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