|
PRIVACY Forum Archive Document
|
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 electronic
publishing joint venture to maintain books, records, and accounts separately
from those of the BOC. Under subsection (b)(2), the affiliate is prohibited
from incurring debt in a manner that would permit a creditor upon default to
have recourse to the assets of the BOC. Subsections (b)(3) and (b)(4)
govern the manner in which transactions by the affiliate must be carried
out, so as to ensure that they are fully auditable. These subsections also
govern the valuation of assets transferred to the affiliate to prevent cross
subsidies. Subsection (b)(5) prohibits the affiliate and the BOC from having
corporate officers or property in common.
Under subsection (b)(6), the affiliate is prohibited from using the
name or trademarks of the affiliated BOC except where used in common with
the entity that owns or controls the BOC. Subsection (b)(7) prohibits a BOC
from performing a number of activities on behalf of the affiliate, including
the hiring or training of personnel, the provision of equipment, and research
and development (R&D). Subsections (b)(8) and (b)(9) require the separate
affiliate to have an annual compliance review performed for five years and
to file a report of any exceptions and the corrective action taken. These
reviews are to be conducted by an independent entity.
Subsection (c)(1) prohibits a BOC from engaging in joint marketing of
any promotion, marketing, sales or advertising with its affiliate, with
certain exceptions. Subsection (c)(2) permits three types of joint
activities between a BOC and its electronic publishing affiliate, under
specified conditions. Subsection (c)(2)(A) permits a BOC to provide inbound
telemarketing or referral services related to the provision of electronic
publishing, if the BOC provides the same service on the same terms and
conditions, and prices to non-affiliates as to its affiliates. The term
"inbound telemarketing or referral services" is defined in subsection (i)(7)
to mean "the marketing of property, goods, or services by telephone to a
customer or potential customer who initiated the call." Subsection
(c)(2)(B) permits a BOC to engage in nondiscriminatory teaming or business
arrangements. Subsection (c)(2)(C) permits a BOC to participate in
electronic publishing joint ventures, provided that the BOC or affiliate has
not more than a 50% (or for small publishers, 80%) direct or indirect equity
interest in the publishing joint venture.
Subsection (d) provides that a BOC that enters the electronic
publishing business through a separated affiliate or joint venture must
provide network access and interconnection to electronic publishers at just
and reasonable rates that are not higher on a per-unit basis than those
charged to any other electronic publisher or any separated affiliate engaged
in electronic publishing. Subsection (e) entitles a person claiming a
violation of this section to file a complaint with the Commission or to
bring a suit as provided in section 207 of the Communications Act. The BOC,
affiliate, or separate affiliate is liable for damages for any violation
found, unless it is discovered first through the internal compliance review
process and corrected within 90 days of such discovery. A person may apply
for a cease and desist order, or apply to a district court of the United
States for an injunction. Subsection (f) requires separated affiliates to
file annual reports with the Commission similar to Form 10-K. Subsection
(g)(1) gives the BOC one year from the date of enactment to comply with the
requirements of this section. Subsection (g)(2) provides that the
provisions of this section cease to apply after June 30, 2000.
Conference agreement
The conference agreement adopts the House provisions with modifications
as a new section 274 of the Communications Act. Subsection (b)(6) of the
House provisions, relating to use of trademarks, was modified to make it
clear that the separate affiliate or electronic publishing joint venture may
not use for marketing the name, trademarks, or service marks of an existing
BOC except for names, trademarks, or service marks that are owned by the
entity that owns or controls the BOC. Subsection (g)(2) was modified so
that the sunset date will be four years after the date of enactment rather
than June 30, 2000.
New Section 275 - Alarm Monitoring Services
Senate bill
Section 225 of the Senate bill adds a new section 258 to the
Communications Act authorizing a BOC to provide alarm monitoring services
four years after the date of enactment if the BOC has been authorized by the
Commission to provide in-region interLATA service unless the Commission
finds that such provision is not in the public interest. It requires the
Commission to establish rules governing the provision of alarm services by a
BOC. It provides for expedited consideration of complaints and allows the
Commission to use title V remedies.
The one exception to this general rule is contained in section
258(f). It provides that the limitations of subsections (a) and (b) do not
apply to any alarm monitoring services provided by a BOC that was in that
business as of June 1, 1995, as long as certain conditions specified in that
subsection are met.
House amendment
Section 273(a) prohibits a BOC from offering alarm service until six
(6) years after the date of enactment, unless a BOC was already providing
such service on January 1, 1995.
Section 273(b) prohibits discrimination by a telephone company in the
provision of alarm services, either by refusing to provide its competitors
with the same network services it provides itself, or by cross-subsidizing
from its local telephone service.
Section 273(c) establishes procedures for expedited consideration of
complaints of violations of subsection (b), requiring the Commission to make
a final determination within 120 days after the receipt of a complaint. If
a violation is found, the Commission is required to issue a cease and desist
order within 60 days.
Conference agreement
The conference agreement adopts the House provisions with modifications
as a new section 275 of the Communications Act. The prohibition on BOC
entry is shortened to 5 years. The grandfather provision is modified to
clarify that new subsection (a) does not prohibit or limit the provision,
directly or through an affiliate, of alarm monitoring services by a BOC that
was engaged in providing alarm monitoring services as of November 30, 1995,
directly or through an affiliate. However, such a BOC may not acquire an
equity interest in or obtain financial control of any unaffiliated alarm
monitoring services entities from November 30, 1995, until five years after
the date of enactment. This section further provides that nothing in the
language prohibiting acquisitions or control should be construed to prevent
the exchange of customer accounts and related assets with unaffiliated alarm
monitoring services entities.
The House nondiscrimination provisions are adopted with the
clarification that they apply to incumbent local exchange carriers rather
than all common carriers. The House provisions on expedited consideration
of complaints are adopted with the clarification that they apply to
incumbent local exchange carriers rather than all common carriers. The
Senate provisions on the use of data by local exchange carriers are adopted
with the clarification that they apply to all local exchange carriers. The
House definition of "alarm monitoring service" is adopted with the
clarification that the definition applies to the transmission of signals by
means of the facilities of any local exchange carrier rather than just those
of a BOC.
New Section 276 - Provision of Payphone Services
Senate bill
Section 311 of the Senate bill adds a new section 265 to the
Communications Act, to address certain practices of the BOCs with regard to
telemessaging and payphone services. This section is designed to prohibit
cross-subsidization between a BOC's telephone exchange or exchange access
services and its payphone and telemessaging services. Existing joint-cost
rules are not adequate to prevent such activities.
This section prohibits a BOC from discriminating between
affiliated and nonaffiliated payphone and telemessaging services, under
rules set forth by the Commission. If, however, the Commission finds that
these safeguards are insufficient, the Commission may require the BOCs to
provide telemessaging services through a separate subsidiary.
New section 265 directs the Commission to complete, within 18
months after the date of enactment of the bill, a rulemaking proceeding to
prescribe regulations to carry out this new section. The Commission also is
directed to determine whether, in order to enforce the require- ments of
section 265, it is appropriate to require the BOCs to provide payphone
service or telemessaging services through a separate subsidiary that meets
the requirements of new section 252.
Payphone services are defined to include the provision of
telecommunications service through public or semipublic pay telephones, and
includes the provision of inmate phone service in correctional
institutions. Semipublic payphones are also included within the definition
of payphone services.
New section 265 prohibits the BOCs from cross-subsidizing and from
preferring or discriminating in favor of their own payphone operations. The
Commission is directed to conduct rulemaking proceedings to implement new
section 265.
Nothing in section 265 is intended to limit the authority of the
Commission to address these structural issues, or other payphone related
issues, under the existing provisions of the Communications Act.
House amendment
Section 274 directs the Commission to adopt rules that eliminate all
discrimination between BOC and independent payphones and all subsidies or
cost recovery for BOC payphones from regulated interstate or intrastate
exchange or exchange access revenue. The BOC payphone operations will be
transferred, at an appropriate valuation, from the regulated accounts
associated with local exchange services to the BOC's unregulated books. The
Commission's implementing safeguards must be at least equal to those adopted
in the Commission's Computer III proceedings. In place of the existing
regulatory structure, the Commission is directed to establish a new system
whereby all payphone service providers are fairly compensated for every
interstate and intrastate call made using their payphones, including, for
example, "toll-free" calls to subscribers to 800 and new 888 services and
calls dialed by means of carrier access codes. In crafting implementing
rules, the Commission is not bound to adhere to existing mechanisms or
procedures established for general regulatory purposes in other provisions
of the Communications Act.
Section 274(b)(1)(D) also makes it possible for independent payphone
service providers, as well as BOCs, in all jurisdictions, to select the
intraLATA carriers serving their payphones. However, existing contracts and
agreements between location providers and payphone service providers,
interLATA, or intraLATA carriers are grandfathered. Location providers
prospectively also have control over the ultimate choice of interLATA and
intraLATA carriers in connection with their choice of payphone service
providers.
Section 274(b)(2) directs the Commission to determine whether it is
necessary to support the maintenance of "public interest payphones." This
term refers to payphones at locations where payphone service would not
otherwise be available as a result of the operation of the market. Thus,
the term does not apply to a payphone located near other payphones, or to a
payphone that, even though unprofitable by itself, is provided for a
location provider with whom the payphone provider has a contract.
Section 274(c) authorizes the Commission to preempt State regulations
that are inconsistent with the Commission's regulations under section 274.
Conference agreement
The conference agreement adopts the House provision with some
modifications and a clarification as a new section 276 of the Communications
Act. The conferees added to subsection (b)(1)(D) the phrase "unless the
Commission determines in the rulemaking that it is not in the public
interest." This modification would allow the Commission, if it determines
that it is in the public interest, not to allow the BOCs to have the same
rights as independent payphone providers in negotiating with the interLATA
carriers for their payphones. In addition, the conferees clarify in
subsection (b)(1)(E) that the location provider has the ultimate
decision-making authority in determining interLATA services in connection
with the choice of payphone providers.
TITLE II - BROADCAST SERVICES
Section 201 - Broadcaster Spectrum Flexibility
Senate bill
If the Commission, by rule, permits a licensee to provide advanced
television services, subsection (a) of section 207 of the Senate bill
requires the Commission to adopt rules to permit broadcasters flexibility to
use the advanced television spectrum for ancillary or supplementary
services. The broadcaster must provide at least one free, over-the-air
advanced television broadcast service on that spectrum. Similar rules for
existing broadcast spectrum must also be adopted.
Paragraph (2) requires that if the licensee offers ancillary or
supplementary service for which payment of a subscription fee is required,
or is compensated for transmitting material furnished by a third party, then
the Commission will collect an annual fee from the licensee. The fee shall
be based, in part, on the licensee's total amount of spectrum, and the
amount of spectrum used and the amount of time the spectrum is used for
those ancillary and supplementary services. The fee, however, cannot exceed
the amount, on an annualized basis, paid by licensees providing competing
services on spectrum subject to auction.
Paragraph (3) states that licensees are not relieved of their
public interest requirements. Paragraph (4) defines "advanced television
services" as a television service using digital or other advanced technology
to enhance audio quality and visual resolution. The paragraph also defines
"existing" spectrum as that spectrum used for television broadcast purposes
as of the date of enactment.
House amendment
Section 301 of the House amendment directs the Commission, if the
Commission issues licenses for advanced television services, to limit the
initial eligibility for such licenses to incumbent broadcast licensees and
permittees and authorizes the Commission to adopt regulations that would
permit broadcasters to use such spectrum for ancillary or supplementary
services. Apart from the restrictions contained herein, this section leaves
the final determination of the uses of spectrum assigned to the
broadcasters. This section restricts any potential use of spectrum apart
from the main channel signal to "ancillary and supplementary" uses, provided
the use of a designated frequency for such services is consistent with the
technology or method designated by the Commission for the provision of
advanced television services.
Paragraph (b)(2) requires the Commission to prescribe regulations that
avoid the derogation of any advanced television services, including high
definition television (HDTV) services.
Paragraph (b)(3) clarifies the regulation of ancillary and
supplementary services. It requires that Commission regulations that are
applicable to such services be applicable to the offering of analogous
services by any other person. This section, however, specifically does not
confer "must carry" status on any of these ancillary or supplementary
services.
Paragraph (b)(4) requires the Commission to adopt any technical or
other requirements necessary to assure signal quality for ATV services and
provides, inter alia, that the Commission may review and update its
requirements concerning minimum broadcast hours for television broadcasters
for both NTSC and ATV services.
Subsection (c) provides that if the Commission issues licenses for
advanced television services, it shall precondition such issuance on the
requirement that one or the other of the licenses be surrendered to the
Commission pursuant to its regulations. Subsection (c) also requires that
any license surrendered must be reassigned through competitive bidding. This
provision is designed to ensure that licensees' use of 12 megahertz would be
for temporary simulcast purposes only, and that, in due course, one of the
licensed channels will revert to the Commission for assignment by
competitive bidding. Subsection (c) also requires that the Commission must
base its decision regarding the surrender of the license on public
acceptance of the new technology through obtaining television receivers
capable of receiving an ATV signal or on the potential loss of reception for
a substantial portion of the public.
Subsection (d) requires the Commission to establish a fee program for
any ancillary or supplementary services if subscription fees or any other
compensation fees apart from commercial advertisements are required in order
to receive such services.
Subsection (e) requires the Commission to conduct an evaluation within
10 years after the date it issues its licenses for advanced television
services.
In subsection (f), the House adopts the Commission's definition of high
definition television.
Conference agreement
The conference agreement adopts the House amendment with
modifications. The conference agreement retains the requirement in the
House amendment that the Commission condition the issuance of a new license
of the return, after some period, of either the original broadcast license
or the new license. However, the conference agreement leaves to the
Commission the determination of when such licenses shall be returned and how
to reallocate returned spectrum. With respect to paragraph (b)(3), the
conferees do not intend this paragraph to confer must carry status on
advanced television or other video services offered on designated
frequencies. Under the 1992 Cable Act, that issue is to be the subject of a
Commission proceeding under section 614(b)(4)(B) of the Communications Act.
Further, the conference agreement also adopts the Senate language that the
Act's public interest obligations extend to the new licenses and services.
The conference agreement modifies the House amendment to provide that if the
Commission decides to issue additional licenses for ATV services, it should
limit the initial eligibility to broadcast licensees.
Section 202 - Broadcast Ownership
Senate bill
Section 207(b) of the Senate bill requires the Commission to change its
rules regarding the amount of national audience a single broadcast licensee
may reach. The current cap is 25% of the nation's television households.
The Senate bill raises that to 35%. Section 207 directs the Commission to
eliminate its rules regarding the number of radio stations one entity may
own, either nationally or within a particular market. The Commission may
refuse a transfer of a radio license if it would result in an undue
concentration of control or would thereby harm competition. Section
207(b)(3) grandfathers existing television local marketing agreements
(LMAs). Section 207(b)(4) eliminates the cable-broadcast crossownership ban
in section 613(a) of the Communications Act, and the Commission is also
required to review its ownership rules biennially, as part of its overall
regulatory review required by new section 259 of the Communications Act.
This provision is effective upon enactment.
House amendment
Section 302 of the House amendment adds a new section 337 to the
Communications Act addressing broadcast ownership. Section 337, subject to
specified restrictions and consistent with the cross-ownership restrictions
of section 613(a) of the Communications Act, prohibits the Commission from
prescribing or enforcing any regulation which prohibits or limits, on a
national or local basis, a licensee from holding any form of ownership or
other interest in two or more broadcast stations or in a broadcast station
and any other medium of mass communication. This section also prohibits the
Commission from prescribing or enforcing any regulation which prohibits a
person or entity from owning, operating or controlling two or more networks
of broadcast stations or from owning, operating, or controlling a network of
broadcast stations and any other medium of mass communications. Section
337(b)(1) eliminates current limits placed on television audience nationwide
and places new limits on ownership of television stations by a single entity
at a national audience reach exceeding 35 percent for the year following
enactment of this section. This section directs the Commission to conduct a
study of the operation of these national ownership limitations and to submit
a report to Congress on the development of competition in the television
marketplace and the need, if any, to revisit these limitations.
Section 337(b)(2) sets forth the circumstances under which one entity
may own or operate two television stations in a local market. Subparagraph
(B) creates a presumption in favor of UHF/UHF and UHF/VHF combinations.
Subparagraph (C) clarifies that the Commission may also permit VHF/VHF
combinations where it determines that doing so will not harm competition and
diversity.
Subsection (c) permits the Commission, under certain circumstances, to
consider concentrations of local media interests in proceedings to grant,
renew or authorize the assignment of station licenses. In a proceeding to
grant, renew, or authorize the assignment of any station license under this
title, the Commission may deny the application if the Commission determines
that the combination of such station and more than one other non-broadcast
media of mass communication would result in an undue concentration of media
voices in the respective local market. The Commission shall not grant
applications that would result in two or fewer persons or entities
controlling all the media of mass communications in the market. There is no
requirement that any existing interests be divested, but the Commission may
condition the grant of an application to acquire additional media interests.
Subsection (d) clarifies that any Commission rule prescribed prior to
the date of enactment of this legislation that is inconsistent with the
requirements of this section is repealed on the date of enactment. Nothing
in subsection (d) is to be construed to prohibit the continuation or renewal
of any television local marketing agreement in effect on the date of
enactment.
Conference agreement
Section 202(a) of the conference agreement directs the Commission to
modify its multiple ownership rules to eliminate its limitations on the
number of radio stations which may be owned or controlled nationally. New
subsection (b) directs the Commission to further modify its rules with
respect to the number of radio stations a party may own, operate or control
in a local market. Subsection (b)(2) provides an exception to the local
market limits, where the acquisition or interest in a radio station will
result in an increase in the number of radio stations.
Subsection 202(c)(1) directs the Commission to modify its multiple
ownership rules to eliminate the number of television stations which may be
owned or controlled nationally and to increase the national audience reach
limitation for television stations to 35 percent. Subsection (c)(2) directs
the Commission to conduct a rulemaking proceeding to determine whether its
rules restricting ownership of more than one television station in a local
market should be retained, modified or eliminated. It is the intention of
conferees that, if the Commission revises the multiple ownership rules, it
shall permit VHF-VHF combinations only in compelling circumstances.
Section 202(d) directs the Commission to extend its waiver policy with
respect to its one to a market ownership rules to any of the top fifty
markets. The Commission now generally bans crossownerships of radio and
television stations in the same market, but has implemented a waiver policy
which recognizes the potential for public interest benefits of such
combinations when bedrock diversity interested are not threatened. The
conferees in adopting subsection (d), intend to extend the benefits of this
policy to the top fifty markets. Also, in the Commission's proceeding to
review its television ownership rules generally, the Commission is
considering whether generally to allow such local crossownerships, including
combinations of a television station and more than one radio station in the
same service. The conferees expect that the Commission's future
implementation of its current radio-television waiver policy, as well as any
changes to its rules it may adopt in its pending review, will take into
account the increased competition and the need for diversity in today's
radio marketplace that is the rationale for subsection (d).
Subsection (e) directs the Commission to revise its rules at 47 CFR
73.658(g) to permit a television station to affiliate with a person or
entity that maintains two or more networks unless such dual or multiple
networks are composed of (1) two or more of the four existing networks (ABC,
CBS, NBC, FOX) or, (2) any of the four existing networks and one of the two
emerging networks (WBTN, UPN). The conferees do not intend these
limitations to apply if such networks are not operated simultaneously, or if
there is no substantial overlap in the territory served by the group of
stations comprising each such networks.
Subsection (f) directs the Commission to revise its rules to permit
crossownership interests between a broadcast network and a cable system. If
necessary, the Commission is directed to revise its rules to ensure
carriage, channel positioning and nondiscriminatory treatment of
non-affiliated broadcast stations by cable systems affiliated with a
broadcast network.
Subsection (g) grandfathers LMAs currently in existence upon enactment
of this legislation and allows LMAs in the future, consistent with the
Commission's rules. The conferees note the positive contributions of
television LMAs and this subsection assures that this legislation does not
deprive the public of the benefits of existing LMAs that were otherwise in
compliance with Commission regulations on the date of enactment.
Subsection (h) directs the Commission to review its rules adopted under
section 202 and all of its ownership rules biennially. In its review, the
Commission shall determine whether any of its ownership rules, including
those adopted pursuant to this section, are necessary in the public interest
as the result of competition. Based on its findings in such a review, the
Commission is directed to repeal or modify any regulation it determines is
no longer in the public interest. Apart from the biennial review required
by subsection (h), the conferees are aware that the Commission already has
several broadcast deregulation proceedings underway. It is the intention of
the conferees that the Commission continue with these proceedings and
conclude them in a timely manner.
Subsection (i) amends section 613(a) of the Communications Act by
repealing the restriction on broadcast-cable crossownership. The conferees
do not intend that this repeal of the statutory prohibition should prejudge
the outcome of any review by the Commission of its rules. Subsection (i)
also amends 613(a) by revising the cable-MMDS crossownership restriction so
that it does not apply in any franchise area in which a cable operator faces
effective competition.
Section 203 - Terms of Licenses
Senate bill
Section 207 of the Senate bill amends section 307(c) of the
Communications Act to increase the term of license renewal for television
licenses from five to ten years and for radio licenses from seven to ten
years.
House amendment
Section 306 of the House amendment contains a similar provision but
amends section 307(c) of the Communications Act to provide for a seven year
license term for all broadcast licenses.
Conference agreement
The conference agreement adopts the House provisions but extends the
license term for broadcast licensees to eight years for both television and
radio.
Section 204 - Broadcast License Renewal Procedures
Senate bill
Subsection (d) of section 207 amends the broadcast license renewal
procedures. This subsection amends section 309 of the Communications Act by
adding a new subsection (k) which gives the incumbent broadcaster the
ability to apply for its license renewal without competing applications. A
broadcaster would apply for its renewal, and the Commission would grant such
a renewal, if, during the preceding term of its license the station has
served the public interest, convenience, and necessity, has not made any
serious violations of the Communications Act or of the Commission's rules,
and has not, through other violations, shown a pattern of abuse.
The Commission may not consider whether the granting of a license
to a person other than the renewal applicant might serve the public
interest, convenience, and necessity prior to its decision to approve or
deny the renewal application. Under this section, the Commission has
discretion to consider what is a serious violation of the Communications
Act. If a licensee does not meet those criteria, the Commission may either
deny the renewal, or impose conditions on the renewal. Once the Commission,
after conducting a hearing on the record, denies an application for renewal,
it is then able to accept applications for a construction permit for the
channel or facilities of the former licensee.
Subparagraph (4) would require broadcast licensees to attach a summary
of comments regarding violent programming to its renewal application.
House amendment
Section 305 of the House amendment similarly amends section 309 of the
Communications Act by adding a new subsection (k) mandating a change in the
manner in which broadcast license renewal applications are processed.
Subsection (k) allows for Commission consideration of the renewal
application of the incumbent broadcast licensee without the contemporaneous
consideration of competing applications. Under this subsection, the
Commission would grant a renewal application if it finds that the station,
during its term, had served the public interest, convenience, and necessity;
there had been no serious violations by the licensee of the Communications
Act or Commission rules; and there had been no other violations of the
Communications Act or Commission rules which, taken together, indicate a
pattern of abuse. If the Commission finds that the licensee has failed to
meet these requirements, it could deny the renewal application or grant a
conditional approval, including renewal for a lesser term. Only after
denying a renewal application could the Commission accept and consider
competing applications for the license.
Conference agreement
The conference agreement adopts the House provisions with modifications
to include the Senate provision requiring a renewal applicant to attach to
its application a summary of comments regarding violent programming. The
conference agreement sets the effective date for this section at May 1, 1995.
Section 205 - Direct Broadcast Satellite Service
Senate bill
Section 312(a) of the Senate bill amends section 705(e)(4) of the
Communications Act to extend the current legal protection against signal
piracy to direct-broadcast services.
Section 312(b) amends section 303 of the Communications Act to clarify
that the Commission has exclusive jurisdiction over the regulation of direct
broadcast satellite (DBS) service.
House amendment
The House has identical provisions in sections 308 and 311 of the House
amendment.
Conference agreement
The conference agreement adopts the Senate provision with a conforming
change to the definition of "direct-to-home."
Section 206 - Automated Ship Distress and Safety Systems
Senate bill
Section 306 of the Senate bill provides that notwithstanding any other
provision of the Communications Act, any ship documented under the laws of
the United States operating in accordance with the Global Maritime Distress
and Safety System provisions of the Safety of Life at Sea Convention is not
required to be equipped with a radio telegraphy station operated by one or
more radio officers or operators.
House amendment
This House provision is identical.
Conference agreement
The conference agreement adopts the Senate provision with a
modification placing the provision as an amendment to section 364 of the
Communications Act. This provision permits a ship that fully complies with
the Global Maritime Distress and Safety System (GMDSS) provisions of the
Safety of Life at Sea Convention to be exempted from requirements to carry a
radio telegraph station operated by one or more radio operators. Due to the
conferees' concern about the proper implementation of the GMDSS, the
provision specifies that this exemption shall only take effect upon the
United States Coast Guard's determination that the system is fully
installed, maintained, and is operating properly on each vessel.
Section 207 - Restrictions on Over-The-Air Reception Devices
Senate bill
No provision.
House amendment
Section 308 of the House amendment directs the Commission to promulgate
rules prohibiting restrictions which inhibit a viewer's ability to receive
video programming from over-the-air broadcast stations or direct broadcast
satellite services.
Conference agreement
The conference agreement adopts the House provision with modifications
to extend the prohibition to devices that permit reception of multichannel
multipoint distribution services.
TITLE III - CABLE SERVICES
Section 301 - Cable Act Reform
Senate bill
Section 203(a) of the Senate bill amends the definition of "cable
system" in section 602 of the Communications Act.
Section 203(b) of section 204 of the bill limits the rate regulation
currently imposed by the 1992 Cable Act.
Paragraph (1) amends the rate regulation provisions of section 623
of the Communications Act for the expanded tier. First, it eliminates the
ability of a single subscriber to initiate a rate complaint proceeding at
the Commission. Franchising authorities are the relevant State and local
government entities that still retain the ability to initiate a rate
proceeding. Second, rates for cable programming services will only be
considered unreasonable, and subject to regulation, if the rates
substantially exceed the national average for comparable cable programming
services.
Paragraph (2) amends the definition of effective competition in
section 623(l)(1) to allow the provision of video services by a local
exchange carrier either through a common carrier video platform, or as a
cable operator, in an unaffiliated cable operator's franchise area to
satisfy the effective competition test.
Section 203(c) eliminates cable rate regulation for small cable
operators serving areas of 35,000 or fewer subscribers.
Section 203(d) provides that any programming access rules that apply to
a cable operator under section 628 of the Communications Act also apply to a
telecommunications carrier or its affiliate that provides video programming
directly to subscribers.
Section 203(e) provides for expedited decisions by the Commission
regarding market determinations under section 614 of the Communications Act.
Section 203(f) provides that the provisions of this section take
effect on the date of enactment.
House amendment
Section 307(a) of the House amendment amends the definition of "cable
service" in section 602(6) of the Communications Act by adding "or use" to
the definition, reflecting the evolution of video programming toward
interactive services.
Subsection (b) prohibits the Commission from requiring the divestiture
of, or preventing or restricting the acquisition of, any cable system based
solely on the geographic location of the system.
Subsection (c) amends section 623(a) of the Communications Act to
deregulate equipment, installations, and additional connections furnished to
subscribers that receive more than basic cable service when a cable system
has effective competition pursuant to section 623(l)(1)(b).
Subsection (d) amends section 623(a) of the Communications Act to limit
basic tier rate increases by a cable operator to once every six months and
permits cable operators to implement such increases after 30 days notice.
Subsection (d) limits the franchising authority's scope of review to the
incremental change in the basic tier rate effected by a rate increase.
Subsection (e) amends section 623(a) of the Communications Act to
promote the development of a broadband, two-way telecommunications
infrastructure. Under this paragraph, cable operators are permitted to
aggregate equipment costs broadly. However, subsection (e) does not permit
averaging for equipment used by consumers that subscribe only to basic
service tier. Subsection (e) directs the Commission to complete its
revisions to current rules necessary to implement this subsection within 120
days.
Subsection (f) amends section 623(c) of the Communications Act
governing review of complaints by inserting a new paragraph (3) requiring
that the Commission receive complaints from three percent of a system's
subscribers, or 10 subscribers, whichever is greater, before it initiates a
rate case.
Subsection (f) extends from 45 days to 90 days the amount of time after
a cable programming service rate increase goes into effect that during which
subscribers may file a complaint. Pending rate cases will be subject to the
new complaint threshold and complaining parties are granted a 90-day
extension to bring complaints into conformance with the new complaint
threshold requirement. Subsection (f) clarifies that the Commission's scope
of review is limited to the last incremental consumer programming service
rate increase consistent with the intent of the 1992 Cable Act.
Subsection (g) clarifies that a cable operator must comply with the
uniform rate structure requirement in section 623(d) of the 1992 Cable Act
only with respect to regulated services. Subsection (g) also amends section
623(d) of the Communications Act to exempt bulk discounts to multiple
dwelling units ("MDUs") from the uniform rate requirement.
Subsection (h) amends section 623(l)(1) of the Communications Act by
adding a fourth effective competition test. Under this new test, effective
competition for cable programming service tier and subscriber equipment
(other than that necessary for receiving the basic service tier) is present:
(1) where a common carrier has been authorized to provide video dialtone
service in the cable franchise area; (2) where a common carrier has been
authorized by the Commission or pursuant to a franchise to provide video
programming directly to subscribers in the cable franchise area; or (3) when
the Commission completes all actions necessary to prescribe the video
platform rules pursuant to section 653(b)(1). When any of these events
occurs, the rates for a cable system's cable programming services, as well
as equipment, installations, and additional television connections are
deregulated.
Subsection (h) does not apply to basic cable service. Basic service,
including all equipment, additional television connections, and
installations furnished to basic-only subscribers, remains subject to
regulation until the cable operator meets one of the effective competition
tests contained in section 623(l)(1)(A),(B), and (C) of the Communications
Act.
Subsection (i) amends section 623 of the Communications Act to
deregulate the rates for the cable programming service tiers of small
companies and the rates for the basic service tier of small company systems
that offered only a single tier of service as of December 31, 1994.
Subsection (i) does not deregulate the basic tier of small cable systems
that offer multiple tiers of cable service.
In order to qualify as a "small cable operator," a cable operator must:
(1) directly, or through an affiliate, serve in the aggregate fewer than one
percent of all cable subscribers nationwide; and (2) not be affiliated with
any entity whose annual gross revenues in the aggregate exceed $250,000,000.
Subsection (j) amends section 624(e) of the Communications Act by
prohibiting States or franchising authorities from regulating in the areas
of technical standards, customer equipment, and transmission technologies.
Subsection (k) amends section 624A(b)(2) of the Communications Act and
directs that no Federal agency, State, or franchising authority may prohibit
a cable operator's use of any security system, including scrambling, but
permits the Commission to prohibit scrambling of video programming on the
broadcast-basic service tier unless scrambling is necessary to prevent signal
piracy.
Subsection (l) amends section 624A of the Communications Act to direct
the Commission to set only minimal standards when implementing regulations
to assure compatibility between cable "set-top" boxes, televisions, and
video cassette recorders, and to rely on the marketplace for other features,
services, and functions to ensure basic compatibility. This subsection
clarifies section 624(c)(1)(A) further to ensure that Commission efforts
with respect to cable compatibility do not affect unrelated markets, such as
computers or home automation communications, or result in a preference for
one home automation protocol over another.
Subsection (m) amends section 625(d) of the Communications Act by
clarifying that a cable operator may move any service off the basic service
tier at its discretion, other than the local broadcast signals and access
channels required to be carried on the basic service tier under section
623(b)(7)(A) of the Communications Act.
Subsection (n) amends section 632 of the Communications Act to provide
cable operators with flexibility to use "reasonable" written means to convey
rate and service changes to consumers. Notice need not be inserted in the
subscriber's bill.
Subsection (n) also provides that prior notice is not required for any
rate change that is the result of a regulatory fee, franchise fee, or any
other fee, tax, assessment or change of any kind imposed by the Government
on the transaction between a cable operator and a subscriber.
Subsection (o) amends section 623 of the Communications Act to clarify
that losses incurred prior to the enactment of the 1992 Cable Act by a cable
system owned and operated by the original franchisee may not be disallowed
in determination of rate regulation.
Conference agreement
The conference agreement adopts the House provisions with
modifications. It adopts the House provision amending the definition of
cable service. The conferees intend the amendment to reflect the evolution
of cable to include interactive services such as game channels and
information services made available to subscribers by the cable operator, as
well as enhanced services. This amendment is not intended to affect Federal
or State regulation of telecommunications service offered through cable
system facilities, or to cause dial-up access to information services over
telephone lines to be classified as a cable service. The conference
agreement adopts the Senate provision amending the definition of cable
system to clarify that the term does not include a facility that serves
subscribers without using any public right-of-way.
The conference agreement sunsets regulation of the cable programming
services tier on March 31, 1999. The agreement directs the Commission to
review a rate increase for an operator's cable programming services tier
within 90 days of a complaint.
The conference agreement amends the Communications Act's requirements
for a uniform rate structure to clarify that such requirements do not apply
to (1) a cable operator with respect to the provision of cable service over
its cable system in any geographic area in which the video programming
services offered by the operator in that area are subject to effective
competition, or (2) any video programming offered on a per channel or per
program basis. Bulk discounts to multiple dwelling units shall not be
subject to the uniform rate requirement except that a cable operator may not
charge predatory prices to a multiple dwelling unit. Upon a prima facie
showing by a complainant that there are reasonable grounds to believe that
the discounted price is predatory, the cable system shall have the burden of
showing that its discounted price is not predatory.
The conference agreement adopts an amendment to section 623(l) of the
Communications Act to expand the effective competition test for deregulating
both basic and cable programming service tiers. The test provides that
effective competition exists when a telephone company or any multichannel
video programming distributor is offering video programming services
directly to subscribers by any means in the franchise area of an
unaffiliated cable operator provided such service is comparable to that
provided by the unaffiliated cable operator. "By any means," includes any
medium (other than direct-to-home satellite service) for the delivery of
comparable programming, including MMDS, LMDS, an open video system, or a
cable system. For purposes of section 623(l)(1)(D) of the Communications
Act, "offer" has the same meaning given that term in the Commission's rules
as in effect on the date of enactment of the bill. See 47 CFR 76.905(e).
The conferees intend that "comparable" requires that the video programming
services should include access to at least 12 channels of programming, at
least some of which are television broadcasting signals. See 47 CFR
76.905(g).
The conference agreement adopts the Senate provision with respect to
deregulation of small cable systems with the modification that the franchise
area served by such system must reach 50,000 or fewer subscribers. The
agreement adopts the House provisions on market determinations, technical
standards, cable equipment compatibility, and subscriber notices. The
agreement amends section 628 of the Communications Act to extend the program
access requirements to satellite cable programming vendors in which a common
carrier providing video programming by any means has an attributable
interest. This provision clarifies that such common carriers shall not be
deemed to have an attributable interest in such programming vendor (or its
parent company) solely as a result of the common carrier's holding, or
having the right to appoint or elect, two or fewer common officers or
directors. The conference agreement amends section 617 of the
Communications Act to repeal the anti-trafficking restrictions. The
conference agreement adopts the House provisions on equipment aggregation
and treatment of prior year losses.
The conference agreement also adopts the House provision on cable
equipment compatibility. As used in section 624A of the Communications Act,
the term "affect" means to produce a material influence upon, or alteration
in, such features, functions, protocols, and other product and service
options. The conferees intend that the Commission should promptly complete
its pending rulemaking on cable equipment compatibility, but not at the risk
that premature or overbroad Government standards may interfere in the
market-driven process of standardization in technology intensive markets.
Section 302 - Cable Service Provided by Telephone Companies
Senate bill
The Senate bill creates new sections of the Communications Act to
provide for the provision of video programming by telephone companies.
House amendment
The House amendment creates new sections of the Communications Act to
provide for the provision of video programming by telephone companies.
Conference agreement
Section 302 of the conference agreement establishes a new "Part V" of
title VI of the Communications Act. Part V contains new sections 651-653 to
provide for the provision of video programming by telephone companies.
New Section 651 - Regulatory Treatment of Video Programming Services
Senate bill
Section 202 of the Senate bill eliminates the cable/telephone cross
ownership restriction and grants telephone companies the option of providing
video programming to subscribers over a cable system or over a video
platform. It also states that a BOC need not use a separate affiliate if it
provides facilities, services or information to all programmers on the same
terms and conditions as it provides to its own operations, and if it does
not use telecommunications services to subsidize the provision of video
programming. In addition, it states that when a BOC provides cable service
as a cable operator, it must do so through a separate affiliate, except that
if the cable service is provided using the company's own telephone exchange
facilities, it is not required to make capacity available on a
nondiscriminatory basis to other video service providers because of such
use.
House amendment
Section 201 of the House amendment permits a common carrier that
provides video programming directly to subscribers in its telephone service
area, to do so either over a video platform or over a cable system. In
addition, it requires the carrier to provide notice to programming providers
and to submit detailed information to the Commission concerning its
intention to establish capacity for the provision of video programming.
Carriers are required to establish channel capacity sufficient to meet all
bona fide demand and to expand capacity in response to demand for additional
capacity.
Conference agreement
New section 651 of the Communications Act specifically addresses the
regulatory treatment of video programming services provided by telephone
companies. Recognizing that there can be different strategies, services and
technologies for entering video markets, the conferees agree to multiple
entry options to promote competition, to encourage investment in new
technologies and to maximize consumer choice of services that best meet
their information and entertainment needs.
New section 651(a)(1) states that common carriers, or other persons,
that use radio communication to provide video programming will be regulated
under title III of the Communications Act, and are subject to the
requirements of new section 652 of the Communications Act but are not
otherwise subject to the requirements of title VI. This will create parity
among providers of services using radio communication.
New section 651(a)(2) states that when common carriers provide only
video transmission on a common carrier basis, they are subject only to title
II and to new section 652, and are not otherwise subject to the requirements
of title VI merely by engaging in common carrier transport of video
programming.
New section 651(a)(3) states that common carriers providing video
programming to subscribers by any means other than those described in new
section 651(a)(1) or (a)(2), are subject to the requirements of title VI,
unless such programming is provided by means of an open video system that
has been certified by the Commission. New section 651(a)(3) also states
that carriers that provide programming using a certified open video system
are subject to the requirements of part V, and only those provisions of
parts I through IV of title VI as are specifically provided in new section
653(c). Open video systems are not subject to the requirements of title II
for the provision of video programming or cable services.
Common carriers that provide video programming using radio
communication or using common carriage transmission, or a combination of
those services, also may choose to provide an open video system. New
section 651(a)(4) provides that such systems are subject to the same
requirements as other open video systems.
New section 651(b) states that a local exchange carrier that provides
cable service by means of an open video system, or by means of an integrated
cable system utilizing its own telephone exchange facilities, is not
required by title II to also make transmission capacity and related services
available on a nondiscriminatory basis to any other person for the provision
of cable service or video programming directly to subscribers. This
provision clarifies that the open video system operator's obligation to
provide system capacity and facilities to others is limited to, and governed
by, part V and the other requirements specifically provided in new section
653(c). Likewise, a local exchange carrier that utilizes its own telephone
exchange facilities and services to provide cable services other than
through an open video system is required by such use only to make cable and
video programming capacity and facilities available to others for the
provision of cable service to the extent provided in parts I through IV of
title VI, regardless of whether those facilities also are used to provide
telephone exchange service under title II. Similarly, under new section
651(c) common carriers that establish video delivery systems, including
cable and open video systems, are not required to obtain section 214
authority prior to establishing or operating such systems. This requirement
has served as an obstacle to competitive entry and has disproportionately
disadvantaged new competitors. Eliminating this barrier to entry will hasten
the development of video competition and will provide consumers with
increased program choice.
New Section 652 - Prohibition on Buyouts
Senate bill
Section 202 of the Senate bill adds to section 613(b) of the
Communications Act several provisions restricting the ability of a local
exchange carrier to acquire more than a 10 percent financial interest or any
management interest in a cable operator in its telephone service area and
restricting the ability of a cable operator to acquire similar interests in
a local exchange carrier in the cable operator's franchise area. It
includes certain exceptions for acquisitions in non-urban areas with less
than 50,000 inhabitants, and it authorizes the Commission to grant waivers
for economic distress, economic viability of the cable system, or where any
anticompetitive effects of the proposed transaction are clearly outweighed
by the public interest, and where the local franchising authority approves
the waiver. The bill directs the Commission to act on such waiver requests
within 180 days of filing. The Senate provisions also permit a local
exchange carrier, if certain conditions are met, to use excess capacity of a
cable company for that portion of the transmission facilities of the cable
operator from the last multi-user terminal to the premises of the end user.
Section 706 of the Senate bill authorizes a local exchange carrier or
any of its affiliates to purchase or otherwise acquire more than 10 percent
of the financial interest or any management interest in any cable system in
its telephone service area so long as (1) the cable system serves no more
than 20,000 cable subscribers and (2) no more than 12,000 of those cable
subscribers live in an urbanized area.
House amendment
Section 655 of the House amendment contains a general prohibition on
buy-outs by a common carrier of a cable system within its service
territory. Subsection (b) provides exceptions that would permit a common
carrier to purchase a cable system or systems under circumstances including
the following: (1) the cable system serves a rural area; (2) the total
number of subscribers served by such systems adds up to less than ten
percent of the households served by the carrier in the telephone service
area, and no such system or systems serve a franchise area with more than
35,000 inhabitants for an affiliated system, or more than 50,000 inhabitants
for any system that is not affiliated with any system whose franchise area
is contiguous; and (3) the exemption would permit a carrier to obtain, by
contract with a cable operator, use of the "drop"from the curb to the home
that is controlled by the cable company, if such use was reasonably limited
in scope and duration as determined by the Commission.
The exception under subparagraph (4) is intended to address a market
situation where a dominant cable operator that is a large multiple systems
operator (MSO) shares a market with a small independent cable system.
Subsection (c) also contains the waiver process for the buy-out
provision under which the Commission may grant a waiver upon a showing of
undue economic distress by the owner of the cable system if a sale to a
telephone company is blocked. The Commission is directed to act on a waiver
application within 180 days after it is filed.
Conference agreement
The conference agreement adopts the provisions of the Senate bill
limiting acquisitions and prohibiting joint ventures between local exchange
companies and cable operators that operate in the same market to provide
video programming to subscribers or to provide telecommunications services
in such market. Such carriers or cable operators may enter into a joint
venture or partnership for other purposes, including the construction of
facilities for the provision of such programming or services. With respect
to exceptions to these general rules contained in new section 652(a), (b),
and (c), the conferees agreed, in general, to take the most restrictive
provisions of both the Senate bill and the House amendment in order to
maximize competition between local exchange carriers and cable operators
within local markets.
In new section 652(d)(1) the conference agreement allows a local
exchange carrier to obtain a controlling interest in, management interest
in, or a joint venture or partnership with a cable system operator for the
use of such system located within its telephone service area to the extent
that such system or facilities only serve places or territories that have
fewer than 35,000 inhabitants and are outside urbanized areas. The
agreement further stipulates that such systems in the aggregate serve less
than 10 percent of the households in the telephone service area of such
local exchange carrier. New section 652(d)(1) also permits a cable operator
to obtain a controlling interest in, management interest in, or a joint
venture or partnership with a local exchange carrier for the use of such
carrier's facilities if such facilities serve places or territories that
have fewer than 35,000 inhabitants and are outside of urbanized areas. The
agreement contains other very limited exceptions to the general rules
contained in new section 652(a), (b), and (c). In new section 652(d)(3)
acquisitions would be permitted in competitive markets where a local exchange
carrier seeking to obtain a controlling interest or form a joint venture
with a cable system may do so if narrowly drawn requirements are met. New
section 652(d)(4) provides that new section 652(a) shall not apply to
certain cable systems serving less than 17,000 subscribers outside of the
top television markets. New section 652(d)(5) of the conference agreement
allows a non-Tier I local exchange carrier to obtain more than a ten percent
interest in, or to form a joint venture or partnership with, a small cable
system that serves no more than 20,000 cable subscribers within the
telephone company's service territory, provided that no more than 12,000 of
those subscribers live within an urbanized area. The conference agreement
also allows for limited joint use of certain cable system facilities. In
new section 652(d)(2) the agreement adopts language from the Senate bill
that will allow a local exchange carrier to obtain, with the concurrence of
the cable operator on the rates, terms and conditions, the use of that part
of the transmission facilities of a cable system extending from the last
multi-user terminal to the premises of the end user. The agreement
stipulates that such joint use is permitted if such use is reasonably
limited in scope and duration as determined by the Commission.
The conferees also provided for the establishment of a waiver process
of the statutory rules. In new section 652(d)(6), the conferees give
specific guidance to the Commission with respect to granting waivers. In
that regard, the conferees allow the Commission to waive the various
restrictions in this section if: the cable company or telephone company
would be subjected to undue economic stress, the cable system of local
exchange facilities would not be economically viable, the anticompetitive
effects of the proposed transaction are clearly outweighed by the public
interest, and the local franchising authority approves of such waiver.
Finally, new section 652(e) contains a definition of telephone service
area for the purposes of this section.
New Section 653 - Establishment of Open Video Systems
Senate bill
Section 202 of the Senate bill amends section 613(b) of the
Communications Act to state that nothing precludes a telecommunications
carrier from carrying video programming provided by others directly to
subscribers over a common carrier video platform. It also states that
nothing precludes a video program provider that makes use of a common
carrier video platform from being treated as an operator of a cable system
for purposes of section 111 of title 17, U.S.C.
It also requires providers of common carrier video platform services to
provide local broadcast stations, and public, educational and governmental
entities, access to platforms for the purpose of transmission of television
broadcast programming at rates no higher than the incremental-cost-based
rates of providing such access.
It states that video program providers may be required to pay fees in
lieu of franchise fees, if the fees are competitively neutral and are
separately identified in consumer billing. It also states that common
carriers are not required to obtain certificates under section 214 in order
to construct facilities to provide video programming services. Within 1
year after enactment, the Commission must prescribe regulations that set
forth a number of safeguards. Finally, it specifies that the amendment made
by subsection (a) takes effect on the date of enactment, while the amendment
made by subsection (b) (which states that no section 214 is required to
build platform facilities) takes effect 1 year after enactment.
House amendment
Section 201 of the House amendment adds new section 653 to the
Communications Act. Section 653 permits common carriers to establish video
platforms but requires them to notify the Commission of their intent to do
so; it also specifies the information that must be included in such
notification. Carriers establishing platforms are required to establish
channel capacity for the provision of video programming in response to bona
fide requests for capacity and must notify the Commission if there is a
delay in or denial of capacity and are required to construct additional
capacity to meet excess demand. The Commission is required to resolve
disputes arising from requests for capacity within 180 days of notice of
such a dispute.
The Commission is given 6 months from the date of enactment to complete
all actions necessary (including any reconsideration) to prescribe
regulations that -- prohibit carriers from discriminating among video
programming providers with regard to carriage on the platform; determine
what constitutes a bona fide request for capacity; permit channel sharing;
extend regulations concerning sports exclusivity, network nonduplication and
syndicated exclusivity to video platforms; require platforms to provide
service, transmission and interconnection to unaffiliated programmers that
is equivalent to that provided to the common carrier's video affiliate;
prohibit unreasonable discrimination in favor of the common carrier's video
affiliate concerning material or information needed to select programming;
and, prohibit a common carrier from excluding areas from its video platform
service area on the basis of ethnicity, race or income.
Section 656, as added by the House amendment, sets forth the
applicability of parts I through IV of title VI to any video programming
affiliate established by a common carrier in accordance with the
requirements of part V. Subsection (a) states that, in general, any
provision that applies to a cable operator under the following sections also
applies to such affiliate -- sections 613 (other than subsection (a)(2)),
616, 617, 628, 631, 632 and 643 of title VI. Sections 611, 612, 614 and 615
of title VI and section 325 of title III also apply to such affiliates in
accordance with the regulations prescribed under subsection (b). Parts III
and IV (other than sections 628, 631, 632 and 634) of title VI to apply to
such affiliates.
Subsection (b) addresses implementation. The Commission is required to
prescribe regulations to ensure that common carriers that operate video
platforms provide: capacity, services, facilities and equipment for public,
educational and governmental use; capacity for commercial use; capacity for
broadcast television stations; and, an opportunity for commercial broadcast
stations to choose between mandatory carriage and reimbursement for
retransmission. It also directs the Commission to impose obligations that
are no greater or lesser than the corresponding cable operator obligations
referenced in subsection (a)(2) of section 656.
Finally, this subsection also states that video programming affiliates
of common carriers that establish platforms, and multichannel video
programming distributors that use such platforms to offer competing service,
are subject to the payment of local franchise fees. It adds that such fees
are in lieu of fees imposed under section 622 and that the rate of such fees
may not exceed the rate at which franchise fees are imposed on cable
operators in the same franchise area
Conference agreement
The conference agreement adds a new section 653 to the Communications
Act. The conferees recognize that telephone companies need to be able to
choose from among multiple video entry options to encourage entry, and so
systems under this section are allowed to tailor services to meet the unique
competitive and consumer needs of individual markets. New section 653(a)
focuses on the establishment of open video systems by local exchange
carriers and provides for reduced regulatory burdens subject to compliance
with the provisions of new section 653(b) and Commission certification of a
carrier's intent to comply. New section 653(a) also gives the Commission
authority to resolve disputes (and award damages), but requires such
resolution to occur within 180 days after notice of the dispute is submitted
to the Commission.
New section 653(b) gives the Commission six months from the date of
enactment to complete all actions necessary, including any reconsideration,
to prescribe regulations to accomplish the following
o except as required by section 611, 614 or 615, to prohibit open video
system operators from discriminating among video programmers with
regard to carriage, and ensure that the rates, terms and
conditions for carriage are just and reasonable and are not
unjustly or unreasonably discriminatory;
o if demand exceeds channel capacity, to prohibit an open video system
operator and its affiliates from selecting the video programming
services that occupy more than one-third of the activated channel
capacity of the system; but this limitation does not in any way
limit the number of channels a carrier and its affiliates may offer
to provide directly to subscribers;
o to permit an open video system operator to require channel sharing;
that is, to carry only one channel of any video programming
service that is offered by more than one video programming
provider (including the local exchange carrier's video programming
affiliate), provided that subscribers have ready and immediate
access to any such video programming service;
o to extend the Commission's regulations concerning sports exclusivity,
network nonduplication and syndicated exclusivity to the
distribution of video programming over open video systems, must
carry for commercial and noncommercial broadcast stations, and
retransmission content; and,
o to prohibit an open video system operator from unreasonably
discriminating in favor of itself and its affiliates with regard
to material or information provided for the purpose of selecting
programming or presenting information to subscribers; to require
an open video system operator to ensure that video programming
providers or copyright holders are able to identify their
programming services to subscribers; to require the operator to
transmit such identification without change or alteration; and to
prohibit an open video system operator from omitting television
broadcasters or other unaffiliated video programming services from
carriage on any navigational device, guide, or menu.
New section 653(c) sets forth the reduced regulatory burdens imposed on
open video systems. There are several reasons for streamlining the
regulatory obligations of such systems. First, the conferees hope that this
approach will encourage common carriers to deploy open video systems and
introduce vigorous competition in entertainment and information markets.
Second, the conferees recognize that common carriers that deploy open
systems will be "new" entrants in established markets and deserve lighter
regulatory burdens to level the playing field. Third, the development of
competition and the operation of market forces mean that government oversight
and regulation can and should be reduced.
New section 653(c)(1)(A) states that the following provisions that
apply to cable operators also apply to certified operators of open video
systems -- sections 613 (other than subsection (a)(2) thereof), 616, 623(f),
628, 631, and 634; new section 653(c)(1)(B) states that the following
sections -- 611, 612, 614, and 615, and section 325 of title III -- apply in
accordance with regulations prescribed under paragraph (2); and, new section
653(c)(1)(C) states that sections 612 and 617, and parts III and IV (other
than sections 623(f), 628, 631, and 634), of this title do not apply.
With respect to the rulemaking proceeding required by new section
653(b)(1), new section 653(c)(2)(A) requires that the Commission shall, to
the extent possible, impose obligations that are no greater or lesser than
the obligations contained in the provisions described in new section
653(c)(1)(B).
New section 653(c)(2)(B) states that open video system operators may be
subject to fees imposed by local franchising authorities, but that such fees
are in lieu of fees required under section 622. A State governmental
authority could also impose taxes, fees or other assessments in lieu of
franchise or franchise-like fees imposed by municipalities. In another
effort to ensure parity among video providers, the conferees state that such
fees may only be assessed on revenues derived from comparable cable services
and the rate at which such fees are imposed on operators of open video
systems may not exceed the rate at which franchise fees are imposed on any
cable operator in the corresponding franchise area. Open system operators
would have the same flexibility as their cable operator competitors to state
separately these fees on their customer bills.
The conferees intend that an operator of an open video system under
this part shall be subject, to the extent permissible under State and local
law, to the authority of a local government to manage its public
rights-of-way in a nondiscriminatory and competitively neutral manner.
New section 653(c)(3) is a further attempt to ensure that operators of
open video systems are not burdened with unreasonable regulatory
obligations. It states that the requirements of new section 653 are
intended to operate in lieu of, and not in addition to, the requirements of
title II. The conferees do not intend that the Commission impose title
II-like regulation under the authority of this section.
Rules and regulations adopted by the Commission pursuant to its
jurisdiction under title II should not be merged with or added to the rules
and regulations governing open video systems, which will be subject to new
section 653, not title II. Section 302(b)(3) of the conference agreement
specifically repeals the Commission's video dialtone rules. Those rules
implemented a rigid common carrier regime, including the Commission's
customer premises equipment and Computer III rules, and thereby created
substantial obstacles to the actual operation of open video systems.
New section 653(c)(4) provides that nothing in the Communications Act
precludes a video programming provider making use of an open video system
from being treated as an operator of a cable system for purposes of section
111 of title 17, United States Code.
New section 653(d) contains the definition of the term telephone
service area' to be used in conjunction with the provisions of new section
653.
Section 302(b) of the conference agreement contains technical and
conforming amendments. Paragraph (1) repeals subsection (b) of section 613
of the Communications Act (47 U.S.C.533(b)). Paragraph (2) amends paragraph
(7) of section 602 of the Communications Act to clarify that the provision
solely of interactive on-demand services over a common carrier facility or
the provision of an open video system does not render the facility a cable
system and redesignates paragraphs (12) through (19) as (13) through (20)
and, inserts paragraph (12), defining "interactive on-demand services."
Paragraph (3), as noted previously, provides that the Commission's video
dialtone regulations, adopted in CC Docket No. 87-266, are repealed on the
date of enactment and shall not apply to the operation of an open video
system. Repeal of the Commission's video dialtone regulations is not
intended to alter the status of any video dialtone service offered before
the regulations required by this section become effective.
Section 303 - Preemption of Franchising Authority Regulation of
Telecommunications Services
Senate bill
Subsection 201(b) of the Senate bill establishes the principles
applicable to the provision of telecommunications by a cable operator.
Paragraph (1) of this subsection adds a new paragraph 3(A) to section 62
l(b) of the Communications Act, which sets forth the jurisdiction of and
limi- tations on franchising authorities over cable operators engaged in the
provision of telecommunications services. Specifically, a cable operator or
affiliate engaged in the provision of telecommunications services is not
required to obtain a franchise under title VI of the Communications Act, nor
do the provisions of title VI apply to a cable operator or affiliate to the
extent they are engaged in the provision of telecommunications services.
Franchising authorities are prohibited from ordering a cable operator or
affiliate to discontinue the provision of telecommunications service,
requiring cable operators to obtain a franchise to provide
telecommunications services, or requiring a cable operator to provide
telecommunications services or facilities as a condition of initial grant of
franchise, franchise renewal, or transfer of a franchise. However, the
Senate intends that telecommunications services provided by a cable company
shall be subject to the authority of a local government to manage its public
rights of way in a non-discriminatory and competitively neutral manner and
to charge fair and reasonable fees for its use. These changes do not affect
existing Federal or State authority with respect to telecommunications
services.
House amendment
Section 106 of the House amendment creates a new section 621(b)(3)(A)
of the Communications Act that provides that, to the extent a cable operator
is engaged in providing a telecommunications service other than cable
service, it shall not be required to obtain a franchise, and the provisions
of title VI of the Communications Act shall not apply. Subparagraph (B)
provides that a franchising authority may not impose any requirement that
has the effect of prohibiting or limiting the provision of
telecommunications service by a cable operator.
Subparagraph (C) provides that a franchising authority may not
terminate an operator's offering of a telecommunications service or cable
service because of the failure of the operator to obtain a franchise for the
provision of telecommunications services. Subparagraph (D) establishes that
franchising authorities may not require a cable operator to provide any
telecommunications service or facilities, other than intergovernmental
services, as a condition of the initial grant of a franchise or renewal.
Subsection (b) amends section 622(b) of the Communications Act by
inserting the phrase "to provide cable services." This amendment makes
clear that the franchise fee provision is not intended to reach revenues
that a cable operator derives for providing new telecommunications services
over its system, but only the operators cable-related revenues.
Conference agreement
The conference agreement adopts the House provision with some minor,
technical modifications. The conferees intend that, to the extent
permissible under State and local law, telecommunications services,
including those provided by a cable company, shall be subject to the
authority of a local government to, in a nondiscriminatory and competitively
neutral way, manage its public rights-of-way and charge fair and reasonable
fees.
Section 304 - Competitive Availability of Navigation Devices
Senate bill
No provision.
House amendment
Section 203 of the House amendment directs the Commission to adopt
regulations to assure the competitive availability to consumers of converter
boxes, interactive communications devices, and other customer premises
equipment from manufacturers, retailers, and other vendors not affiliated
with a telecommunications operator. Section 203 does not prohibit
telecommunications system operators from also offering navigation devices
and other customer premise equipment to customers provided that the system
operators' charges for navigation devices and equipment are separately
stated, and are not subsidized by the charges for the network service.
Section 203 specifically recognizes that cable and other
telecommunications system operators have a valid interest, which the
Commission should continue to protect, in system or signal security and in
preventing theft of service and, therefore, the Commission may not prescribe
regulations which would jeopardize signal security or impede the legal
rights of a provision to preempt theft of service.
Section 203 directs the Commission to waive a regulation for a limited
time where the telecommunications system operator has shown that the waiver
is necessary to the introduction of a new telecommunications subscription
service.
Section 203(f) sunsets the regulations adopted pursuant to this section
when the Commission determines that the market for customer premises
equipment, including navigation devises, has become competitive.
Conference agreement
The conference agreement adopts the House provision with modifications
as a new section 629 of the Communications Act. The scope of the
regulations are narrowed to include only equipment used to access services
provided by multichannel video programming distributors. In prescribing
regulations to ensure the commercial availability of such equipment to
consumers, the Commission is directed to consult with private
standard-setting organizations, such as IEEE, DAVIC (Digital Audio Video
Council), MPEG, ANSI and other appropriate bodies. The conferees intend
that the Commission avoid actions which could have the effect of freezing or
chilling the development of new technologies and services. One purpose of
this section is to help ensure that consumers are not forced to purchase or
lease a specific, proprietary converter box, interactive device or other
equipment from the cable system or network operator. Thus, in implementing
this section, the Commission should take cognizance of the current state of
the marketplace and consider the results of private standards setting
activities.
The conference agreement also directs the Commission to act on waiver
requests within 90 days. The agreement sunsets the regulations when the
Commission determines the following: the market for the multichannel video
programming distributors is competitive; the market for equipment used in
conjunction with the services is competitive; and elimination of the
regulations are in the public interest and would promote competition. The
agreement makes clear that nothing in this section expands or limits current
Commission authority.
Section 305 - Video Programming Accessibility
Senate bill
Section 308 of the Senate bill adds a new section 262 to the
Communications Act in part to require the Commission to ensure that video
programming is accessible through closed captions and that video programming
providers or owners maximize the accessibility of video programming
previously published or exhibited through the provision of closed captions.
New section 262(f) further provides the Commission with authority to exempt
various program and providers of video programs from this requirement. In
addition, a provider of video programming or program owner may petition the
Commission for an exemption from the requirements of this subsection.
Section 262(f) also requires the Commission to undertake a study of the
current extent of closed captioning of video programming and of previously
published video programming; providers of video programming; the cost and
market for closed captioning; strategies to improve competition and
innovation in the provision of closed captioning; and such other matters as
the Commission considers relevant.
New section 262(g) requires the Commission to prescribe regulations to
implement all provisions of this new section, not later than eighteen (18)
months after the date of enactment of this Act. As noted above, such
regulations shall be consistent with the standards developed by the Board in
accordance with section 262(e) of this new section.
New section 262(h) authorizes the Commission to enforce this new
section. The Commission shall resolve, by final order, a complaint alleging
a violation of this section within 180 days after the date such complaint is
filed.
Subsection (b) of section 308 requires that the Commission
undertake within 6 months of enactment of this Act a study of the
feasibility of requiring the use of video descriptions on video programming
in order to ensure the accessibility of video programming to individuals
with visual impairments.
House amendment
Section 204 of the House amendment is designed to ensure that video
services are accessible to hearing impaired and visually impaired
individuals. Subsection (a) requires the Commission to complete an inquiry
within 180 days of enactment of this section to ascertain the level at which
video programming is closed captioned. In its inquiry, the Commission should
examine the level of closed captioning for live and prerecorded programming,
the extent to which existing or previously published programming is closed
captioned, the type and size of the provider or owner providing the closed
captioning, the size of the markets served, the relative audience shares
achieved, and any other relevant factors. The Commission also should examine
the quality of closed captioning and the style and standards which are
appropriate for the particular type of programming. Finally, the Commission
should examine the costs of closed captioning to programs and program
providers.
Subsection (b) provides that, consistent with the results of its
inquiry, the Commission is instructed to establish an appropriate schedule
of deadlines and technical requirements regarding closed captioning of
programming. Accordingly, the Commission shall establish reasonable
timetables and exceptions for implementing this section. Such schedules
should not be economically burdensome on program providers, distributors or
the owners of such programs.
Section 204(d) allows the Commission to exempt specific programs, or
classes of programs, or entire services from captioning requirements. Any
exemption should be granted using the information collected during the
inquiry, and should be based on a finding that the provision of closed
captioning would be economically burdensome to the provider or owner of such
programs.
The term "provider" contained throughout section 204(d) refers to the
specific television station, cable operator, cable network or other service
that provides programming to the public. When considering such exemptions,
the Commission should focus on the individual outlet and not on the
financial conditions of that outlet's corporate parent, nor on the resources
of other business units within the parent's corporate structure.
When considering exemptions under paragraph (d)(1), the Commission
shall consider several factors, including but not limited to: (1) the nature
and cost of providing closed captions; (2) the impact on the operations of
the program provider, distributor, or owner; (3) the financial resources of
the program provider, distributor, or owner and the financial impact of the
program; (4) the cost of the captioning, considering the relative size of
the market served or the audience share; (5) the cost of the captioning,
considering whether the program is locally or regionally produced and
distributed; (6) the non-profit status of the provider; and (7) the
existence of alternative means of providing access to the hearing impaired,
such as signing.
Paragraph (d)(2) recognizes that closed captioning should not be
required where it would be inconsistent with programming contracts between
program owners, distributors, or providers, already in effect as of the date
of enactment of this section, or inconsistent in effect as of the date of
enactment of this section, or inconsistent with copyright law. In addition,
cable operators and common carriers establishing video platforms may not
refuse to carry programming or services which are required to be carried
under the carriage provisions of title VI of the Communications Act or
pursuant to retransmission consent obligations due to closed captioning
requirements.
Paragraph (d)(3) authorizes the Commission to grant additional
exemptions, on a case-by- case basis, where providing closed captions would
constitute an undue burden. In making such determinations, the Commission
shall balance the need for closed captioned programming against the
potential for hindering the production and distribution of programming.
Subsection (f) directs the Commission to initiate an inquiry within six
months of the date of enactment, regarding the use of video descriptions on
video programming in order to ensure the accessibility of video programming
to persons with visual impairments. The Commission shall report to Congress
on its findings. The report shall assess appropriate methods for phasing
video descriptions into the marketplace, technical and quality standards for
video descriptions, a definition of programming for which video descriptions
would apply, and other technical and legal issues. Following the completion
of this inquiry the Commission may adopt regulations it deems necessary to
promote the accessibility of video programming to persons with visual
impairments. It is the goal of the House to ensure that all Americans
ultimately have access to video services and programs, particularly as video
programming becomes an increasingly important part of the home, school and
workplace. Subparagraph (h) makes clear that the Commission has exclusive
jurisdiction over complaints arising under this section.
Conference agreement
The conference agreement adopts the House provision with modifications
which are incorporated as new section 713 of the Communications Act. The
agreement deletes the House provision referencing a Commission rulemaking
with respect to video description. The remedies available under the
Communications Act, including the provisions of sections 207 and 208, are
available to enforce compliance with the provisions of section 713.
TITLE IV - REGULATORY REFORM
Section 401 - Regulatory Forbearance
Senate bill
Section 303 of the Senate bill adds a new section 260 of the
Communications Act, under which the Commission must forbear from regulation
of a carrier or a service if it determines that enforcement is not necessary
to ensure that charges are just and reasonable and not unjustly or
unreasonably discriminatory or to protect consumers, and that forbearance is
consistent with the public interest. In making the determination to
forbear, the Commission shall consider whether forbearance would promote
competition. This section allows a carrier to petition the Commission to
request that the Commission exercise the authority granted by this section,
and such petition shall be deemed granted if the Commission does not deny
the petition within 90 days (unless extended for an additional 60 day
period). The Commission may grant the petition in whole or in part, and
must justify its decision in writing.
House amendment
Section 103 of the House amendment adds new section 230 to the
Communications Act. Section 230 requires that the Commission forbear from
applying regulation from part I or part II of title II (except for sections
201, 202, 208, 243, and 248) to a common carrier or service unless it
determines that enforcement is necessary to ensure that charges are
reasonable and not unjustly or unreasonably discriminatory or to protect
consumers, or that forbearance is inconsistent with the public interest. In
making the determination to forbear, the Commission shall consider whether
forbearance would promote competition.
Section 230(c) allows joint marketing of mobile services in connection
with telephone exchange service, exchange access, intra- and interLATA
telecommunication service and information services.
Conference agreement
The conferees agree to create a new section 10 in title I of the
Communications Act. New subsection (a) of section 10 requires the
Commission to forbear from applying any provision of the Communications Act
or from applying any of its regulations to a telecommunications carrier or
telecommunications service, if the Commission determines that enforcement is
not necessary to:
o ensure that charges, practices, classifications or regulations for
such carrier or service are just and reasonable, and not unjustly
or unreasonably discriminatory;
o protect consumers; and o protect the public interest.
In making its public interest determinations, the Commission under new
subsection (b) of section 10 shall consider whether or not forbearance will
promote competition.
New subsection (c) permits carriers to petition for forbearance and
these petitions shall be deemed granted if the Commission does not deny such
petition within one year of the Commission's receipt of the petition. The
Commission may only extend this one year time period for 90 days. The
Commission can also approve or deny the petition in whole or in part.
New subsection (d) provides that the Commission may not forbear from
applying the requirements of new sections 251(c) or 271 until the Commission
determines that those requirements have been fully implemented.
New subsection (e) provides that a State may not continue to apply or
enforce any provision of the Communications Act that the Commission has
determined to forbear from applying under new subsection (a). This new
subsection is not intended to limit or preempt State enforcement of State
statutes or regulations.
Section 402 - Biennial Review of Regulations; Regulatory Relief
Senate bill
Section 302 of the Senate bill adds a new section 259 of the
Communications Act, under which every two years the Commission and a
Federal-State Joint Board must review all regulations issued under the
Communications Act or any State legislation to determine whether they are
still necessary in the public interest as a result of meaningful
competition. The Commission is required to repeal any of its regulations
found to be no longer necessary.
House amendment
No provision.
Conference agreement
The conferees agree to create a new section 11 in title I of the
Communications Act. New subsection (a) of section 11 requires the
Commission, beginning in 1998 and in every even numbered year thereafter, to
review all of its regulations that apply to the operations and activities of
providers of telecommunications services and determine whether any of these
regulations are no longer in the public interest because competition between
providers renders the regulation no longer meaningful.
New subsection (b) of section 11 requires the Commission to eliminate
the regulations that it determines are no longer in the public interest.
New subsection (b) of section 402 of the conference agreement addresses
regulatory relief that streamlines the procedures for revision by local
exchange carriers of charges, classifications and practices under section
204 of the Communications Act. New subsection (b) of section 402 also
eliminates the section 214 approval requirement for extension of lines and
permits carriers to file ARMIS reports annually.
New subsection (c) of section 402 of the conference agreement requires
the Commission in classifying carriers according to 47 CFR 32.11, and in
establishing reporting requirements pursuant to 47 CFR part 43 and 47 CFR
64.903, to adjust revenue requirements to account for inflation as of the
date the Commission's Report and Order on Docket No. CC 91-141 was released,
and annually thereafter.
Section 403 - Elimination of Unnecessary Commission Regulations and Functions
Senate bill
Section 302(b) of the Senate bill is intended to eliminate unnecessary
Commission regulations and functions. Subsection (b)(1) repeals the current
requirement that the Commission set depreciation rates for common carriers,
thus allowing the Commission flexibility to assess whether doing so would
serve the public interest.
Subsection (b)(2) authorizes the Commission to hire outside,
independent licensed CPA's to audit telecommunications carriers and vests
those outsiders with the same authority as Commission staff auditors.
Subsection (b)(3) streamlines the Federal-State coordination process by
allowing states and the Commission to select the least formal method
appropriate in resolving specific regulatory issues.
Subsection (b)(4) allows for inspection of ship radio stations by
private entities and provides the Commission with authority to waive the
current mandatory annual inspection while providing greater flexibility in
scheduling ship inspections.
Subsection (b)(5) would give the Commission flexibility in determining
whether broadcast construction permits are required where the likelihood of
interference is minimal or does not exist.
Subsection (b)(6) allows automatic cancellation of a broadcaster's
license if the station does not transmit for 12 consecutive months.
Subsection (b)(7) provides Commission staff with authority to process
routine comparative ITFS applications.
Subsection (b)(8) permits the Commission to delegate, subject to
established Commission standards, testing and certification of
telecommunications devices and home electronics equipment to private
laboratories.
Subsection (b)(9) eliminates the requirement that a public hearing be
held for a station to make routine changes in frequency, hours of operation,
and authorized power.
Subsection (b)(10) also eliminates the individual licensing requirement
currently imposed on domestic ships and aircraft, citizens band radio and
personal radio services, if the Commission determines it is in the public
interest.
Subsection (b)(11) expedites the licensing of fixed microwave service
by eliminating the requirement that 30 days public notice be given prior to
granting these licenses.
Subsection (b)12) also ends redundant Commission jurisdiction over ship
radios owned by other government agencies.
Subsection (b)(13) broadens the number of individuals authorized to
administer amateur radio examinations and reduces the amount of paperwork
that must be kept.
Subsection (b)(14) authorizes the Commission to streamline and reduce
its renewal procedures for non-broadcast radio license renewal applicants
such as cellular licensees.
House amendment
The House has no comparable provisions, except for the provision
delegating equipment testing authority.
Conference agreement
The conference agreement adopts the Senate provisions, except for
subsection (b)(3), with modifications. Specifically, subsections (b)(4),
(b)(7), (b)(10) and (b)(11) of the Senate bill have been modified to
incorporate provisions as passed in the House budget reconciliation
legislation (House Report 104-280).
The conference agreement also amends section 310(b) of the
Communications Act to remove the restrictions on corporations having foreign
officers or directors.
TITLE V - OBSCENITY AND VIOLENCE
SUBTITLE A - OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF
TELECOMMUNICATIONS FACILITIES
Section 502 - Obscene or Harassing Use of Telecommunications Facilities
under the Communications Act of 1934
Senate bill
Section 401 of the Senate bill updates section 223(a) of the
Communications Act by using the term "telecommunications service" as a
replacement for or in addition to "telephone" references in the present
law. The term "communication" is added to current law references to
"conversation." An intent requirement is added to section 223(a)(1)(A) that
liability is incurred for "obscene, lewd, lascivious, filthy, or indecent"
communications with the intent to "annoy, abuse, threaten, or harass another
person."
Current law "Dial-a-Porn" provisions (sections 223(b)&(c)) are
untouched by the Senate bill.
A new section 223(d) is added to prohibit the use of a
telecommunications device to make or make available an obscene
communication.
A new section 223(e) is added to prohibit the use of a
telecommunications device to make or make available an indecent
communications to minors.
New defenses are provided to assure that the mere provision of access
to an interactive computer service does not create liability. The access
providers provision is not available to one who provides access to a system
with which they conspire or own or control. Employers are provided a
defense for actions by employees unless the employee's conduct is within the
scope of employment and is known, authorized, or ratified by the employer.
A good faith defense is provided for "reasonable, effective, and
appropriate" measures to restrict access to prohibited communications. The
word "effective" is given its common meaning and does not require an
absolute 100 percent restriction of access to be judged "effective."
Nothing in the defenses to section 223 are intended to narrow or effect
the application of the existing dial-a-porn law or other Federal criminal
law or to provide a defense for the person who created and sent a prohibited
communication.
The use of the good faith defenses which are otherwise legal shall not
expose an individual to liability and the States may not impose obligations
for commercial activities which are inconsistent with the treatment of
activities or actions described in this section.
House amendment
No provision.
Conference agreement.
The conference agreement adopts the Senate provisions with
modifications. New subsection 223(d)(1) applies to content providers who
send prohibited material to a specific person or persons under 18 years of
age. Its "display" prohibition applies to content providers who post
indecent material for online display without taking precautions that shield
that material from minors.
New section 223(d)(1) codifies the definition of indecency from FCC v.
Pacifica Foundation, 438 U.S. 726 (1978). Defenses to violations of the new
sections assure that attention is focused on bad actors and not those who
lack knowledge of a violation or whose actions are equivalent to those of
common carriers.
The conferees intend that the term indecency (and the rendition of the
definition of that term in new section 502) has the same meaning as
established in FCC v. Pacifica Foundation, 438 U.S. 726 (1978), and Sable
Communications of California, Inc. v. FCC, 492 U.S. 115 (1989). These cases
clearly establish the principle that the federal government has a compelling
interest in shielding minors from indecency. Moreover, these cases firmly
establish the principle that the indecency standard is fully consistent with
the Constitution and specifically limited in its reach so that the term is
not unconstitutionally vague. See also Action for Children's Television v.
FCC, 58 F. 3d 654, 662-63 (en banc) (D.C. Cir. 1995), cert. denied, 64
U.S.L.W. 3465 (1996); Alliance For Community Media v. FCC, 56 F. 3d 105,
1124-25 (D.C. Cir. 1995) cert. granted sub. nom., Denver Area Education
Telecommunications Consortium v. FCC, 116 S.CT. 471 (1995); Dial Information
Services Corp. of New York v. Thornburgh, 938 F.2d 1535, 1540-41 (2d Cir.
1991) cert. denied sub. nom., Dial Information Services Corp. of New York v.
Barr, 502 U.S. 1072 (1992); Action for Children's Television v. FCC, 932 F.
2d 1504, 1508 (D.C. Cir. 1991).
The precise contours of the definition of indecency have varied
slightly depending on the communications medium to which it has been
applied. The essence of the phrase -- patently offensive descriptions of
sexual and excretory activities -- has remained constant, however. At the
time of this writing, the Supreme Court will consider at least one
constitutional challenge to federal indecency statutes. Importantly, the
question whether indecency is overly broad or unconstitutionally vague is
not seriously at issue in that challenge. See Alliance for Community Media,
supra, (whether State action exists as to private decisions by cable
operators). There is little doubt that indecency can be applied to
computer-mediated communications consistent with constitutional strictures,
insofar as it has already been applied without rejection in other media
contexts, including telephone, cable, and broadcast radio.
The conferees considered, but rejected, the so-called "harmful to
minors" standard. See Ginsberg v. New York, 390 U.S. 629, 641-43 (1968).
The proponents of the "harmful to minors" standard contended that that
standard contains an exemption for material with "serious literary,
artistic, political, and scientific value," and therefore was the better of
the two alternative standards. ("Harmful to minors" laws use the "variable
obscenity" test and prohibit the sale, and sometimes the display, of certain
sexually explicit material to minors.) This assertion misapprehends the
indecency standard itself, and disregards the Supreme Court's various rulings
on this issue. See Pacifica, 438 U.S. at 743, n. 18, and its progeny. The
gravamen of the indecency concept is "patent offensiveness." Such a
determination cannot be made without a consideration of the context of the
description or depiction at issue. It is the understanding of the conferees
that, as applied, the patent offensiveness inquiry involves two distinct
elements: the intention to be patently offensive, and a patently offensive
result. In the Matter of Sagittarius Broadcasting Corp. et al, 7 FCC Rcd.
6873, 6875 (1992); In the Matter of Audio Enterprises, Inc., 3 FCC Rcd. 930,
932 (1987). Material with serious redeeming value is quite obviously
intended to edify and educate, not to offend. Therefore, it will be
imperative to consider the context and the nature of the material in
question when determining its "patent offensiveness."
In view of the solid constitutional pedigree of the indecency standard
(see Pacifica), 438 U.S. at 743 (describing indecency as low value and
marginally protected by the First Amendment)), use of the indecency standard
poses no significant risk to the free-wheeling and vibrant nature of
discourse or to serious, literary, and artistic works that currently can be
found on the Internet, and which is expected to continue and grow. As the
Supreme Court itself noted when upholding the constitutionality of indecency
prohibitions, prohibiting indecency merely focuses speakers to re-cast their
message into less offensive terms, but does not prohibit or disfavor the
essential meaning of the communication. Pacifica, 438 U.S. at 743, n. 18.
Likewise, requiring that access restrictions be imposed to protect minors
from exposure to indecent material does not prohibit or disfavor the
essential meaning of the indecent communication, it merely puts it in its
appropriate place: away from children.
Violators of this section shall be fined under title 18, U.S. Code, or
imprisoned not more than two years, or both.
Each intentional act of posting indecent content for display shall be
considered a separate violation of this subsection, rather than each
occasion upon which indecent material is accessed or downloaded from an
interactive computer service or posted without the content provider's
knowledge on such a service. New subsection 223(d)(2) sets forth the
standard of liability for facilities providers who intentionally permit
their facilities to be used for an activity prohibited by new subsection
223(d)(1).
New subsection 223(e) includes statutory defenses for violations of new
sections 223(a) and (d) that supplement other defenses available at law,
such as common law defenses. New subsections 223(e)(1), (e)(2) and (e)(3)
set forth the "access provider" defense. The defense protects entities from
liability for providing access or connection to or from a facility, network
or system not under their control. The defense covers provision of related
capabilities incidental to providing access, such as server and software
functions, that do not involve the creation of content.
The defense does not apply to entities that conspire with entities
actively involved in the creation of content prohibited by this section, or
who advertise that they offer access to prohibited content. Nor does it
apply to provision of access or connection to a facility, system or network
that engages in violations of this section and that is owned or controlled
by the access provider. In the absence of these conditions, commercial and
non-profit Internet operators who provide access to the Internet and other
interactive computer services shall not be liable for indecent material
accessed by means of their services. This provision is designed to target
the criminal penalties of new sections 223(a) and (d) at content providers
who violate this section and persons who conspire with such content
providers, rather than entities that simply offer general access to the
Internet and other online content. The conferees intend that this defense
be construed broadly to avoid impairing the growth of online communications
through a regime of vicarious liability.
New subsection 223(e)(4) provides a defense to employers whose
employees or agents make unauthorized use of office communications systems.
This defense is intended to limit vicarious or imputed liability of
employers for actions of their employees or agents. To be outside the
defense, the prohibited action must be within the scope of the employee's or
agent's employment. In addition, the employer must either have knowledge of
the prohibited action and affirmatively act to authorize or ratify it, or
recklessly disregard the action. Both conditions must be met in order for
employers to be held liable for the actions of an employee or agent. The
good faith defenses set forth in new subsection 223(e)(5) are provided for
"reasonable, effective, and appropriate" measures to restrict access to
prohibited communications. The word "effective" is given its common meaning
and does not require an absolute 100% restriction of access to be judged
effective. The managers acknowledge that content selection standards, and
other technologies that enable restriction of minors from prohibited
communication, which are currently under development, might qualify as
reasonable, effective, and appropriate access restriction devices if they
are effective at protecting minors from exposure to indecent material via
the Internet.
New subsection 223(e)(6) permits the Commission to describe its view of
what constitute "reasonable, effective and appropriate" measures and
provides that use of such measures shall be admissible as evidence that the
defendant qualifies for the good faith defense. This new subsection grants
no further authority to the Commission over interactive computer services and
should be narrowly construed.
New subsection 223(f)(1) supplements, without in any way limiting, the
"Good Samaritan" liability protections of new section 230.
New subsection 223(f)(2) preempts inconsistent State and local
regulation of activities and actions described in new subsections 223(a)(2)
and (d). This provision is intended to establish a uniform national
standard of content regulation for a national, and indeed a global, medium,
in which content is transmitted instantaneously in point-to-point and
point-to-multipoint communications. As originally passed by the Senate,
this subsection excluded non-commercial content providers. The conferees
have expanded this section to provide for consistent national and State and
local content regulation of both commercial and non-commercial providers.
The conferees recognize and wish to protect the important work of nonprofit
libraries and higher educational institutions in providing the public with
both access to electronic communications networks like the Internet, and
valuable content which they are uniquely well-positioned to provide.
Accordingly, nonprofit libraries and educational institutions, like
commercial entities, are assured by this provision that they will not be
subjected to liability at the State or local level in a manner inconsistent
with the treatment of their activities or actions under this legislation.
The conferees also recognize the critical importance of access software in
making the Internet and other interactive computer services accessible to
Americans who are not computer experts. Accordingly, provision of "access
software" is included within the access provider defense. As defined in new
subsection 223(h)(3), the term includes software that enables a user to do
any of an enumerated list of functions that are set forth in technical
language. It includes client and server software, such as proxy server
software that downloads and caches popular web pages to reduce the load of
traffic on the Internet and to permit faster retrieval. The definition
distinguishes between software that actually creates or includes prohibited
content and software that allows the user to access content provided by
others.
Section 503 - Obscene Programming on Cable Television
Senate bill
Section 403 of the Senate bill amends section 639 of the Communications
Act to increase the maximum fine for transmitting obscene programming on
cable television from $10,000 to $100,000.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision with
modifications. $10,000 is struck from the current law and "under title 18,
United States Code" is inserted.
Section 504 - Scrambling of Cable Channels for Nonsubscribers
Senate bill
Section 407 of the Senate bill adds a new section 640 to the
Communications Act requiring cable television operators to fully scramble or
otherwise block upon subscriber request and at no charge to the subscriber,
the audio and video portions of programming not specifically subscribed to
by a household and unsuitable for children in the judgment of the subscriber.
House amendment
No provision.
Conference agreement.
The conference agreement adopts the Senate provision with modifications
as a new section 640 of the Communications Act. The "unsuitable for
children" standard is dropped. Programming not subscribed to by a household
shall be blocked on request without charge.
Section 505 - Scrambling of Sexually Explicit Adult Video Service
Programming
Senate bill
Section 408 of the Senate bill requires that cable operators offering
sexually explicit adult programming or other programming that is indecent on
any channel of its service primarily dedicated to sexually-oriented
programming fully scramble or block the video and audio portions of such
channel or channels so that one not a subscriber does not receive it.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate with modifications as a new
section 641 of the Communications Act.
Section 506 - Cable Operator Refusal to Carry Certain Programs
Senate bill
Section 408 of the Senate bill amends title VI of the Communications
Act to allow cable operators to refuse to transmit any public access or
leased access program or portion of a program which contains obscenity,
indecency, or nudity.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision.
Section 507 - Protection of Minors and Clarification of Current
Laws Regarding Communication of Obscene Materials Through the Use of
Computers.
Senate bill
No provision.
House amendment
Section 403(a)(2) of the House amendment made conforming and clarifying
amendments to sections 1462, 1467, and 1469 of title 18, United States
Code. Those statutes currently prohibit the interstate transportation of
obscenity for the purpose of sale or distribution, whether commercial or
non-commercial in nature. These statutes outlaw the importation of
obscenity, by whatever means. These provisions were intended to simply
clarify sections 1462, 1465, and 1467 of title 18, United States Code.
Conference agreement
The Senate recedes to the House with modifications. Section 507 simply
clarifies that the current obscenity statutes, in fact, do prohibit using a
computer to import and receive an importation of, and transport to sell or
distribute, "obscene" material.
The amendments made by this section are clarifying and shall not be
interpreted to limit or repeal any prohibition contained in sections 1462 or
1465 of title 18, United States Code, before such amendment, under the rule
established in United States v. Alpers, 338 U.S. 680 (1950).
Section 508 - Coercion and Enticement of Minors
Senate bill
Several provisions of the Senate bill protect children from harassing,
indecent or obscene communications.
House amendment
Several provisions of the House amendment protect children from
obscene or indecent communications.
Conference agreement
Section 508 would amend section 2422 of title 18 to prohibit the use of
a facility of interstate commerce which includes telecommunications devices
and other forms of communication for the purpose of luring, enticing, or
coercing a minor into prostitution or a sexual crime for which a person
could be held criminally liable, or attempt to do so. On July 24, 1995, the
Senate Judiciary Committee held a hearing on online indecency, obscenity,
and child endangerment. The record of this hearing supports the need for
Congress to take effective action to protect children and families from
online harm.
Section 509 - Online Family Empowerment Senate bill
No provision
House amendment
Section 104 of the House amendment protects from civil liability those
providers and users of interactive computer services for actions to restrict
or to enable restriction of access to objectionable online material.
Conference agreement
The conference agreement adopts the House provision with minor
modifications as a new section 230 of the Communications Act. This section
provides "Good Samaritan" protections from civil liability for providers or
users of an interactive computer service for actions to restrict or to
enable restriction of access to objectionable online material. One of the
specific purposes of this section is to overrule Stratton-Oakmont v. Prodigy
and any other similar decisions which have treated such providers and users
as publishers or speakers of content that is not their own because they have
restricted access to objectionable material. The conferees believe that such
decisions create serious obstacles to the important federal policy of
empowering parents to determine the content of communications their children
receive through interactive computer services.
These protections apply to all interactive computer services, as
defined in new subsection 230(e)(2), including non-subscriber systems such
as those operated by many businesses for employee use. They also apply to
all access software providers, as defined in new section 230(e)(5),
including providers of proxy server software.
The conferees do not intend, however, that these protections from civil
liability apply to so-called "cancelbotting," in which recipients of a
message respond by deleting the message from the computer systems of others
without the consent of the originator or without having the right to do so.
SUBTITLE B - VIOLENCE
Section 551 - Parental Choice in Television Programming
Senate bill
Sections 501-505 of Senate bill gives the industry one year to
voluntarily develop a ratings system for TV programs. If the industry fails
to do so, a Federal TV Ratings Commission would set the ratings. The
Commission would be appointed by the President, subject to confirmation by
the Senate and would establish rules for rating the level of violence and
other objectionable content in programs. The Board would also establish
rules for TV broadcasters and cable systems to transmit the ratings to
viewers. The Commission would be authorized funds necessary to carry out
its duties. The Senate bill requires TV manufacturers to equip all 13 inch
or greater TV sets with circuitry to block rated shows.
House amendment
Section 305 of the House amendment gives the cable and broadcast
industries one year to develop voluntary ratings for video programming
containing violence, sex and other indecent materials and to agree
voluntarily to broadcast signals containing such ratings. If the industry
fails to come up with an acceptable plan, the Commission must develop
guidelines for rating programs based on recommendations from an advisory
committee that is fairly balanced politically. If a program is rated, the
broadcasters must transmit the signal of the rating. The House amendment
requires TV manufacturers to equip 13 inch or greater sets with circuitry
that will enable the set to block out all programs with a common rating.
Conference agreement
The conference agreement adopts the House provisions with
modifications. In subsection (a), Congress makes findings concerning the
adverse impact of violent and indecent video programming on children, the
compelling interest of the government in addressing this problem, and the
promise of technological tools that allow parents to protect their children
by blocking harmful programming on their television sets.
In subsection (b), Congress provides the Commission the authority to
set up an advisory committee to recommend a system for rating video
programming that contains sexual, violent or other indecent material about
which parents should be informed before it is displayed to children. It
also provides the Commission with authority to prescribe rules requiring a
distributor to transmit a rating if the distributor has decided to rate a
video program. However, in subsection (e), Congress delays the Commission's
exercise of this authority to no sooner than one year after the date of
enactment, and only if it determines that distributors of video programming
have not established an acceptable voluntary system for rating programming
nor agreed voluntarily to broadcast signals that contain ratings of such
programming.
In subsection (b)(1), the Commission is authorized to prescribe
guidelines and recommended procedures for a rating system based on the
recommendations from the advisory committee. Nothing in this language is
intended to preclude publishing the rating in print advertisements or on the
air, but under this subsection the distributor must include the electronic
transmission of the rating as an additional method of empowering parents to
block programming carrying the rating.
The rules prescribed for transmitting a rating are requirements. In
contrast, the guidelines and recommended procedures for a rating system are
not rules and do not include requirements. They are intended to provide
industry with a carefully considered and practical system for rating
programs if industry does not develop such a system itself. However,
nothing in subsection (b)(1) authorizes, and the conferees do not intend
that, the Commission require the adoption of the recommended rating system
nor that any particular program be rated.
In subsection (b)(2), Congress directs the Commission to ensure that
the advisory committee is composed of representatives from the private
sector and be fairly balanced in terms of political affiliation, the points
of view represented, and the functions to be performed by the committee. It
also direct the Commission to provide to the committee such staff and
resources as may be necessary and require the committee to submit a final
report no later than one year after the appointment of its members.
In new subsections (c) and (d), the conferees have removed language
from the House amendment concerning the importation of televisions, and
clarified that the requirements of these subsections apply to all
televisions above a certain size shipped in interstate commerce (regardless
of where they were manufactured) or televisions manufactured in the United
States. Such sets are required by these two subsections to include a
feature designed to enable viewers to block display of programs carrying a
common rating in compliance with rules prescribed by the Commission. Under
subsection (c)(4), the Commission is authorized to amend these rules as
appropriate to allow set manufacturers to comply with this subsection using
alternative technology that meets certain standards of cost, effectiveness
and ease of use.
Under subsection (e)(1), the effective date for subsection (b)
(regarding the appointment of an advisory committee to recommend a rating
system and the rules for transmitting a rating) is no less than one year
after the date of enactment. The actual effective date has also been made
contingent on a determination by the Commission that distributors of video
programming have not, by such date, established a voluntary system for
rating video programming and such programming is acceptable to the
Commission and have also agreed to include ratings in the transmission of
signals to television sets for blocking.
Under subsection (e)(2), the effective date for subsection (c)
(regarding the rules for the manufacture of television sets capable of
blocking) is no less than two years after the date of enactment. The
conferees intend that the actual effective date be specified by the
Commission after consultation with the television manufacturing industry.
Section 552 - Technology Fund
Senate bill
No provision.
House amendment
Section 304 of the House amendment encourages broadcast, cable,
satellite, syndication, and other video programming distributors to
establish a technology fund to encourage TV and electronics equipment
manufacturers to facilitate the development of blocking technology that
would empower parents to block TV programming they deem inappropriate for
their children.
Conference agreement
The conference agreement adopts the House provision with modifications
to encourage the availability of blocking technology to low income families.
SUBTITLE C - JUDICIAL REVIEW
Section 561 - Expedited Review
Conference agreement
The conference agreement adds new language to provide for expedited
judicial review of the indecency, obscenity and violence provisions of this
title. In any civil action in which a party makes a facial challenge to
these provisions, the challenge shall be heard by a three-judge district
court convened under 28 U.S.C. 2284. Any decision of the three-judge
district court holding a provision unconstitutional shall be directly
appealable to the Supreme Court as a matter of right. However, the direct
right of appeal provided in subsection (b) in this limited circumstance does
not limit any appeal rights applicable to other circumstances under general
statutes.
The conferees emphasize that these provisions are limited in several
ways. They apply only in civil actions. If a party makes a facial
challenge in a criminal context, that party would not be able to use the
procedures provided in this section. These provisions apply only to facial
challenges. These provisions do not apply to actions in which the party
only challenges the provision as applied to the particular party involved.
However, the three-judge district court could hear both a facial challenge
and an "as applied" challenge if they were combined in the same action, and
facial validity had not yet been determined. Thus, the conferees intend
that these provisions should be invoked in only the limited number of cases
necessary to determine the facial validity of these provisions. If that
facial validity is upheld by the courts, these provisions may not be used in
every "as applied" challenge brought thereafter.
TITLE VI - EFFECT ON OTHER LAWS
Section 601 - Applicability of Consent Decrees and Other Law
Senate bill
Section 7(a) of the Senate bill provides that except for the
supersession of the Modification of Final Judgment, nothing in the
Communications Act shall be construed to modify, impair, or supersede the
applicability of any antitrust law. Section 7(b) provides that the
Communications Act shall supersede the Modification of Final Judgment to the
extent that it is inconsistent with the Communications Act. Section 7(c) of
the bill transfers jurisdiction of any parts of the Modification of Final
Judgment which are not superseded to the Commission. Section 7(d)
supersedes the GTE consent decree.
Section 201(c) of the Senate bill provides that except as provided in
section 202, nothing in the Communications Act shall be construed to modify,
impair, or supersede any State or local tax law.
Section 226 of the Senate bill provides that notwithstanding any other
provision of law or any judicial order, no person shall be subject to the
provisions of the Modification of Final Judgment solely by reason of having
acquired CMS or private mobile service assets or operations previously owned
by a BOC or an affiliate of a BOC.
House amendment
Section 401(a) of the House amendment provides that certain specified
sections of the Modification of Final Judgment are superseded. Section
401(b) provides that nothing in the Communications Act or the amendments
made by the conference agreement shall be construed to modify, impair, or
supersede any of the antitrust laws. Section 401(c)(1) provides that parts
II and III of title II of the Communications Act shall not be construed to
modify, impair, or supersede Federal, State, or local law unless expressly
so provided in such part. Section 401(c)(2) provides that notwithstanding
section 401(c)(1), nothing in the Communications Act or the amendments made
by the conference agreement shall be construed to modify, impair, or
supersede any State or local tax law except as provided in sections 243(e)
and 622 of the Communications Act and section 402 of this Act.
Section 401(d) of the House amendment provides that the GTE consent
decree is superseded. Section 401(e) provides that no person shall be
considered an affiliate, successor, or an assign of a BOC under section III
of the Modification of Final Judgment by reason of having acquired wireless
exchange assets or operations previously owned by a BOC or an affiliate of a
BOC. Section 401(f) defines the term "antitrust laws" as used in section
401. Section 401(g) provides that for the purposes of this section, the
terms "Modification of Final Judgment" and "Bell Operating Company" have the
same meanings provided such terms in section 3 of the Communications Act.
Conference agreement
The conference agreement adopts a new approach to the supersession of
the Modification of Final Judgment (now called the AT&T Consent Decree in
the conference agreement) and the GTE consent decree, and it adds language
superseding the AT&T-McCaw Consent Decree ("McCaw Consent Decree"). The
conferees sought to avoid any possibility that the language in the
conference agreement might be interpreted as impinging on the judicial
power. Congress may not by legislation retroactively overturn a final
judgment. Plaut v. Spendthrift Farm, Inc., 115 S.Ct. 1447 (1995). On the
other hand, Congress may by legislation modify or eliminate the prospective
effect of a continuing injunction. Robertson v. Seattle Audubon Society,
503 U.S. 429 (1992); Plaut, 115 S.Ct. 1447; Pennsylvania v. Wheeling &
Belmont Bridge Co., 59 U.S. 421 (1856).
The conferees believe that the AT&T Consent Decree, the GTE Consent
Decree, and the McCaw Consent Decree are continuing injunctions rather than
final judgments. The Committee has chosen to use the term "AT&T Consent
Decree" rather than "Modification of Final Judgment" to emphasize that
point.
To avoid any possible constitutional problem, the conferees adopted the
following new approach. Rather than "superseding" all or part of these
continuing injunctions, the conference agreement simply provides that all
conduct or activities that are currently subject to these consent decrees
shall, on and after the date of enactment, become subject to the
requirements and obligations of the Communications Act and shall no longer
be subject to the restrictions and obligations of the respective consent
decrees.
The conferees intend that the court shall retain jurisdiction over the
three consent decrees for the limited purpose of dealing with any conduct or
activity occurring before the date of enactment. Nothing in the language
eliminating the prospective effect of the three consent decrees should be
construed as eliminating the jurisdiction of the Court to deal with
pre-enactment conduct or activities under the consent decrees.
At the time of the divestiture of AT&T under the AT&T Consent Decree,
AT&T and the BOCs entered into a number of long-term contracts that dealt
with pensions, contingent liabilities, and the like. These contracts are
not incorporated by reference in the AT&T Consent Decree, and nothing in the
language eliminating the prospective effect of the AT&T Consent Decree should
be construed as affecting these contracts.
By eliminating the prospective effect of the GTE Consent Decree, this
language removes entirely the GTE Consent Decree's prohibition on GTE's and
the GTE Operating Companies' entry into the interexchange market. No
provision in the Communications Act should be construed as creating or
continuing in any way the GTE Consent Decree's prohibition on GTE or its
operating companies' entry into the interexchange market.
Language explicitly overturning the McCaw Consent Decree was not
included in either bill. However, the new approach to the AT&T and GTE
Consent Decrees, as well as intervening events, justify the overturning of
the McCaw Consent Decree in the conference agreement.
The McCaw Consent Decree includes three major elements: (1) equal
access and interconnection requirements for AT&T's cellular business, (2)
restrictions on AT&T's manufacturing business, and (3) a separate subsidiary
requirement for AT&T's cellular business. Both bills contained language
that would have overturned the equal access and interconnection requirements
for all cellular businesses, and that language is included in the conference
agreement. Since the passage of the original bills in both the House and
Senate, AT&T has announced that it will spin off its manufacturing business,
and so the manufacturing aspects of the decree will soon become moot.
Finally, a recent decision of the Sixth Circuit, Cincinnati Bell Tel. Co. v.
FCC, 69 F.3d 752 (6th Cir. 1995), may lead to the removal of the separate
subsidiary requirement for other cellular businesses. Accordingly, there is
little reason to keep the McCaw Consent Decree in place.
The McCaw Consent Decree presents a slightly different problem than the
other two consent decrees because it has not yet been formally entered by
the court. The parties agreed to the McCaw Consent Decree and filed it with
the court on July 15, 1994. AT&T entered into a stipulation to abide by the
proposed consent decree until the court completed its review under the
Tunney Act. That review is still continuing. Nonetheless, the conferees
believe that the same basic principles of law set forth above relating to
modifying the prospective effect of injunctions apply to the McCaw Consent
Decree, which is defined to include the stipulation.
The new approach adopted in the Committee required that several new
provisions be added to the conference agreement. Two of these provisions
are described below. Two other provisions, relating to equal access and
nondiscrimination for interexchange carriers and existing activities under
consent decree waivers, are also related to this change and they are
described in the appropriate sections of this Joint Statement.
Both the Senate bill and the House amendment specifically provided that
a company would not be considered a successor to a BOC or otherwise subject
to restrictions imposed on BOCs solely because the company acquired (by
spinoff, transfer, or any other manner) wireless exchange assets or
operations from a BOC. The language of these provisions provided this
protection under the AT&T Consent Decree. Because of the new approach to
the AT&T Consent Decree, the language in the bills no longer worked to
provide the protection that was intended. For that reason, those specific
provisions in both bills are omitted from the conference agreement.
In lieu of those provisions, the conference agreement modifies the
definition of BOC so that successors or assigns of the listed BOCs fall
within the definition only if they provide wireline telephone exchange
service. This change of definition is intended to provide the same
protection that the provisions in the two bills provided -- that a successor
to a BOC's wireless assets shall not be treated as a BOC simply because of
the acquisition of those assets.
The conference agreement adopts the House antitrust savings clause with
modifications. The antitrust savings clause provides that except as
provided in paragraphs two and three, nothing in this Act or the amendments
made by the conference agreement shall be construed to modify, impair, or
supersede the applicability of any of the antitrust laws. The clause was
modified to include the repeal of section 221(a) of the Communications Act
(47 U.S.C. 221(a)). Congress enacted section 221(a) in the days when
local telephone service was viewed as a natural monopoly. Its purpose was
to allow competing local telephone companies to merge without facing
antitrust scrutiny. Thus, the statute provides that when any two telephone
companies merge, the Commission should determine whether the merger will be
"of advantage to the persons to whom service is to be rendered and in the
public interest." If so, the Commission can render the transaction immune
from "any Act or Acts of Congress making the proposed transaction
unlawful." In a world of regulated monopolies, this idea made sense.
However, section 221(a) could inadvertently undercut several of the
provisions of the Telecommunications Act of 1996. The problem arises for at
least two reasons. First, the critical term "telephone company" is not
defined. In the old world of regulated monopolies, a definition probably
was not necessary. However, in the new world of competition, many companies
will be able to argue plausibly that they are telephone companies.
Second, section 221(a) allows the Commission to confer immunity from
any Act of Congress (including the Telecommunications Act of 1996) after
performing a public interest review. Section 221(a) could be used to avoid
the cable-telco buyout provisions of the Telecommunications Act of 1996.
Any cable company that owned any telephone assets could become a telephone
company and be bought out by a BOC by applying for immunity under this
section.
In addition, if immunity were conferred under section 221(a), it would
allow mergers between telecommunications giants to go forward without any
antitrust or securities review. In the old world, the statute was usually
used to confer immunity on mergers between non-competing Bell operating
subsidiaries or mergers between Bells and small independents within their
territories. Neither of these situations involved competitive
considerations.
However, in the future, the conferees anticipate that cable companies
will be providing local telephone service and the BOCs will be providing
cable service. Mergers between these kinds of companies should not be
allowed to go through without a thorough antitrust review under the normal
Hart-Scott-Rodino process. The new language contains a conforming change to
clarify that these mergers will now be subject to Hart-Scott-Rodino review.
By returning review of mergers in a competitive industry to the DOJ, this
repeal would be consistent with one of the underlying themes of the bill --
to get both agencies back to their proper roles and to end government by
consent decree. The Commission should be carrying out the policies of the
Communications Act, and the DOJ should be carrying out the policies of the
antitrust laws. The repeal would not affect the Commission's ability to
conduct any review of a merger for Communications Act purposes, e.g.
transfer of licenses. Rather, it would simply end the Commission's ability
to confer antitrust immunity.
The conference agreement adopts the House provision stating that the
bill does not have any effect on any other Federal, State, or local law
unless the bill expressly so provides. This provision prevents affected
parties from asserting that the bill impliedly preempts other laws. The
conference agreement adopts the House version of the State tax savings
clause with a modification to clarify that fees for open video systems are
excluded from the savings clause. Section 602 - Preemption of Local
Taxation with Respect to Direct-to-Home Services
Senate bill
No provision.
House amendment
Section 402 of the House amendment preempts local taxation on the
provision of direct-to-home (DTH) satellite services. This section exempts
DTH satellite service providers and their sales and distribution agents and
representatives from collecting and remitting local taxes on
satellite-delivered programming services. Section 402 does not preempt
local taxes on the sale of the equipment needed to receive these services.
Conference agreement
The conference agreement adopts the House provisions with
modifications. This section exempts DTH satellite service providers from
collecting and remitting local taxes and fees on DTH satellite services.
DTH satellite service is programming delivered via satellite directly to
subscribers equipped with satellite receivers at their premises; it does not
require the use of public rights-of-way or the physical facilities or
services of a community.
The conferees adopt the House language, but narrow the language to
ensure that the exemption is only provided for the actual sale of the
programming delivered by the direct-to-home satellite service. The
conference agreement amends the House provisions to clarify that the
exemption applies to taxes "on" direct-to-home satellite service rather than
"with respect to the provision of" such service. The conference agreement
deletes the language specifying that the sale of equipment was not within
the exemption. The conference agreement amends the definition of
"direct-to-home satellite service" so that it includes only programming
transmitted or broadcast by satellite.
The intent of these amendments is to clarify that the exemption applies
only to the programming provided by the direct-to-home satellite service.
To give two illustrative examples, the exemption does not apply to the sale
of equipment; that language was deleted only because it could have created a
negative implication that the exemption was broader than intended. In
addition, the exemption does not apply to real estate taxes that are
otherwise applicable when the provider owns or leases real estate in a
jurisdiction. Also, States are free to tax the sale of the service and they
may rebate some or all of those monies to localities if they so desire.
TITLE VII - MISCELLANEOUS PROVISIONS
Section 701 - Prevention of Unfair Billing Practices for Information or
Services Provided Over Toll-Free Telephone Calls
Senate bill
Section 406 of the Senate bill amends section 228(c) of the
Communications Act to add protection against the use of toll free telephone
numbers to connect an individual to a "pay-per-call" service. Published
reports have indicated that toll free numbers have been used to defeat the
blocking of "pay-per-call" numbers by connecting a caller to a
"pay-per-call" service after a toll free connection has been made.
Households, businesses and other institutions have been billed for
"pay-per-call" charges even though "pay-per-call" blocking techniques were
used. This provision is intended to stop that practice.
Section 703 of the Senate bill also amends section 228(c) of the
Communications Act to clarify that subscribers who call an 800 number or
other toll-free numbers shall not be charged for the calls unless the
calling party agrees to be charged under a written subscription agreement or
other appropriate means. Section 703(a) enumerates findings made by
Congress concerning the prevention of unfair billing practices for
information or services provided over toll-free telephone calls.
House amendment
Section 110 protects unsuspecting callers from being charged for 800
calls that they expect to be toll-free -- thereby preserving the toll-free
status and integrity of the 800 number exchange and $8 billion industry --
by requiring strict cost disclosure requirements to ensure that consumers
clearly know when there is a charge for a call, how much the charge will be,
and how they will be billed.
Pursuant to the provisions of this section, information providers must
obtain legal, informed consent from a caller through either a written
pre-authorized contract between the information providers and the caller, or
through the use of an instructive preamble at the start of all non-free 800
calls. Both of these options ensure that consumers know there is a charge
for the information service and that they are giving their consent to be
charged.
Conference agreement
The conference agreement adopts the Senate provisions with
modifications. The conferees agreed to close a loophole in current law,
which permits information providers to evade the restrictions of section 228
by filing tariffs for the provision of information services. Many
information providers have taken advantage of this exemption by filing
tariffs -- especially for 1-500, 1-700 and 10XXX numbers -- and charging
customers high prices for the services. This exemption has proven to be a
problem because consumers have none of the protections that were enacted as
part of the Telephone Disclosure and Dispute Resolution Act (P.L. 102-556).
Section 701(b) of the conference agreement closes that loophole.
Section 702 - Privacy of Customer Information
Senate bill
Section 102 of the Senate bill amends the Communications Act to add a
new section 252 to impose separate affiliate and other safeguards on certain
activities of the BOCs. Subsection (g) of new section 252 establishes rules
to ensure that the BOCs protect the confidentiality of proprietary
information they receive and to prohibit the sharing of such information in
aggregate form with any subsidiary or affiliate unless that information is
available to all other persons on the same terms and conditions. In
general, a BOC may not share with anyone customer-specific proprietary
information without the consent of the person to whom it relates.
Exceptions to this general rule permit disclosure in response to a court
order or to initiate, render, bill and collect for telecommunications
services. For purposes of this subsection the term "customer proprietary
information" does not include subscriber list information.
Subsection 301(c) of the Senate bill defines the term "subscriber list
information" and requires local exchange carriers to provide subscriber list
information on a timely and unbundled basis and at nondiscriminatory and
reasonable rates, terms and conditions to anyone upon request for the
purpose of publishing directories in any format.
Subsection 301(d) provides that telecommunications carriers have a duty
to protect the confidentiality of proprietary information of other common
carriers and customers, including resellers. A telecommunications carrier
that receives such from another carrier may not use such information for its
own marketing efforts.
House amendment
Section 105 of the House amendment adds a new section 222 to the
Communications Act. Section 222 establishes privacy protections for
customer proprietary network information (CPNI). Section 222(a) imposes on
carriers a statutory duty to provide subscriber list information on a timely
basis, under nondiscriminatory and reasonable rates, terms and conditions,
to any publisher of directories upon request.
Section 222(b)(1)(B) prohibits the use of CPNI "in the identifications
or solicitation of potential customers for any service other than the
service from which such information is derived."
With respect to section 222(b)(2), the House recognizes that carriers
are likely to incur some costs in complying with the customer-requested
disclosures contemplated by this section. This section does not preclude a
carrier from being reimbursed by the customers or third parties for the
costs associated with making such disclosures. In addition, the disclosures
described in this section include only the information provided to the
carrier by the customer. A carrier is not required to disclose any of its
work product based on such information.
In section 222(b)(3), the term "aggregate information" should not be
construed as a mechanism whereby carriers are forced to disclose sensitive
information to their competitors. Indeed, the key component of "aggregate
information" is that such information would have to be able to be disclosed
only to those persons who have the approval of the customer. Thus, the
House intends that the use of "aggregate information" would be rather
limited or restricted.
Section 222(c) states that this section shall not prevent the use of
CPNI to combat toll fraud or to bill and collect for services requested by
the customers.
Section 222(d) allows the Commission to exempt from its requirements of
subsection (b) carriers with fewer than 500,000 access lines, if the
Commission determines either that such an exemption is in the public
interest or that compliance would impose an undue burden.
Section 222(e) defines terms used in this section. Section 104(b)
directs the Commission to review the impact of converging communications
technologies on customer privacy. This section requires the Commission to
commence a proceeding within one year after the date of enactment to examine
the impact of converging technologies and globalization of communications
networks has on the privacy rights of consumers and possible remedies to
protect them. This section also directs changes in the Commission's
regulations to ensure that customer privacy rights are considered in the
introduction of new telecommunications service and directs the Commission to
correct any defects in its privacy regulations that are identified pursuant
to this section. The Commission is also directed to make any
recommendations to Congress for any legislative changes required to correct
such defects within 18 months after the date of enactment of this Act.
This section defines three fundamental principles to protect all
consumers. These principles are: (1) the right of consumers to know the
specific information that is being collected about them; (2) the right of
consumers to have proper notice that such information is being used for other
purposes; and (3) the right of consumers to stop the reuse or sale of that
information.
Conference agreement
The conference agreement adopts the Senate provisions with
modifications. Section 702 of the conference agreement amends title II of
the Communications Act by adding a new section 222.
In general, the new section 222 strives to balance both competitive and
consumer privacy interests with respect to CPNI. New subsection 222(a)
stipulates that it is the duty of every telecommunications carrier to
protect the confidentiality of proprietary information of and relating to
other carriers, equipment manufacturers and customers, including carriers
reselling telecommunications services provided by a telecommunications
carrier.
New subsection 222(b) provides that a telecommunications carrier that
receives or obtains proprietary information from another carrier for
purposes of providing any telecommunications service shall use such
information only for such purpose and shall not use such information for its
own marketing efforts.
In new subsection 222(c) use of CPNI by telecommunications carriers is
limited, except as provided by law or with the approval of the customer.
New subsection (c) specifies that telecommunications carriers shall only
use, disclose, or permit access to individually identifiable CPNI in its
provision of the telecommunications service for which such information is
derived or in its provision of services necessary to or used in the
provision of such telecommunications service, including directory services.
The conferees also agreed upon a provision that will require disclosure of
CPNI by a telecommunications carrier upon affirmative written request by the
customer, to any person designated by the customer.
The conference agreement also asserts carriers' rights in new
subsection 222(d) to use CPNI to initiate, render, bill, and collect for
telecommunications service. New subsection (d) also allows use of CPNI to
protect the rights or property of the carrier. The conferees intend new
subsection 222(d)(2) to allow carriers to use CPNI in limited fashion for
credit evaluation to protect themselves from fraudulent operators who
subscribe to telecommunications services, run up large bills, and then
change carriers without payment.
New subsection 222(e) stipulates that subscriber list information shall
be made available by telecommunications carriers that provide telephone
exchange service on a timely and unbundled basis to any person upon request
for the purpose of publishing directories in any format. The subscriber
list information provision guarantees independent publishers access to
subscriber list information at reasonable and nondiscriminatory rates, terms
and conditions from any provider of local telephone service.
New subsection 222(f) contains definitions of CPNI, aggregate
information and subscriber list information.
Section 703 - Pole Attachments
Senate bill
Section 204 of the Senate bill amends section 224 of the Communications
Act. Section 204 requires that poles, ducts, conduits and rights-of-way
controlled by utilities are made available to cable television systems at
the rates, terms and conditions that are just and reasonable regardless of
whether the cable system is providing cable television services or
telecommunications services. Section 204 further requires the Commission to
prescribe additional regulations to establish rates for attachments by
telecommunications carriers. Such rates will take effect five years from
date of enactment and be phased in over a five year period. House amendment
Section 105 of the House amendment is intended to remedy the inequity
of charges for pole attachments among providers of telecommunications
services. First, it expands the scope of the coverage of section 224 of the
Communications Act. Under current law, section 224(a)(4) currently defines
"pole attachment" to mean any attachment by a cable television system to a
pole, conduit, or right of way owned or controlled by a utility. This
section expands the definition of "pole attachment" to include attachments
by all providers of telecommunications services.
Second, it amends section 224 to direct the Commission, no later than
one year after the date of enactment of the Communications Act of 1995, to
prescribe regulations for ensuring that utilities charge just and reasonable
and nondiscriminatory rates for pole attachments to all providers of
telecommunications services, including such attachments used by cable
television systems to provide telecommunications services.
The new provision directs the Commission to regulate pole attachment
rates based on a "fully allocated cost" formula. In prescribing pole
attachment rates, the Commission shall: (1) recognize that the entire pole,
duct, conduit, or right-of-way other than the usable space is of equal
benefit to all entities attaching to the pole and therefore apportion the
cost of the space other than the usable space equally among all such
attachments; (2) recognize that the usable space is of proportional benefit
to all entities attaching to the pole, duct, conduit, or right-of-way and
therefore apportion the cost of the usable space according to the percentage
of usable space required for each entity; and (3) allow for reasonable terms
and conditions relating to health, safety, and the provision of reliable
utility service.
This new provision further provides that, to the extent that a company
seeks pole attachment for a wire used solely to provide cable television
services (as defined by section 602(6) of the Communications Act), that
cable company will continue to pay the rate authorized under current law (as
set forth in subparagraph (d)(1) of the 1978 Act). If, however, a cable
television system also provides telecommunications services, then that
company shall instead pay the pole attachment rate prescribed by the
Commission pursuant to the fully allocated cost formula.
Finally, the new provision requires that whenever the owner of a
conduit or right-of-way intends to modify or to alter such conduit or
right-of-way, the owner shall provide written notification of such action to
any entity that has obtained an attachment so that such entity may have a
reasonable opportunity to add to or modify its existing attachment. Any
entity that adds to or modifies its existing attachment after receiving such
notification shall bear a proportionate share of the costs incurred by the
owner in making such conduit or right-of-way accessible.
Conference agreement
The conference agreement adopts the Senate provision with
modifications. The conference agreement amends section 224 of the
Communications Act by adding new subsection (e)(1) to allow parties to
negotiate the rates, terms, and conditions for attaching to poles, ducts,
conduits, and rights-of-way owned or controlled by utilities. New
subsection 224(e)(2) establishes a new rate formula charged to
telecommunications carriers for the non-useable space of each pole. Such
rate shall be based upon the number of attaching entities. The conferees
also agree to three additional provisions from the House amendment. First,
subsection (g) requires utilities that engage in the provision of
telecommunications services or cable services to impute to its costs of
providing such service an equal amount to the pole attachment rate for which
such company would be liable under section 224. Second, new subsection
224(h) requires utilities to provide written notification to attaching
entities of any plans to modify or alter its poles, ducts, conduit, or
rights-of-way. New subsection 224(h) also requires any attaching entity
that takes advantage of such opportunity to modify its own attachments shall
bear a proportionate share of the costs of such alterations. Third, new
subsection 224(i) prevents a utility from imposing the cost of
rearrangements to other attaching entities if done solely for the benefit of
the utility.
Section 704 - Facilities Siting; Radio Frequency Emission Standards
Senate bill
No provision.
House amendment
Section 108 of the House amendment required the Commission to issue
regulations within 180 days of enactment for siting of CMS. A negotiated
rulemaking committee comprised of State and local governments, public safety
agencies and the affected industries were to have attempted to develop a
uniform policy to propose to the Commission for the siting of wireless tower
sites.
The House amendment also required the Commission to complete its
pending Radio Frequency (RF) emission exposure standards within 180 days of
enactment. The siting of facilities could not be denied on the basis of RF
emission levels for facilities that were in compliance with the Commission
standard.
The House amendment also required that to the greatest extent possible
the Federal government make available the use of Federal property,
rights-of-way, easements and any other physical instruments in the siting of
wireless telecommunications facilities.
Conference agreement
The conference agreement creates a new section 704 which prevents
Commission preemption of local and State land use decisions and preserves
the authority of State and local governments over zoning and land use
matters except in the limited circumstances set forth in the conference
agreement. The conference agreement also provides a mechanism for judicial
relief from zoning decisions that fail to comply with the provisions of this
section. It is the intent of the conferees that other than under section
332(c)(7)(B)(iv) of the Communications Act of 1934 as amended by this Act
and section 704 of the Telecommunications Act of 1996 the courts shall have
exclusive jurisdiction over all other disputes arising under this section.
Any pending Commission rulemaking concerning the preemption of local zoning
authority over the placement, construction or modification of CMS facilities
should be terminated.
When utilizing the term "functionally equivalent services" the
conferees are referring only to personal wireless services as defined in
this section that directly compete against one another. The intent of the
conferees is to ensure that a State or local government does not in making a
decision regarding the placement, construction and modification of
facilities of personal wireless services described in this section
unreasonably favor one competitor over another. The conferees also intend
that the phrase "unreasonably discriminate among providers of functionally
equivalent services" will provide localities with the flexibility to treat
facilities that create different visual, aesthetic, or safety concerns
differently to the extent permitted under generally applicable zoning
requirements even if those facilities provide functionally equivalent
services. For example, the conferees do not intend that if a State or local
government grants a permit in a commercial district, it must also grant a
permit for a competitor's 50-foot tower in a residential district.
Actions taken by State or local governments shall not prohibit or have
the effect of prohibiting the placement, construction or modification of
personal wireless services. It is the intent of this section that bans or
policies that have the effect of banning personal wireless services or
facilities not be allowed and that decisions be made on a case-by-case basis.
Under subsection (c)(7)(B)(ii), decisions are to be rendered in a
reasonable period of time, taking into account the nature and scope of each
request. If a request for placement of a personal wireless service facility
involves a zoning variance or a public hearing or comment process, the time
period for rendering a decision will be the usual period under such
circumstances. It is not the intent of this provision to give preferential
treatment to the personal wireless service industry in the processing of
requests, or to subject their requests to any but the generally applicable
time frames for zoning decision.
The phrase "substantial evidence contained in a written record" is the
traditional standard used for judicial review of agency actions.
The conferees intend section 332(c)(7)(B)(iv) to prevent a State or
local government or its instrumentalities from basing the regulation of the
placement, construction or modification of CMS facilities directly or
indirectly on the environmental effects of radio frequency emissions if
those facilities comply with the Commission's regulations adopted pursuant
to section 704(b) concerning such emissions.
The limitations on the role and powers of the Commission under this
subparagraph relate to local land use regulations and are not intended to
limit or affect the Commission's general authority over radio
telecommunications, including the authority to regulate the construction,
modification and operation of radio facilities.
The conferees intend that the court to which a party appeals a decision
under section 332(c)(7)(B)(v) may be the Federal district court in which the
facilities are located or a State court of competent jurisdiction, at the
option of the party making the appeal, and that the courts act expeditiously
in deciding such cases. The term "final action" of that new subparagraph
means final administrative action at the State or local government level so
that a party can commence action under the subparagraph rather than waiting
for the exhaustion of any independent State court remedy otherwise
required.
With respect to the availability of Federal property for the use of
wireless telecommunications infrastructure sites under section 704(c), the
conferees generally adopt the House provisions, but substitute the President
or his designee for the Commission.
It should be noted that the provisions relating to telecommunications
facilities are not limited to commercial mobile radio licensees, but also
will include other Commission licensed wireless common carriers such as
point to point microwave in the extremely high frequency portion of the
electromagnetic spectrum which rely on line of sight for transmitting
communication services.
Section 705 - Mobile Service Direct Access to Long Distance Carriers
Senate bill
Subsection (b) of section 221 of the Senate bill, as passes, states
that notwithstanding the MFJ or any other consent decree, no CMS provider
will be required by court order or otherwise to provide long distance equal
access. The Commission may only order equal access if a CMS provider is
subject to the interconnection obligations of section 251 and if the
Commission finds that such a requirement is in the public interest. CMS
providers shall ensure that its subscribers can obtain unblocked access to
the interexchange carrier of their choice through the use of interexchange
carrier identification codes, except that the unblocking requirement shall
not apply to mobile satellite services unless the Commission finds it is in
the public interest.
House amendment
Under section 109 of the House amendment, the Commission shall require
providers of two-way switched voice CMS to allow their subscribers to access
the telephone toll services provider of their choice through the use of
carrier identification codes. The Commission rules will supersede the equal
access, balloting and presubscription requirements imposed by the MFJ and
the AT&T-McCaw consent decree. The Commission may exempt carriers or
classes of carriers from the requirements of this section if it is
consistent with the public interest, convenience, and necessity, and the
provision of mobile services by satellite is specifically exempt from this
section.
Conference agreement
The conference agreement adopts the House provision with modifications
as a new paragraph (8) of section 332 of the Communications Act.
Specifically, no CMS provider is required to provide equal access to common
carriers providing telephone toll services. However, the Commission may
impose rules to require unblocked access through the use of mechanisms such
as carrier identification codes or toll-free numbers, if it determines that
customers are being denied access to the telephone toll service provider of
their choice, and such denial is contrary to the public interest,
convenience, and necessity. The requirements for unblocked access to
providers of telephone toll service shall not apply to mobile satellite
services unless the Commission finds it to be in the public interest.
Section 706 - Advanced Telecommunications Incentives
Senate bill
Section 304 of the Senate bill ensures that advanced telecommunications
capability is promptly deployed by requiring the Commission to initiate and
complete regular inquiries to determine whether advanced telecommunications
capability, particularly to schools and classrooms, is being deployed in a
"reasonable and timely fashion." Such determinations shall include an
assessment by the Commission of the availability, at reasonable cost, of
equipment needed to deliver advanced broadband capability. If the
Commission makes a negative determination, it is required to take immediate
action to accelerate deployment. Measures to be used include: price cap
regulation, regulatory forbearance, and other methods that remove barriers
and provide the proper incentives for infrastructure investment. The
Commission may preempt State commissions if they fail to act to ensure
reasonable and timely access.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision with a
modification.
Section 707 - Telecommunications Development Fund
Senate bill
No provision.
House amendment
Section 112 creates the Telecommunications Development Fund (TDF). The
TDF is an organization to provide funds for small businesses involved in
telecommunications applications. The TDF is formulated to serve as a
quasi-governmental entity that will provide low interest loans as well as
financial guarantees. The capital for the Fund will be derived from the
deposit of up-front payments for spectrum auctions into an interest bearing
account.
Businesses with gross assets of less that $50 million will be eligible
to receive loans, based upon an assessment of their loan application. The
fund will be administered as a not-for-profit organization, and funds will
be disbursed on a race and gender neutral basis. The board of directors will
consist of seven members: four from the private sector, and one from three
Federal agencies (the Commission, Department of Treasury, and the Small
Business Administration).
The fund will provide for reinvestment, create jobs, and promote
technological innovation in the telecommunications industry. A unique aspect
of the Fund is that it will promote public/private sector partnerships to
enhance fund assets, and promote technology development and transfer.
Conference agreement
The conference agreement adopts the House provision as a new section
714 of the Communications Act.
Section 708 - National Education Technology Funding Corporation
Senate bill
Title VI of the Senate bill adds the National Education Technology
Funding Corporation Act of 1995. The provisions of this title authorize a
corporation, established in the District of Columbia as a private, nonprofit
corporation which is not an agency or independent establishment of the
Federal Government, to receive financial assistance from Federal departments
and agencies. The Corporation will receive such assistance to leverage
resources and stimulate private investment in education technology
infrastructure, to encourage States to create and upgrade interactive high
capacity networks for elementary schools, secondary schools and public
libraries, to provide loans, grants and other forms of assistance to State
education technology agencies, and other educational purposes. The
Corporation's financial statements shall be audited annually, and the
Corporation shall publish an annual report to the President and the Congress.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision.
Section 709 - Report on the Use of Advanced Telecommunications Services for
Medical Purposes
Senate bill
No provision.
House amendment
The House amendment directs the Assistant Secretary of Commerce for
Communications and Information, in consultation with the Secretary of Health
and Human Services, to submit a report on telemedicine grant programs
conducted by the government.
Conference agreement
The conference agreement adopts the House provision.
Section 710 - Authorization of Appropriations
Senate bill
No provision.
House amendment
This section authorizes appropriations for the Commission of such sums
as may be necessary to carry out this Act, and provides that additional
amounts appropriated to carry out this Act shall be construed to be changes
in the amounts appropriated for the performance of the activities described
in section 9(a) of the Communications Act.
Conference agreement
The conference agreement adopts the House provision with a technical
modification to section 309(j)(8)(B) of the Communications Act.
Radio, Television, and Press Contact Information
Copyright © 2005 Vortex Technology. All Rights Reserved.