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PRIVACY Forum Archive Document
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Joint Explanatory Statement of the Committee of Conference
Section 1 - Short Title and
Section 2 - Table of Contents
Senate bill
Section 1 provides that the bill may be cited as the
"Telecommunications Competition and Deregulation Act of 1995." Section 2
contains a table of contents for the Senate bill.
House amendment
Section 1 designates the short title as the "Communications Act of
1995." Section 2 contains a table of contents for the House amendment.
Conference agreement
Section 1 designates the title of the bill as the "Telecommunications
Act of 1996." Section 2 contains a table of contents for the conference
agreement.
Section 3 - Definitions
Senate bill
Section 8(a) includes definitions of the Modification of the Final
Judgment (MFJ), the GTE Consent Decree, and an "integrated
telecommunications service provider." An "integrated telecommunications
service provider" means a person engaged in the provision of multiple
services, such as voice, data, image, graphics, and video services, which
make common use of all or part of the same transmission facilities,
switches, signaling, or control devices.
Section 8(b) adds several definitions to section 3 of the
Communications Act of 1934 (47 U.S.C. 153) ("the Communications Act")
including definitions for "local exchange carrier," "telecommunications,"
"telecommunications service," "telecommunications carrier,"
"telecommunications number portability," "information service," "rural
telephone company," and "service area."
New subsection (kk) defines "local exchange carrier" to mean a
provider of telephone exchange service or exchange access service.
"Telephone exchange service" is already defined in section 3 of the
Communications Act.
"Telecommunications" is defined in new subsection (ll) to mean the
transmission, between or among points specified by the user, of information
of the user's choosing including voice, data, image, graphics, and video,
without change in the form or content of the information, as sent and
received, with or without benefit of any closed transmission medium. The
term "telecommunications service" defined in new subsection (mm) of section
3 of the Communications Act means the offering of telecommunications for a
fee directly to the public or to such classes of users as to be effectively
available to the public, regardless of the facilities used to transmit the
telecommunications service. This definition is intended to include
commercial mobile service ("CMS"), competitive access services, and
alternative local telecommunications services to the extent they are offered
to the public or to such classes of users as to be effectively available to
the public.
Subsection (nn) defines "telecommunications carrier" to mean any
provider of telecommunications service, except that the term does not
include aggregators of telecommunications services as defined in section 226
of the Communications Act. The definition amends the Communications Act to
explicitly provide that a "telecommunications carrier" shall be treated as a
common carrier for purposes of the Communications Act, but only to the extent
that it is engaged in providing telecommunications services.
New subsection (oo) defines "telecommunications number
portability" to mean the ability of users of telecommunications services to
retain, at the same location, existing telecommunications numbers without
impairment of quality, reliability, or convenience when switching from one
telecommunications carrier to another. Number portability allows consumers
remaining at the same location to retain their existing telephone numbers
when switching from one telecommunications carrier to another.
New subsection (pp) defines "information service" similar to the
Federal Communications Commission's ("the Commission") definition of
"enhanced services." The Senate intends that the Commission would have the
continued flexibility to modify its definition and rules pertaining to
enhanced services as technology changes.
Subsection (rr) adds a definition of "rural telephone company"
that includes companies that (i) do not serve areas containing any part of
an incorporated place of 10,000 or more inhabitants, or any incorporated or
unincorporated territory in an urbanized area, or (ii) have fewer than
100,000 access lines in a State.
New subsection (ss) adds to the Communications Act a definition of
"service area." "Service area" means a geographic area established by the
Commission and the States for the purpose of determining universal service
obligations and support mechanisms. The service area of a rural telephone
company means such company's study area until the Commission and States,
based on a recommendation of a Federal-State Joint Board, establish a
different definition.
House amendment
Subsection (a) of section 501 adds new definitions, including for
"information service," "telecommunications," "telecommunications service,"
"telecommunications equipment," "local exchange carrier," "affiliate,"
"customer premises equipment," "electronic publishing," "exchange area," and
"rural telephone company." "Information service" and "telecommunications"
are defined based on the definition used in the Modification of Final
Judgment. The definition of "telecommunications" refers to transmission "by
means of an electromagnetic transmission medium."
The term "local exchange carrier" does not include a person insofar as
such person is engaged in the provision of CMS under section 332(c) of the
Communications Act, except to the extent that the Commission finds that such
service as provided by such person in a State is a replacement for a
substantial portion of the wireless telephone exchange service within such
State.
The term "telecommunications service" is defined as those services and
facilities offered on a "common carrier" basis, recognizing the distinction
between common carrier offerings that are provided to the public or to such
classes of users as to be effectively available to a substantial portion of
the public, and private services.
This section defines the term "rural telephone company" to mean a local
exchange carrier (LEC) to the extent that such carrier serves an
unincorporated area of less than 10,000 residents, or any territory defined
by the Bureau of the Census as a rural area; or if such carrier has fewer
than 50,000 access lines; or if such carrier provides telephone exchange
service to a local study area with fewer than 100,000 access lines; or if
such carrier has less than 15 percent of the access lines in communities of
more than 50,000 residents.
The definition of a "Bell Operating Company" does not include an entity
that owns a former Bell Operating Company's wireless operations that are no
longer affiliated with a Bell Operating Company's wireline exchange
facilities.
Conference agreement
Section 3(a) of the conference agreement both amends and adds
definitions to section 3 of the Communications Act. The Senate recedes to
the House with respect to the definitions of "cable system," "customer
premises equipment," "dialing parity," "interLATA service," "LATA," "rural
telephone company," and "telecommunications equipment," as well as on the
House amendment to the existing definition of "telephone exchange service."
The Senate recedes to the House with amendments regarding the definitions of
"Bell Operating Company," "exchange access," "information service," and
"local exchange carrier."
The Senate definition of "Bell Operating Company" was included;
however, the conference agreement included the language in the House
amendment clarifying that the term the "successor and assign" is limited to
those providing wireline telephone exchange service so that Airtouch
Communications, a former affiliate of Pacific Telesis that does not provide
wireline telephone exchange service, or any other similarly situated former
affiliate of a Bell Operating Company ("BOC"), is not included in that
definition. The Senate definition of "local exchange carrier" was included
to ensure that the Commission could, if future circumstances warrant,
include CMS providers which provide telephone exchange service or exchange
access in the definition of "local exchange carrier."
The House recedes to the Senate with respect to the definitions of
"affiliate" and "cable service." The House recedes to the Senate with
amendments with respect to the definitions of "number portability,"
"telecommunications," "telecommunications carrier," and "telecommunications
service."
The conference agreement includes two new definitions to clarify
certain provisions in the Senate bill and the House amendment. The term
"AT&T Consent Decree" was substituted for "Modification of Final Judgment"
in order to characterize more accurately the intent of the Senate bill and
House amendment with respect to the supersession issues addressed in title
VI. The term "network element" was included to describe the facilities,
such as local loops, equipment, such as switching, and the features,
functions, and capabilities that a local exchange carrier must provide for
certain purposes under other sections of the conference agreement.
The House recedes to the Senate with an amendment with respect to new
subsection 3(b) of the conference agreement, which provides that, except
where otherwise provided, the terms used in the conference agreement have
the same meaning as those terms have in the Communications Act.
The Senate recedes to the House amendment with respect to new
subsection 3(c) of the conference agreement, which amends section 3 of the
Communications Act to reorder the definitions in that section alphabetically
and to make other stylistic changes.
TITLE I - TELECOMMUNICATIONS SERVICES
SUBTITLE A - TELECOMMUNICATIONS SERVICES
Section 101 - Interconnection
Senate bill
The Senate bill creates new sections of the Communications Act to
create competitive markets.
House amendment
The House amendment creates new sections of the Communications Act to
create competitive markets.
Conference agreement
Section 101 of the conference agreement establishes a new "Part II" of
title II of the Communications Act. Part II contains new sections 251-261
of the Communications Act to create competitive communications markets.
New Section 251 - Interconnection
Senate bill
New subsection 251(a) imposes a duty on local exchange carriers
possessing market power in the provision of telephone exchange service or
exchange access service in a particular local area to negotiate in good
faith and to provide interconnection with other telecommunications carriers
that have requested interconnection for the purpose of providing telephone
exchange service or exchange access service. The obligations and procedures
prescribed in this section do not apply to interconnection arrangements
between local exchange carriers and telecommunications carriers under
section 201 of the Communications Act for the purpose of providing
interexchange service, and nothing in this section is intended to affect the
Commission's access charge rules. Local exchange carriers with market power
are required to provide interconnection at reasonable and nondiscriminatory
rates.
The Commission will determine which local exchange carriers have
market power for purposes of this section. In determining market power, the
relevant market shall include all providers of telephone exchange service or
exchange access service in a local service area, regardless of the
technology used to provide such service.
The obligation to negotiate interconnection shall apply to a local
exchange carrier or a class of local exchange carriers that are determined
by the Commission to have market power in providing exchange services. The
references to a "class" of carriers are intended to relieve the Commission
of the need to make a separate market power determination for each individual
carrier. These references are not intended to require the local exchange
carriers to engage in negotiations as a class, although subsection 251(a)(2)
provides that multilateral negotiations are permitted. However, a local
exchange carrier that chooses to participate in multilateral negotia- tions
will be subject to an individual obligation to negotiate in good faith and
will remain subject to the time limitations contained in this and other
provisions of section 251.
New section 251 provides two alternative methods for reaching
interconnection agreements.
New subsection 251(b) provides a list of minimum standards relating to
types of interconnection the local exchange carrier must agree to provide,
if sought by the telecommunications carrier requesting interconnection. The
minimum standards include unbundled access to the network functions and
services of the local exchange carrier's network, and unbundled access to
the local exchange carrier's telecommunications facilities and information,
including databases and signaling, that are necessary for transmission and
routing and the interoperability of both carriers' networks. The
negotiation process established by this section is intended to resolve
questions of economic reasonableness with respect to the interconnection
requirements. That is, either the parties resolve the issue or the State
will impose conditions for interconnection consistent with section 251 and
the Commission's rules.
The minimum standards also require interconnection to the local
exchange carrier's network that is at least equal in type, quality, and
price to the interconnection the carrier provides to any other party,
including itself or affiliated companies. At a minimum, the Senate intends
that any technically feasible point would be any point at which the local
exchange carrier provides access to any other party, including itself or any
affiliated entry. Access to poles, ducts, conduits, and rights-of-way owned
or controlled by the local exchange carrier is also a minimum standard.
Number portability and local dialing parity are included in the
minimum standards of subsection 251(b). If requested, a local exchange
carrier must take any action under its control to provide interim or final
number portability as soon as it is technically feasible. Section 307 of
the bill adds new section 261 of the Communications Act which establishes a
neutral telecommunications numbering administration and defines interim and
final number portability. The Commission will determine when final number
portability is technically feasible. A similar requirement applies to local
dialing parity.
The minimum standards also cover resale or sharing of the local
exchange carrier's unbundled telecommunications services and network
functions. The carrier is not permitted to attach unreasonable conditions
to the resale or sharing of those services or functions. Subsection 251(b)
provides certain circumstances where it would not be unreasonable for a
State to limit the resale of services included within the definition of
universal service.
Additional minimum standards relate to reciprocal compensation
arrangements, including in-kind exchange of traffic or traffic balance
measures, reasonable notice of changes in the information necessary for
transmission and routing of services over the carrier's network, and
schedules of itemized charges and conditions.
Subsection 251(i) requires the Commission to promulgate rules to
implement section 251 within 6 months after enactment. If a State fails to
carry out its responsibilities under section 251 in accordance with the
rules promulgated by the Commission, the Senate intends that the Commission
assume the responsibilities of the State in the applicable proceeding or
matter.
Subsection 251(i) also requires the Commission or a State to waive
or modify the requirements of the minimum standards of subsection 251(b) in
the case of a rural telephone company, and allows the Commission or a State
to waive or modify those requirements in the case of a local exchange
carrier with fewer than two percent of the nation's subscriber lines
installed in the aggregate nationwide. In order to waive or modify the
requirements of subsection 251(b) for such companies or carriers, the
Commission or a State must determine that the application of such
requirements would result in unfair competition, impose a significant
adverse economic impact on users of telecommunications services, be
technically infeasible, or otherwise not be in the public interest. The
Senate intends that the Commission or a State shall, consistent with the
protection of consumers and allowing for competition, use this authority to
provide a level playing field, particularly when a company or carrier to
which this subsection applies faces competition from a telecommunications
carrier that is a large global or nationwide entity that has financial or
technological resources that are significantly greater than the resources of
the company or carrier.
New subsection 251(j) provides that nothing in section 251
precludes a State from imposing requirements on telecommunications carriers
with respect to intrastate services that the State determines are necessary
to further competition in the provision of telephone exchange service or
exchange access service, so long as any such requirements are not
inconsistent with the Commission's rules to implement section 251.
New subsection 251(k) provides that nothing in section 251 is
intended to change or modify the Commission's rules at 47 CFR 69 et seq.
regarding the charges that an interexchange carrier pays to local exchange
carriers for access to the local exchange carrier's network. The Senate
also does not intend that section 251 should affect regulations implemented
under section 201 with respect to interconnection between interexchange
carriers and local exchange carriers.
Section 307 of the bill adds a new section 261 to the Communications
Act. New section 261 requires local exchange carriers to provide for number
portability and also requires the neutral administration of a nationwide
telephone numbering system.
Subsection 261(a) requires that, as of the date of enactment,
interconnection agreements reached under section 251 must, if requested,
provide for interim number portability.
Interim number portability may require that calls to or from the
subscriber be routed through the local exchange carrier's switch. Some
method of call forwarding or similar arrangement could be used to satisfy
this requirement. The method of providing interim number portability and
the amount of compensation, if any, for providing such service is subject to
the negotiated interconnection agreement, pursuant to section 251.
Subsection 261(b) provides that final number portability shall be made
available, upon request, when the Commission determines that final
telecommunications portability is technically feasible. Subsection 261(d)
States that the cost of such number portability shall be borne by all
providers on a competitively neutral basis.
Subsection 261(c) of new section 261 requires that all providers
of telephone exchange service or exchange access service comply with the
guidelines, rules, or plans, of the entity or entities responsible for
administering a nationwide neutral number system. This provision is not
intended to affect the Commission's ongoing proceeding on numbering
administration.
Subsection 261(c)(2) requires that all telecommunications carriers
which provide local exchange or exchange access service in the same
telephone service area be assigned the same numbering plan area code.
House amendment
Section 241 of section 101 of the House amendment restates the
obligation contained in section 201(a) of the Communications Act on all
common carriers to interconnect with the facilities and equipment of other
providers of telecommunications services and information services.
Section 242(a)(1) sets out the specific requirements of openness and
accessibility that apply to LECs as competitors enter the local market and
seek access to, and interconnection with, the incumbent's network
facilities. Under section 242(a)(2), LECs have the duty to offer unbundled
services, elements, features, functions, and capabilities whenever
technically feasible. Section 242(a)(3) imposes the duty to offer resale at
wholesale rates, which are defined as retail, less the avoided costs.
Section 242(a)(4) sets out the duty to provide number portability, to the
extent technically feasible. Section 242(a)(5) sets out the duty to provide
dialing parity. Section 242(a)(6) sets out the duty to afford access to the
poles, ducts, conduits, and rights-of-way of the incumbent carrier, as
provided under the pole attachment provisions of the Communications Act.
Section 242(a)(7) places the responsibility on local telephone companies not
to install network features, functions, and capabilities that violate the
requirement of network functionality and accessibility. Section 242(a)(8)
places a duty on both parties to negotiate in good faith on all requirements
relating to interconnection agreements.
Section 242(b)(1) describes the specific terms and conditions for
interconnection, compensation, and equal access, which are integral to a
competing provider seeking to offer local telephone services over its own
facilities. Under section 242(b)(2), any interconnection agreement entered
into must provide for mutual and reciprocal recovery of costs, and may
include a range of compensation schemes, such as an in-kind exchange of
traffic without cash payment (known as bill-and-keep arrangements). Under
section 242(b)(3), the LEC has a responsibility to offer reasonable and
nondiscriminatory access on an unbundled basis "that is equal in type and
quality" to that which it affords itself or any other person. Section
242(b)(4) directs the Commission to establish regulations requiring actual
collocation, or physical collocation, of equipment necessary for
interconnection at the premises of a LEC, except that virtual collocation is
permitted where the LEC demonstrates that actual collocation is not
practical for technical reasons or because of space limitations.
This section also directs the Commission to establish regulations
requiring full compensation to the LEC for costs of providing services
related to equal access, interconnection, number portability, and unbundling
and requires a carrier, to the extent it provides a telecommunications
service or an information service over its own network, to impute to itself
the charge for access and interconnection that it charges other persons for
providing such services. Subsection 242(c) mandates the manner in which
number portability and dialing parity must be provided. This section does
not require intraLATA toll dialing parity until a BOC is authorized to offer
long distance service.
Section 242(d)(1) prohibits a provider from joint marketing of local
and interLATA toll service until the BOC in that State is authorized to
provide long distance service pursuant to section 245. Section 242(d)(2)
grandfathers joint marketing arrangements in place before the date of
enactment. Section 242(e) grants to the Commission the authority to waive
or modify, in whole or in part, the requirements of section 242 for any
carrier that has, in the aggregate nationwide, fewer than 500,000 access
lines installed, to the extent that the Commission determines the effect of
the requirements would be economically burdensome, or technologically
infeasible. Section 242(f) gives State commissions the authority to waive
section 242 requirements with respect to rural telephone companies, and
subsection 242(g) sets out the time and manner for compliance if the State
determines that the exemption should not apply.
Conference agreement
The conference agreement adopts a new model for interconnection that
incorporates provisions from both the Senate bill and House amendment in a
new section 251 of the Communications Act. New section 251(a) imposes a
general duty to interconnect directly or indirectly between all
telecommunications carriers and the duty not to install network features and
functions that do not comply with the guidelines and standards established
under new sections 255 and 256 of the Communications Act.
New section 251(b) imposes several duties on all local exchange
carriers, including the "new entrants" into the local exchange market.
These include the duties: (1) not to prohibit resale of their service; (2)
to provide number portability; (3) to provide dialing parity; (4) to afford
access to poles, ducts, conduits, and rights-of-way consistent with the pole
attachment provisions in section 224 of the Communications Act; and (5) to
establish reciprocal compensation arrangements for the transport and
termination of traffic. The conferees note that the duties imposed under
section new 251(b) make sense only in the context of a specific request from
another telecommunications carriers or any other person who actually seeks
to connect with or provide services using the LEC's network.
New section 251(c) imposes several additional obligations on incumbent
LECs. These include the duties: (1) to negotiate in good faith, subject to
the provisions of section 252, binding agreements to provide all of the
obligations imposed in new sections 251(b) and 251(c); (2) to provide
interconnection at any technically feasible point of the same type and
quality it provides to itself, on just, reasonable, and nondiscriminatory
terms and conditions; (3) to provide access to network elements on an
unbundled basis; (4) to offer resale of its telecommunications services at
wholesale rates; (5) to provide reasonable public notice of changes to its
network; and (6) to provide physical collocation, or virtual collocation if
physical collocation is not practical.
New section 251(d) requires the Commission to adopt regulations to
implement new section 251 within 6 months, and states that nothing precludes
the enforcement of State regulations that are consistent with the
requirements of new section 251. New section 251(e) clarifies the
Commission's authority for numbering administration. The costs for
numbering administration and number portability shall be borne by all
providers on a competitively neutral basis.
New section 251(f)(1) provides for the exemption of rural telephone
companies from the requirements of new subsection (c) until a bona fide
request is received that the State commission determines is not unduly
economically burdensome, is technically feasible, and is consistent with the
universal service provisions of new section 254, except the specific public
interest determinations thereunder. The State commission receiving notice
of a bona fide request must rule on it within 120 days and, if no exemption
is granted, shall establish a schedule for compliance with the request. The
exemption is not available where an incumbent cable operator makes a request
to an incumbent telephone company providing video programming in the same
service area, except where rural telephone companies offer video programming
directly to subscribers on the date of enactment.
New section 251(f)(2) allows a local exchange carrier with less than 2%
of the subscribed access lines nationwide to petition for a suspension or
modification of the requirements under new sections 251(b) and 251(c) for
the telephone exchange service facilities specified in the petition. The
State commission shall grant the petition to the extent that it is necessary
to avoid significant adverse impacts on consumers, imposing an undue
economic burden or a technically infeasible requirement on the incumbent,
and provided that the modification or suspension is in the public interest.
The approach of both the Senate bill and the House amendment assumed
that Bell Operating Companies ("BOCs") would be required to continue to
provide equal access and nondiscrimination to interexchange carriers and
information service providers under those parts of the AT&T Consent Decree
that would have remained in effect under either approach. Because the new
approach completely eliminates the prospective effect of the AT&T Consent
Decree, some provision is necessary to keep these requirements in place. By
the same token, although not specifically addressed in either the Senate
bill or the House amendment, some provision is also needed to ensure that
the GTE Operating Companies that provide local exchange services continue to
provide equal access and nondiscrimination to interexchange carriers and
information service providers.
Accordingly, the conference agreement includes a new section 251(g).
This section provides that, on and after the date of enactment, each local
exchange carrier, to the extent that it provides wireline services, shall
have a statutory duty to provide equal access and nondiscrimination to
interexchange carriers and information service providers. In the interim,
between the date of enactment and the date the Commission promulgates new
regulations under this section, the substance of this new statutory duty
shall be the equal access and nondiscrimination restrictions and
obligations, including receipt of compensation, that applied to the local
exchange carrier immediately prior to the date of enactment, regardless of
the source. When the Commission promulgates its new regulations, the
conferees expect that the Commission will explicitly identify those parts of
the interim restrictions and obligations that it is superseding so that
there is no confusion as to what restrictions and obligations remain in
effect. These interim restrictions and obligations shall be enforceable in
the same manner as Commission regulations.
Even though the substance of the interim restrictions and obligations
on the BOCs and GTE Operating Companies will be taken from the respective
consent decrees, these restrictions and obligations shall not be enforceable
under either consent decree because the provisions of section 601(a) of the
bill eliminate the prospective effect of both consent decrees. The use of
the provisions of the respective consent decrees to provide, on an interim
basis, the substance of the new statutory duty in no way revives the consent
decrees. In particular, the use of the provisions of the GTE consent decree
relating to equal access and nondiscrimination on this interim basis should
not be construed in any way as recreating or continuing the GTE Consent
Decree's prohibition on GTE's or the GTE Operating Companies' entry into the
interexchange market.
The old consent decree obligations no longer exist with respect to
post-enactment conduct, and the new obligations flow only from the statute.
These new statutory obligations shall be enforceable only through the means
provided under law for the enforcement of Commission regulations. Nothing
in this section should be construed as providing any authority for the
enforcement of these statutory obligations under either of the consent
decrees from which their substance will be taken. Nothing in this section
should be construed as requiring any parties to renegotiate any agreements
currently in existence unless the new Commission regulations under this
section require such renegotiation.
New subsection 251(h) provides the definition of "incumbent local
telephone carrier." New subsection 251(i) makes clear the conferees'
intent that the provisions of new section
251 are in addition to, and in no way limit or affect, the Commission's
existing authority regarding interconnection under section 201 of the
Communications Act.
New Section 252 - Procedures for Negotiation, Arbitration, and Approval of
Agreements
Senate bill
Section 251(c) makes clear that a local exchange carrier may meet its
section 251 interconnection obligations by negotiating and entering into a
binding agreement that does not reflect the minimum standards listed in
section 251(b). Each such negotiated interconnection agreement must include
a schedule of itemized charges for each service, facility, or function
included in the agreement, and must be submitted to a State under section
251(e).
Section 251(d) provides procedures under which any party negotiating an
interconnection agreement may ask the State to participate in the
negotiations and to arbitrate any differences arising in the negotiations. A
State may be asked to arbitrate at any point in the negotiations.
In addition to the possibility of arbitration by the State, section
251(d) provides a more formal remedy under which any party may petition the
State to intervene in the negotiations. If issues remain unresolved more
than 135 days after the date the local exchange carrier received the request
to negotiate, any party to the negotiations may petition the State to
intervene for the purpose of resolving any issues that remain open in the
negotiation. Requests to the State to intervene must be made during the 25
day period that begins 135 days after the local exchange carrier received
the negotiation request. The State is required to resolve any open issues and
conduct its review of the agreement under section 251(e) not later than 10
months after the date the local exchange carrier received the request to
negotiate. In resolving any open issues the solution imposed by a State must
be consistent with the Commission's rules to implement this section, the
minimum standards required under section 251(b) and the provisions of section
251(d)(6) with respect to any charges imposed.
Section 251(e) requires that any interconnection agreement under
section 251 must be submitted to the State for approval. The State must
approve or reject the agreement and make written findings as to any
deficiencies in the agreement. An agreement successfully negotiated under
subsection (c) by the parties without regard to the minimum standards set
forth in section 251(b) may only be rejected if the State finds the
agreement discriminates against a telecommunications carrier that is not a
party to the agreement. The State may reject interconnection agreements
negotiated under subsection (d) if the State finds the agreement does not
meet the minimum standards set forth in subsection 251(b), or if the State
finds that implementation of the agreement is not in the public interest.
Section 251(f) requires a State to make a copy of each agreement
approved by the State under section 251(e) available for public inspection
and copying within 10 days after the agreement is approved.
Section 251(g) requires a local exchange carrier to make available any
service, facility, or function provided under an interconnection agreement
to which that local exchange carrier is a party to any other
telecommunications carrier that requests such service, facility, or function
on the same terms and conditions as are provided in that agreement.
Section 251(i) provides that if a State fails to carry out its
responsibilities under section 251 in accordance with the rules promulgated
by the Commission, the Commission shall assume the responsibilities of the
State in the applicable proceeding or matter.
House amendment
Section 244 of the House amendment requires, within eighteen months, an
exchange carrier to file with the State commission in that State in which it
is offering service, and with the Commission for interstate services, a
statement of terms and conditions confirming that it is in compliance with
the section 242 requirements.
Section 244(b)(1) provides for State commission review of an exchange
carrier's statement and permits a State to impose its own intrastate service
standards. Paragraph (2) requires the Commission to conduct a similar
review. Under section 244(c), both reviews must be completed within 60 days
of the submission of statements to the respective regulatory authorities, or
simply be allowed to take effect, as commonly occurs at present with most
tariffs. Section 244(c)(2) clarifies that the authority to review the
statements does not terminate once they take effect.
Section 244(d) allows an exchange carrier to file an agreement as a
statement of services under section 244(a). It also permits exchange
carriers to enter into subsequent agreements on different terms and
conditions, but with two caveats. First, the subsequent agreement must
undergo the same review process, and second, it may not be discriminatory
with respect to other agreements it has entered into.
Finally, subsection (e) sunsets the requirement of filing statements of
terms and conditions once the local exchange market is deemed competitive.
Conference agreement
In new section 252(a), the House recedes to the Senate with an
amendment to provide that any party may ask the State to participate during
a voluntary negotiation period in the mediation of agreements. Agreements
arrived at voluntarily do not need to meet the requirements of new section
251(b) and (c).
The House recedes to the Senate on new section 252(b), with an
amendment to clarify the role of a State commission in arbitrating and
resolving agreements at the request of any of the parties.
New section 252(c) requires a State commission to ensure that any
resolution of unresolved issues in a negotiation meets the requirements of
new section 251 and any regulations to implement that section. To the
extent that a State establishes the rates for specific provisions of an
agreement, it must do so according to new section 252(d). In addition, a
State must provide a schedule for implementation of the terms of the
agreement.
New section 252(d) combines the pricing standards in the Senate bill
and the House amendment. Charges for interconnection under new section
251(c)(2) and for network elements under new section 251(c)(3) are to be
determined based on cost and may include a reasonable profit. Charges for
transport and termination of traffic pursuant to new section 251(b)(5) are to
be based on reciprocal compensation. The wholesale rate for resold
telecommunications services under new section 251(c)(4) is to be determined
by the State commission on the basis of the retail rate charged to
subscribers of such telecommunications services, excluding costs that will be
avoided by the incumbent carrier.
The House recedes to the Senate on new section 252(e). Agreements
arrived at through voluntary negotiation or compulsory arbitration must be
approved by the State commission under new section 252(e), which provides a
specific timetable for State action, provides Commission authority to act if
a State does not, and preserves State authority to enforce State law
requirements in agreements approved under this section.
The Senate recedes to the House with an amendment to new section
252(f), which permits a BOC to file a statement of the terms and conditions
under which it generally offers interconnection and access to network
elements. Any such statement must be approved by the State commission.
New section 252(g) was included by the conferees to permit a State
commission, to the extent practical, to consolidate certain proceedings
required under the Communications Act to promote administrative efficiency.
New section 252(h) requires that all agreements or statements approved
by a State commission be available from such commission for public
inspection and copying.
New section 252(i) requires a local exchange carrier to make available
on the same terms and conditions to any telecommunications carrier that
requests it any interconnection, service, or network element that the local
exchange carrier provides to any other party under an approved agreement or
statement.
New section 252(j) states that the term "incumbent local exchange
carrier" has the same meaning as that term has in new section 251(h).
New Section 253 - Removal of Barriers to Entry
Senate bill
Section 201(a) adds a new section 254 to the Communications Act and is
intended to remove all barriers to entry in the provision of
telecommunications services.
Subsection (a) of new section 254 preempts any State and local statutes
and regulations, or other State and local legal requirements, that may
prohibit or have the effect of prohibiting any entity from providing
interstate or intrastate telecommunications services.
Subsection (b) of section 254 preserves a State's authority to impose,
on a competitively neutral basis and consistent with universal service
provisions, requirements necessary to preserve and advance universal
service, protect the public safety and welfare, ensure the continued quality
of telecommunications services, and safeguard the rights of consumers.
States may not exercise this authority in a way that has the effect of
imposing entry barriers or other prohibitions preempted by new section
254(a).
Subsection (c) of new section 254 provides that nothing in new section
254 affects the authority of States or local governments to manage the
public rights-of-way or to require, on a competitively neutral and
nondiscriminatory basis, fair and reasonable compensation for the use of
public rights-of-way, on a nondiscriminatory basis, provided any
compensation required is publicly disclosed.
Subsection (d) requires the Commission, after notice and an opportunity
for public comment, to preempt the enforcement of any State or local
statutes, regulations or legal requirements that violate or are inconsistent
with the prohibition on entry barriers contained in subsections (a) or (b)
of section 254.
Subsection (e) of new section 254 simply clarifies that new section 254
does not affect the application of section 332(c)(3) of the Communications
Act to CMS providers.
Section 309 adds a new section 263 to the Communications Act and is
intended to permit States to adopt certain statutes or regulations regarding
the provision of service by competing telecommunications carriers in rural
markets. Such statutes or regulations may be no more restrictive than the
criteria set forth in section 309. The Commission is authorized to preempt
any State statute or regulation that is inconsistent with the Commission's
regulations implementing this section.
House amendment
The House provisions are identical or similar to subsections 254(a),
(b) and (c). The House amendment does not have a similar provision (d)
requiring the Commission to preempt State or local barriers to entry, if it
makes a determination that they have been erected.
Conference agreement
The conference agreement adopts the Senate provisions. New section
253(b) clarifies that nothing in this section shall affect the ability
of a State
to safeguard the rights of consumers. In addition to consumers of
telecommunications services, the conferees intend that this includes the
consumers of electric, gas, water or steam utilities, to the extent such
utilities choose to provide telecommunications services. Existing State laws
or regulations that reasonably condition telecommunications activities of a
monopoly utility and are designed to protect captive utility ratepayers from
the potential harms caused by such activities are not preempted under this
section. However, explicit prohibitions on entry by a utility into
telecommunications are preempted under this section.
The rural markets provision in section 309 of the Senate bill is
simplified and moved to this section. The modification clarifies that,
without violating the prohibition on barriers to entry, a State may require
a competitor seeking to provide service in a rural market to meet the
requirements for designation as an eligible telecommunications carrier.
That is, the State may require the competitor to offer service and advertise
throughout the service area served by a rural telephone company. The
provision would not apply if the rural telephone company has obtained an
exemption, suspension, or modification under new section 251(f) that
effectively prevents a competitor from meeting the eligible
telecommunications carrier requirements. In addition, the provision would
not apply to providers of CMS. New Section 254 - Universal Service
Senate bill
Section 103 of the bill establishes a Federal-State Joint Board to
review existing universal service support mechanisms and make
recommendations regarding steps necessary to preserve and advance this
fundamental communications policy goal. Section 103 also adds a new section
253, entitled "Universal Service," to the Communications Act. As new
section 253 explicitly provides, the Senate intends that States shall
continue to have the primary role in implementing universal service for
intrastate services, so long as the level of universal service provided by
each State meets the minimum definition of universal service established
under new section 253(b) and a State does not take any action inconsistent
with the obligation for all telecommunications carriers to contribute to the
preservation and advancement of universal service under new section 253(c).
Section 103(a) of the bill requires the Commission to institute a
Federal-State Joint Board under section 410(c) of the Communications Act to
recommend within 9 months of the date of enactment new rules regarding
implementation of universal service.
Section 103(a) also provides that at least once every four years
the Commission is required to institute a new Joint Board proceeding to
review the implementation of new section 253 regarding universal service,
and to make recommendations regarding any changes that are needed.
Section 103(b) of the bill requires the Commission to complete any
proceeding to implement the recommendations of the initial Joint Board
within one year of the date of enactment of the bill, any other Joint Board
on universal service matters within one year of receiving such
recommendations.
Section 103(c) of the bill simply clarifies that the amendments to
the Communications Act made by the Senate bill do not necessarily affect the
Commission's existing separations rules for local exchange or interexchange
carriers. However, this subsection does not prohibit or restrict the
Commission's ability to change those separations rules through an
appropriate proceeding.
Section 103(d) establishes new section 253 in the Communications
Act. New section 253(a) establishes seven principles on which the Joint
Board and the Commission shall base policies for the preservation and
advancement of universal service.
Subsection (b) of new section 253 provides that the Commission
shall define universal service, based on recommendations from the public,
Congress, and the Joint Board. To ensure that the definition of universal
service evolves over time to keep pace with modern life, the subsection
requires the Commission to include, at a minimum, any telecommunications
service that is subscribed to by a substantial majority of residential
customers.
Subsection (c) of new section 253 requires all telecommunications
carriers to contribute on an equitable and nondiscriminatory basis to the
preservation and advancement of universal service. The Commission or a
State may require any other telecommunications provider, such as private
telecommunications providers, to contribute to the preservation and
advancement of universal service, if the public interest so requires.
Subsection (d) of new section 253 provides that a State may adopt
additional definitions, mechanisms, and standards to preserve and advance
universal service within such State, provided that they are not inconsistent
with the regulations of the Commission. A State must adopt separate support
mechanisms for any additional standards or definitions required by the State.
Subsection (e) of new section 253 provides that only
telecommunications carriers that are designated as essential
telecommunications carriers under new section 214(d) shall be eligible to
receive support payments, if any, established by the Commission or a State
to preserve and advance universal service. Any such support payments must
accurately reflect the amount reasonably necessary to preserve and advance
universal service.
Subsection (e) is not intended to prohibit support mechanisms that
directly help individuals afford universal service.
Subsection (f) of new section 253 directs the Commission and the
States to make universal service support explicit and to ensure that
essential telecommunications carriers are able to provide universal service
at just, reasonable and affordable rates. Carriers receiving such support
must use it to provide service in the area for which the support was
received.
Subsection (g) of new section 253 simply incorporates in the
Communications Act the existing practice of geographic rate averaging and
rate integration for interexchange, or long distance, telecommunications
rates to ensure that rural customers continue to receive such service at
rates that are comparable to those charged to urban customers. States shall
continue to be responsible for enforcing this subsection with respect to
intrastate interexchange services, so long as the State rules are not
inconsistent with Commission rules and policies on rate averaging.
Subsection (h) of new section 253 prohibits telecommunications
carriers from subsidizing competitive services with revenues from
non-competitive services. The Commission and the States are required to
establish any necessary cost allocation rules, accounting safeguards, and
other guidelines to ensure that universal service bears no more than a
reasonable share (and may bear less than a reasonable share) of the joint
and common costs of facilities used to provide both competitive and
noncompetitive services.
Subsection (i) of new section 253 requires the Commission to submit a
report to Congress prior to increasing support for universal service or
requiring increased participation by telecommunications carriers. Any such
increase cannot take effect until 120 days after the report is submitted to
Congress.
Subsection (j) of new section 253 states that nothing in new section
253 limits or expands the Commission's authority with respect to universal
service.
Subsection (k) of new section 253 states that the subsections that
provide that all telecommunications carriers shall contribute to universal
service, preserve the States' authority to adopt their own definitions and
mechanisms, establish eligibility for universal service support, and control
the level of universal service support shall take effect one year after the
date of enactment of this bill.
Section 310 of the Senate bill, known as the
Snowe-Rockefeller-Exon-Kerrey Amendment, provides for preferential rates to
schools, libraries and rural health care facilities.
House amendment
Section 247(a) establishes a Federal-State Joint Board, pursuant to
section 410(c) of the Communications Act, for the purpose of recommending
actions the Commission and the States should take to preserve universal
service.
Section 247(b) sets forth six principles upon which the Board shall
base its policies for the preservation of universal service.
Section 247(b)(1) states that any plan adopted should maintain just and
reasonable rates. Section 247(b)(2) states that the Joint Board should
recommend a definition of the nature and extent of services included within
the carriers' obligations to provide universal service. Section 247(b)(3)
and (4) state that the plan should provide adequate and sustainable support
mechanisms and require equitable and non-discriminatory contributions from
all providers to support the plan. The plan should also seek to promote
access to advanced telecommunications services and reasonably comparable
services between rural and urban areas. Section 247(b)(5) directs that the
plan include recommendations to ensure access to advanced telecommunications
services for students in elementary and secondary schools.
Section 247(c) requires the Joint Board, in defining carrier
obligations with respect to universal service pursuant to subsection (b)(2),
to consider several factors: (1) the extent to which a telecommunications
service has been subscribed to by customers; (2) whether such service is
essential to public health, safety, or the public interest; (3) whether such
service is deployed in the public switched network; and (4) whether
inclusion of such service is otherwise consistent with the public interest,
convenience, and necessity.
Section 247(d) requires that the Joint Board be convened and report its
recommendations within 270 days after enactment. The Commission is required
to act on the recommendations within one year.
Section 247(e) makes clear that States are free to adopt regulations
imposing universal service obligations on intrastate services.
Section 247(f) sunsets the Joint Board created by this section five
years after enactment.
Conference agreement
The conference agreement amends the Communications Act to add a new
section 254 entitled "Universal Service." The House recedes to the Senate
with modifications. New section 254(a) incorporates the provisions of
section 103(a) of the Senate bill, with the addition of a State-appointed
utility consumer advocate to the Joint Board. The conferees intend that, in
making its recommendations to the Commission, the Joint Board will
thoroughly review the existing system of Federal universal service support.
To the extent possible, the conferees intend that any support
mechanisms continued or created under new section 254 should be explicit,
rather than implicit as many support mechanisms are today. In addition, the
conferees do not view the existing proceeding under Common Carrier Docket
80-286 (regarding Amendment of Part 36 of the Commission's Rules and
appointment of a Joint Board) as an appropriate foundation on which to base
the proceeding required by new section 254(a).
New section 254(b) combines the principles found in both the Senate
bill and the House amendment, with the addition of "insular areas" (such as
the Pacific Island territories) and "low-income consumers" to the list of
consumers to whom access to telecommunications and information services
should be provided.
New section 254(c) defines universal service as "an evolving level of
telecommunications services" established periodically by the Commission.
The definition is to take into account advances in telecommunications and
information technology, and should be based on a consideration of the four
criteria set forth in the subsection. The Commission is given specific
authority to alter the definition from time to time, and to provide a
different definition for schools, libraries, and health care facilities.
New section 254(d) requires that all telecommunications carriers
providing interstate telecommunications services shall contribute to the
preservation and advancement of universal service. The Commission is given
specific authority to exempt a telecommunications carrier or class of
telecommunications carriers from this requirement if their contribution
would be "de minimis." The conferees intend that this authority would only
be used in cases where the administrative cost of collecting contributions
from a carrier or carriers would exceed the contribution that carrier would
otherwise have to make under the formula for contributions selected by the
Commission. This section preserves the Commission's authority to require all
providers of interstate telecommunications to contribute, if the public
interest requires it, to preserve and advance universal service.
New section 254(e) provides that only eligible telecommunications
carriers designated under new section 214(e) shall be eligible to receive
specific Federal universal service support. Any eligible telecommunications
carrier that receives such support shall only use that support to provide,
maintain, and upgrade facilities and services for universal service in the
area for which the support is received. In keeping with the conferees'
intent that all universal service support should be clearly identified, this
subsection states that such support should be made explicit and should be
sufficient to achieve the purposes of new section 254. The conferees intend
that only eligible telecommunications carriers should receive support from
specific Federal universal service support mechanisms; however, this
restriction should not be construed to prohibit any telecommunications
carrier from using any particular method to establish rates or charges for
its services to other telecommunications carriers, to the extent such rates
or charges are otherwise permissible under the Communications Act or other
law.
State authority with respect to universal service is specifically
preserved under new section 254(f). A State may adopt any measure with
respect to universal service that is not inconsistent with the Commission's
rules. This subsection also requires all providers of intrastate
telecommunications to contribute to universal service within a State in an
equitable and non-discriminatory manner, as determined by the State. A
State may adopt additional requirements with respect to universal service in
that State, so long as those additional requirements do not rely upon or
burden Federal universal service support mechanisms.
New section 254(g) is intended to incorporate the policies of
geographic rate averaging and rate integration of interexchange services in
order to ensure that subscribers in rural and high cost areas throughout the
Nation are able to continue to receive both intrastate and interstate
interexchange services at rates no higher than those paid by urban
subscribers. The conferees intend the Commission's rules to require
geographic rate averaging and rate integration, and to incorporate the
policies contained in the Commission's proceeding entitled "Integration of
Rates and Services for the Provision of Communications by Authorized Common
Carriers between the United States Mainland and the Offshore Points of
Hawaii, Alaska and Puerto Rico/Virgin Islands (61 FCC2d 380 (1976)). The
conferees are aware that the Commission has permitted interexchange
providers to offer non-averaged rates for specific services in limited
circumstances (such as services offered under Tariff 12 contracts), and
intend that the Commission, where appropriate, could continue to authorize
limited exceptions to the general geographic rate averaging policy using the
authority provided by new section 10 of the Communications Act. Further,
the conferees expect that the Commission will continue to require that
geographically averaged and rate integrated services, and any services for
which an exception is granted, be generally available in the area served by
a particular provider. In addition, the conferees do not intend that this
subsection would require the renegotiation of existing contracts for the
provision of telecommunications services.
New subsection 254(h) incorporates, with modifications, the provisions
of section 310 of the Senate bill. New subsection (h) of section 254 is
intended to ensure that health care providers for rural areas, elementary
and secondary school classrooms, and libraries have affordable access to
modern telecommunications services that will enable them to provide medical
and educational services to all parts of the Nation.
The ability of K-12 classrooms, libraries and rural health care
providers to obtain access to advanced telecommunications services is
critical to ensuring that these services are available on a universal
basis. The provisions of subsection (h) will help open new worlds of
knowledge, learning and education to all Americans -- rich and poor, rural
and urban. They are intended, for example, to provide the ability to browse
library collections, review the collections of museums, or find new
information on the treatment of an illness, to Americans everywhere via
schools and libraries. This universal access will assure that no one is
barred from benefitting from the power of the Information Age.
New subsection (h)(1)(A) provides that any telecommunications carrier
shall, upon a bona fide request, provide telecommunications services
necessary for the provision of health care services to any health care
provider serving persons who reside in rural areas. The rates charged for
the service shall be rates that are reasonably comparable to rates charged
for similar services in urban areas. It is intended that the rural health
care provider receive an affordable rate for the services necessary for the
purposes of telemedicine and instruction relating to such services.
New subsection (h)(1)(B) requires that any telecommunications carrier
shall, upon a bona fide request, provide services for educational purposes
included in the definition of universal service under new subsection (c)(3)
for elementary and secondary schools and libraries at rates that are less
than the amounts charged for similar services to other parties, and are
necessary to ensure affordable access to and use of such telecommunications
services.
A telecommunications carrier providing service under new subsection
(h)(1)(B) is permitted either to have the amount of the discount treated as
an offset to its obligation to contribute to the mechanisms to preserve and
advance universal service; or, to receive reimbursement utilizing the
support mechanisms to preserve and advance universal service. Pursuant to
new subsection (c)(3), the Commission is authorized to designate a separate
definition of universal service applicable only to public institutional
telecommunications users. In so doing, the conferees expect the Commission
and the Joint Board to take into account the particular needs of hospitals,
K-12 schools and libraries.
New subsection (h)(2) requires the Commission to establish rules to
enhance the availability of advanced telecommunications and information
services to public institutional telecommunications users. For example, the
Commission could determine that telecommunications and information services
that constitute universal service for classrooms and libraries shall include
dedicated data links and the ability to obtain access to educational
materials, research information, statistics, information on Government
services, reports developed by Federal, State, and local governments, and
information services which can be carried over the Internet. The Commission
also is required to determine under what circumstances a telecommunications
carrier may be required to connect public institutional telecommunications
users to its network.
New subsection (h)(3) clarifies that telecommunications services and
network capacity provided to health care providers, schools and libraries
may not be resold or transferred for monetary gain.
New subsection (h)(4) specifies that the following entities are not
eligible to receive discounted rates under this section: for-profit
businesses, elementary and secondary schools with endowments of more than
$50,000,000, and libraries that are not eligible to participate in
State-based applications for Library Services and Technology Funds.
New subsection (h)(5) defines the terms "elementary and secondary
schools," "health care provider," and "public institutional
telecommunications user" as used throughout this subsection. The conferees
intend that consortiums of educational institutions providing distance
learning to elementary and secondary schools be considered an educational
provider for purposes of this section.
New subsection (i) states that the Commission and the States should
ensure that universal service is available at rates that are just,
reasonable and affordable.
New subsection 254(j) has been added to clarify that this section is
not intended to alter the existing provision of Lifeline Service to needy
consumers.
The House recedes to the Senate with minor technical modifications on
new subsection 254(k), which prohibits cross-subsidization and permits the
Commission and the States to establish cost allocation rules for facilities
used in the provision of services supported through Federal universal
support mechanisms.
New Section 255 - Access By Persons With Disabilities
Senate bill
Section 308(a) of the Senate bill adds a new section 262 to the
Communications Act to require that manufacturers of telecommunications
equipment and customer premises equipment ensure that equipment is designed,
developed, and fabricated to be accessible and usable by individuals with
disabilities, if readily achievable.
Similarly, providers of telecommunications services must ensure
that telecommunications services are accessible to and usable by individuals
with disabilities, if readily achievable. In addition, the Commission is
required to undertake a study of closed captioning and to promulgate rules
to implement section 262. Section 308(b) adds a Commission study of video
description.
Section 262(a) defines the terms used in this section. New
section 262(b) requires manufacturers of telecommunications and
customer premises
equipment to ensure that such equipment is designed, developed, and
fabricated to be accessible to and usable by individuals with disabilities,
if readily achievable.
New section 262(c) requires providers of telecommunications
service to ensure that such service be accessible to and usable by
individuals with disabilities, if readily achievable.
New section 262(d) requires that whenever the provisions of
subsections (b) and (c) are not readily achievable, the manufacturer of
telecommunications and customer premises equipment, or the provider of
telecommunications service, shall ensure that such equipment or service is
compatible with existing peripheral devices or specialized customer premises
equipment commonly used by individuals with disabilities to achieve access,
if readily achievable.
New section 262(e) requires the Architectural and Transportation
Barriers Compliance Board ("Board") to develop guidelines for accessibility
of telecommunications and customer premises equipment and telecommunication
service, as lead agency in consultation with the National Telecommunications
and Information Administration (NTIA) and the National Institute of
Standards and Technology (NIST), within 1 year of enactment of this Act.
The Board shall periodically review and update such guidelines. The Senate
has elsewhere assigned responsibility for promulgating regulations for this
new section to the Commission.
House amendment
Section 249(c) of section 101 directs the Commission within one year to
establish regulations designed to make network capabilities and services
accessible to individuals with disabilities. Section 249(d) prohibits
private rights of action, and mandates that all remedies are available only
through the Communications Act.
Conference agreement
The conferees adopt the Senate provisions with several modifications as
a new section 255 of the Communications Act. Specifically, the conferees
adopted the provisions of subsections (a), (b), (c), (d) and (e) of new
section 262 of the Communications Act, as added by the Senate bill. The
conferees deleted the provision in subsection (e) of the Senate bill
creating roles for NTIA and NIST. In addition, the conferees adopted the
provisions of section 249(d) of the House amendment, which states that
nothing in this section authorizes any private rights of action. The
remedies available under the Communications Act, including the provisions of
sections 207 and 208, are available to enforce compliance with the
provisions of section 255.
New Section 256 - Coordination for Interconnectivity
Senate bill
Section 107 of the Senate bill concerns the coordination for
telecommunications network-level interoperability. The provision permits
the Commission to participate, in a manner consistent with its authority and
practice prior to the date of enactment of this Act in the development of
voluntary industry standards-setting organizations to promote
interoperability. The purpose of the provision is to promote
nondiscriminatory access to telecommunications networks by the broadest
number of users and vendors of communications products and services.
House amendment
Section 249(a) reaffirms the duty of all common carriers to ensure
network functionality. Section 249(b) directs the Commission to establish
procedures for Commission oversight of coordinated network planning by
common carriers and other providers of telecommunications services.
However, the Commission is not given authority to set standards for
interconnection. Instead, voluntary industry standard-setting organizations
shall establish any standards. The standard-setting process described in
this provision applies to interconnection of the public's switched
telecommunications networks. It is not intended to apply to telephone
equipment or other customer premises equipment (CPE). Nothing in section
249(b) should be construed as limiting or superseding these
interconnectivity requirements or the existing authority and
responsibilities of the Commission in enforcing them.
Conference agreement
The conference agreement adopts the Senate provision with minor
modifications as a new section 256 of the Communications Act.
New Section 257 - Market Entry Barriers Proceeding
Senate bill
No provision.
House amendment
Section 250 requires the Commission to adopt rules that identify and
eliminate market entry barriers for entrepreneurs and small businesses in
the provision and ownership of telecommunications and information services.
The Commission must review these rules and report to Congress every three
years on how it might prescribe or eliminate rules to promote the purposes
of this section.
Conference agreement
The conference agreement adopts the House provisions with minor
modifications as a new section 257 of the Communications Act.
New Section 258 - Illegal Changes in Subscriber Carrier Selections
Senate bill
No provision.
House amendment
Section 251 requires the Commission to adopt rules to prevent illegal
changes in subscriber selections, a practice known as "slamming." The
Commission has adopted rules to address problems in the long distance
industry of unauthorized changes of a consumer's long distance carrier. The
House provision is designed to extend the protections of the current rule to
local exchange carriers as well.
Conference agreement
The conferees adopt the House provision as a new section 258 of the
Communications Act. It is the understanding of the conferees that in
addition to requiring that the carrier violating the Commission's procedures
must reimburse the original carrier for forgone revenues, the Commission's
rules should also provide that consumers are made whole. Specifically, the
Commission's rules should require that carriers guilty of "slamming" should
be held liable for premiums, including travel bonuses, that would otherwise
have been earned by telephone subscribers but were not earned due to the
violation of the Commission's rules under this section.
New Section 259 - Infrastructure Sharing
Senate bill
Section 106(a) of the Senate bill requires that within one year of the
date of enactment, the Commission shall prescribe rules requiring local
exchange carriers that were subject to Part 69 of the Commission's rules on
the date of enactment to share network facilities, technology, and
information with qualifying carriers. The qualifying carrier may request
such sharing for the purpose of providing telecommunications services or
access to information services in areas where the carrier is designated as
an essential telecommunications carrier under new section 214(d). The bill
does not grant immunity from the antitrust laws for activities undertaken
pursuant to this section.
Section 106(b) establishes the terms and conditions of the Commission's
regulations. Such regulations shall:
(1) not require a local exchange carrier to take any action that is
economically unreasonable or contrary to public interest;
(2) permit, but not require, joint ownership of facilities among local
exchange carriers and qualifying carriers;
(3) ensure that the local exchange carrier not be treated as a common
carrier for hire with respect to technology, information or facilities
shared with the qualifying carrier under this section;
(4) ensure that qualifying carriers benefit fully from sharing; (5)
establish conditions to promote cooperation; (6) not require a local
exchange carrier to share in areas where the local exchange
carrier provides telephone exchange service or exchange access service; and
(7) require the local exchange carrier to file with the Commission or
State, any tariffs, contract or other arrangement showing the rate, terms,
and conditions under which such local exchange carrier is complying with the
sharing requirements of this section.
Subsection (c) requires that local exchange carriers sharing
infrastructure must provide information to sharing parties about deployment
of services and equipment, including software.
Subsection (d) defines those carriers eligible to request
infrastructure sharing under this section.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provisions as a new section
259 of the Communications Act.
New Section 260 - Provision of Telemessaging Service
Senate bill
Section 311 of the Senate bill adds a new section 265 to the
Communications Act, to address certain practices of the BOCs with regard to
telemessaging. This section is designed to prohibit cross-subsidization
between a BOC's telephone exchange or exchange access services and its
telemessaging services.
This section prohibits a BOC from discriminating between
affiliated and nonaffiliated telemessaging services, under rules set forth
by the Commission. If, however, the Commission finds that these safeguards
are insufficient, the Commission may require the BOCs to provide
telemessaging services through a separate subsidiary.
New section 265 directs the Commission to complete, within 18
months after the date of enactment of the bill, a rulemaking proceeding to
prescribe regulations to carry out this new section. The Commission also is
directed to determine whether, in order to enforce the require- ments of
section 265, it is appropriate to require the BOCs to provide telemessaging
services through a separate subsidiary that meets the requirements of new
section 252, as added to the Communications Act by section 102 of the bill.
House amendment
Section 273(b) prohibits discrimination by a telephone company in the
provision of telemessaging services, either by refusing to provide its
competitors with the same network services it provides itself, or by
cross-subsidizing from its local telephone service.
Section 273(c) establishes procedures for expedited consideration of
complaints of violations of subsection (b), requiring the Commission to make
a final determination within 120 days after the receipt of a complaint. If
a violation is found, the Commission is required to issue a cease and desist
order within 60 days.
Section 601 establishes a new complaint procedure for violations of the
Communications Act and Commission rules and regulations for providers of
telemessaging service, or other small businesses providing an information or
telecommunications services. This section defines a small business as any
business entity, including any affiliate or subsidiary, with fewer than 300
employees.
Conference agreement
The conference agreement creates a new section 260 in the
Communications Act relating specifically to the provision of telemessaging
services. This section prohibits local exchange carriers subject to new
section 251(c) that are engaged in telemessaging from subsidizing their
telemessaging services, either directly or indirectly, from telephone
exchange service operations or revenues. It also prohibits such carriers
from discriminating against nonaffiliated entities with respect to the terms
and conditions of any network services they provide to their own
telemessaging operations. This section requires the Commission to establish
procedures or regulations thereunder for the expedited receipt and review of
complaints alleging discrimination or cross-subsidization that result in
material financial harm to providers of telemessaging services. Such
procedures shall ensure that the Commission makes a determination regarding
any such complaint within 120 days. If the complaint contains an
appropriate showing that the alleged violation occurred, the Commission
shall, within 60 days of receipt, order such local exchange carrier to cease
engaging in such violation.
New Section 261 - Effect on Other Requirements
Senate bill
The Senate bill contains several savings clauses.
House amendment
The House amendment contains several savings clauses.
Conference agreement
The conferees included new section 261 of the Communications Act to
consolidate savings clauses found in both the Senate bill and the House
amendment. New section 261(a) makes clear that the Commission may continue
to enforce its existing regulations in fulfilling new part II of title II of
the Communications Act, provided they are not inconsistent with that part.
New sections 261(b) and (c) preserve State authority to enforce existing
regulations and to prescribe additional requirements, so long as those
regulations and requirements are not inconsistent with the Communications
Act.
Section 102 - Eligible Telecommunications Carriers
Senate bill
Section 104 of the Senate bill amends section 214(d) of the
Communications Act by designating the existing text of section 214(d) as
paragraph (1) and by adding seven new paragraphs regarding designation of
essential telecommunications carriers. The bill provides that the
Commission shall designate essential telecommunications carriers for
interstate services and the States shall designate such carriers for
intrastate services.
New paragraph (2) of section 214(d) makes explicit the implicit
authority of the Commission or a State to require a common carrier to
provide service to any community or portion of a community that requests
such service. In the event that more than one common car- rier provides
service in an area, and none of the carriers will provide service to a
community or portion thereof in that area which requests service, this
paragraph gives the Commission or a State the authority to decide which
common carrier is best suited to provide such service. If the Commission or
a State orders a carrier to provide service to a community or portion
thereof under this paragraph, it shall designate such carrier an essential
telecommunications carrier.
Paragraph (3) of section 214(d) provides that the Commission or a
State may designate a common carrier as an essential telecommunications
carrier for a particular service area, thus making that carrier eligible for
support payments to preserve and advance universal service, if any such
payments are established under new section 253 of the Communications Act.
Any carrier designated as an essential telecommunications carrier must
provide universal service and any additional services specified by the
Commission or a State throughout the service area for which the designation
is made. In addition, these services must be offered throughout that
service area at nondiscriminatory rates established by the Commission or a
State, and the carrier must advertise those rates using media of general
distribution.
New paragraph (4) of section 214(d) allows the Commission to
designate more than one common carrier as a communications carrier for a
particular service area. In addition, the bill requires a State to make
additional findings before designating more than one carrier as an essential
telecommunications carrier.
To the extent that more than one common carrier is designated as
an essential telecommunications carrier, each additional carrier so
designated must meet the same requirements with respect to service
throughout the same service area at nondiscriminatory rates established by
the Commission or a State, as well as the advertisement of those rates.
New paragraph (5) of section 214(d) requires the Commission and
States to establish rules governing the use of resale by a carrier to meet
the requirements for designation as an essential telecommunications carrier,
as well as rules to permit a carrier that has been designated as an
essential telecommunications carrier to relinquish that designation so long
as at least one other carrier also been designated as an essential
telecommunications carrier for that area. Paragraph (5) also requires the
Commission and the States to provide appropriate rules to govern how quickly
an essential telecommunications carrier whose services are be resold may
cease service to an area, in order to provide other essential
telecommunications carriers adequate notice to extend facilities or to
arrange for the purchase of replacement facilities or services.
New paragraph (6) of section 214(d) sets forth the penalties
applicable to an essential telecommunications carrier with respect to a
Commission or State order to provide universal service within a reasonable
period of time. In determining what constitutes a reasonable period of
time, the bill provides that the Commission or a State must consider the
nature of the construction required to provide such service, the time
interval that normally would attend such construction and the time needed to
obtain regulatory or financial approval.
New paragraph (7) of section 214(d) of the Communications Act
requires the Commission or a State to designate an essential
telecommunications carrier for interexchange services for any unserved
community or portion thereof that requests such service. An essential
telecommunications carrier designated under this paragraph must provide
service at nationwide geographically averaged rates, in the case of
interstate services, and geographically averaged rates in the case of
intrastate services. The Commission or a State may allow a carrier
designated under this paragraph to receive support payments, if any, that
may be provided under section 253.
New paragraph (8) of section 214(d) grants the Commission
authority to promulgate guidelines for the States to implement this section.
House amendment
No provision.
Conference agreement
The House recedes to the Senate with an amendment. The conference
agreement amends section 214 of the Communications Act by adding a new
subsection (e) regarding the provision of universal service and the
designation of carriers which are eligible to receive support through the
specific Federal universal support mechanisms established under new section
254 of the Communications Act.
New section 214(e)(1) states that a common carrier designated as an
"eligible telecommunications carrier" shall offer the services included in
the definition of universal service throughout the area specified by the
State commission, and that such services must be advertised generally
throughout that area. Upon designation, a carrier is eligible for any
specific support provided under new section 254 for the provision of
universal service in the area for which that carrier is designated.
Upon its own motion or upon request, a State commission is required
under new section 214(e)(2) to designate a common carrier that meets the
requirements of new section 214(e)(1) as an eligible telecommunications
carrier. If more than one common carrier that meets the requirements of new
section 214(e)(1) requests designation as an eligible telecommunications
carrier in a particular area, the State commission shall, in the case of
areas not served by a rural telephone company, designate all such carriers
as eligible. If the area for which a second carrier requests designation as
an eligible telecommunications carrier is served by a rural telephone
company, then the State commission may only designate an additional carrier
as an eligible telecommunications carrier if the State commission first
determines that such additional designation is in the public interest.
If no common carrier will provide universal service to a community or
portion of a community that requests such service, new section 214(e)(3)
makes explicit the implicit authority of the Commission, with respect to
interstate services, and a State, with respect to intrastate services, to
order a common carrier to provide such service. If more than one common
carrier provides service in an area and none of those carriers will provide
service to a community or portion thereof, this provision gives the
Commission or a State the authority to decide which common carrier is best
suited to provide service. Any carrier required to provide service under
this paragraph shall be designated as an eligible telecommunications carrier
under new section 214(e)(1) for the community or portion thereof such
carrier is required to serve. For purposes of new section 214(e)(1), the
conferees intend that the service area for a carrier designated by the
Commission or a State under section 214(e)(3) shall be the community or
portion thereof that requests service and for which that carrier is ordered
to provide service.
New section 214(e)(4) establishes rules for the relinquishment by a
carrier of its designation as an eligible telecommunications carrier. A
State commission must permit an eligible telecommunications carrier to
relinquish that designation if more than one eligible telecommunications
carrier serves an area, and must require that the remaining eligible
telecommunications carrier or carriers continue to offer universal service
to all consumers in that area. The conferees note that a carrier must be
permitted to relinquish the designation within one year after the State
commission approves the request, and expect that the Commission and the
States will adopt appropriate mechanisms to ensure that any additional
carrier designated as an eligible telecommunications carrier will be able to
acquire or construct any necessary facilities for that area within the time
limit set in new section 214(e)(4).
New section 214(e)(5) provides the definition of "service area," which
in general is determined by a State commission.
Section 103 - Exempt Telecommunications Companies
Senate bill
Sections 102 and 205 contained provisions pertaining to the entry by
utility companies into telecommunications and related businesses, and
exempting the telecommunications activities of registered holding companies
from the Public Utility Holding Company Act (PUHCA).
House amendment
No provision.
Conference agreement
The conference agreement amends PUHCA to allow registered holding
companies to diversify into telecommunications, information and related
services and products. The Commission must determine that a registered
holding company is providing telecommunications services, information
services and other related services through a single purpose subsidiary,
designated an "exempt telecommunications company" (ETC). Prior State
approval is required before any utility that is associated with a registered
holding company may sell to an ETC any asset in the retail rates of that
utility as of December 19, 1995. State approval is also required for a
contract when a public utility company seeks to purchase telecommunications
products or services from an ETC that is an associate company or affiliate
of such public utility unless the State or State commission waives such
requirement.
The financing and other relationships between ETCs and registered
holding companies shall not be subject to prior approval or other
restriction by the Securities and Exchange Commission (SEC). However, the
SEC shall continue to have jurisdiction to find violations of the federal
securities laws (including PUHCA) and to bring enforcement actions related
to such violations. The section provides reporting requirements concerning
investments and activities of registered public utility holding company
systems. Public utility companies are prohibited from assuming the
liabilities of an ETC and from pledging or mortgaging the assets of a
utility for the benefit of an ETC. State commissions may examine the books
and records of the ETC and any public utility company, associate company or
affiliate in the registered holding company system as they relate to the
activities of the ETC. States may also order an audit of a public utility
company that is an associate of an ETC. Nothing in this section affects the
ability of the FCC or a State commission to regulate the activities of an
ETC. Nothing in PUHCA shall preclude the rate review authority of the
Federal Energy Regulatory Commission or a State commission with respect to
purchases from or sale to an ETC.
The relevant portion of section 102 of the Senate bill is deleted from
the conference agreement.
Section 104 - Nondiscrimination Principle
Senate bill
Subsection 103(f) adds new section 253A to the Communications Act
concerning exclusion of telecommunications services. New subsection (a)
directs the Commission to prohibit any telecommunications carrier from
excluding from its services any high-cost area, any rural location or any
resident based on the person's income, provided that a carrier may exclude
an area if the carrier demonstrates that there will be insufficient demand
for the carrier to earn a return over the long term and that providing a
service to such area will be less profitable for the carrier than providing
the service in areas to which the carrier is already providing or has
proposed to provide service. New subsection (b) would direct the Commission
to provide for public comment on the adequacy of the carrier's proposed
service area.
House amendment
Section 201 of the House amendment adds new section 653(b)(1) to the
Communications Act concerning safeguards on video platforms. Subparagraph
(G) of that section prohibits a common carrier from excluding areas from its
video platform service area on the basis of the ethnicity, race, or income
of the residents of that area, and provides for public comments on the
adequacy of the proposed service area on the basis of the standards.
Conference agreement
The conference agreement in section 104 amends section 1 of the
Communications Act by adding a new provision to make clear that a purpose of
the Communications Act is to make available service to all the people of the
United States "without discrimination on the basis of race, color, religion,
national origin, or sex." This amendment to section 1 applies to all
entities covered by the Communications Act.
SUBTITLE B - SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
Section 151 - Bell Operating Company Provisions
Senate bill
The Senate bill creates new sections of the Communications Act with
respect to special provisions applicable to BOCs.
House amendment
The House amendment creates new sections of the Communications Act with
respect to special provisions applicable to BOCs.
Conference agreement
Section 151 of the conference agreement establishes a new "Part III" of
title II of the Communications Act. Part III contains new sections 271-276
of the Communications Act with respect to special provisions applicable to
BOCs.
New Section 271 - Bell Operating Company Entry Into InterLATA Services
Senate bill
Section 221(a) of the Senate bill adds a new section 255 to the
Communications Act. Subsection (a) of new section 255 establishes the
general requirements for the three different categories of service: in
region interLATA; out of region interLATA; and incidental services. New
section 255(b) establishes specific interLATA interconnection requirements
that must be fully implemented in order for the Commission to provide
authorization for a BOC to provide in region interLATA services. The
Commission is specifically prohibited from limiting or extending the terms
of the "competitive checklist" contained in subsection (b)(2). The
competitive checklist is not intended to be a limitation on the
interconnection requirements contained in section 251, but rather, at a
minimum, be provided by a BOC in any interconnection agreement approved
under section 251 to which that company is a party (assuming the other party
or parties to that agreement have requested the items included in the
checklist) before the Commission may authorize the BOC to provide in region
interLATA services.
Finally, section 255(b) includes a restriction on the ability of
telecommunications carriers that serve greater than five percent of the
nation's presubscribed access lines to jointly market local exchange service
purchased from a BOC and interLATA service offered by the telecommunications
carrier until such time as the BOC is authorized to provide interLATA serv-
ices in that telephone exchange area or until three years after the date of
enactment, whichever is earlier. New subsection 255(c) provides the process
for application by a BOC to provide in region interLATA services, as well as
the process for approval or rejection of that application by the Commission
and for review by the courts. The application by the BOC must state with
particularity the nature and scope of the activity and each product market
or service market, as well as the geographic market for which in region
interLATA authorization is sought. Within 90 days of receiving an
application, the Commission must issue a written determination, after notice
and opportunity for a hearing on the record, granting or denying the
application in whole or in part. The Commission is required to consult with
the Attorney General regarding the application during that 90 day period.
The Attorney General may analyze a BOC application under any legal standard
(including the Clayton Act, Sherman Act, other antitrust laws, section
VIII(C) of the MFJ, Robinson-Patman Act or any other standard).
The Commission may only grant an application, or any part of an
application, if the Commission finds that the petitioning BOC has fully
implemented the competitive checklist in new section 255(b)(2), that the
interLATA services will be provided through a separate subsidiary that meets
the requirements of new section 252, and that the provision of the requested
interLATA services is consistent with the public interest, convenience, and
necessity. As noted earlier, the Commission is specifically prohibited from
limiting or extending the terms used in the competitive checklist, and the
Senate intends that the determination of whether the checklist has been fully
implemented should be a straightforward analysis based on ascertainable
facts. Likewise, the Senate believes that the Commission should be able to
readily determine if the requested services will or will not be provided
through a separate subsidiary that meets all of the requirements of section
252. Finally, the Senate notes that the Commission's determination of
whether the provision of the requested interLATA services is consistent with
the public interest, convenience, and necessity must be based on substantial
evidence on the record as a whole.
Subsection (c) also requires a BOC which is authorized to provide
interLATA services under this subsection to provide intraLATA toll dialing
parity throughout the market in which that company is authorized to provide
interLATA service. In the event that the Commission finds that the BOC has
not provided the required intraLATA toll dialing parity, or fails to
continue to provide that parity (except for inadvertent interruptions that
are beyond the control of the BOC), then the Commission shall suspend the
authorization to provide interLATA services in that market until that
company provides or restores the required intraLATA toll dialing parity.
Lastly, sub- section (c) provides that a State may not order a BOC to
provide intraLATA toll dialing parity before the company is authorized to
provide interLATA services in that area or until three years after the date
of enactment, whichever is earlier. However, this restriction does not
apply to single LATA States or States that have ordered intraLATA toll
dialing in that State prior to June 1, 1995.
BOCs (including any subsidiary or affiliate) are permitted under
new section 255(d) to provide interLATA telecommunications services
immediately upon the date of enactment of the bill if those services
originate in any area in which that BOC is not the dominant provider of
wireline telephone exchange service or exchange access service.
New subsection 255(e) establishes the rules for the provision by a
BOC of in region InterLATA services that are incidental to the provision of
specific services listed in paragraph (1) of subsection (e). This list of
specific services is intended to be narrowly construed by the Commission. A
BOC must first obtain authorization under new section 255(c) before it may
provide any in region InterLATA services not listed in subsection (e)(1).
In addition, the BOC may only provide the services specified in
subparagraphs (C) and (D) of subsection (e)(1), which in general are
information storage and retrieval services, through the use of
telecommunications facilities that are leased from an unaffiliated provider
of those services until the BOC receives authority to provide InterLATA
services under subsection (c). Finally, subsection (e) requires that the
provision of incidental services by the BOC shall not adversely affect
telephone exchange ratepayers or competition in any telecommunications
market. The Senate intends that the Commission will ensure that these
requirements are met.
New section 255(f) provides that a BOC may provide interLATA service in
connection with CMS upon the date of enactment.
The terms "interLATA," "audio programming services," "video
programming services," and "other programming services" are defined in new
section 255(g).
House amendment
Section 245 provides the method by which a BOC may seek entry to offer
interLATA, or long distance, service on a State-by-State basis. Section
245(a) provides that a BOC may file a verification of access and
interconnection compliance anytime after six months after the date of
enactment. The verification must include, under section 245(a)(1), a State
certification of "openness," or the so-called "checklist" requirements, and
under section 245(a)(2), either of the following: pursuant to section
245(a)(2)(A), the presence of a facilities-based competitor; or pursuant to
section 245(a)(2)(B), a statement of the terms and conditions the BOC would
make available under section 244, if no provider had requested access and
interconnection within three (3) months prior to the BOC filing under
section 245. For purposes of section 245(a)(2)(B), a BOC shall not be
considered to have received a request for access and interconnection if a
requesting provider failed to bargain in good faith, as required under
section 242(a)(8), or if the provider failed to comply, within a reasonable
time period, with the requirement under section 242(a)(1) to implement the
schedule contained in its access and interconnection agreement.
Section 245(b) sets out the "checklist" requirements that must be
included in the State certification that the BOC files with the Commission
as part of its verification. These checklist requirements include the
following: (1) interconnection; (2) unbundling of network elements; (3)
resale; (4) number portability; (5) dialing parity; (6) access to conduits
and rights-of-way; (7) no State or local barriers to entry; (8) network
functionality and accessibility; and (9) good faith negotiations by the
BOC. Section 245(c)(1) sets out the Commission review process for interLATA
authorization on a Statewide, permanent basis. Under section 245(c)(2), the
Commission may conduct a de novo review only if a State commission lacks,
under relevant State law, the jurisdiction or authority to make the required
certification, fails to act within ninety (90) days of receiving a BOC
request for certification, or has attempted to impose a term or condition
that exceeds its authority, as limited in section 243. Under section
245(c)(3), the Commission has ninety (90) days to approve, disapprove, or
approve with conditions the BOC request, unless the BOC consents to a longer
period of time. Under Section 245(c)(4), the Commission must determine that
the BOC has complied with each and every one of the requirements. As
mandated in section 245(d), the Commission has continuing authority after
approving a BOC's application for entry into long distance to review a BOC's
compliance with the certification requirements under this section.
Section 245(f) prohibits a BOC from providing interLATA service, unless
authorized by the Commission. Section 245(f) grandfathers any activity
authorized by court order or pending before the court prior to the date of
enactment. Section 245(g) creates exceptions for the provision of
incidental services.
Section 245(g)(1) permits a BOC to engage in interLATA activities
related to the provision of cable services. Section 245(g)(2) permits a BOC
to offer interLATA services over cable system facilities located outside the
BOC's region. Section 245(g)(3) allows a BOC to offer CMS, as defined in
section 332(d)(1) of the Communications Act. Section 245(g)(4) allows a BOC
to engage in interLATA services relevant to the provision of information
services from a central computer. Section 245(g)(5) and (6) allow a BOC to
engage in interLATA services related to signaling information integral to
the internal operation of the telephone network.
Notwithstanding the dialing parity requirements of section 242(a)(5),
as provided in section 245(i), a BOC is not required to provide dialing
parity for intraLATA toll service ("short haul" long distance) before the
BOC is authorized to provide long distance service in that State. Section
245(j) prohibits the Commission from exercising the general authority to
forbear from regulation granted to the Commission under section 230 until
five years after the date of enactment. Section 245(k) sunsets this section
once the Commission and State commission, in the relevant local exchange
market, determine that the BOC has become subject to full and open
competition.
Conference agreement
The conference agreement adds a new section 271 to the Communications
Act relating to BOC entry into the interLATA market. New section 271(b)(1)
requires a BOC to obtain Commission authorization prior to offering
interLATA services within its region unless those services are previously
authorized, as defined in new section 271(f), or "incidental" to the
provision of another service, as defined in new section 271(g), in which
case, the interLATA service may be offered after the date of enactment. New
section 271(b)(2) permits a BOC to offer out-of-region services immediately
after the date of enactment.
New section 271(c) sets out the requirements for a BOC's provision of
interLATA services originating in an in-region State (as defined in new
section 271(i)). In addition to complying with the specific interconnection
requirements under new section 271(c)(2), a BOC must satisfy the "in-region"
test by virtue of the presence of a facilities-based competitor or
competitors under new section 271(c)(1)(A), or by the failure of a
facilities-based competitor to request access or interconnection (under new
section 251) as required under new section 271(c)(1)(B). This test that the
conference agreement adopts comes virtually verbatim from the House
amendment.
With respect to the facilities-based competitor requirement, the
presence of a competitor offering the following services specifically does
not suffice to meet the requirement: (1) exchange access; (2) telephone
exchange service offered exclusively through the resale of the BOC's
telephone exchange service; and (3) cellular service. The competitor must
offer telephone exchange service either exclusively over its own facilities
or predominantly over its own facilities in combination with the resale of
another carrier's service.
This conference agreement recognizes that it is unlikely that
competitors will have a fully redundant network in place when they initially
offer local service, because the investment necessary is so significant.
Some facilities and capabilities (e.g., central office switching) will
likely need to be obtained from the incumbent local exchange carrier as
network elements pursuant to new section 251. Nonetheless, the conference
agreement includes the "predominantly over their own telephone exchange
service facilities" requirement to ensure a competitor offering service
exclusively through the resale of the BOC's telephone exchange service does
not qualify, and that an unaffiliated competing provider is present in the
market.
The House has specifically considered how to describe the
facilities-based competitor in new subsection 271(c)(1)(A). While the
definition of facilities-based competition has evolved through the
legislative process in the House, the Commerce Committee Report (House Report
104-204 Part I) that accompanied H.R. 1555 pointed out that meaningful
facilities-based competition is possible, given that cable services are
available to more than 95% of United States homes. Some of the initial
forays of cable companies into the field of local telephony therefore hold
the promise of providing the sort of local residential competition that has
consistently been contemplated. For example, large, well established
companies such as Time Warner and Jones Intercable are actively pursuing
plans to offer local telephone service in significant markets. Similarly,
Cablevision has recently entered into an interconnection agreement with New
York Telephone with the goal of offering telephony on Long Island to its
650,000 cable subscribers.
For purposes of new section 271(c)(1)(A), the BOC must have entered
into one or more binding agreements under which it is providing access and
interconnection to one or more competitors providing telephone exchange
service to residential and business subscribers. The requirement that the
BOC "is providing access and interconnection" means that the competitor has
implemented the agreement and the competitor is operational. This
requirement is important because it will assist the appropriate State
commission in providing its consultation and in the explicit factual
determination by the Commission under new section 271(d)(2)(B) that the
requesting BOC has fully implemented the interconnection agreement elements
set out in the "checklist" under new section 271(c)(2).
New section 271(c)(1)(B) also is adopted from the House amendment, and
it is intended to ensure that a BOC is not effectively prevented from
seeking entry into the interLATA services market simply because no
facilities-based competitor that meets the criteria set out in new section
271(c)(1)(A) has sought to enter the market. The conference agreement
stipulates that a BOC may seek entry under new section 271(c)(1)(B) at any
time following 10 months after the date of enactment, provided no qualifying
facilities-based competitor has requested access and interconnection under
new section 251 by the date that is 3 months prior to the date that the BOC
seeks interLATA authorization. Consequently, it is important that the
Commission rules to implement new section 251 be promulgated within 6 months
after the date of enactment, so that potential competitors will have the
benefit of being informed of the Commission rules in requesting access and
interconnection before the statutory window in new section 271(c)(1)(B)
shuts.
New section 271(c)(2) sets out the specific interconnection
requirements that comprise the "checklist" that a BOC must satisfy as part
of its entry test.
In new section 271(d), the conference agreement adopts the basic
structure of the Senate bill concerning authorization of BOC entry by the
Commission, with a modification to permit the BOC to apply on a
State-by-State basis.
New section 271(d) sets forth administrative provisions regarding
applications for BOC entry under this section. In making an evaluation, the
Attorney General may use any appropriate standard, including: (1) the
standard included in the House amendment, whether there is a dangerous
probability that the BOC or its affiliates would successfully use market
power to substantially impede competition in the market such company seeks
to enter; (2) the standard contained in section VIII(C) of the AT&T Consent
Decree, whether there is no substantial possibility that the BOC or its
affiliates could use monopoly power to impede competition in the market such
company seeks to enter; or (3) any other standard the Attorney General deems
appropriate.
New section 271(e)(1) prohibits joint marketing of local services
obtained from the BOC under new section 251(c)(4) and long distance service
within a State by telecommunications carriers with more than five percent of
the Nation's presubscribed access lines for three years after the date of
enactment, or until a BOC is authorized to offer interLATA services within
that State, whichever is earlier.
New section 271(e)(2) requires any BOC authorized to offer interLATA
services to provide intraLATA toll dialing parity coincident with its
exercise of that interLATA authority. States may not order a BOC to
implement toll dialing parity prior to its entry into interLATA service.
Any single-LATA State or any State that has issued an order by December 19,
1995, requiring a BOC to implement intraLATA toll dialing parity is
grandfathered under this Act. The prohibition against "non-grandfathered"
States expires three years after the date of enactment.
The conference agreement in new section 271(f) adopts the House
provision grandfathering activities under existing waivers. Both the House
and Senate bill included separate grandfather provisions for manufacturing
in the manufacturing section. The conference agreement combines these
separate provisions into one provision covering both interLATA services and
manufacturing, and that provision is included in the interLATA section.
Because of the new approach to the supersession of the AT&T Consent Decree
described below, this section was modified to clarify that requests for
waivers pending with the court on the date of enactment are no longer
included within this section. Instead, only those waiver requests that have
been acted on before the date of enactment will be included. All conduct
occurring after the date of enactment will no longer be subject to the AT&T
Consent Decree and will be subject to the Communications Act, as amended by
the conference agreement.
New section 271(g) sets out the "incidental" interLATA activities that
the BOCs are permitted to provide upon the date of enactment.
New Section 272 - Separate Affiliate; Safeguards
Senate bill
Section 102 of the Senate bill amends the Communications Act to add a
new section 252 to impose separate subsidiary and other safeguards on
certain activities of the BOCs. Section 102 requires that to the extent a
BOC engages in certain businesses, it must do so through an entity that is
separate from any entities that provide telephone exchange service.
Subsection 252(b) spells out the structural and transactional requirements
that apply to the separate subsidiary, section 252(c) details the
nondiscrimination safeguards, section 252(d) requires a biennial audit of
compliance with the separate subsidiary requirements, section 252(e) imposes
restrictions on joint marketing, and subsection 252(f) sets forth additional
requirements with respect to the provision of interLATA services.
The activities that must be separated from the entity providing
telephone exchange service include telecommunications equipment
manufacturing and interLATA telecommunications services, except
out-of-region and incidental services (not including information services)
and interLATA services that have been authorized by the MFJ court. A BOC
also would have to provide alarm monitoring services and certain information
services through a separate subsidiary, including cable services and
information services which the company was not permitted to offer before
July 24, 1991. In a related provision, section 203 of the bill provides
that a BOC need not use a separate affiliate to provide video programming
services over a common carrier video platform if it complies with certain
obligations.
Under section 252(e) of this section the BOC entity that provides
telephone exchange service may not jointly market the services required to
be provided through a separate subsidiary with telephone exchange service in
an area until that company is authorized to provide interLATA service under
new section 255. In addition, a separate subsidiary required under this
section may not jointly market its services with the telephone exchange
service provided by its affiliated BOC entity unless such entity allows
other unaffiliated entities that offer the same or similar services to those
that are offered by the separate subsidiary to also market its telephone
exchange services.
Additional requirements for the provision of interLATA services are
included in new section 252(f). These provisions are intended to reduce
litigation by establishing in advance the standard to which a BOC entity
that provides telephone exchange service or exchange access service must
comply in providing interconnection to an unaffiliated entity.
Section 252(g) establishes rules to ensure that the BOCs protect
the confidentiality of proprietary information they receive and to prohibit
the sharing of such information in aggregate form with any subsidiary or
affiliate unless that information is available to all other persons on the
same terms and conditions. In general, a BOC may not share with anyone
customer-specific proprietary information without the consent of the person
to whom it relates. Exceptions to this general rule permit disclosure in
response to a court order or to initiate, render, bill and collect for
telecommunications services.
New subsection 252(h) provides that the Commission may grant
exceptions to the requirements of section 252 upon a showing that granting
of such exception is necessary for the public interest, convenience, and
necessity. The Senate intends this exception authority to be used whenever
a requirement of this section is not necessary to protect consumers or to
prevent anti-competitive behavior. However, the Senate does not intend that
the Commission would grant an exception to the basic separate subsidiary
requirements of this section for any service prior to authorizing the
provision of interLATA service under section 255 by the BOC seeking the
exception to a requirement of this section.
Public utility holding companies that engage in the provision of
telecommunications services are required to do so through a separate
subsidiary under new section 252(i). In addition, a State may require a
public utility company that provides telecommunications services to do so
through a separate subsidiary. The separate subsidiary for public utility
holding companies is required to meet some, but not all, of the structural
separation and nondiscriminatory safeguard provisions that are applicable to
BOC subsidiaries. Section 252(i) provides that a public utility holding
company shall be treated as a BOC for the purpose of those provisions of
section 252 that subsection (i) applies to those holding companies.
Subsection (b) of section 102 requires the Commission to
promulgate any regulations necessary to implement new section 252 of the
Communications Act within nine months of the date of enactment of this
bill. The subsection also provides that any separate subsidiary estab-
lished or designated by a BOC for purposes of complying with new section
252(a) prior to the issuance of the regulations shall be required to comply
with the regulations when they are issued.
Section 102(c) provides that the amendment to the Communications
Act made by this section takes effect on the date of enactment of this bill.
House amendment
Section 246(a) creates a separate subsidiary requirement for the BOC
provision of interLATA telecommunications or information services. Section
246(b) requires transactions between a BOC and its subsidiary to be on an
arm's length basis. Sections 246(c) and (d) mandates fully separate
operations and property, including books, records, and accounts between the
BOC and its subsidiary. Sections 246(e) and (f) prohibit discrimination and
cross-subsidies, respectively. Under section 246(k), this provision sunsets
eighteen months after the date of enactment.
Conference agreement
The conference agreement adopts the Senate provisions with several
modifications. New section 272 of the Communications Act does not contain
the provision in the Senate bill requiring that alarm monitoring services,
and the interLATA services that are incidental thereto, be provided through
the separate affiliate required by this section. The conferees also
accepted the provision in the House amendment that requires a separate
affiliate for interLATA information services, other than electronic
publishing and alarm monitoring, which permit a customer located in one LATA
to retrieve stored information from, or file information for storage in,
information storage facilities of such company that are located in another
LATA.
The conferees deleted the Senate provision providing for Commission
exceptions to the requirements of this section. Instead, the conferees
adopted a three year "sunset" of the separate affiliate requirement for
interLATA services and manufacturing activities. The three year period
commences on the date on which the BOC is authorized to offer interLATA
services. In addition, the conference agreement provides that the separate
affiliate requirement for interLATA information services "sunsets" four
years after the date of enactment of the Telecommunications Act of 1996.
In any case, the Commission is given authority to extend the separate
affiliate requirement by rule or order.
New section 272(g)(1) permits the separate affiliate required by this
section to jointly market any of its services in conjunction with the
telephone exchange services and other services of the BOC so long as the BOC
permits other entities offering the same or similar services to sell and
market the BOC's telephone exchange services.
New section 272(g)(2) permits a BOC, once it has been authorized to
provide interLATA service pursuant to new section 271(d), to jointly market
its telephone exchange services in conjunction with the interLATA service
being offered by the separate affiliate in that State required by this
section.
New section 272(g)(3) provides that the joint marketing authorized by
new sections 272(g)(1) and (g)(2) does not violate the nondiscrimination
safeguards in new subsection (e).
New Section 273 - Manufacturing by Bell Operating Companies
Senate bill
Section 222 of the Senate bill adds a new section 256 to the
Communications Act to - remove the restrictions on manufacturing imposed by
the MFJ on the BOCs under certain conditions, and allows those companies to
engage in manufacturing subject to certain safeguards.
New section 256(a) permits a BOC, through a separate subsidiary
that meets the requirements of new section 252, to engage in the manufacture
and provision of telecommuni- cations equipment and the manufacture of
customer premises equipment (CPE) as soon as that company receives
authorization to provide in region interLATA services under new section
255(c).
Subsection (b) of new section 256 requires that a BOC engaged in
manufacturing may only do so through a separate subsidiary that meets the
requirements of new section 252.
New section 256(c) requires that a BOC make available to local
exchange carriers telecommunications equipment and any software integral to
that equipment that is manufactured by the BOC's affiliate under certain
conditions. The manufacturing subsidiary has the obligation to sell
telecommunications equipment to an unaffiliated local telephone exchange
carrier. This obligation may only be enforced on the manufacturing
subsidiary if the local telephone company either does not manufacture
equipment (by itself or through an affiliated entity), or it agrees to make
available to the BOC any telecommunications equipment (including software
integral to such equipment) that the local telephone company manufactures
(by itself or through an affiliated en- tity) without discrimination or
self-preference as to price, delivery, terms, or conditions.
In addition, subsection (c) prohibits a BOC from discriminating with
respect to bids for services or equipment, establishing standards or
certifying equipment, or the sale of telecommunications equipment and
software. A BOC and any entity that the company owns or controls also is
required to protect any proprietary information submitted to it with
contract bids or with respect to establishing standards or certifying
equipment, and may not release that infor- mation to anyone unless
specifically authorized to do so by the owner of the proprietary information.
New section 256(d) permits a BOC or its subsidiaries or affiliates to
engage in close collaboration with any manufacturer of customer premises
equipment or telecommunications equipment not affiliated with the BOC during
the design and development of hardware, software, or combinations thereof
related to customer premises equipment or telecommunications equipment.
Subsection (e) requires the Commission to prescribe regulations to
require each BOC to file information concerning technical requirements
concerning its telephone exchange facilities.
Subsection (f) of new section 256 simply authorizes the Commission
to prescribe such additional rules and regulations as the Commission
determines necessary to carry out the provisions and purposes of section 256.
Administration and enforcement of new section 256 are provided for
in subsection (g) of that section. Paragraph (1) of new subsection 256(g)
makes clear that the Commission has the same authority, power, and functions
with respect to the BOC as it has with respect to enforcement or
administration of title II for any other common carrier subject to the
Communications Act. Paragraph (2) allows any injured party by an act or
omission of the BOC or its manufacturing subsidiary which violates the
requirements of new section 256 to bring a civil action in any U.S. District
Court to recover the full amount of any damages and to obtain any
appropriate court order to remedy the violation. In the alternative, the
party may seek relief from the Commission pursuant to sections 206 through
209 of the Communications Act.
New section 256(h) makes clear that nothing in new section 256 is
intended to change the status of Bell Communications Research (Bellcore).
Subsection (h) specifically states that nothing in this section permits
Bellcore or any successor entity that is jointly owned by any of the BOCs to
manufacture or provide telecommunications equipment or manufacture CPE.
Subsection (b) of section 222 of the bill permits the BOCs to continue
to engage in activities in which they were authorized to engage prior to the
date of enactment of the bill.
House amendment
Section 271(a) allows a BOC to engage in equipment manufacturing when
the Commission has approved verifications that a parent BOC, and each BOC
within the parent company's region, are in compliance with the access and
interconnection requirements of section 242. A BOC may engage in
manufacturing only through a separate subsidiary for the first eighteen
months after it is authorized.
Section 271(b) allows a BOC to engage in close collaboration with
manufacturers during the design and development of hardware and software.
Notwithstanding subsection (a), a BOC may engage in research and enter
royalty agreements.
Section 271(c) requires a BOC to file at the Commission all protocol
and technical requirements relating to connection with and proposed changes
to the network. The BOCs must provide access to this information on a
non-discriminatory basis.
Section 271(d) prohibits Bell Communications Research, or "Bellcore,"
from engaging in manufacturing so long as Bellcore is owned by one or more
BOC or is involved in equipment standard setting or product certification
activities.
Section 271(e) requires BOCs to make equipment procurement decisions
based on objective commercial criteria, such as price, quality, delivery,
and other commercial factors.
Section 271(e)(2) prohibits each BOC from restricting sales to any
other local telephone company. Section 271(e)(3) requires that the
proprietary information which vendors share with BOCs as their transactions
are carried out is protected from release not specifically authorized by the
owner of such information.
Subsection 271(f) provides the Commission with the same enforcement
authority with respect to a BOC as with any common carrier.
Section 271(g) grandfathers all previously authorized manufacturing
related activities.
Conference agreement
The conference agreement adopts the Senate provisions with
modifications as a new section 273 of the Communications Act. The agreement
permits a BOC to engage in manufacturing after the Commission authorizes the
company to provide interLATA services under new section 271(d) in any
in-region State. A BOC and its affiliates may not engage in manufacturing
in conjunction with another unaffiliated BOC or any of its affiliates. BOCs
may engage in research and enter royalty agreements.
The conference agreement includes provisions governing a
standards-setting organization such as Bellcore. Additionally, the overall
intent of establishing a dispute resolution provision, as contained in new
subsection 273(d)(5), is to enable all interested parties to influence the
final resolution of the dispute without significantly impairing the
efficiency, timeliness, and technical quality of the activity.
Further, under new section 273, a BOC may not discriminate in favor of
equipment produced or supplied by an affiliate for the duration of a
requirement for a manufacturing separate subsidiary under this Act. Each
BOC shall make procurement decisions on the basis of an objective assessment
of price, quality, delivery, and other commercial factors.
New Section 274 - Electronic Publishing by Bell Operating Companies
Senate bill
The Senate bill included electronic publishing in the provisions
applicable to information services under the separate affiliate requirements
of section 252 of the Senate bill.
House amendment
Section 272 sets forth regulatory requirements for BOC participation in
electronic publishing. Subsection (a) of this section states generally that
a BOC or any affiliate may only engage in electronic publishing through a
separate affiliate or an electronic publishing joint venture.
Subsection (b)(1) requires the separate affiliate or e