Revolution

Telecommunications Act of 1996

S.652

One Hundred Fourth Congress of the United States of America
AT THE SECOND SESSION Begun and held at the City of Washington on Wednesday, the third day of January, one thousand nine hundred and ninety-six
An Act To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.

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

SECTION 1. SHORT TITLE; REFERENCES.

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

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

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

SEC. 3. DEFINITIONS.

            (a) ADDITIONAL DEFINITIONS- Section 3 (47 U.S.C. 153) is amended--
                (1) in subsection (r)--
                    (A) by inserting `(A)' after `means'; and
                    (B) by inserting before the period at the end the
                  following: `, or (B) comparable service provided through a
                  system of switches, transmission equipment, or other
                  facilities (or combination thereof) by which a subscriber
                  can originate and terminate a telecommunications service';
                  and
                (2) by adding at the end thereof the following:
                `(33) AFFILIATE- The term `affiliate' means a person that
              (directly or indirectly) owns or controls, is owned or
              controlled by, or is under common ownership or control with,
              another person. For purposes of this paragraph, the term `own'
              means to own an equity interest (or the equivalent thereof) of
              more than 10 percent.
                `(34) AT&T CONSENT DECREE- The term `AT&T Consent Decree'
              means the order entered August 24, 1982, in the antitrust
              action styled United States v. Western Electric, Civil Action
              No. 82-0192, in the United States District Court for the
              District of Columbia, and includes any judgment or order with
              respect to such action entered on or after August 24, 1982.
                `(35) BELL OPERATING COMPANY- The term `Bell operating
              company'--
                    `(A) means any of the following companies: Bell Telephone
                  Company of Nevada, Illinois Bell Telephone Company, Indiana
                  Bell Telephone Company, Incorporated, Michigan Bell
                  Telephone Company, New England Telephone and Telegraph
                  Company, New Jersey Bell Telephone Company, New York
                  Telephone Company, U S West Communications Company, South
                  Central Bell Telephone Company, Southern Bell Telephone and
                  Telegraph Company, Southwestern Bell Telephone Company, The
                  Bell Telephone Company of Pennsylvania, The Chesapeake and
                  Potomac Telephone Company, The Chesapeake and Potomac
                  Telephone Company of Maryland, The Chesapeake and Potomac
                  Telephone Company of Virginia, The Chesapeake and Potomac
                  Telephone Company of West Virginia, The Diamond State
                  Telephone Company, The Ohio Bell Telephone Company, The
                  Pacific Telephone and Telegraph Company, or Wisconsin
                  Telephone Company; and
                    `(B) includes any successor or assign of any such company
                  that provides wireline telephone exchange service; but
                    `(C) does not include an affiliate of any such company,
                  other than an affiliate described in subparagraph (A) or (B).
                `(36) CABLE SERVICE- The term `cable service' has the meaning
              given such term in section 602.
                `(37) CABLE SYSTEM- The term `cable system' has the meaning
              given such term in section 602.
                `(38) CUSTOMER PREMISES EQUIPMENT- The term `customer
              premises equipment' means equipment employed on the premises of
              a person (other than a carrier) to originate, route, or
              terminate telecommunications.
                `(39) DIALING PARITY- The term `dialing parity' means that a
              person that is not an affiliate of a local exchange carrier is
              able to provide telecommunications services in such a manner
              that customers have the ability to route automatically, without
              the use of any access code, their telecommunications to the
              telecommunications services provider of the customer's
              designation from among 2 or more telecommunications services
              providers (including such local exchange carrier).
                `(40) EXCHANGE ACCESS- The term `exchange access' means the
              offering of access to telephone exchange services or facilities
              for the purpose of the origination or termination of telephone
              toll services.
                `(41) INFORMATION SERVICE- The term `information service'
              means the offering of a capability for generating, acquiring,
              storing, transforming, processing, retrieving, utilizing, or
              making available information via telecommunications, and
              includes electronic publishing, but does not include any use of
              any such capability for the management, control, or operation
              of a telecommunications system or the management of a
              telecommunications service.
                `(42) INTERLATA SERVICE- The term `interLATA service' means
              telecommunications between a point located in a local access
              and transport area and a point located outside such area.
                `(43) LOCAL ACCESS AND TRANSPORT AREA- The term `local access
              and transport area' or `LATA' means a contiguous geographic
              area--
                    `(A) established before the date of enactment of the
                  Telecommunications Act of 1996 by a Bell operating company
                  such that no exchange area includes points within more than
                  1 metropolitan statistical area, consolidated metropolitan
                  statistical area, or State, except as expressly permitted
                  under the AT&T Consent Decree; or
                    `(B) established or modified by a Bell operating company
                  after such date of enactment and approved by the Commission.
                `(44) LOCAL EXCHANGE CARRIER- The term `local exchange
              carrier' means any person that is engaged in the provision of
              telephone exchange service or exchange access. Such term does
              not include a person insofar as such person is engaged in the
              provision of a commercial mobile service under section 332(c),
              except to the extent that the Commission finds that such
              service should be included in the definition of such term.
                `(45) NETWORK ELEMENT- The term `network element' means a
              facility or equipment used in the provision of a
              telecommunications service. Such term also includes features,
              functions, and capabilities that are provided by means of such
              facility or equipment, including subscriber numbers, databases,
              signaling systems, and information sufficient for billing and
              collection or used in the transmission, routing, or other
              provision of a telecommunications service.
                `(46) NUMBER PORTABILITY- The term `number portability' means
              the ability of users of telecommunications services to retain,
              at the same location, existing telecommunications numbers
              without impairment of quality, reliability, or convenience when
              switching from one telecommunications carrier to another.
                `(47) RURAL TELEPHONE COMPANY- The term `rural telephone
              company' means a local exchange carrier operating entity to the
              extent that such entity--
                    `(A) provides common carrier service to any local
                  exchange carrier study area that does not include either--
                        `(i) any incorporated place of 10,000 inhabitants or
                      more, or any part thereof, based on the most recently
                      available population statistics of the Bureau of the
                      Census; or
                        `(ii) any territory, incorporated or unincorporated,
                      included in an urbanized area, as defined by the Bureau
                      of the Census as of August 10, 1993;
                    `(B) provides telephone exchange service, including
                  exchange access, to fewer than 50,000 access lines;
                    `(C) provides telephone exchange service to any local
                  exchange carrier study area with fewer than 100,000 access
                  lines; or
                    `(D) has less than 15 percent of its access lines in
                  communities of more than 50,000 on the date of enactment of
                  the Telecommunications Act of 1996.
                `(48) TELECOMMUNICATIONS- The term `telecommunications' means
              the transmission, between or among points specified by the
              user, of information of the user's choosing, without change in
              the form or content of the information as sent and received.
                `(49) TELECOMMUNICATIONS CARRIER- The term
              `telecommunications carrier' means any provider of
              telecommunications services, except that such term does not
              include aggregators of telecommunications services (as defined
              in section 226).  A telecommunications carrier shall be treated
              as a common carrier under this Act only to the extent that it
              is engaged in providing telecommunications services, except
              that the Commission shall determine whether the provision of
              fixed and mobile satellite service shall be treated as common
              carriage.
                `(50) TELECOMMUNICATIONS EQUIPMENT- The term
              `telecommunications equipment' means equipment, other than
              customer premises equipment, used by a carrier to provide
              telecommunications services, and includes software integral to
              such equipment (including upgrades).
                `(51) TELECOMMUNICATIONS SERVICE- The term
              `telecommunications service' means the offering of
              telecommunications for a fee directly to the public, or to such
              classes of users as to be effectively available directly to the
              public, regardless of the facilities used.'.
            (b) COMMON TERMINOLOGY- Except as otherwise provided in this Act,
          the terms used in this Act have the meanings provided in section 3
          of the Communications Act of 1934 (47 U.S.C. 153), as amended by
          this section.
            (c) STYLISTIC CONSISTENCY- Section 3 (47 U.S.C. 153) is amended--
                (1) in subsections (e) and (n), by redesignating clauses (1),
              (2), and (3), as clauses (A), (B), and (C), respectively;
                (2) in subsection (w), by redesignating paragraphs (1)
              through (5) as subparagraphs (A) through (E), respectively;
                (3) in subsections (y) and (z), by redesignating paragraphs
              (1) and (2) as subparagraphs (A) and (B), respectively;
                (4) by redesignating subsections (a) through (ff) as
              paragraphs (1) through (32);
                (5) by indenting such paragraphs 2 em spaces;
                (6) by inserting after the designation of each such paragraph--
                    (A) a heading, in a form consistent with the form of the
                  heading of this subsection, consisting of the term defined
                  by such paragraph, or the first term so defined if such
                  paragraph defines more than one term; and
                    (B) the words `The term';
                (7) by changing the first letter of each defined term in such
              paragraphs from a capital to a lower case letter (except for
              `United States', `State', `State commission', and `Great Lakes
              Agreement'); and
                (8) by reordering such paragraphs and the additional
              paragraphs added by subsection (a) in alphabetical order based
              on the headings of such paragraphs and renumbering such
              paragraphs as so reordered.
            (d) CONFORMING AMENDMENTS- The Act is amended--
                (1) in section 225(a)(1), by striking `section 3(h)' and
              inserting `section 3';
                (2) in section 332(d), by striking `section 3(n)' each place
              it appears and inserting `section 3'; and
                (3) in sections 621(d)(3), 636(d), and 637(a)(2), by striking
              `section 3(v)' and inserting `section 3'.
                           TITLE I--TELECOMMUNICATION SERVICES
                         SUBTITLE A--TELECOMMUNICATIONS SERVICES

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

            (a) AMENDMENT- Title II is amended by inserting after section 229
          (47 U.S.C. 229) the following new part:
                      `PART II--DEVELOPMENT OF COMPETITIVE MARKETS

`SEC. 251. INTERCONNECTION.

            `(a) GENERAL DUTY OF TELECOMMUNICATIONS CARRIERS- Each
          telecommunications carrier has the duty--
                `(1) to interconnect directly or indirectly with the
              facilities and equipment of other telecommunications carriers;
              and
                `(2) not to install network features, functions, or
              capabilities that do not comply with the guidelines and
              standards established pursuant to section 255 or 256.
            `(b) OBLIGATIONS OF ALL LOCAL EXCHANGE CARRIERS- Each local
          exchange carrier has the following duties:
                `(1) RESALE- The duty not to prohibit, and not to impose
              unreasonable or discriminatory conditions or limitations on,
              the resale of its telecommunications services.
                `(2) NUMBER PORTABILITY- The duty to provide, to the extent
              technically feasible, number portability in accordance with
              requirements prescribed by the Commission.
                `(3) DIALING PARITY- The duty to provide dialing parity to
              competing providers of telephone exchange service and telephone
              toll service, and the duty to permit all such providers to have
              nondiscriminatory access to telephone numbers, operator
              services, directory assistance, and directory listing, with no
              unreasonable dialing delays.
                `(4) ACCESS TO RIGHTS-OF-WAY- The duty to afford access to
              the poles, ducts, conduits, and rights-of-way of such carrier
              to competing providers of telecommunications services on rates,
              terms, and conditions that are consistent with section 224.
                `(5) RECIPROCAL COMPENSATION- The duty to establish
              reciprocal compensation arrangements for the transport and
              termination of telecommunications.
            `(c) ADDITIONAL OBLIGATIONS OF INCUMBENT LOCAL EXCHANGE CARRIERS-
          In addition to the duties contained in subsection (b), each
          incumbent local exchange carrier has the following duties:
                `(1) DUTY TO NEGOTIATE- The duty to negotiate in good faith
              in accordance with section 252 the particular terms and
              conditions of agreements to fulfill the duties described in
              paragraphs (1) through (5) of subsection (b) and this
              subsection. The requesting telecommunications carrier also has
              the duty to negotiate in good faith the terms and conditions of
              such agreements.
                `(2) INTERCONNECTION- The duty to provide, for the facilities
              and equipment of any requesting telecommunications carrier,
              interconnection with the local exchange carrier's network--
                    `(A) for the transmission and routing of telephone
                  exchange service and exchange access;
                    `(B) at any technically feasible point within the
                  carrier's network;
                    `(C) that is at least equal in quality to that provided
                  by the local exchange carrier to itself or to any
                  subsidiary, affiliate, or any other party to which the
                  carrier provides interconnection; and
                    `(D) on rates, terms, and conditions that are just,
                  reasonable, and nondiscriminatory, in accordance with the
                  terms and conditions of the agreement and the requirements
                  of this section and section 252.
                `(3) UNBUNDLED ACCESS- The duty to provide, to any requesting
              telecommunications carrier for the provision of a
              telecommunications service, nondiscriminatory access to network
              elements on an unbundled basis at any technically feasible
              point on rates, terms, and conditions that are just,
              reasonable, and nondiscriminatory in accordance with the terms
              and conditions of the agreement and the requirements of this
              section and section 252. An incumbent local exchange carrier
              shall provide such unbundled network elements in a manner that
              allows requesting carriers to combine such elements in order to
              provide such telecommunications service.
                `(4) RESALE- The duty--
                    `(A) to offer for resale at wholesale rates any
                  telecommunications service that the carrier provides at
                  retail to subscribers who are not telecommunications
                  carriers; and
                    `(B) not to prohibit, and not to impose unreasonable or
                  discriminatory conditions or limitations on, the resale of
                  such telecommunications service, except that a State
                  commission may, consistent with regulations prescribed by
                  the Commission under this section, prohibit a reseller that
                  obtains at wholesale rates a telecommunications service
                  that is available at retail only to a category of
                  subscribers from offering such service to a different
                  category of subscribers.
                `(5) NOTICE OF CHANGES- The duty to provide reasonable public
              notice of changes in the information necessary for the
              transmission and routing of services using that local exchange
              carrier's facilities or networks, as well as of any other
              changes that would affect the interoperability of those
              facilities and networks.
                `(6) COLLOCATION- The duty to provide, on rates, terms, and
              conditions that are just, reasonable, and nondiscriminatory,
              for physical collocation of equipment necessary for
              interconnection or access to unbundled network elements at the
              premises of the local exchange carrier, except that the carrier
              may provide for virtual collocation if the local exchange
              carrier demonstrates to the State commission that physical
              collocation is not practical for technical reasons or because
              of space limitations.
            `(d) IMPLEMENTATION-
                `(1) IN GENERAL- Within 6 months after the date of enactment
              of the Telecommunications Act of 1996, the Commission shall
              complete all actions necessary to establish regulations to
              implement the requirements of this section.
                `(2) ACCESS STANDARDS- In determining what network elements
              should be made available for purposes of subsection (c)(3), the
              Commission shall consider, at a minimum, whether--
                    `(A) access to such network elements as are proprietary
                  in nature is necessary; and
                    `(B) the failure to provide access to such network
                  elements would impair the ability of the telecommunications
                  carrier seeking access to provide the services that it
                  seeks to offer.
                `(3) PRESERVATION OF STATE ACCESS REGULATIONS- In prescribing
              and enforcing regulations to implement the requirements of this
              section, the Commission shall not preclude the enforcement of
              any regulation, order, or policy of a State commission that--
                    `(A) establishes access and interconnection obligations
                  of local exchange carriers;
                    `(B) is consistent with the requirements of this section;
                  and
                    `(C) does not substantially prevent implementation of the
                  requirements of this section and the purposes of this part.
            `(e) NUMBERING ADMINISTRATION-
                `(1) COMMISSION AUTHORITY AND JURISDICTION- The Commission
              shall create or designate one or more impartial entities to
              administer telecommunications numbering and to make such
              numbers available on an equitable basis. The Commission shall
              have exclusive jurisdiction over those portions of the North
              American Numbering Plan that pertain to the United States.
              Nothing in this paragraph shall preclude the Commission from
              delegating to State commissions or other entities all or any
              portion of such jurisdiction.
                `(2)  COSTS- The cost of establishing telecommunications
              numbering administration arrangements and number portability
              shall be borne by all telecommunications carriers on a
              competitively neutral basis as determined by the Commission.
            `(f) EXEMPTIONS, SUSPENSIONS, AND MODIFICATIONS-
                `(1) EXEMPTION FOR CERTAIN RURAL TELEPHONE COMPANIES-
                    `(A) EXEMPTION- Subsection (c) of this section shall not
                  apply to a rural telephone company until (i) such company
                  has received a bona fide request for interconnection,
                  services, or network elements, and (ii) the State
                  commission determines (under subparagraph (B)) that such
                  request is not unduly economically burdensome, is
                  technically feasible, and is consistent with section 254
                  (other than subsections (b)(7) and (c)(1)(D) thereof).
                    `(B) STATE TERMINATION OF EXEMPTION AND IMPLEMENTATION
                  SCHEDULE- The party making a bona fide request of a rural
                  telephone company for interconnection, services, or network
                  elements shall submit a notice of its request to the State
                  commission. The State commission shall conduct an inquiry
                  for the purpose of determining whether to terminate the
                  exemption under subparagraph (A). Within 120 days after the
                  State commission receives notice of the request, the State
                  commission shall terminate the exemption if the request is
                  not unduly economically burdensome, is technically
                  feasible, and is consistent with section 254 (other than
                  subsections (b)(7) and (c)(1)(D) thereof). Upon termination
                  of the exemption, a State commission shall establish an
                  implementation schedule for compliance with the request
                  that is consistent in time and manner with Commission
                  regulations.
                    `(C) LIMITATION ON EXEMPTION- The exemption provided by
                  this paragraph shall not apply with respect to a request
                  under subsection (c) from a cable operator providing video
                  programming, and seeking to provide any telecommunications
                  service, in the area in which the rural telephone company
                  provides video programming. The limitation contained in
                  this subparagraph shall not apply to a rural telephone
                  company that is providing video programming on the date of
                  enactment of the Telecommunications Act of 1996.
                `(2) SUSPENSIONS AND MODIFICATIONS FOR RURAL CARRIERS- A
              local exchange carrier with fewer than 2 percent of the
              Nation's subscriber lines installed in the aggregate nationwide
              may petition a State commission for a suspension or
              modification of the application of a requirement or
              requirements of subsection (b) or (c) to telephone exchange
              service facilities specified in such petition. The State
              commission shall grant such petition to the extent that, and
              for such duration as, the State commission determines that such
              suspension or modification--
                    `(A) is necessary--
                        `(i) to avoid a significant adverse economic impact
                      on users of telecommunications services generally;
                        `(ii) to avoid imposing a requirement that is unduly
                      economically burdensome; or
                        `(iii) to avoid imposing a requirement that is
                      technically infeasible; and
                    `(B)  is consistent with the public interest,
                  convenience, and necessity.
              The State commission shall act upon any petition filed under
              this paragraph within 180 days after receiving such petition.
              Pending such action, the State commission may suspend
              enforcement of the requirement or requirements to which the
              petition applies with respect to the petitioning carrier or
              carriers.
            `(g) CONTINUED ENFORCEMENT OF EXCHANGE ACCESS AND INTERCONNECTION
          REQUIREMENTS- On and after the date of enactment of the
          Telecommunications Act of 1996, each local exchange carrier, to the
          extent that it provides wireline services, shall provide exchange
          access, information access, and exchange services for such access
          to interexchange carriers and information service providers in
          accordance with the same equal access and nondiscriminatory
          interconnection restrictions and obligations (including receipt of
          compensation) that apply to such carrier on the date immediately
          preceding the date of enactment of the Telecommunications Act of
          1996 under any court order, consent decree, or regulation, order,
          or policy of the Commission, until such restrictions and
          obligations are explicitly superseded by regulations prescribed by
          the Commission after such date of enactment. During the period
          beginning on such date of enactment and until such restrictions and
          obligations are so superseded, such restrictions and obligations
          shall be enforceable in the same manner as regulations of the
          Commission.
            `(h) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER-
                `(1) DEFINITION- For purposes of this section, the term
              `incumbent local exchange carrier' means, with respect to an
              area, the local exchange carrier that--
                    `(A) on the date of enactment of the Telecommunications
                  Act of 1996, provided telephone exchange service in such
                  area; and
                    `(B)(i) on such date of enactment, was deemed to be a
                  member of the exchange carrier association pursuant to
                  section 69.601(b) of the Commission's regulations (47
                  C.F.R. 69.601(b)); or
                    `(ii) is a person or entity that, on or after such date
                  of enactment, became a successor or assign of a member
                  described in clause (i).
                `(2) TREATMENT OF COMPARABLE CARRIERS AS INCUMBENTS- The
              Commission may, by rule, provide for the treatment of a local
              exchange carrier (or class or category thereof) as an incumbent
              local exchange carrier for purposes of this section if--
                    `(A) such carrier occupies a position in the market for
                  telephone exchange service within an area that is
                  comparable to the position occupied by a carrier described
                  in paragraph (1);
                    `(B) such carrier has substantially replaced an incumbent
                  local exchange carrier described in paragraph (1); and
                    `(C) such treatment is consistent with the public
                  interest, convenience, and necessity and the purposes of
                  this section.
            `(i) SAVINGS PROVISION- Nothing in this section shall be
          construed to limit or otherwise affect the Commission's authority
          under section 201.

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

            `(a) AGREEMENTS ARRIVED AT THROUGH NEGOTIATION-
                `(1) VOLUNTARY NEGOTIATIONS- Upon receiving a request for
              interconnection, services, or network elements pursuant to
              section 251, an incumbent local exchange carrier may negotiate
              and enter into a binding agreement with the requesting
              telecommunications carrier or carriers without regard to the
              standards set forth in subsections (b) and (c) of section 251.
              The agreement shall include a detailed schedule of itemized
              charges for interconnection and each service or network element
              included in the agreement. The agreement, including any
              interconnection agreement negotiated before the date of
              enactment of the Telecommunications Act of 1996, shall be
              submitted to the State commission under subsection (e) of this
              section.
                `(2) MEDIATION- Any party negotiating an agreement under this
              section may, at any point in the negotiation, ask a State
              commission to participate in the negotiation and to mediate any
              differences arising in the course of the negotiation.
            `(b) AGREEMENTS ARRIVED AT THROUGH COMPULSORY ARBITRATION-
                `(1) ARBITRATION- During the period from the 135th to the
              160th day (inclusive) after the date on which an incumbent
              local exchange carrier receives a request for negotiation under
              this section, the carrier or any other party to the negotiation
              may petition a State commission to arbitrate any open issues.
                `(2) DUTY OF PETITIONER-
                    `(A) A party that petitions a State commission under
                  paragraph (1) shall, at the same time as it submits the
                  petition, provide the State commission all relevant
                  documentation concerning--
                        `(i) the unresolved issues;
                        `(ii) the position of each of the parties with
                      respect to those issues; and
                        `(iii) any other issue discussed and resolved by the
                      parties.
                    `(B) A party petitioning a State commission under
                  paragraph (1) shall provide a copy of the petition and any
                  documentation to the other party or parties not later than
                  the day on which the State commission receives the petition.
                `(3) OPPORTUNITY TO RESPOND- A non-petitioning party to a
              negotiation under this section may respond to the other party's
              petition and provide such additional information as it wishes
              within 25 days after the State commission receives the petition.
                `(4) ACTION BY STATE COMMISSION-
                    `(A) The State commission shall limit its consideration
                  of any petition under paragraph (1) (and any response
                  thereto) to the issues set forth in the petition and in the
                  response, if any, filed under paragraph (3).
                    `(B) The State commission may require the petitioning
                  party and the responding party to provide such information
                  as may be necessary for the State commission to reach a
                  decision on the unresolved issues. If any party refuses or
                  fails unreasonably to respond on a timely basis to any
                  reasonable request from the State commission, then the
                  State commission may proceed on the basis of the best
                  information available to it from whatever source derived.
                    `(C) The State commission shall resolve each issue set
                  forth in the petition and the response, if any, by imposing
                  appropriate conditions as required to implement subsection
                  (c) upon the parties to the agreement, and shall conclude
                  the resolution of any unresolved issues not later than 9
                  months after the date on which the local exchange carrier
                  received the request under this section.
                `(5) REFUSAL TO NEGOTIATE- The refusal of any other party to
              the negotiation to participate further in the negotiations, to
              cooperate with the State commission in carrying out its
              function as an arbitrator, or to continue to negotiate in good
              faith in the presence, or with the assistance, of the State
              commission shall be considered a failure to negotiate in good
              faith.
            `(c) STANDARDS FOR ARBITRATION- In resolving by arbitration under
          subsection (b) any open issues and imposing conditions upon the
          parties to the agreement, a State commission shall--
                `(1) ensure that such resolution and conditions meet the
              requirements of section 251, including the regulations
              prescribed by the Commission pursuant to section 251;
                `(2) establish any rates for interconnection, services, or
              network elements according to subsection (d); and
                `(3) provide a schedule for implementation of the terms and
              conditions by the parties to the agreement.
            `(d) PRICING STANDARDS-
                `(1) INTERCONNECTION AND NETWORK ELEMENT CHARGES-
              Determinations by a State commission of the just and reasonable
              rate for the interconnection of facilities and equipment for
              purposes of subsection (c)(2) of section 251, and the just and
              reasonable rate for network elements for purposes of subsection
              (c)(3) of such section--
                    `(A) shall be--
                        `(i) based on the cost (determined without reference
                      to a rate-of-return or other rate-based proceeding) of
                      providing the interconnection or network element
                      (whichever is applicable), and
                        `(ii) nondiscriminatory, and
                    `(B) may include a reasonable profit.
                `(2) CHARGES FOR TRANSPORT AND TERMINATION OF TRAFFIC-
                    `(A) IN GENERAL- For the purposes of compliance by an
                  incumbent local exchange carrier with section 251(b)(5), a
                  State commission shall not consider the terms and
                  conditions for reciprocal compensation to be just and
                  reasonable unless--
                        `(i) such terms and conditions provide for the mutual
                      and reciprocal recovery by each carrier of costs
                      associated with the transport and termination on each
                      carrier's network facilities of calls that originate on
                      the network facilities of the other carrier; and
                        `(ii) such terms and conditions determine such costs
                      on the basis of a reasonable approximation of the
                      additional costs of terminating such calls.
                    `(B) RULES OF CONSTRUCTION- This paragraph shall not be
                  construed--
                        `(i) to preclude arrangements that afford the mutual
                      recovery of costs through the offsetting of reciprocal
                      obligations, including arrangements that waive mutual
                      recovery (such as bill-and-keep arrangements); or
                        `(ii) to authorize the Commission or any State
                      commission to engage in any rate regulation proceeding
                      to establish with particularity the additional costs of
                      transporting or terminating calls, or to require
                      carriers to maintain records with respect to the
                      additional costs of such calls.
                `(3) WHOLESALE PRICES FOR TELECOMMUNICATIONS SERVICES- For
              the purposes of section 251(c)(4), a State commission shall
              determine wholesale rates on the basis of retail rates charged
              to subscribers for the telecommunications service requested,
              excluding the portion thereof attributable to any marketing,
              billing, collection, and other costs that will be avoided by
              the local exchange carrier.
            `(e) APPROVAL BY STATE COMMISSION-
                `(1) APPROVAL REQUIRED- Any interconnection agreement adopted
              by negotiation or arbitration shall be submitted for approval
              to the State commission. A State commission to which an
              agreement is submitted shall approve or reject the agreement,
              with written findings as to any deficiencies.
                `(2) GROUNDS FOR REJECTION- The State commission may only
              reject--
                    `(A) an agreement (or any portion thereof) adopted by
                  negotiation under subsection (a) if it finds that--
                        `(i) the agreement (or portion thereof) discriminates
                      against a telecommunications carrier not a party to the
                      agreement; or
                        `(ii) the implementation of such agreement or portion
                      is not consistent with the public interest,
                      convenience, and necessity; or
                    `(B) an agreement (or any portion thereof) adopted by
                  arbitration under subsection (b) if it finds that the
                  agreement does not meet the requirements of section 251,
                  including the regulations prescribed by the Commission
                  pursuant to section 251, or the standards set forth in
                  subsection (d) of this section.
                `(3) PRESERVATION OF AUTHORITY- Notwithstanding paragraph
              (2), but subject to section 253, nothing in this section shall
              prohibit a State commission from establishing or enforcing
              other requirements of State law in its review of an agreement,
              including requiring compliance with intrastate
              telecommunications service quality standards or requirements.
                `(4) SCHEDULE FOR DECISION- If the State commission does not
              act to approve or reject the agreement within 90 days after
              submission by the parties of an agreement adopted by
              negotiation under subsection (a), or within 30 days after
              submission by the parties of an agreement adopted by
              arbitration under subsection (b), the agreement shall be deemed
              approved.  No State court shall have jurisdiction to review the
              action of a State commission in approving or rejecting an
              agreement under this section.
                `(5) COMMISSION TO ACT IF STATE WILL NOT ACT- If a State
              commission fails to act to carry out its responsibility under
              this section in any proceeding or other matter under this
              section, then the Commission shall issue an order preempting
              the State commission's jurisdiction of that proceeding or
              matter within 90 days after being notified (or taking notice)
              of such failure, and shall assume the responsibility of the
              State commission under this section with respect to the
              proceeding or matter and act for the State commission.
                `(6) REVIEW OF STATE COMMISSION ACTIONS- In a case in which a
              State fails to act as described in paragraph (5), the
              proceeding by the Commission under such paragraph and any
              judicial review of the Commission's actions shall be the
              exclusive remedies for a State commission's failure to act. In
              any case in which a State commission makes a determination
              under this section, any party aggrieved by such determination
              may bring an action in an appropriate Federal district court to
              determine whether the agreement or statement meets the
              requirements of section 251 and this section.
            `(f) STATEMENTS OF GENERALLY AVAILABLE TERMS-
                `(1) IN GENERAL- A Bell operating company may prepare and
              file with a State commission a statement of the terms and
              conditions that such company generally offers within that State
              to comply with the requirements of section 251 and the
              regulations thereunder and the standards applicable under this
              section.
                `(2) STATE COMMISSION REVIEW- A State commission may not
              approve such statement unless such statement complies with
              subsection (d) of this section and section 251 and the
              regulations thereunder. Except as provided in section 253,
              nothing in this section shall prohibit a State commission from
              establishing or enforcing other requirements of State law in
              its review of such statement, including requiring compliance
              with intrastate telecommunications service quality standards or
              requirements.
                `(3) SCHEDULE FOR REVIEW- The State commission to which a
              statement is submitted shall, not later than 60 days after the
              date of such submission--
                    `(A) complete the review of such statement under
                  paragraph (2) (including any reconsideration thereof),
                  unless the submitting carrier agrees to an extension of the
                  period for such review; or
                    `(B) permit such statement to take effect.
                `(4) AUTHORITY TO CONTINUE REVIEW- Paragraph (3) shall not
              preclude the State commission from continuing to review a
              statement that has been permitted to take effect under
              subparagraph (B) of such paragraph or from approving or
              disapproving such statement under paragraph (2).
                `(5) DUTY TO NEGOTIATE NOT AFFECTED- The submission or
              approval of a statement under this subsection shall not relieve
              a Bell operating company of its duty to negotiate the terms and
              conditions of an agreement under section 251.
            `(g) CONSOLIDATION OF STATE PROCEEDINGS- Where not inconsistent
          with the requirements of this Act, a State commission may, to the
          extent practical, consolidate proceedings under sections 214(e),
          251(f), 253, and this section in order to reduce administrative
          burdens on telecommunications carriers, other parties to the
          proceedings, and the State commission in carrying out its
          responsibilities under this Act.
            `(h) FILING REQUIRED- A State commission shall make a copy of
          each agreement approved under subsection (e) and each statement
          approved under subsection (f) available for public inspection and
          copying within 10 days after the agreement or statement is
          approved. The State commission may charge a reasonable and
          nondiscriminatory fee to the parties to the agreement or to the
          party filing the statement to cover the costs of approving and
          filing such agreement or statement.
            `(i) AVAILABILITY TO OTHER TELECOMMUNICATIONS CARRIERS- A local
          exchange carrier shall make available any interconnection, service,
          or network element provided under an agreement approved under this
          section to which it is a party to any other requesting
          telecommunications carrier upon the same terms and conditions as
          those provided in the agreement.
            `(j) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER- For purposes
          of this section, the term `incumbent local exchange carrier' has
          the meaning provided in section 251(h).

`SEC. 253. REMOVAL OF BARRIERS TO ENTRY.

            `(a) IN GENERAL- No State or local statute or regulation, or
          other State or local legal requirement, may prohibit or have the
          effect of prohibiting the ability of any entity to provide any
          interstate or intrastate telecommunications service.
            `(b) STATE REGULATORY AUTHORITY- Nothing in this section shall
          affect the ability of a State to impose, on a competitively neutral
          basis and consistent with section 254, requirements necessary to
          preserve and advance universal service, protect the public safety
          and welfare, ensure the continued quality of telecommunications
          services, and safeguard the rights of consumers.
            `(c) STATE AND LOCAL GOVERNMENT AUTHORITY- Nothing in this
          section affects the authority of a State or local government to
          manage the public rights-of-way  or to require fair and reasonable
          compensation from telecommunications providers, on a competitively
          neutral and nondiscriminatory basis, for use of public
          rights-of-way on a nondiscriminatory basis, if the compensation
          required is publicly disclosed by such government.
            `(d) PREEMPTION- If, after notice and an opportunity for public
          comment, the Commission determines that a State or local government
          has permitted or imposed any statute, regulation, or legal
          requirement that violates subsection (a) or (b), the Commission
          shall preempt the enforcement of such statute, regulation, or legal
          requirement to the extent necessary to correct such violation or
          inconsistency.
            `(e) COMMERCIAL MOBILE SERVICE PROVIDERS- Nothing in this section
          shall affect the application of section 332(c)(3) to commercial
          mobile service providers.
            `(f) RURAL MARKETS- It shall not be a violation of this section
          for a State to require a telecommunications carrier that seeks to
          provide telephone exchange service or exchange access in a service
          area served by a rural telephone company to meet the requirements
          in section 214(e)(1) for designation as an eligible
          telecommunications carrier for that area before being permitted to
          provide such service. This subsection shall not apply--
                `(1) to a service area served by a rural telephone company
              that has obtained an exemption, suspension, or modification of
              section 251(c)(4) that effectively prevents a competitor from
              meeting the requirements of section 214(e)(1); and
                `(2) to a provider of commercial mobile services.

`SEC. 254. UNIVERSAL SERVICE.

            `(a) PROCEDURES TO REVIEW UNIVERSAL SERVICE REQUIREMENTS-
                `(1) FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE- Within
              one month after the date of enactment of the Telecommunications
              Act of 1996, the Commission shall institute and refer to a
              Federal-State Joint Board under section 410(c) a proceeding to
              recommend changes to any of its regulations in order to
              implement sections 214(e) and this section, including the
              definition of the services that are supported by Federal
              universal service support mechanisms and a specific timetable
              for completion of such recommendations. In addition to the
              members of the Joint Board required under section 410(c), one
              member of such Joint Board shall be a State-appointed utility
              consumer advocate nominated by a national organization of State
              utility consumer advocates. The Joint Board shall, after notice
              and opportunity for public comment, make its recommendations to
              the Commission 9 months after the date of enactment of the
              Telecommunications Act of 1996.
                `(2) COMMISSION ACTION- The Commission shall initiate a
              single proceeding to implement the recommendations from the
              Joint Board required by paragraph (1) and shall complete such
              proceeding within 15 months after the date of enactment of the
              Telecommunications Act of 1996. The rules established by such
              proceeding shall include a definition of the services that are
              supported by Federal universal service support mechanisms and a
              specific timetable for implementation. Thereafter, the
              Commission shall complete any proceeding to implement
              subsequent recommendations from any Joint Board on universal
              service within one year after receiving such recommendations.
            `(b) UNIVERSAL SERVICE PRINCIPLES- The Joint Board and the
          Commission shall base policies for the preservation and advancement
          of universal service on the following principles:
                `(1) QUALITY AND RATES- Quality services should be available
              at just, reasonable, and affordable rates.
                `(2) ACCESS TO ADVANCED SERVICES- Access to advanced
              telecommunications and information services should be provided
              in all regions of the Nation.
                `(3) ACCESS IN RURAL AND HIGH COST AREAS- Consumers in all
              regions of the Nation, including low-income consumers and those
              in rural, insular, and high cost areas, should have access to
              telecommunications and information services, including
              interexchange services and advanced telecommunications and
              information services, that are reasonably comparable to those
              services provided in urban areas and that are available at
              rates that are reasonably comparable to rates charged for
              similar services in urban areas.
                `(4) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS- All
              providers of telecommunications services should make an
              equitable and nondiscriminatory contribution to the
              preservation and advancement of universal service.
                `(5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS- There
              should be specific, predictable and sufficient Federal and
              State mechanisms to preserve and advance universal service.
                `(6) ACCESS TO ADVANCED TELECOMMUNICATIONS SERVICES FOR
              SCHOOLS, HEALTH CARE, AND LIBRARIES- Elementary and secondary
              schools and classrooms, health care providers, and libraries
              should have access to advanced telecommunications services as
              described in subsection (h).
                `(7) ADDITIONAL PRINCIPLES- Such other principles as the
              Joint Board and the Commission determine are necessary and
              appropriate for the protection of the public interest,
              convenience, and necessity and are consistent with this Act.
            `(c) DEFINITION-
                `(1) IN GENERAL- Universal service is an evolving level of
              telecommunications services that the Commission shall establish
              periodically under this section, taking into account advances
              in telecommunications and information technologies and
              services. The Joint Board in recommending, and the Commission
              in establishing, the definition of the services that are
              supported by Federal universal service support mechanisms shall
              consider the extent to which such telecommunications services--
                    `(A) are essential to education, public health, or public
                  safety;
                    `(B) have, through the operation of market choices by
                  customers, been subscribed to by a substantial majority of
                  residential customers;
                    `(C) are being deployed in public telecommunications
                  networks by telecommunications carriers; and
                    `(D) are consistent with the public interest,
                  convenience, and necessity.
                `(2) ALTERATIONS AND MODIFICATIONS- The Joint Board may, from
              time to time, recommend to the Commission modifications in the
              definition of the services that are supported by Federal
              universal service support mechanisms.
                `(3) SPECIAL SERVICES- In addition to the services included
              in the definition of universal service under paragraph (1), the
              Commission may designate additional services for such support
              mechanisms for schools, libraries, and health care providers
              for the purposes of subsection (h).
            `(d) TELECOMMUNICATIONS CARRIER CONTRIBUTION- Every
          telecommunications carrier that provides interstate
          telecommunications services shall contribute, on an equitable and
          nondiscriminatory basis, to the specific, predictable, and
          sufficient mechanisms established by the Commission to preserve and
          advance universal service. The Commission may exempt a carrier or
          class of carriers from this requirement if the carrier's
          telecommunications activities are limited to such an extent that
          the level of such carrier's contribution to the preservation and
          advancement of universal service would be de minimis.  Any other
          provider of interstate telecommunications may be required to
          contribute to the preservation and advancement of universal service
          if the public interest so requires.
            `(e) UNIVERSAL SERVICE SUPPORT- After the date on which
          Commission regulations implementing this section take effect, only
          an eligible telecommunications carrier designated under section
          214(e) shall be eligible to receive specific Federal universal
          service support. A carrier that receives such support shall use
          that support only for the provision, maintenance, and upgrading of
          facilities and services for which the support is intended.  Any
          such support should be explicit and sufficient to achieve the
          purposes of this section.
            `(f) STATE AUTHORITY- A State may adopt regulations not
          inconsistent with the Commission's rules to preserve and advance
          universal service. Every telecommunications carrier that provides
          intrastate telecommunications services shall contribute, on an
          equitable and nondiscriminatory basis, in a manner determined by
          the State to the preservation and advancement of universal service
          in that State.  A State may adopt regulations to provide for
          additional definitions and standards to preserve and advance
          universal service within that State only to the extent that such
          regulations adopt additional specific, predictable, and sufficient
          mechanisms to support such definitions or standards that do not
          rely on or burden Federal universal service support mechanisms.
            `(g) INTEREXCHANGE AND INTERSTATE SERVICES- Within 6 months after
          the date of enactment of the Telecommunications Act of 1996, the
          Commission shall adopt rules to require that the rates charged by
          providers of interexchange telecommunications services to
          subscribers in rural and high cost areas shall be no higher than
          the rates charged by each such provider to its subscribers in urban
          areas. Such rules shall also require that a provider of interstate
          interexchange telecommunications services shall provide such
          services to its subscribers in each State at rates no higher than
          the rates charged to its subscribers in any other State.
            `(h) TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVIDERS-
                `(1) IN GENERAL-
                    `(A) HEALTH CARE PROVIDERS FOR RURAL AREAS- A
                  telecommunications carrier shall, upon receiving a bona
                  fide request, provide telecommunications services which are
                  necessary for the provision of health care services in a
                  State, including instruction relating to such services, to
                  any public or nonprofit health care provider that serves
                  persons who reside in rural areas in that State at rates
                  that are reasonably comparable to rates charged for similar
                  services in urban areas in that State. A telecommunications
                  carrier providing service under this paragraph shall be
                  entitled to have an amount equal to the difference, if any,
                  between the rates for services provided to health care
                  providers for rural areas in a State and the rates for
                  similar services provided to other customers in comparable
                  rural areas in that State treated as a service obligation
                  as a part of its obligation to participate in the
                  mechanisms to preserve and advance universal service.
                    `(B) EDUCATIONAL PROVIDERS AND LIBRARIES- All
                  telecommunications carriers serving a geographic area
                  shall, upon a bona fide request for any of its services
                  that are within the definition of universal service under
                  subsection (c)(3), provide such services to elementary
                  schools, secondary schools, and libraries for educational
                  purposes at rates less than the amounts charged for similar
                  services to other parties. The discount shall be an amount
                  that the Commission, with respect to interstate services,
                  and the States, with respect to intrastate services,
                  determine is appropriate and necessary to ensure affordable
                  access to and use of such services by such entities. A
                  telecommunications carrier providing service under this
                  paragraph shall--
                        `(i) have an amount equal to the amount of the
                      discount treated as an offset to its obligation to
                      contribute to the mechanisms to preserve and advance
                      universal service, or
                        `(ii) notwithstanding the provisions of subsection
                      (e) of this section, receive reimbursement utilizing
                      the support mechanisms to preserve and advance
                      universal service.
                `(2) ADVANCED SERVICES- The Commission shall establish
              competitively neutral rules--
                    `(A) to enhance, to the extent technically feasible and
                  economically reasonable, access to advanced
                  telecommunications and information services for all public
                  and nonprofit elementary and secondary school classrooms,
                  health care providers, and libraries; and
                    `(B) to define the circumstances under which a
                  telecommunications carrier may be required to connect its
                  network to such public institutional telecommunications
                  users.
                `(3) TERMS AND CONDITIONS- Telecommunications services and
              network capacity provided to a public institutional
              telecommunications user under this subsection may not be sold,
              resold, or otherwise transferred by such user in consideration
              for money or any other thing of value.
                `(4) ELIGIBILITY OF USERS- No entity listed in this
              subsection shall be entitled to preferential rates or treatment
              as required by this subsection, if such entity operates as a
              for-profit business, is a school described in paragraph (5)(A)
              with an endowment of more than $50,000,000, or is a library not
              eligible for participation in State-based plans for funds under
              title III of the Library Services and Construction Act (20
              U.S.C. 335c et seq.).
                `(5) DEFINITIONS- For purposes of this subsection:
                    `(A) ELEMENTARY AND SECONDARY SCHOOLS- The term
                  `elementary and secondary schools' means elementary schools
                  and secondary schools, as defined in paragraphs (14) and
                  (25), respectively, of section 14101 of the Elementary and
                  Secondary Education Act of 1965 (20 U.S.C. 8801).
                    `(B) HEALTH CARE PROVIDER- The term `health care
                  provider' means--
                        `(i) post-secondary educational institutions offering
                      health care instruction, teaching hospitals, and
                      medical schools;
                        `(ii) community health centers or health centers
                      providing health care to migrants;
                        `(iii) local health departments or agencies;
                        `(iv) community mental health centers;
                        `(v) not-for-profit hospitals;
                        `(vi) rural health clinics; and
                        `(vii) consortia of health care providers consisting
                      of one or more entities described in clauses (i)
                      through (vi).
                    `(C) PUBLIC INSTITUTIONAL TELECOMMUNICATIONS USER- The
                  term `public institutional telecommunications user' means
                  an elementary or secondary school, a library, or a health
                  care provider as those terms are defined in this paragraph.
            `(i) CONSUMER PROTECTION- The Commission and the States should
          ensure that universal service is available at rates that are just,
          reasonable, and affordable.
            `(j) LIFELINE ASSISTANCE- Nothing in this section shall affect
          the collection, distribution, or administration of the Lifeline
          Assistance Program provided for by the Commission under regulations
          set forth in section 69.117 of title 47, Code of Federal
          Regulations, and other related sections of such title.
            `(k) SUBSIDY OF COMPETITIVE SERVICES PROHIBITED- A
          telecommunications carrier may not use services that are not
          competitive to subsidize services that are subject to competition.
          The Commission, with respect to interstate services, and the
          States, with respect to intrastate services, shall establish any
          necessary cost allocation rules, accounting safeguards, and
          guidelines to ensure that services included in the definition of
          universal service bear no more than a reasonable share of the joint
          and common costs of facilities used to provide those services.

`SEC. 255. ACCESS BY PERSONS WITH DISABILITIES.

            `(a) DEFINITIONS- As used in this section--
                `(1) DISABILITY- The term `disability' has the meaning given
              to it by section 3(2)(A) of the Americans with Disabilities Act
              of 1990 (42 U.S.C. 12102(2)(A)).
                `(2) READILY ACHIEVABLE- The term `readily achievable' has
              the meaning given to it by section 301(9) of that Act (42
              U.S.C. 12181(9)).
            `(b) MANUFACTURING- A manufacturer of telecommunications
          equipment or customer premises equipment shall ensure that the
          equipment is designed, developed, and fabricated to be accessible
          to and usable by individuals with disabilities, if readily
          achievable.
            `(c) TELECOMMUNICATIONS SERVICES- A provider of
          telecommunications service shall ensure that the service is
          accessible to and usable by individuals with disabilities, if
          readily achievable.
            `(d) COMPATIBILITY- Whenever the requirements of subsections (b)
          and (c) are not readily achievable, such a manufacturer or provider
          shall ensure that the equipment or service is compatible with
          existing peripheral devices or specialized customer premises
          equipment commonly used by individuals with disabilities to achieve
          access, if readily achievable.
            `(e) GUIDELINES- Within 18 months after the date of enactment of
          the Telecommunications Act of 1996, the Architectural and
          Transportation Barriers Compliance Board shall develop guidelines
          for accessibility of telecommunications equipment and customer
          premises equipment in conjunction with the Commission. The Board
          shall review and update the guidelines periodically.
            `(f) NO ADDITIONAL PRIVATE RIGHTS AUTHORIZED- Nothing in this
          section shall be construed to authorize any private right of action
          to enforce any requirement of this section or any regulation
          thereunder. The Commission shall have exclusive jurisdiction with
          respect to any complaint under this section.

`SEC. 256. COORDINATION FOR INTERCONNECTIVITY.

            `(a) PURPOSE- It is the purpose of this section--
                `(1) to promote nondiscriminatory accessibility by the
              broadest number of users and vendors of communications products
              and services to public telecommunications networks used to
              provide telecommunications service through--
                    `(A) coordinated public telecommunications network
                  planning and design by telecommunications carriers and
                  other providers of telecommunications service; and
                    `(B) public telecommunications network interconnectivity,
                  and interconnectivity of devices with such networks used to
                  provide telecommunications service; and
                `(2) to ensure the ability of users and information providers
              to seamlessly and transparently transmit and receive
              information between and across telecommunications networks.
            `(b) COMMISSION FUNCTIONS- In carrying out the purposes of this
          section, the Commission--
                `(1) shall establish procedures for Commission oversight of
              coordinated network planning by telecommunications carriers and
              other providers of telecommunications service for the effective
              and efficient interconnection of public telecommunications
              networks used to provide telecommunications service; and
                `(2) may participate, in a manner consistent with its
              authority and practice prior to the date of enactment of this
              section, in the development by appropriate industry
              standards-setting organizations of public telecommunications
              network interconnectivity standards that promote access to--
                    `(A) public telecommunications networks used to provide
                  telecommunications service;
                    `(B) network capabilities and services by individuals
                  with disabilities; and
                    `(C) information services by subscribers of rural
                  telephone companies.
            `(c) COMMISSION'S AUTHORITY- Nothing in this section shall be
          construed as expanding or limiting any authority that the
          Commission may have under law in effect before the date of
          enactment of the Telecommunications Act of 1996.
            `(d) DEFINITION- As used in this section, the term `public
          telecommunications network interconnectivity' means the ability of
          two or more public telecommunications networks used to provide
          telecommunications service to communicate and exchange information
          without degeneration, and to interact in concert with one another.

`SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.

            `(a) ELIMINATION OF BARRIERS- Within 15 months after the date of
          enactment of the Telecommunications Act of 1996, the Commission
          shall complete a proceeding for the purpose of identifying and
          eliminating, by regulations pursuant to its authority under this
          Act (other than this section), market entry barriers for
          entrepreneurs and other small businesses in the provision and
          ownership of telecommunications services and information services,
          or in the provision of parts or services to providers of
          telecommunications services and information services.
            `(b) NATIONAL POLICY- In carrying out subsection (a), the
          Commission shall seek to promote the policies and purposes of this
          Act favoring diversity of media voices, vigorous economic
          competition, technological advancement, and promotion of the public
          interest, convenience, and necessity.
            `(c) PERIODIC REVIEW- Every 3 years following the completion of
          the proceeding required by subsection (a), the Commission shall
          review and report to Congress on--
                `(1) any regulations prescribed to eliminate barriers within
              its jurisdiction that are identified under subsection (a) and
              that can be prescribed consistent with the public interest,
              convenience, and necessity; and
                `(2) the statutory barriers identified under subsection (a)
              that the Commission recommends be eliminated, consistent with
              the public interest, convenience, and necessity.

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

            `(a) PROHIBITION- No telecommunications carrier shall submit or
          execute a change in a subscriber's selection of a provider of
          telephone exchange service or telephone toll service except in
          accordance with such verification procedures as the Commission
          shall prescribe. Nothing in this section shall preclude any State
          commission from enforcing such procedures with respect to
          intrastate services.
            `(b) LIABILITY FOR CHARGES- Any telecommunications carrier that
          violates the verification procedures described in subsection (a)
          and that collects charges for telephone exchange service or
          telephone toll service from a subscriber shall be liable to the
          carrier previously selected by the subscriber in an amount equal to
          all charges paid by such subscriber after such violation, in
          accordance with such procedures as the Commission may prescribe.
          The remedies provided by this subsection are in addition to any
          other remedies available by law.

`SEC. 259. INFRASTRUCTURE SHARING.

            `(a) REGULATIONS REQUIRED- The Commission shall prescribe, within
          one year after the date of enactment of the Telecommunications Act
          of 1996, regulations that require incumbent local exchange carriers
          (as defined in section 251(h)) to make available to any qualifying
          carrier such public switched network infrastructure, technology,
          information, and telecommunications facilities and functions as may
          be requested by such qualifying carrier for the purpose of enabling
          such qualifying carrier to provide telecommunications services, or
          to provide access to information services, in the service area in
          which such qualifying carrier has requested and obtained
          designation as an eligible telecommunications carrier under section
          214(e).
            `(b) TERMS AND CONDITIONS OF REGULATIONS- The regulations
          prescribed by the Commission pursuant to this section shall--
                `(1) not require a local exchange carrier to which this
              section applies to take any action that is economically
              unreasonable or that is contrary to the public interest;
                `(2) permit, but shall not require, the joint ownership or
              operation of public switched network infrastructure and
              services by or among such local exchange carrier and a
              qualifying carrier;
                `(3) ensure that such local exchange carrier will not be
              treated by the Commission or any State as a common carrier for
              hire or as offering common carrier services with respect to any
              infrastructure, technology, information, facilities, or
              functions made available to a qualifying carrier in accordance
              with regulations issued pursuant to this section;
                `(4) ensure that such local exchange carrier makes such
              infrastructure, technology, information, facilities, or
              functions available to a qualifying carrier on just and
              reasonable terms and conditions that permit such qualifying
              carrier to fully benefit from the economies of scale and scope
              of such local exchange carrier, as determined in accordance
              with guidelines prescribed by the Commission in regulations
              issued pursuant to this section;
                `(5) establish conditions that promote cooperation between
              local exchange carriers to which this section applies and
              qualifying carriers;
                `(6) not require a local exchange carrier to which this
              section applies to engage in any infrastructure sharing
              agreement for any services or access which are to be provided
              or offered to consumers by the qualifying carrier in such local
              exchange carrier's telephone exchange area; and
                `(7) require that such local exchange carrier file with the
              Commission or State for public inspection, any tariffs,
              contracts, or other arrangements showing the rates, terms, and
              conditions under which such carrier is making available public
              switched network infrastructure and functions under this section.
            `(c) INFORMATION CONCERNING DEPLOYMENT OF NEW SERVICES AND
          EQUIPMENT- A local exchange carrier to which this section applies
          that has entered into an infrastructure sharing agreement under
          this section shall provide to each party to such agreement timely
          information on the planned deployment of telecommunications
          services and equipment, including any software or upgrades of
          software integral to the use or operation of such
          telecommunications equipment.
            `(d) DEFINITION- For purposes of this section, the term
          `qualifying carrier' means a telecommunications carrier that--
                `(1) lacks economies of scale or scope, as determined in
              accordance with regulations prescribed by the Commission
              pursuant to this section; and
                `(2) offers telephone exchange service, exchange access, and
              any other service that is included in universal service, to all
              consumers without preference throughout the service area for
              which such carrier has been designated as an eligible
              telecommunications carrier under section 214(e).

`SEC. 260. PROVISION OF TELEMESSAGING SERVICE.

            `(a) NONDISCRIMINATION SAFEGUARDS- Any local exchange carrier
          subject to the requirements of section 251(c)  that provides
          telemessaging service--
                `(1) shall not subsidize its telemessaging service directly
              or indirectly from its telephone exchange service or its
              exchange access; and
                `(2) shall not prefer or discriminate in favor of its
              telemessaging service operations in its provision of
              telecommunications services.
            `(b) EXPEDITED CONSIDERATION OF COMPLAINTS- The Commission shall
          establish procedures for the receipt and review of complaints
          concerning violations of subsection (a) or the regulations
          thereunder that result in material financial harm to a provider of
          telemessaging service. Such procedures shall ensure that the
          Commission will make a final determination with respect to any such
          complaint within 120 days after receipt of the complaint. If the
          complaint contains an appropriate showing that the alleged
          violation occurred, the Commission shall, within 60 days after
          receipt of the complaint, order the local exchange carrier and any
          affiliates to cease engaging in such violation pending such final
          determination.
            `(c) DEFINITION- As used in this section, the term `telemessaging
          service' means voice mail and voice storage and retrieval services,
          any live operator services used to record, transcribe, or relay
          messages (other than telecommunications relay services), and any
          ancillary services offered in combination with these services.

`SEC. 261. EFFECT ON OTHER REQUIREMENTS.

            `(a) COMMISSION REGULATIONS- Nothing in this part shall be
          construed to prohibit the Commission from enforcing regulations
          prescribed prior to the date of enactment of the Telecommunications
          Act of 1996 in fulfilling the requirements of this part, to the
          extent that such regulations are not inconsistent with the
          provisions of this part.
            `(b) EXISTING STATE REGULATIONS- Nothing in this part shall be
          construed to prohibit any State commission from enforcing
          regulations prescribed prior to the date of enactment of the
          Telecommunications Act of 1996, or from prescribing regulations
          after such date of enactment, in fulfilling the requirements of
          this part, if such regulations are not inconsistent with the
          provisions of this part.
            `(c) ADDITIONAL STATE REQUIREMENTS- Nothing in this part
          precludes a State from imposing requirements on a
          telecommunications carrier for intrastate services that are
          necessary to further competition in the provision of telephone
          exchange service or exchange access, as long as the State's
          requirements are not inconsistent with this part or the
          Commission's regulations to implement this part.'.
            (b) DESIGNATION OF PART I- Title II of the Act is further amended
          by inserting before the heading of section 201 the following new
          heading:
                          `PART I--COMMON CARRIER REGULATION'.
            (c) STYLISTIC CONSISTENCY- The Act is amended so that--
                (1) the designation and heading of each title of the Act
              shall be in the form and typeface of the designation and
              heading of this title of this Act; and
                (2) the designation and heading of each part of each title of
              the Act shall be in the form and typeface of the designation
              and heading of part I of title II of the Act, as amended by
              subsection (a).

SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

            (a) IN GENERAL- Section 214 (47 U.S.C. 214) is amended by adding
          at the end thereof the following new subsection:
            `(e) PROVISION OF UNIVERSAL SERVICE-
                `(1) ELIGIBLE TELECOMMUNICATIONS CARRIERS- A common carrier
              designated as an eligible telecommunications carrier under
              paragraph (2) or (3) shall be eligible to receive universal
              service support in accordance with section 254 and shall,
              throughout the service area for which the designation is
              received--
                    `(A) offer the services that are supported by Federal
                  universal service support mechanisms under section 254(c),
                  either using its own facilities or a combination of its own
                  facilities and resale of another carrier's services
                  (including the services offered by another eligible
                  telecommunications carrier); and
                    `(B) advertise the availability of such services and the
                  charges therefor using media of general distribution.
                `(2) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS- A
              State commission shall upon its own motion or upon request
              designate a common carrier that meets the requirements of
              paragraph (1) as an eligible telecommunications carrier for a
              service area designated by the State commission. Upon request
              and consistent with the public interest, convenience, and
              necessity, the State commission may, in the case of an area
              served by a rural telephone company, and shall, in the case of
              all other areas, designate more than one common carrier as an
              eligible telecommunications carrier for a service area
              designated by the State commission, so long as each additional
              requesting carrier meets the requirements of paragraph (1).
              Before designating an additional eligible telecommunications
              carrier for an area served by a rural telephone company, the
              State commission shall find that the designation is in the
              public interest.
                `(3) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS FOR
              UNSERVED AREAS- If no common carrier will provide the services
              that are supported by Federal universal service support
              mechanisms under section 254(c) to an unserved community or any
              portion thereof that requests such service, the Commission,
              with respect to interstate services, or a State commission,
              with respect to intrastate services, shall determine which
              common carrier or carriers are best able to provide such
              service to the requesting unserved community or portion thereof
              and shall order such carrier or carriers to provide such
              service for that unserved community or portion thereof. Any
              carrier or carriers ordered to provide such service under this
              paragraph shall meet the requirements of paragraph (1) and
              shall be designated as an eligible telecommunications carrier
              for that community or portion thereof.
                `(4) RELINQUISHMENT OF UNIVERSAL SERVICE- A State commission
              shall permit an eligible telecommunications carrier to
              relinquish its designation as such a carrier in any area served
              by more than one eligible telecommunications carrier. An
              eligible telecommunications carrier that seeks to relinquish
              its eligible telecommunications carrier designation for an area
              served by more than one eligible telecommunications carrier
              shall give advance notice to the State commission of such
              relinquishment. Prior to permitting a telecommunications
              carrier designated as an eligible telecommunications carrier to
              cease providing universal service in an area served by more
              than one eligible telecommunications carrier, the State
              commission shall require the remaining eligible
              telecommunications carrier or carriers to ensure that all
              customers served by the relinquishing carrier will continue to
              be served, and shall require sufficient notice to permit the
              purchase or construction of adequate facilities by any
              remaining eligible telecommunications carrier. The State
              commission shall establish a time, not to exceed one year after
              the State commission approves such relinquishment under this
              paragraph, within which such purchase or construction shall be
              completed.
                `(5) SERVICE AREA DEFINED- The term `service area' means a
              geographic area established by a State commission for the
              purpose of determining universal service obligations and
              support mechanisms. In the case of an area served by a rural
              telephone company, `service area' means such company's `study
              area' unless and until the Commission and the States, after
              taking into account recommendations of a Federal-State Joint
              Board instituted under section 410(c), establish a different
              definition of service area for such company.'.

SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

            The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 and
          following) is amended by redesignating sections 34 and 35 as
          sections 35 and 36, respectively, and by inserting the following
          new section after section 33:

`SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

            `(a) DEFINITIONS- For purposes of this section--
                `(1) EXEMPT TELECOMMUNICATIONS COMPANY- The term `exempt
              telecommunications company' means any person determined by the
              Federal Communications Commission to be engaged directly or
              indirectly, wherever located, through one or more affiliates
              (as defined in section 2(a)(11)(B)), and exclusively in the
              business of providing---
                    `(A) telecommunications services;
                    `(B) information services;
                    `(C) other services or products subject to the
                  jurisdiction of the Federal Communications Commission; or
                    `(D) products or services that are related or incidental
                  to the provision of a product or service described in
                  subparagraph (A), (B),  or (C).
              No person shall be deemed to be an exempt telecommunications
              company under this section unless such person has applied to
              the Federal Communications Commission for a determination under
              this paragraph. A person applying in good faith for such a
              determination shall be deemed an exempt telecommunications
              company under this section, with all of the exemptions provided
              by this section, until the Federal Communications Commission
              makes such determination. The Federal Communications Commission
              shall make such determination within 60 days of its receipt of
              any such application filed after the enactment of this section
              and shall notify the Commission whenever a determination is
              made under this paragraph that any person is an exempt
              telecommunications company. Not later than 12 months after the
              date of enactment of this section, the Federal Communications
              Commission shall promulgate rules implementing the provisions
              of this paragraph which shall be applicable to applications
              filed under this paragraph after the effective date of such
              rules.
                `(2) OTHER TERMS- For purposes of this section, the terms
              `telecommunications services' and `information services' shall
              have the same meanings as provided in the Communications Act of
              1934.
            `(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILITIES- If
          a rate or charge for the sale of electric energy or natural gas
          (other than any portion of a rate or charge which represents
          recovery of the cost of a wholesale rate or charge) for, or in
          connection with, assets of a public utility company that is an
          associate company or affiliate of a registered holding company was
          in effect under the laws of any State as of December 19, 1995, the
          public utility company owning such assets may not sell such assets
          to an exempt telecommunications company that is an associate
          company or affiliate unless State commissions having jurisdiction
          over such public utility company approve such sale.  Nothing in
          this subsection shall preempt the otherwise applicable authority of
          any State to approve or disapprove the sale of such assets. The
          approval of the Commission under this Act shall not be required for
          the sale of assets as provided in this subsection.
            `(c) OWNERSHIP OF ETCS BY EXEMPT HOLDING COMPANIES-
          Notwithstanding any provision of this Act, a holding company that
          is exempt under section 3 of this Act shall be permitted, without
          condition or limitation under this Act, to acquire and maintain an
          interest in the business of one or more exempt telecommunications
          companies.
            `(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPANIES-
          Notwithstanding any provision of this Act, a registered holding
          company shall be permitted (without the need to apply for, or
          receive, approval from the Commission, and otherwise without
          condition under this Act) to acquire and hold the securities, or an
          interest in the business, of one or more exempt telecommunications
          companies.
            `(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS AND
          REGISTERED HOLDING COMPANIES- The relationship between an exempt
          telecommunications company and a registered holding company, its
          affiliates and associate companies, shall remain subject to the
          jurisdiction of the Commission under this Act:
          Provided,  That--
                `(1) section 11 of this Act shall not prohibit the ownership
              of an interest in the business of one or more exempt
              telecommunications companies by a registered holding company
              (regardless of activities engaged in or where facilities owned
              or operated by such exempt telecommunications companies are
              located), and such ownership by a registered holding company
              shall be deemed consistent with the operation of an integrated
              public utility system;
                `(2) the ownership of an interest in the business of one or
              more exempt telecommunications companies by a registered
              holding company (regardless of activities engaged in or where
              facilities owned or operated by such exempt telecommunications
              companies are located) shall be considered as reasonably
              incidental, or economically necessary or appropriate, to the
              operations of an integrated public utility system;
                `(3) the Commission shall have no jurisdiction under this Act
              over, and there shall be no restriction or approval required
              under this Act with respect to (A) the issue or sale of a
              security by a registered holding company for purposes of
              financing the acquisition of an exempt telecommunications
              company, or (B) the guarantee of a security of an exempt
              telecommunications company by a registered holding company; and
                `(4) except for costs that should be fairly and equitably
              allocated among companies that are associate companies of a
              registered holding company, the Commission shall have no
              jurisdiction under this Act over the sales, service, and
              construction contracts between an exempt telecommunications
              company and a registered holding company, its affiliates and
              associate companies.
            `(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND ACTIVITIES
          OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYSTEMS-
                `(1) OBLIGATIONS TO REPORT INFORMATION- Any registered
              holding company or subsidiary thereof that acquires or holds
              the securities, or an interest in the business, of an exempt
              telecommunications company shall file with the Commission such
              information as the Commission, by rule, may prescribe
              concerning--
                    `(A) investments and activities by the registered holding
                  company, or any subsidiary thereof, with respect to exempt
                  telecommunications companies, and
                    `(B) any activities of an exempt telecommunications
                  company within the holding company system,
              that are reasonably likely to have a material impact on the
              financial or operational condition of the holding company system.
                `(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION- If, based
              on reports provided to the Commission pursuant to paragraph (1)
              of this subsection or other available information, the
              Commission reasonably concludes that it has concerns regarding
              the financial or operational condition of any registered
              holding company or any subsidiary thereof (including an exempt
              telecommunications company), the Commission may require such
              registered holding company to make additional reports and
              provide additional information.
                `(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION-
              Notwithstanding any other provision of law, the Commission
              shall not be compelled to disclose any information required to
              be reported under this subsection. Nothing in this subsection
              shall authorize the Commission to withhold the information from
              Congress, or prevent the Commission from complying with a
              request for information from any other Federal or State
              department or agency requesting the information for purposes
              within the scope of its jurisdiction. For purposes of section
              552 of title 5, United States Code, this subsection shall be
              considered a statute described in subsection (b)(3)(B) of such
              section 552.
            `(g) ASSUMPTION OF LIABILITIES- Any public utility company that
          is an associate company, or an affiliate, of a registered holding
          company and that is subject to the jurisdiction of a State
          commission with respect to its retail electric or gas rates shall
          not issue any security for the purpose of financing the
          acquisition, ownership, or operation of an exempt
          telecommunications company. Any public utility company that is an
          associate company, or an affiliate, of a registered holding company
          and that is subject to the jurisdiction of a State commission with
          respect to its retail electric or gas rates shall not assume any
          obligation or liability as guarantor, endorser, surety, or
          otherwise by the public utility company in respect of any security
          of an exempt telecommunications company.
            `(h) PLEDGING OR MORTGAGING OF ASSETS- Any public utility company
          that is an associate company, or affiliate, of a registered holding
          company and that is subject to the jurisdiction of a State
          commission with respect to its retail electric or gas rates shall
          not pledge, mortgage, or otherwise use as collateral any assets of
          the public utility company or assets of any subsidiary company
          thereof for the benefit of an exempt telecommunications company.
            `(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS- A public
          utility company may enter into a contract to purchase services or
          products described in subsection (a)(1) from an exempt
          telecommunications company that is an affiliate or associate
          company of the public utility company only if--
                `(1) every State commission having jurisdiction over the
              retail rates of such public utility company approves such
              contract; or
                `(2)  such public utility company is not subject to State
              commission retail rate regulation and the purchased services or
              products--
                    `(A) would not be resold to any affiliate or associate
                  company; or
                    `(B) would be resold to an affiliate or associate company
                  and every State commission having jurisdiction over the
                  retail rates of such affiliate or associate company makes
                  the determination required by subparagraph (A).
          The requirements of this subsection shall not apply in any case in
          which the State or the State commission concerned publishes a
          notice that the State or State commission waives its authority
          under this subsection.
            `(j) NONPREEMPTION OF RATE AUTHORITY- Nothing in this Act shall
          preclude the Federal Energy Regulatory Commission or a State
          commission from exercising its jurisdiction under otherwise
          applicable law to determine whether a public utility company may
          recover in rates the costs of products or services purchased from
          or sold to an associate company or affiliate that is an exempt
          telecommunications company, regardless of whether such costs are
          incurred through the direct or indirect purchase or sale of
          products or services from such associate company or affiliate.
            `(k) RECIPROCAL ARRANGEMENTS PROHIBITED- Reciprocal arrangements
          among companies that are not affiliates or associate companies of
          each other that are entered into in order to avoid the provisions
          of this section are prohibited.
            `(l) BOOKS AND RECORDS- (1) Upon written order of a State
          commission, a State commission may examine the books, accounts,
          memoranda, contracts, and records of--
                `(A) a public utility company subject to its regulatory
              authority under State law;
                `(B) any exempt telecommunications company selling products
              or services to such public utility company or to an associate
              company of such public utility company; and
                `(C) any associate company or affiliate of an exempt
              telecommunications company which sells products or services to
              a public utility company referred to in subparagraph (A),
          wherever located, if such examination is required for the effective
          discharge of the State commission's regulatory responsibilities
          affecting the provision of electric or gas service in connection
          with the activities of such exempt telecommunications company.
            `(2) Where a State commission issues an order pursuant to
          paragraph (1), the State commission shall not publicly disclose
          trade secrets or sensitive commercial information.
            `(3) Any United States district court located in the State in
          which the State commission referred to in paragraph (1) is located
          shall have jurisdiction to enforce compliance with this subsection.
            `(4) Nothing in this section shall--
                `(A) preempt applicable State law concerning the provision of
              records and other information; or
                `(B) in any way limit rights to obtain records and other
              information under Federal law, contracts, or otherwise.
            `(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS-
                `(1) STATE MAY ORDER AUDIT- Any State commission with
              jurisdiction over a public utility company that--
                    `(A) is an associate company of a registered holding
                  company; and
                    `(B) transacts business, directly or indirectly, with a
                  subsidiary company, an affiliate or an associate company
                  that is an exempt telecommunications company,
              may order an independent audit to be performed, no more
              frequently than on an annual basis, of all matters deemed
              relevant by the selected auditor that reasonably relate to
              retail rates:   Provided  , That such
              matters relate, directly or indirectly, to transactions or
              transfers between the public utility company subject to its
              jurisdiction and such exempt telecommunications company.
                `(2) SELECTION OF FIRM TO CONDUCT AUDIT- (A) If a State
              commission orders an audit in accordance with paragraph (1),
              the public utility company and the State commission shall
              jointly select, within 60 days, a firm to perform the audit.
              The firm selected to perform the audit shall possess
              demonstrated qualifications relating to--
                    `(i) competency, including adequate technical training
                  and professional proficiency in each discipline necessary
                  to carry out the audit; and
                    `(ii) independence and objectivity, including that the
                  firm be free from personal or external impairments to
                  independence, and should assume an independent position
                  with the State commission and auditee, making certain that
                  the audit is based upon an impartial consideration of all
                  pertinent facts and responsible opinions.
                `(B) The public utility company and the exempt
              telecommunications company shall cooperate fully with all
              reasonable requests necessary to perform the audit and the
              public utility company shall bear all costs of having the audit
              performed.
                `(3) AVAILABILITY OF AUDITOR'S REPORT- The auditor's report
              shall be provided to the State commission not later than 6
              months after the selection of the auditor, and provided to the
              public utility company not later than 60 days thereafter.
            `(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION- Nothing in
          this section shall affect the authority of the Federal
          Communications Commission under the Communications Act of 1934, or
          the authority of State commissions under State laws concerning the
          provision of telecommunications services, to regulate the
          activities of an exempt telecommunications company.'.

SEC. 104. NONDISCRIMINATION PRINCIPLE.

             Section 1 (47 U.S.C.  151) is amended by inserting after `to all
          the people of the United States' the following: `, without
          discrimination on the basis of race, color, religion, national
          origin, or sex,'.
           SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

SEC. 151. BELL OPERATING COMPANY PROVISIONS.

            (a) ESTABLISHMENT OF PART III OF TITLE II- Title II is amended by
          adding at the end of part II (as added by section 101) the
          following new part:
            `PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

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

            `(a) GENERAL LIMITATION- Neither a Bell operating company, nor
          any affiliate of a Bell operating company, may provide interLATA
          services except as provided in this section.
            `(b) INTERLATA SERVICES TO WHICH THIS SECTION APPLIES-
                `(1) IN-REGION SERVICES- A Bell operating company, or any
              affiliate of that Bell operating company, may provide interLATA
              services originating in any of its in-region States (as defined
              in subsection (i)) if the Commission approves the application
              of such company for such State under subsection (d)(3).
                `(2) OUT-OF-REGION SERVICES- A Bell operating company, or any
              affiliate of that Bell operating company, may provide interLATA
              services originating outside its in-region States after the
              date of enactment of the Telecommunications Act of 1996,
              subject to subsection (j).
                `(3) INCIDENTAL INTERLATA SERVICES- A Bell operating company,
              or any affiliate of a Bell operating company, may provide
              incidental interLATA services (as defined in subsection (g))
              originating in any State after the date of enactment of the
              Telecommunications Act of 1996.
                `(4) TERMINATION- Nothing in this section prohibits a Bell
              operating company or any of its affiliates from providing
              termination for interLATA services, subject to subsection (j).
            `(c) REQUIREMENTS FOR PROVIDING CERTAIN IN-REGION INTERLATA
          SERVICES-
                `(1) AGREEMENT OR STATEMENT- A Bell operating company meets
              the requirements of this paragraph if it meets the requirements
              of subparagraph (A) or subparagraph (B) of this paragraph for
              each State for which the authorization is sought.
                    `(A) PRESENCE OF A FACILITIES-BASED COMPETITOR- A Bell
                  operating company meets the requirements of this
                  subparagraph if it has entered into one or more binding
                  agreements that have been approved under section 252
                  specifying the terms and conditions under which the Bell
                  operating company is providing access and interconnection
                  to its network facilities for the network facilities of one
                  or more unaffiliated competing providers of telephone
                  exchange service (as defined in section 3(47)(A), but
                  excluding exchange access) to residential and business
                  subscribers. For the purpose of this subparagraph, such
                  telephone exchange service may be offered by such competing
                  providers either exclusively over their own telephone
                  exchange service facilities or predominantly over their own
                  telephone exchange service facilities in combination with
                  the resale of the telecommunications services of another
                  carrier. For the purpose of this subparagraph, services
                  provided pursuant to subpart K of part 22 of the
                  Commission's regulations (47 C.F.R. 22.901 et seq.) shall
                  not be considered to be telephone exchange services.
                    `(B) FAILURE TO REQUEST ACCESS- A Bell operating company
                  meets the requirements of this subparagraph if, after 10
                  months after the date of enactment of the
                  Telecommunications Act of 1996, no such provider has
                  requested the access and interconnection described in
                  subparagraph (A) before the date which is 3 months before
                  the date the company makes its application under subsection
                  (d)(1), and a statement of the terms and conditions that
                  the company generally offers to provide such access and
                  interconnection has been approved or permitted to take
                  effect by the State commission under section 252(f).  For
                  purposes of this subparagraph, a Bell operating company
                  shall be considered not to have received any request for
                  access and interconnection if the State commission of such
                  State certifies that the only provider or providers making
                  such a request have (i) failed to negotiate in good faith
                  as required by section 252, or (ii) violated the terms of
                  an agreement approved under section 252 by the provider's
                  failure to comply, within a reasonable period of time, with
                  the implementation schedule contained in such agreement.
                `(2) SPECIFIC INTERCONNECTION REQUIREMENTS-
                    `(A) AGREEMENT REQUIRED- A Bell operating company meets
                  the requirements of this paragraph if, within the State for
                  which the authorization is sought--
                        `(i)(I) such company is providing access and
                      interconnection pursuant to one or more agreements
                      described in paragraph (1)(A), or
                        `(II) such company is generally offering access and
                      interconnection pursuant to a statement described in
                      paragraph (1)(B), and
                        `(ii) such access and interconnection meets the
                      requirements of subparagraph (B) of this paragraph.
                    `(B) COMPETITIVE CHECKLIST- Access or interconnection
                  provided or generally offered by a Bell operating company
                  to other telecommunications carriers meets the requirements
                  of this subparagraph if such access and interconnection
                  includes each of the following:
                        `(i) Interconnection in accordance with the
                      requirements of sections 251(c)(2) and 252(d)(1).
                        `(ii) Nondiscriminatory access to network elements in
                      accordance with the requirements of sections 251(c)(3)
                      and 252(d)(1).
                        `(iii) Nondiscriminatory access to the poles, ducts,
                      conduits, and rights-of-way owned or controlled by the
                      Bell operating company at just and reasonable rates in
                      accordance  with the requirements of section 224.
                        `(iv) Local loop transmission from the central office
                      to the customer's premises, unbundled from local
                      switching or other services.
                        `(v) Local transport from the trunk side of a
                      wireline local exchange carrier switch unbundled from
                      switching or other services.
                        `(vi) Local switching unbundled from transport, local
                      loop transmission, or other services.
                        `(vii) Nondiscriminatory access to--
            `(I) 911 and E911 services;
            `(II) directory assistance services to allow the other carrier's
          customers to obtain telephone numbers; and
            `(III) operator call completion services.
                        `(viii) White pages directory listings for customers
                      of the other carrier's telephone exchange service.
                        `(ix) Until the date by which telecommunications
                      numbering administration guidelines, plan, or rules are
                      established, nondiscriminatory access to telephone
                      numbers for assignment to the other carrier's telephone
                      exchange service customers. After that date, compliance
                      with such guidelines, plan, or rules.
                        `(x) Nondiscriminatory access to databases and
                      associated signaling necessary for call routing and
                      completion.
                        `(xi) Until the date by which the Commission issues
                      regulations pursuant to section 251 to require number
                      portability, interim telecommunications number
                      portability through remote call forwarding, direct
                      inward dialing trunks, or other comparable
                      arrangements, with as little impairment of functioning,
                      quality, reliability, and convenience as possible.
                      After that date, full compliance with such regulations.
                        `(xii) Nondiscriminatory access to such services or
                      information as are necessary to allow the requesting
                      carrier to implement local dialing parity in accordance
                      with the requirements of section 251(b)(3).
                        `(xiii) Reciprocal compensation arrangements in
                      accordance with the requirements of section 252(d)(2).
                        `(xiv) Telecommunications services are available for
                      resale in accordance with the requirements of sections
                      251(c)(4) and 252(d)(3).
            `(d) ADMINISTRATIVE PROVISIONS-
                `(1) APPLICATION TO COMMISSION- On and after the date of
              enactment of the Telecommunications Act of 1996, a Bell
              operating company or its affiliate may apply to the Commission
              for authorization to provide interLATA services originating in
              any in-region State. The application shall identify each State
              for which the authorization is sought.
                `(2) CONSULTATION-
                    `(A) CONSULTATION WITH THE ATTORNEY GENERAL- The
                  Commission shall notify the Attorney General promptly of
                  any application under paragraph (1). Before making any
                  determination under this subsection, the Commission shall
                  consult with the Attorney General, and if the Attorney
                  General submits any comments in writing, such comments
                  shall be included in the record of the Commission's
                  decision. In consulting with and submitting comments to the
                  Commission under this paragraph, the Attorney General shall
                  provide to the Commission an evaluation of the application
                  using any standard the Attorney General considers
                  appropriate. The Commission shall give substantial weight
                  to the Attorney General's evaluation, but such evaluation
                  shall not have any preclusive effect on any Commission
                  decision under paragraph (3).
                    `(B) CONSULTATION WITH STATE COMMISSIONS- Before making
                  any determination under this subsection, the Commission
                  shall consult with the State commission of any State that
                  is the subject of the application in order to verify the
                  compliance of the Bell operating company with the
                  requirements of subsection (c).
                `(3) DETERMINATION- Not later than 90 days after receiving an
              application under paragraph (1), the Commission shall issue a
              written determination approving or denying the authorization
              requested in the application for each State. The Commission
              shall not approve the authorization requested in an application
              submitted under paragraph (1) unless it finds that--
                    `(A) the petitioning Bell operating company has met the
                  requirements of subsection (c)(1) and--
                        `(i) with respect to access and interconnection
                      provided pursuant to subsection (c)(1)(A), has fully
                      implemented the competitive checklist in subsection
                      (c)(2)(B); or
                        `(ii) with respect to access and interconnection
                      generally offered pursuant to a statement under
                      subsection (c)(1)(B), such statement offers all of the
                      items included in the competitive checklist in
                      subsection (c)(2)(B);
                    `(B) the requested authorization will be carried out in
                  accordance with the requirements of section s272; and
                    `(C) the requested authorization is consistent with the
                  public interest, convenience, and necessity.
              The Commission shall state the basis for its approval or denial
              of the application.
                `(4) LIMITATION ON COMMISSION- The Commission may not, by
              rule or otherwise, limit or extend the terms used in the
              competitive checklist set forth in subsection (c)(2)(B).
                `(5) PUBLICATION- Not later than 10 days after issuing a
              determination under paragraph (3), the Commission shall publish
              in the Federal Register a brief description of the determination.
                `(6) ENFORCEMENT OF CONDITIONS-
                    `(A) COMMISSION AUTHORITY- If at any time after the
                  approval of an application under paragraph (3), the
                  Commission determines that a Bell operating company has
                  ceased to meet any of the conditions required for such
                  approval, the Commission may, after notice and opportunity
                  for a hearing--
                        `(i) issue an order to such company to correct the
                      deficiency;
                        `(ii) impose a penalty on such company pursuant to
                      title V; or
                        `(iii) suspend or revoke such approval.
                    `(B) RECEIPT AND REVIEW OF COMPLAINTS- The Commission
                  shall establish procedures for the review of complaints
                  concerning failures by Bell operating companies to meet
                  conditions required for approval under paragraph (3).
                  Unless the parties otherwise agree, the Commission shall
                  act on such complaint within 90 days.
            `(e) LIMITATIONS-
                `(1) JOINT MARKETING OF LOCAL AND LONG DISTANCE SERVICES-
              Until a Bell operating company is authorized pursuant to
              subsection (d) to provide interLATA services in an in-region
              State, or until 36 months have passed since the date of
              enactment of the Telecommunications Act of 1996, whichever is
              earlier, a telecommunications carrier that serves greater than
              5 percent of the Nation's presubscribed access lines may not
              jointly market in such State telephone exchange service
              obtained from such company pursuant to section 251(c)(4) with
              interLATA services offered by that telecommunications carrier.
                `(2) INTRALATA TOLL DIALING PARITY-
                    `(A) PROVISION REQUIRED- A Bell operating company granted
                  authority to provide interLATA services under subsection
                  (d) shall provide intraLATA toll dialing parity throughout
                  that State coincident with its exercise of that authority.
                    `(B) LIMITATION- Except for single-LATA States and States
                  that have issued an order by December 19, 1995, requiring a
                  Bell operating company to implement intraLATA toll dialing
                  parity, a State may not require a Bell operating company to
                  implement intraLATA toll dialing parity in that State
                  before a Bell operating company has been granted authority
                  under this section to provide interLATA services
                  originating in that State or before 3 years after the date
                  of enactment of the Telecommunications Act of 1996,
                  whichever is earlier. Nothing in this subparagraph
                  precludes a State from issuing an order requiring intraLATA
                  toll dialing parity in that State prior to either such date
                  so long as such order does not take effect until after the
                  earlier of either such dates.
            `(f) EXCEPTION FOR PREVIOUSLY AUTHORIZED ACTIVITIES- Neither
          subsection (a) nor section 273 shall prohibit a Bell operating
          company or affiliate from engaging, at any time after the date of
          enactment of the Telecommunications Act of 1996, in any activity to
          the extent authorized by, and subject to the terms and conditions
          contained in, an order entered by the United States District Court
          for the District of Columbia pursuant to section VII or VIII(C) of
          the AT&T Consent Decree if such order was entered on or before such
          date of enactment, to the extent such order is not reversed or
          vacated on appeal. Nothing in this subsection shall be construed to
          limit, or to impose terms or conditions on, an activity in which a
          Bell operating company is otherwise authorized to engage under any
          other provision of this section.
            `(g) DEFINITION OF INCIDENTAL INTERLATA SERVICES- For purposes of
          this section, the term `incidental interLATA services' means the
          interLATA provision by a Bell operating company or its affiliate--
                `(1)(A) of audio programming, video programming, or other
              programming services to subscribers to such services of such
              company or affiliate;
                `(B) of the capability for interaction by such subscribers to
              select or respond to such audio programming, video programming,
              or other programming services;
                `(C) to distributors of audio programming or video
              programming that such company or affiliate owns or controls, or
              is licensed by the copyright owner of such programming (or by
              an assignee of such owner) to distribute; or
                `(D) of alarm monitoring services;
                `(2) of two-way interactive video services or Internet
              services over dedicated facilities to or for elementary and
              secondary schools as defined in section 254(h)(5);
                `(3) of commercial mobile services in accordance with section
              332(c) of this Act and with the regulations prescribed by the
              Commission pursuant to paragraph (8) of such section;
                `(4) of a service that permits a customer that is located in
              one LATA to retrieve stored information from, or file
              information for storage in, information storage facilities of
              such company that are located in another LATA;
                `(5) of signaling information used in connection with the
              provision of telephone exchange services or exchange access by
              a local exchange carrier; or
                `(6) of network control signaling information to, and receipt
              of such signaling information from, common carriers offering
              interLATA services at any location within the area in which
              such Bell operating company provides telephone exchange
              services or exchange access.
            `(h) LIMITATIONS- The provisions of subsection (g) are intended
          to be narrowly construed. The interLATA services provided under
          subparagraph (A), (B), or (C) of subsection (g)(1) are limited to
          those interLATA transmissions incidental to the provision by a Bell
          operating company or its affiliate of video, audio, and other
          programming services that the company or its affiliate is engaged
          in providing to the public.  The Commission shall ensure that the
          provision of services authorized under subsection (g) by a Bell
          operating company or its affiliate will not adversely affect
          telephone exchange service ratepayers or competition in any
          telecommunications market.
            `(i) ADDITIONAL DEFINITIONS- As used in this section--
                `(1) IN-REGION STATE- The term `in-region State' means a
              State in which a Bell operating company or any of its
              affiliates was authorized to provide wireline telephone
              exchange service pursuant to the reorganization plan approved
              under the AT&T Consent Decree, as in effect on the day before
              the date of enactment of the Telecommunications Act of 1996.
                `(2) AUDIO PROGRAMMING SERVICES- The term `audio programming
              services' means programming provided by, or generally
              considered to be comparable to programming provided by, a radio
              broadcast station.
                `(3) VIDEO PROGRAMMING SERVICES; OTHER PROGRAMMING SERVICES-
              The terms `video programming service' and `other programming
              services' have the same meanings as such terms have under
              section 602 of this Act.
            `(j) CERTAIN SERVICE APPLICATIONS TREATED AS IN-REGION SERVICE
          APPLICATIONS- For purposes of this section, a Bell operating
          company application to provide 800 service, private line service,
          or their equivalents that--
                `(1) terminate in an in-region State of that Bell operating
              company, and
                `(2) allow the called party to determine the interLATA carrier,
          shall be considered an in-region service subject to the
          requirements of subsection (b)(1).

`SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.

            `(a) SEPARATE AFFILIATE REQUIRED FOR COMPETITIVE ACTIVITIES-
                `(1) IN GENERAL- A Bell operating company (including any
              affiliate) which is a local exchange carrier that is subject to
              the requirements of section 251(c) may not provide any service
              described in paragraph (2) unless it provides that service
              through one or more affiliates that--
                    `(A) are separate from any operating company entity that
                  is subject to the requirements of section 251(c); and
                    `(B) meet the requirements of subsection (b).
                `(2) SERVICES FOR WHICH A SEPARATE AFFILIATE IS REQUIRED- The
              services for which a separate affiliate is required by
              paragraph (1) are:
                    `(A) Manufacturing activities (as defined in section
                  273(h)).
                    `(B) Origination of interLATA telecommunications
                  services, other than--
                        `(i) incidental interLATA services described in
                      paragraphs (1), (2), (3), (5), and (6) of section 271(g);
                        `(ii) out-of-region services described in section
                      271(b)(2); or
                        `(iii) previously authorized activities described in
                      section 271(f).
                    `(C) InterLATA information services, other than
                  electronic publishing (as defined in section 274(h)) and
                  alarm monitoring services (as defined in section 275(e)).
            `(b) STRUCTURAL AND TRANSACTIONAL REQUIREMENTS- The separate
          affiliate required by this section--
                `(1) shall operate independently from the Bell operating
              company;
                `(2) shall maintain books, records, and accounts in the
              manner prescribed by the Commission which shall be separate
              from the books, records, and accounts maintained by the Bell
              operating company of which it is an affiliate;
                `(3) shall have separate officers, directors, and employees
              from the Bell operating company of which it is an affiliate;
                `(4) may not obtain credit under any arrangement that would
              permit a creditor, upon default, to have recourse to the assets
              of the Bell operating company; and
                `(5) shall conduct all transactions with the Bell operating
              company of which it is an affiliate on an arm's length basis
              with any such transactions reduced to writing and available for
              public inspection.
           `(c) NONDISCRIMINATION SAFEGUARDS- In its dealings with its
          affiliate described in subsection (a), a Bell operating company--
                `(1) may not discriminate between that company or affiliate
              and any other entity in the provision or procurement of goods,
              services, facilities, and information, or in the establishment
              of standards; and
                `(2) shall account for all transactions with an affiliate
              described in subsection (a) in accordance with accounting
              principles designated or approved by the Commission.
            `(d) BIENNIAL AUDIT-
                `(1) GENERAL REQUIREMENT- A company required to operate a
              separate affiliate under this section shall obtain and pay for
              a joint Federal/State audit every 2 years conducted by an
              independent auditor to determine whether such company has
              complied with this section and the regulations promulgated
              under this section, and particularly whether such company has
              complied with the separate accounting requirements under
              subsection (b).
                `(2) RESULTS SUBMITTED TO COMMISSION; STATE COMMISSIONS- The
              auditor described in paragraph (1) shall submit the results of
              the audit to the Commission and to the State commission of each
              State in which the company audited provides service, which
              shall make such results available for public inspection. Any
              party may submit comments on the final audit report.
                `(3) ACCESS TO DOCUMENTS- For purposes of conducting audits
              and reviews under this subsection--
                    `(A) the independent auditor, the Commission, and the
                  State commission shall have access to the financial
                  accounts and records of each company and of its affiliates
                  necessary to verify transactions conducted with that
                  company that are relevant to the specific activities
                  permitted under this section and that are necessary for the
                  regulation of rates;
                    `(B) the Commission and the State commission shall have
                  access to the working papers and supporting materials of
                  any auditor who performs an audit under this section; and
                    `(C) the State commission shall implement appropriate
                  procedures to ensure the protection of any proprietary
                  information submitted to it under this section.
            `(e) FULFILLMENT OF CERTAIN REQUESTS- A Bell operating company
          and an affiliate that is subject to the requirements of section
          251(c)--
                `(1) shall fulfill any requests from an unaffiliated entity
              for telephone exchange service and exchange access within a
              period no longer than the period in which it provides such
              telephone exchange service and exchange access to itself or to
              its affiliates;
                `(2) shall not provide any facilities, services, or
              information concerning its provision of exchange access to the
              affiliate described in subsection (a) unless such facilities,
              services, or information are made available to other providers
              of interLATA services in that market on the same terms and
              conditions;
                `(3) shall charge the affiliate described in subsection (a),
              or impute to itself (if using the access for its provision of
              its own services), an amount for access to its telephone
              exchange service and exchange access that is no less than the
              amount charged to any unaffiliated interexchange carriers for
              such service; and
                `(4) may provide any interLATA or intraLATA facilities or
              services to its interLATA affiliate if such services or
              facilities are made available to all carriers at the same rates
              and on the same terms and conditions, and so long as the costs
              are appropriately allocated.
            `(f) SUNSET-
                `(1) MANUFACTURING AND LONG DISTANCE- The provisions of this
              section (other than subsection (e)) shall cease to apply with
              respect to the manufacturing activities or the interLATA
              telecommunications services of a Bell operating company 3 years
              after the date such Bell operating company or any Bell
              operating company affiliate is authorized to provide interLATA
              telecommunications services under section 271(d), unless the
              Commission extends such 3-year period by rule or order.
                `(2) INTERLATA INFORMATION SERVICES- The provisions of this
              section (other than subsection (e)) shall cease to apply with
              respect to the interLATA information services of a Bell
              operating company 4 years after the date of enactment of the
              Telecommunications Act of 1996, unless the Commission extends
              such 4-year period by rule or order.
                `(3) PRESERVATION OF EXISTING AUTHORITY- Nothing in this
              subsection shall be construed to limit the authority of the
              Commission under any other section of this Act to prescribe
              safeguards consistent with the public interest, convenience,
              and necessity.
            `(g) JOINT MARKETING-
                `(1) AFFILIATE SALES OF TELEPHONE EXCHANGE SERVICES- A Bell
              operating company affiliate required by this section may not
              market or sell telephone exchange services provided by the Bell
              operating company unless that company permits other entities
              offering the same or similar service to market and sell its
              telephone exchange services.
                `(2) BELL OPERATING COMPANY SALES OF AFFILIATE SERVICES- A
              Bell operating company may not market or sell interLATA service
              provided by an affiliate required by this section within any of
              its in-region States until such company is authorized to
              provide interLATA services in such State under section 271(d).
                `(3) RULE OF CONSTRUCTION- The joint marketing and sale of
              services permitted under this subsection shall not be
              considered to violate the nondiscrimination provisions of
              subsection (c).
            `(h) TRANSITION- With respect to any activity in which a Bell
          operating company is engaged on the date of enactment of the
          Telecommunications Act of 1996, such company shall have one year
          from such date of enactment to comply with the requirements of this
          section.

`SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.

            `(a) AUTHORIZATION- A Bell operating company may manufacture and
          provide telecommunications equipment, and manufacture customer
          premises equipment, if the Commission authorizes that Bell
          operating company or any Bell operating company affiliate to
          provide interLATA services under section 271(d), subject to the
          requirements of this section and the regulations prescribed
          thereunder, except that neither a Bell operating company nor any of
          its affiliates may engage in such manufacturing in conjunction with
          a Bell operating company not so affiliated or any of its affiliates.
            `(b) COLLABORATION; RESEARCH AND ROYALTY AGREEMENTS-
                `(1) COLLABORATION- Subsection (a) shall not prohibit a Bell
              operating company from engaging in close collaboration with any
              manufacturer of customer premises equipment or
              telecommunications equipment during the design and development
              of hardware, software, or combinations thereof related to such
              equipment.
                `(2) CERTAIN RESEARCH ARRANGEMENTS; ROYALTY AGREEMENTS-
              Subsection (a) shall not prohibit a Bell operating company from--
                    `(A) engaging in research activities related to
                  manufacturing, and
                    `(B) entering into royalty agreements with manufacturers
                  of telecommunications equipment.
            `(c) INFORMATION REQUIREMENTS-
                `(1) INFORMATION ON PROTOCOLS AND TECHNICAL REQUIREMENTS-
              Each Bell operating company shall, in accordance with
              regulations prescribed by the Commission, maintain and file
              with the Commission full and complete information with respect
              to the protocols and technical requirements for connection with
              and use of its telephone exchange service facilities.  Each
              such company shall report promptly to the Commission any
              material changes or planned changes to such protocols and
              requirements, and the schedule for implementation of such
              changes or planned changes.
                `(2) DISCLOSURE OF INFORMATION- A Bell operating company
              shall not disclose any information required to be filed under
              paragraph (1) unless that information has been filed promptly,
              as required by regulation by the Commission.
                `(3) ACCESS BY COMPETITORS TO INFORMATION- The Commission may
              prescribe such additional regulations under this subsection as
              may be necessary to ensure that manufacturers have access to
              the information with respect to the protocols and technical
              requirements for connection with and use of telephone exchange
              service facilities that a Bell operating company makes
              available to any manufacturing affiliate or any unaffiliated
              manufacturer.
                `(4) PLANNING INFORMATION- Each Bell operating company shall
              provide, to interconnecting carriers providing telephone
              exchange service, timely information on the planned deployment
              of telecommunications equipment.
            `(d) MANUFACTURING LIMITATIONS FOR STANDARD-SETTING ORGANIZATIONS-
                `(1) APPLICATION TO BELL COMMUNICATIONS RESEARCH OR
              MANUFACTURERS- Bell Communications Research, Inc., or any
              successor entity or affiliate--
                    `(A) shall not be considered a Bell operating company or
                  a successor or assign of a Bell operating company at such
                  time as it is no longer an affiliate of any Bell operating
                  company; and
                    `(B) notwithstanding paragraph (3), shall not engage in
                  manufacturing telecommunications equipment or customer
                  premises equipment as long as it is an affiliate of more
                  than 1 otherwise unaffiliated Bell operating company or
                  successor or assign of any such company.
              Nothing in this subsection prohibits Bell Communications
              Research, Inc., or any successor entity, from engaging in any
              activity in which it is lawfully engaged on the date of
              enactment of the Telecommunications Act of 1996. Nothing
              provided in this subsection shall render Bell Communications
              Research, Inc., or any successor entity, a common carrier under
              title II of this Act. Nothing in this subsection restricts any
              manufacturer from engaging in any activity in which it is
              lawfully engaged on the date of enactment of the
              Telecommunications Act of 1996.
                `(2) PROPRIETARY INFORMATION- Any entity which establishes
              standards for telecommunications equipment or customer premises
              equipment, or generic network requirements for such equipment,
              or certifies telecommunications equipment or customer premises
              equipment, shall be prohibited from releasing or otherwise
              using any proprietary information, designated as such by its
              owner, in its possession as a result of such activity, for any
              purpose other than purposes authorized in writing by the owner
              of such information, even after such entity ceases to be so
              engaged.
                `(3) MANUFACTURING SAFEGUARDS- (A) Except as prohibited in
              paragraph (1), and subject to paragraph (6), any entity which
              certifies telecommunications equipment or customer premises
              equipment manufactured by an unaffiliated entity shall only
              manufacture a particular class of telecommunications equipment
              or customer premises equipment for which it is undertaking or
              has undertaken, during the previous 18 months, certification
              activity for such class of equipment through a separate
              affiliate.
                `(B) Such separate affiliate shall--
                    `(i) maintain books, records, and accounts separate from
                  those of the entity that certifies such equipment,
                  consistent with generally acceptable accounting principles;
                    `(ii) not engage in any joint manufacturing activities
                  with such entity; and
                    `(iii) have segregated facilities and separate employees
                  with such entity.
                `(C) Such entity that certifies such equipment shall--
                    `(i) not discriminate in favor of its manufacturing
                  affiliate in the establishment of standards, generic
                  requirements, or product certification;
                    `(ii) not disclose to the manufacturing affiliate any
                  proprietary information that has been received at any time
                  from an unaffiliated manufacturer, unless authorized in
                  writing by the owner of the information; and
                    `(iii) not permit any employee engaged in product
                  certification for telecommunications equipment or customer
                  premises equipment to engage jointly in sales or marketing
                  of any such equipment with the affiliated manufacturer.
                `(4) STANDARD-SETTING ENTITIES- Any entity that is not an
              accredited standards development organization and that
              establishes industry-wide standards for telecommunications
              equipment or customer premises equipment, or industry-wide
              generic network requirements for such equipment, or that
              certifies telecommunications equipment or customer premises
              equipment manufactured by an unaffiliated entity, shall--
                    `(A) establish and publish any industry-wide standard
                  for, industry-wide generic requirement for, or any
                  substantial modification of an existing industry-wide
                  standard or industry-wide generic requirement for,
                  telecommunications equipment or customer premises equipment
                  only in compliance with the following procedure--
                        `(i) such entity shall issue a public notice of its
                      consideration of a proposed industry-wide standard or
                      industry-wide generic requirement;
                        `(ii) such entity shall issue a public invitation to
                      interested industry parties to fund and participate in
                      such efforts on a reasonable and nondiscriminatory
                      basis, administered in such a manner as not to
                      unreasonably exclude any interested industry party;
                        `(iii) such entity shall publish a text for comment
                      by such parties as have agreed to participate in the
                      process pursuant to clause (ii), provide such parties a
                      full opportunity to submit comments, and respond to
                      comments from such parties;
                        `(iv) such entity shall publish a final text of the
                      industry-wide standard or industry-wide generic
                      requirement, including the comments in their entirety,
                      of any funding party which requests to have its
                      comments so published; and
                        `(v) such entity shall attempt, prior to publishing a
                      text for comment, to agree with the funding parties as
                      a group on a mutually satisfactory dispute resolution
                      process which such parties shall utilize as their sole
                      recourse in the event of a dispute on technical issues
                      as to which there is disagreement between any funding
                      party and the entity conducting such activities, except
                      that if no dispute resolution process is agreed to by
                      all the parties, a funding party may utilize the
                      dispute resolution procedures established pursuant to
                      paragraph (5) of this subsection;
                    `(B) engage in product certification for
                  telecommunications equipment or customer premises equipment
                  manufactured by unaffiliated entities only if--
                        `(i) such activity is performed pursuant to published
                      criteria;
                        `(ii) such activity is performed pursuant to
                      auditable criteria; and
                        `(iii) such activity is performed pursuant to
                      available industry-accepted testing methods and
                      standards, where applicable, unless otherwise agreed
                      upon by the parties funding and performing such activity;
                    `(C) not undertake any actions to monopolize or attempt
                  to monopolize the market for such services; and
                    `(D) not preferentially treat its own telecommunications
                  equipment or customer premises equipment, or that of its
                  affiliate, over that of any other entity in establishing
                  and publishing industry-wide standards or industry-wide
                  generic requirements for, and in certification of,
                  telecommunications equipment and customer premises equipment.
                `(5) ALTERNATE DISPUTE RESOLUTION- Within 90 days after the
              date of enactment of the Telecommunications Act of 1996, the
              Commission shall prescribe a dispute resolution process to be
              utilized in the event that a dispute resolution process is not
              agreed upon by all the parties when establishing and publishing
              any industry-wide standard or industry-wide generic requirement
              for telecommunications equipment or customer premises
              equipment, pursuant to paragraph (4)(A)(v). The Commission
              shall not establish itself as a party to the dispute resolution
              process. Such dispute resolution process shall permit any
              funding party to resolve a dispute with the entity conducting
              the activity that significantly affects such funding party's
              interests, in an open, nondiscriminatory, and unbiased fashion,
              within 30 days after the filing of such dispute. Such disputes
              may be filed within 15 days after the date the funding party
              receives a response to its comments from the entity conducting
              the activity. The Commission shall establish penalties to be
              assessed for delays caused by referral of frivolous disputes to
              the dispute resolution process.
                `(6) SUNSET- The requirements of paragraphs (3) and (4) shall
              terminate for the particular relevant activity when the
              Commission determines that there are alternative sources of
              industry-wide standards, industry-wide generic requirements, or
              product certification for a particular class of
              telecommunications equipment or customer premises equipment
              available in the United States. Alternative sources shall be
              deemed to exist when such sources provide commercially viable
              alternatives that are providing such services to customers. The
              Commission shall act on any application for such a
              determination within 90 days after receipt of such application,
              and shall receive public comment on such application.
                `(7) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the
              purposes of administering this subsection and the regulations
              prescribed thereunder, the Commission shall have the same
              remedial authority as the Commission has in administering and
              enforcing the provisions of this title with respect to any
              common carrier subject to this Act.
                `(8) DEFINITIONS- For purposes of this subsection:
                    `(A) The term `affiliate' shall have the same meaning as
                  in section 3 of this Act, except that, for purposes of
                  paragraph (1)(B)--
                        `(i) an aggregate voting equity interest in Bell
                      Communications Research, Inc., of at least 5 percent of
                      its total voting equity, owned directly or indirectly
                      by more than 1 otherwise unaffiliated Bell operating
                      company, shall constitute an affiliate relationship; and
                        `(ii) a voting equity interest in Bell Communications
                      Research, Inc., by any otherwise unaffiliated Bell
                      operating company of less than 1 percent of Bell
                      Communications Research's total voting equity shall not
                      be considered to be an equity interest under this
                      paragraph.
                    `(B) The term `generic requirement' means a description
                  of acceptable product attributes for use by local exchange
                  carriers in establishing product specifications for the
                  purchase of telecommunications equipment, customer premises
                  equipment, and software integral thereto.
                    `(C) The term `industry-wide' means activities funded by
                  or performed on behalf of local exchange carriers for use
                  in providing wireline telephone exchange service whose
                  combined total of deployed access lines in the United
                  States constitutes at least 30 percent of all access lines
                  deployed by telecommunications carriers in the United
                  States as of the date of enactment of the
                  Telecommunications Act of 1996.
                    `(D) The term `certification' means any technical process
                  whereby a party determines whether a product, for use by
                  more than one local exchange carrier, conforms with the
                  specified requirements pertaining to such product.
                    `(E) The term `accredited standards development
                  organization' means an entity composed of industry members
                  which has been accredited by an institution vested with the
                  responsibility for standards accreditation by the industry.
            `(e) BELL OPERATING COMPANY EQUIPMENT PROCUREMENT AND SALES-
                `(1) NONDISCRIMINATION STANDARDS FOR MANUFACTURING- In the
              procurement or awarding of supply contracts for
              telecommunications equipment, a Bell operating company, or any
              entity acting on its behalf, for the duration of the
              requirement for a separate subsidiary including manufacturing
              under this Act--
                    `(A) shall consider such equipment, produced or supplied
                  by unrelated persons; and
                    `(B) may not discriminate in favor of equipment produced
                  or supplied by an affiliate or related person.
                `(2) PROCUREMENT STANDARDS- Each Bell operating company or
              any entity acting on its behalf shall make procurement
              decisions and award all supply contracts for equipment,
              services, and software on the basis of an objective assessment
              of price, quality, delivery, and other commercial factors.
                `(3) NETWORK PLANNING AND DESIGN- A Bell operating company
              shall, to the extent consistent with the antitrust laws, engage
              in joint network planning and design with local exchange
              carriers operating in the same area of interest.  No
              participant in such planning shall be allowed to delay the
              introduction of new technology or the deployment of facilities
              to provide telecommunications services, and agreement with such
              other carriers shall not be required as a prerequisite for such
              introduction or deployment.
                `(4) SALES RESTRICTIONS- Neither a Bell operating company
              engaged in manufacturing nor a manufacturing affiliate of such
              a company shall restrict sales to any local exchange carrier of
              telecommunications equipment, including software integral to
              the operation of such equipment and related upgrades.
                `(5) PROTECTION OF PROPRIETARY INFORMATION- A Bell operating
              company and any entity it owns or otherwise controls shall
              protect the proprietary information submitted for procurement
              decisions from release not specifically authorized by the owner
              of such information.
            `(f) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the purposes
          of administering and enforcing the provisions of this section and
          the regulations prescribed thereunder, the Commission shall have
          the same authority, power, and functions with respect to any Bell
          operating company or any affiliate thereof as the Commission has in
          administering and enforcing the provisions of this title with
          respect to any common carrier subject to this Act.
            `(g) ADDITIONAL RULES AND REGULATIONS- The Commission may
          prescribe such additional rules and regulations as the Commission
          determines are necessary to carry out the provisions of this
          section, and otherwise to prevent discrimination and
          cross-subsidization in a Bell operating company's dealings with its
          affiliate and with third parties.
            `(h) DEFINITION- As used in this section, the term
          `manufacturing' has the same meaning as such term has under the
          AT&T Consent Decree.

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

            `(a) LIMITATIONS- No Bell operating company or any affiliate may
          engage in the provision of electronic publishing that is
          disseminated by means of such Bell operating company's or any of
          its affiliates' basic telephone service, except that nothing in
          this section shall prohibit a separated affiliate or electronic
          publishing joint venture operated in accordance with this section
          from engaging in the provision of electronic publishing.
            `(b) SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING JOINT VENTURE
          REQUIREMENTS- A separated affiliate or electronic publishing joint
          venture shall be operated independently from the Bell operating
          company. Such separated affiliate or joint venture and the Bell
          operating company with which it is affiliated shall--
                `(1) maintain separate books, records, and accounts and
              prepare separate financial statements;
                `(2) not incur debt in a manner that would permit a creditor
              of the separated affiliate or joint venture upon default to
              have recourse to the assets of the Bell operating company;
                `(3) carry out transactions (A) in a manner consistent with
              such independence, (B) pursuant to written contracts or tariffs
              that are filed with the Commission and made publicly available,
              and (C) in a manner that is auditable in accordance with
              generally accepted auditing standards;
                `(4) value any assets that are transferred directly or
              indirectly from the Bell operating company to a separated
              affiliate or joint venture, and record any transactions by
              which such assets are transferred, in accordance with such
              regulations as may be prescribed by the Commission or a State
              commission to prevent improper cross subsidies;
                `(5) between a separated affiliate and a Bell operating
              company--
                    `(A) have no officers, directors, and employees in common
                  after the effective date of this section; and
                    `(B) own no property in common;
                `(6) not use for the marketing of any product or service of
              the separated affiliate or joint venture, the name, trademarks,
              or service marks of an existing Bell operating company except
              for names, trademarks, or service marks that are owned by the
              entity that owns or controls the Bell operating company;
                `(7) not permit the Bell operating company--
                    `(A) to perform hiring or training of personnel on behalf
                  of a separated affiliate;
                    `(B) to perform the purchasing, installation, or
                  maintenance of equipment on behalf of a separated
                  affiliate, except for telephone service that it provides
                  under tariff or contract subject to the provisions of this
                  section; or
                    `(C) to perform research and development on behalf of a
                  separated affiliate;
                `(8) each have performed annually a compliance review--
                    `(A) that is conducted by an independent entity for the
                  purpose of determining compliance during the preceding
                  calendar year with any provision of this section; and
                    `(B) the results of which are maintained by the separated
                  affiliate or joint venture and the Bell operating company
                  for a period of 5 years subject to review by any lawful
                  authority; and
                `(9) within 90 days of receiving a review described in
              paragraph (8), file a report of any exceptions and corrective
              action with the Commission and allow any person to inspect and
              copy such report subject to reasonable safeguards to protect
              any proprietary information contained in such report from being
              used for purposes other than to enforce or pursue remedies
              under this section.
            `(c) JOINT MARKETING-
                `(1) IN GENERAL- Except as provided in paragraph (2)--
                    `(A) a Bell operating company shall not carry out any
                  promotion, marketing, sales, or advertising for or in
                  conjunction with a separated affiliate; and
                    `(B) a Bell operating company shall not carry out any
                  promotion, marketing, sales, or advertising for or in
                  conjunction with an affiliate that is related to the
                  provision of electronic publishing.
                `(2) PERMISSIBLE JOINT ACTIVITIES-
                    `(A) JOINT TELEMARKETING- A Bell operating company may
                  provide inbound telemarketing or referral services related
                  to the provision of electronic publishing for a separated
                  affiliate, electronic publishing joint venture, affiliate,
                  or unaffiliated electronic publisher:   Provided, 
                  That if such services are provided to
                  a separated affiliate, electronic publishing joint venture,
                  or affiliate, such services shall be made available to all
                  electronic publishers on request, on nondiscriminatory terms.
                    `(B) TEAMING ARRANGEMENTS- A Bell operating company may
                  engage in nondiscriminatory teaming or business
                  arrangements to engage in electronic publishing with any
                  separated affiliate or with any other electronic publisher
                  if (i) the Bell operating company only provides facilities,
                  services, and basic telephone service information as
                  authorized by this section, and (ii) the Bell operating
                  company does not own such teaming or business arrangement.
                    `(C) ELECTRONIC PUBLISHING JOINT VENTURES- A Bell
                  operating company or affiliate may participate on a
                  nonexclusive basis in electronic publishing joint ventures
                  with entities that are not a Bell operating company,
                  affiliate, or separated affiliate to provide electronic
                  publishing services, if the Bell operating company or
                  affiliate has not more than a 50 percent direct or indirect
                  equity interest (or the equivalent thereof) or the right to
                  more than 50 percent of the gross revenues under a revenue
                  sharing or royalty agreement in any electronic publishing
                  joint venture. Officers and employees of a Bell operating
                  company or affiliate participating in an electronic
                  publishing joint venture may not have more than 50 percent
                  of the voting control over the electronic publishing joint
                  venture. In the case of joint ventures with small, local
                  electronic publishers, the Commission for good cause shown
                  may authorize the Bell operating company or affiliate to
                  have a larger equity interest, revenue share, or voting
                  control but not to exceed 80 percent. A Bell operating
                  company participating in an electronic publishing joint
                  venture may provide promotion, marketing, sales, or
                  advertising personnel and services to such joint venture.
            `(d) BELL OPERATING COMPANY REQUIREMENT- A Bell operating company
          under common ownership or control with a separated affiliate or
          electronic publishing joint venture shall provide network access
          and interconnections for basic telephone service to electronic
          publishers at just and reasonable rates that are tariffed (so long
          as rates for such services are subject to regulation) and that are
          not higher on a per-unit basis than those charged for such services
          to any other electronic publisher or any separated affiliate
          engaged in electronic publishing.
            `(e) PRIVATE RIGHT OF ACTION-
                `(1) DAMAGES- Any person claiming that any act or practice of
              any Bell operating company, affiliate, or separated affiliate
              constitutes a violation of this section may file a complaint
              with the Commission or bring suit as provided in section 207 of
              this Act, and such Bell operating company, affiliate, or
              separated affiliate shall be liable as provided in section 206
              of this Act; except that damages may not be awarded for a
              violation that is discovered by a compliance review as required
              by subsection (b)(7) of this section and corrected within 90
              days.
                `(2) CEASE AND DESIST ORDERS- In addition to the provisions
              of paragraph (1), any person claiming that any act or practice
              of any Bell operating company, affiliate, or separated
              affiliate constitutes a violation of this section may make
              application to the Commission for an order to cease and desist
              such violation or may make application in any district court of
              the United States of competent jurisdiction for an order
              enjoining such acts or practices or for an order compelling
              compliance with such requirement.
            `(f) SEPARATED AFFILIATE REPORTING REQUIREMENT- Any separated
          affiliate under this section shall file with the Commission annual
          reports in a form substantially equivalent to the Form 10-K
          required by regulations of the Securities and Exchange Commission.
            `(g) EFFECTIVE DATES-
                `(1) TRANSITION- Any electronic publishing service being
              offered to the public by a Bell operating company or affiliate
              on the date of enactment of the Telecommunications Act of 1996
              shall have one year from such date of enactment to comply with
              the requirements of this section.
                `(2) SUNSET- The provisions of this section shall not apply
              to conduct occurring after 4 years after the date of enactment
              of the Telecommunications Act of 1996.
            `(h) DEFINITION OF ELECTRONIC PUBLISHING-
                `(1) IN GENERAL- The term `electronic publishing' means the
              dissemination, provision, publication, or sale to an
              unaffiliated entity or person, of any one or more of the
              following: news (including sports); entertainment (other than
              interactive games); business, financial, legal, consumer, or
              credit materials; editorials, columns, or features;
              advertising; photos or images; archival or research material;
              legal notices or public records; scientific, educational,
              instructional, technical, professional, trade, or other
              literary materials; or other like or similar information.
                `(2) EXCEPTIONS- The term `electronic publishing' shall not
              include the following services:
                    `(A) Information access, as that term is defined by the
                  AT&T Consent Decree.
                    `(B) The transmission of information as a common carrier.
                    `(C) The transmission of information as part of a gateway
                  to an information service that does not involve the
                  generation or alteration of the content of information,
                  including data transmission, address translation, protocol
                  conversion, billing management, introductory information
                  content, and navigational systems that enable users to
                  access electronic publishing services, which do not affect
                  the presentation of such electronic publishing services to
                  users.
                    `(D) Voice storage and retrieval services, including
                  voice messaging and electronic mail services.
                    `(E) Data processing or transaction processing services
                  that do not involve the generation or alteration of the
                  content of information.
                    `(F) Electronic billing or advertising of a Bell
                  operating company's regulated telecommunications services.
                    `(G) Language translation or data format conversion.
                    `(H) The provision of information necessary for the
                  management, control, or operation of a telephone company
                  telecommunications system.
                    `(I) The provision of directory assistance that provides
                  names, addresses, and telephone numbers and does not
                  include advertising.
                    `(J) Caller identification services.
                    `(K) Repair and provisioning databases and credit card
                  and billing validation for telephone company operations.
                    `(L) 911-E and other emergency assistance databases.
                    `(M) Any other network service of a type that is like or
                  similar to these network services and that does not involve
                  the generation or alteration of the content of information.
                    `(N) Any upgrades to these network services that do not
                  involve the generation or alteration of the content of
                  information.
                    `(O) Video programming or full motion video entertainment
                  on demand.
            `(i) ADDITIONAL DEFINITIONS- As used in this section--
                `(1) The term `affiliate' means any entity that, directly or
              indirectly, owns or controls, is owned or controlled by, or is
              under common ownership or control with, a Bell operating
              company. Such term shall not include a separated affiliate.
                `(2) The term `basic telephone service' means any wireline
              telephone exchange service, or wireline telephone exchange
              service facility, provided by a Bell operating company in a
              telephone exchange area, except that such term does not include--
                    `(A) a competitive wireline telephone exchange service
                  provided in a telephone exchange area where another entity
                  provides a wireline telephone exchange service that was
                  provided on January 1, 1984, or
                    `(B) a commercial mobile service.
                `(3) The term `basic telephone service information' means
              network and customer information of a Bell operating company
              and other information acquired by a Bell operating company as a
              result of its engaging in the provision of basic telephone
              service.
                `(4) The term `control' has the meaning that it has in 17
              C.F.R. 240.12b-2, the regulations promulgated by the Securities
              and Exchange Commission pursuant to the Securities Exchange Act
              of 1934 (15 U.S.C. 78a et seq.) or any successor provision to
              such section.
                `(5) The term `electronic publishing joint venture' means a
              joint venture owned by a Bell operating company or affiliate
              that engages in the provision of electronic publishing which is
              disseminated by means of such Bell operating company's or any
              of its affiliates' basic telephone service.
                `(6) The term `entity' means any organization, and includes
              corporations, partnerships, sole proprietorships, associations,
              and joint ventures.
                `(7) The term `inbound telemarketing' means the marketing of
              property, goods, or services by telephone to a customer or
              potential customer who initiated the call.
                `(8) The term `own' with respect to an entity means to have a
              direct or indirect equity interest (or the equivalent thereof)
              of more than 10 percent of an entity, or the right to more than
              10 percent of the gross revenues of an entity under a revenue
              sharing or royalty agreement.
                `(9) The term `separated affiliate' means a corporation under
              common ownership or control with a Bell operating company that
              does not own or control a Bell operating company and is not
              owned or controlled by a Bell operating company and that
              engages in the provision of electronic publishing which is
              disseminated by means of such Bell operating company's or any
              of its affiliates' basic telephone service.
                `(10) The term `Bell operating company' has the meaning
              provided in section 3, except that such term includes any
              entity or corporation that is owned or controlled by such a
              company (as so defined) but does not include an electronic
              publishing joint venture owned by such an entity or corporation.

`SEC. 275. ALARM MONITORING SERVICES.

            `(a) DELAYED ENTRY INTO ALARM MONITORING-
                `(1) PROHIBITION- No Bell operating company or affiliate
              thereof shall engage in the provision of alarm monitoring
              services before the date which is 5 years after the date of
              enactment of the Telecommunications Act of 1996.
                `(2) EXISTING ACTIVITIES- Paragraph (1) does not prohibit or
              limit the provision, directly or through an affiliate, of alarm
              monitoring services by a Bell operating company that was
              engaged in providing alarm monitoring services as of November
              30, 1995, directly or through an affiliate. Such Bell operating
              company or affiliate may not acquire any equity interest in, or
              obtain financial control of, any unaffiliated alarm monitoring
              service entity after November 30, 1995, and until 5 years after
              the date of enactment of the Telecommunications Act of 1996,
              except that this sentence shall not prohibit an exchange of
              customers for the customers of an unaffiliated alarm monitoring
              service entity.
            `(b) NONDISCRIMINATION- An incumbent local exchange carrier (as
          defined in section 251(h)) engaged in the provision of alarm
          monitoring services shall--
                `(1) provide nonaffiliated entities, upon reasonable request,
              with the network services it provides to its own alarm
              monitoring operations, on nondiscriminatory terms and
              conditions; and
                `(2) not subsidize its alarm monitoring services either
              directly or indirectly from telephone exchange service
              operations.
            `(c) EXPEDITED CONSIDERATION OF COMPLAINTS- The Commission shall
          establish procedures for the receipt and review of complaints
          concerning violations of subsection (b) or the regulations
          thereunder that result in material financial harm to a provider of
          alarm monitoring service. Such procedures shall ensure that the
          Commission will make a final determination with respect to any such
          complaint within 120 days after receipt of the complaint. If the
          complaint contains an appropriate showing that the alleged
          violation occurred, as determined by the Commission in accordance
          with such regulations, the Commission shall, within 60 days after
          receipt of the complaint, order the incumbent local exchange
          carrier (as defined in section 251(h)) and its affiliates to cease
          engaging in such violation pending such final determination.
            `(d) USE OF DATA- A local exchange carrier may not record or use
          in any fashion the occurrence or contents of calls received by
          providers of alarm monitoring services for the purposes of
          marketing such services on behalf of such local exchange carrier,
          or any other entity. Any regulations necessary to enforce this
          subsection shall be issued initially within 6 months after the date
          of enactment of the Telecommunications Act of 1996.
            `(e) DEFINITION OF ALARM MONITORING SERVICE- The term `alarm
          monitoring service' means a service that uses a device located at a
          residence, place of business, or other fixed premises--
                `(1) to receive signals from other devices located at or
              about such premises regarding a possible threat at such
              premises to life, safety, or property, from burglary, fire,
              vandalism, bodily injury, or other emergency, and
                `(2) to transmit a signal regarding such threat by means of
              transmission facilities of a local exchange carrier or one of
              its affiliates to a remote monitoring center to alert a person
              at such center of the need to inform the customer or another
              person or police, fire, rescue, security, or public safety
              personnel of such threat,
          but does not include a service that uses a medical monitoring
          device attached to an individual for the automatic surveillance of
          an ongoing medical condition.

`SEC. 276. PROVISION OF PAYPHONE SERVICE.

            `(a) NONDISCRIMINATION SAFEGUARDS- After the effective date of
          the rules prescribed pursuant to subsection (b), any Bell operating
          company that provides payphone service--
                `(1) shall not subsidize its payphone service directly or
              indirectly from its telephone exchange service operations or
              its exchange access operations; and
                `(2) shall not prefer or discriminate in favor of its
              payphone service.
            `(b) REGULATIONS-
                `(1) CONTENTS OF REGULATIONS- In order to promote competition
              among payphone service providers and promote the widespread
              deployment of payphone services to the benefit of the general
              public, within 9 months after the date of enactment of the
              Telecommunications Act of 1996, the Commission shall take all
              actions necessary (including any reconsideration) to prescribe
              regulations that--
                    `(A) establish a per call compensation plan to ensure
                  that all payphone service providers are fairly compensated
                  for each and every completed intrastate and interstate call
                  using their payphone, except that emergency calls and
                  telecommunications relay service calls for hearing disabled
                  individuals shall not be subject to such compensation;
                    `(B) discontinue the intrastate and interstate carrier
                  access charge payphone service elements and payments in
                  effect on such date of enactment, and all intrastate and
                  interstate payphone subsidies from basic exchange and
                  exchange access revenues, in favor of a compensation plan
                  as specified in subparagraph (A);
                    `(C) prescribe a set of nonstructural safeguards for Bell
                  operating company payphone service to implement the
                  provisions of paragraphs (1) and (2) of subsection (a),
                  which safeguards shall, at a minimum, include the
                  nonstructural safeguards equal to those adopted in the
                  Computer Inquiry-III (CC Docket No. 90-623) proceeding;
                    `(D) provide for Bell operating company payphone service
                  providers to have the same right that independent payphone
                  providers have to negotiate with the location provider on
                  the location provider's selecting and contracting with,
                  and, subject to the terms of any agreement with the
                  location provider, to select and contract with, the
                  carriers that carry interLATA calls from their payphones,
                  unless the Commission determines in the rulemaking pursuant
                  to this section that it is not in the public interest; and
                    `(E) provide for all payphone service providers to have
                  the right to negotiate with the location provider on the
                  location provider's selecting and contracting with, and,
                  subject to the terms of any agreement with the location
                  provider, to select and contract with, the carriers that
                  carry intraLATA calls from their payphones.
                `(2) PUBLIC INTEREST TELEPHONES- In the rulemaking conducted
              pursuant to paragraph (1), the Commission shall determine
              whether public interest payphones, which are provided in the
              interest of public health, safety, and welfare, in locations
              where there would otherwise not be a payphone, should be
              maintained, and if so, ensure that such public interest
              payphones are supported fairly and equitably.
                `(3) EXISTING CONTRACTS- Nothing in this section shall affect
              any existing contracts between location providers and payphone
              service providers or interLATA or intraLATA carriers that are
              in force and effect as of the date of enactment of the
              Telecommunications Act of 1996.
            `(c) STATE PREEMPTION- To the extent that any State requirements
          are inconsistent with the Commission's regulations, the
          Commission's regulations on such matters shall preempt such State
          requirements.
            `(d) DEFINITION- As used in this section, the term `payphone
          service' means the provision of public or semi-public pay
          telephones, the provision of inmate telephone service in
          correctional institutions, and any ancillary services.'.
            (b) REVIEW OF ENTRY DECISIONS- Section 402(b) (47 U.S.C. 402(b))
          is amended--
                (1) in paragraph (6), by striking `(3), and (4)' and
              inserting `(3), (4), and (9)'; and
                (2) by adding at the end the following new paragraph:
            `(9) By any applicant for authority to provide interLATA services
          under section 271 of this Act whose application is denied by the
          Commission.'.
                              TITLE II--BROADCAST SERVICES

SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.

            Title III is amended by inserting after section 335 (47 U.S.C.
          335) the following new section:
          `SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.
            `(a) COMMISSION ACTION- If the Commission determines to issue
          additional licenses for advanced television services, the
          Commission--
                `(1) should limit the initial eligibility for such licenses
              to persons that, as of the date of such issuance, are licensed
              to operate a television broadcast station or hold a permit to
              construct such a station (or both); and
                `(2) shall adopt regulations that allow the holders of such
              licenses to offer such ancillary or supplementary services on
              designated frequencies as may be consistent with the public
              interest, convenience, and necessity.
            `(b) CONTENTS OF REGULATIONS- In prescribing the regulations
          required by subsection (a), the Commission shall--
                `(1) only permit such licensee or permittee to offer
              ancillary or supplementary services if the use of a designated
              frequency for such services is consistent with the technology
              or method designated by the Commission for the provision of
              advanced television services;
                `(2) limit the broadcasting of ancillary or supplementary
              services on designated frequencies so as to avoid derogation of
              any advanced television services, including high definition
              television broadcasts, that the Commission may require using
              such frequencies;
                `(3) apply to any other ancillary or supplementary service
              such of the Commission's regulations as are applicable to the
              offering of analogous services by any other person, except that
              no ancillary or supplementary service shall have any rights to
              carriage under section 614 or 615 or be deemed a multichannel
              video programming distributor for purposes of section 628;
                `(4) adopt such technical and other requirements as may be
              necessary or appropriate to assure the quality of the signal
              used to provide advanced television services, and may adopt
              regulations that stipulate the minimum number of hours per day
              that such signal must be transmitted; and
                `(5) prescribe such other regulations as may be necessary for
              the protection of the public interest, convenience, and
              necessity.
            `(c) RECOVERY OF LICENSE- If the Commission grants a license for
          advanced television services to a person that, as of the date of
          such issuance, is licensed to operate a television broadcast
          station or holds a permit to construct such a station (or both),
          the Commission shall, as a condition of such license, require that
          either the additional license or the original license held by the
          licensee be surrendered to the Commission for reallocation or
          reassignment (or both) pursuant to Commission regulation.
            `(d) PUBLIC INTEREST REQUIREMENT- Nothing in this section shall
          be construed as relieving a television broadcasting station from
          its obligation to serve the public interest, convenience, and
          necessity. In the Commission's review of any application for
          renewal of a broadcast license for a television station that
          provides ancillary or supplementary services, the television
          licensee shall establish that all of its program services on the
          existing or advanced television spectrum are in the public
          interest. Any violation of the Commission rules applicable to
          ancillary or supplementary services shall reflect upon the
          licensee's qualifications for renewal of its license.
            `(e) FEES-
                `(1) SERVICES TO WHICH FEES APPLY- If the regulations
              prescribed pursuant to subsection (a) permit a licensee to
              offer ancillary or supplementary services on a designated
              frequency--
                    `(A) for which the payment of a subscription fee is
                  required in order to receive such services, or
                    `(B) for which the licensee directly or indirectly
                  receives compensation from a third party in return for
                  transmitting material furnished by such third party (other
                  than commercial advertisements used to support broadcasting
                  for which a subscription fee is not required),
              the Commission shall establish a program to assess and collect
              from the licensee for such designated frequency an annual fee
              or other schedule or method of payment that promotes the
              objectives described in subparagraphs (A) and (B) of paragraph
              (2).
                `(2) COLLECTION OF FEES- The program required by paragraph
              (1) shall--
                    `(A) be designed (i) to recover for the public a portion
                  of the value of the public spectrum resource made available
                  for such commercial use, and (ii) to avoid unjust
                  enrichment through the method employed to permit such uses
                  of that resource;
                    `(B) recover for the public an amount that, to the extent
                  feasible, equals but does not exceed (over the term of the
                  license) the amount that would have been recovered had such
                  services been licensed pursuant to the provisions of
                  section 309(j) of this Act and the Commission's regulations
                  thereunder; and
                    `(C) be adjusted by the Commission from time to time in
                  order to continue to comply with the requirements of this
                  paragraph.
                `(3) TREATMENT OF REVENUES-
                    `(A) GENERAL RULE- Except as provided in subparagraph
                  (B), all proceeds obtained pursuant to the regulations
                  required by this subsection shall be deposited in the
                  Treasury in accordance with chapter 33 of title 31, United
                  States Code.
                    `(B) RETENTION OF REVENUES- Notwithstanding subparagraph
                  (A), the salaries and expenses account of the Commission
                  shall retain as an offsetting collection such sums as may
                  be necessary from such proceeds for the costs of developing
                  and implementing the program required by this section and
                  regulating and supervising advanced television services.
                  Such offsetting collections shall be available for
                  obligation subject to the terms and conditions of the
                  receiving appropriations account, and shall be deposited in
                  such accounts on a quarterly basis.
                `(4) REPORT- Within 5 years after the date of enactment of
              the Telecommunications Act of 1996, the Commission shall report
              to the Congress on the implementation of the program required
              by this subsection, and shall annually thereafter advise the
              Congress on the amounts collected pursuant to such program.
            `(f) EVALUATION- Within 10 years after the date the Commission
          first issues additional licenses for advanced television services,
          the Commission shall conduct an evaluation of the advanced
          television services program. Such evaluation shall include--
                `(1) an assessment of the willingness of consumers to
              purchase the television receivers necessary to receive
              broadcasts of advanced television services;
                `(2) an assessment of alternative uses, including public
              safety use, of the frequencies used for such broadcasts; and
                `(3) the extent to which the Commission has been or will be
              able to reduce the amount of spectrum assigned to licensees.
            `(g) DEFINITIONS- As used in this section:
                `(1) ADVANCED TELEVISION SERVICES- The term `advanced
              television services' means television services provided using
              digital or other advanced technology as further defined in the
              opinion, report, and order of the Commission entitled `Advanced
              Television Systems and Their Impact Upon the Existing
              Television Broadcast Service', MM Docket 87-268, adopted
              September 17, 1992, and successor proceedings.
                `(2) DESIGNATED FREQUENCIES- The term `designated frequency'
              means each of the frequencies designated by the Commission for
              licenses for advanced television services.
                `(3) HIGH DEFINITION TELEVISION- The term `high definition
              television' refers to systems that offer approximately twice
              the vertical and horizontal resolution of receivers generally
              available on the date of enactment of the Telecommunications
              Act of 1996, as further defined in the proceedings described in
              paragraph (1) of this subsection.'.

SEC. 202. BROADCAST OWNERSHIP.

            (a) NATIONAL RADIO STATION OWNERSHIP RULE CHANGES REQUIRED- The
          Commission shall modify section 73.3555 of its regulations (47
          C.F.R. 73.3555) by eliminating any provisions limiting the number
          of AM or FM broadcast stations which may be owned or controlled by
          one entity nationally.
            (b) LOCAL RADIO DIVERSITY-
                (1) APPLICABLE CAPS- The Commission shall revise section
              73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide
              that--
                    (A) in a radio market with 45 or more commercial radio
                  stations, a party may own, operate, or control up to 8
                  commercial radio stations, not more than 5 of which are in
                  the same service (AM or FM);
                    (B) in a radio market with between 30 and 44 (inclusive)
                  commercial radio stations, a party may own, operate, or
                  control up to 7 commercial radio stations, not more than 4
                  of which are in the same service (AM or FM);
                    (C) in a radio market with between 15 and 29 (inclusive)
                  commercial radio stations, a party may own, operate, or
                  control up to 6 commercial radio stations, not more than 4
                  of which are in the same service (AM or FM); and
                    (D) in a radio market with 14 or fewer commercial radio
                  stations, a party may own, operate, or control up to 5
                  commercial radio stations, not more than 3 of which are in
                  the same service (AM or FM), except that a party may not
                  own, operate, or control more than 50 percent of the
                  stations in such market.
                (2) EXCEPTION- Notwithstanding any limitation authorized by
              this subsection, the Commission may permit a person or entity
              to own, operate, or control, or have a cognizable interest in,
              radio broadcast stations if the Commission determines that such
              ownership, operation, control, or interest will result in an
              increase in the number of radio broadcast stations in operation.
            (c) TELEVISION OWNERSHIP LIMITATIONS-
                (1) NATIONAL OWNERSHIP LIMITATIONS- The Commission shall
              modify its rules for multiple ownership set forth in section
              73.3555 of its regulations (47 C.F.R. 73.3555)--
                    (A) by eliminating the restrictions on the number of
                  television stations that a person or entity may directly or
                  indirectly own, operate, or control, or have a cognizable
                  interest in, nationwide; and
                    (B) by increasing the national audience reach limitation
                  for television stations to 35 percent.
                (2) LOCAL OWNERSHIP LIMITATIONS- The Commission shall conduct
              a rulemaking proceeding to determine whether to retain, modify,
              or eliminate its limitations on the number of television
              stations that a person or entity may own, operate, or control,
              or have a cognizable interest in, within the same television
              market.
            (d) RELAXATION OF ONE-TO-A-MARKET- With respect to its
          enforcement of its one-to-a-market ownership rules under section
          73.3555 of its regulations, the Commission shall extend its waiver
          policy to any of the top 50 markets, consistent with the public
          interest, convenience, and necessity.
            (e) DUAL NETWORK CHANGES- The Commission shall revise section
          73.658(g) of its regulations (47 C.F.R. 658(g)) to permit a
          television broadcast station to affiliate with a person or entity
          that maintains 2 or more networks of television broadcast stations
          unless such dual or multiple networks are composed of--
                (1) two or more persons or entities that, on the date of
              enactment of the Telecommunications Act of 1996, are `networks'
              as defined in section 73.3613(a)(1) of the Commission's
              regulations (47 C.F.R. 73.3613(a)(1)); or
                (2) any network described in paragraph (1) and an
              English-language program distribution service that, on such
              date, provides 4 or more hours of programming per week on a
              national basis pursuant to network affiliation arrangements
              with local television broadcast stations in markets reaching
              more than 75 percent of television homes (as measured by a
              national ratings service).
            (f) CABLE CROSS OWNERSHIP-
                (1) ELIMINATION OF RESTRICTIONS- The Commission shall revise
              section 76.501 of its regulations (47 C.F.R. 76.501) to permit
              a person or entity to own or control a network of broadcast
              stations and a cable system.
                (2) SAFEGUARDS AGAINST DISCRIMINATION- The Commission shall
              revise such regulations if necessary to ensure carriage,
              channel positioning, and nondiscriminatory treatment of
              nonaffiliated broadcast stations by a cable system described in
              paragraph (1).
            (g) LOCAL MARKETING AGREEMENTS- Nothing in this section shall be
          construed to prohibit the origination, continuation, or renewal of
          any television local marketing agreement that is in compliance with
          the regulations of the Commission.
            (h) FURTHER COMMISSION REVIEW- The Commission shall review its
          rules adopted pursuant to this section and all of its ownership
          rules biennially as part of its regulatory reform review under
          section 11 of the Communications Act of 1934 and shall determine
          whether any of such rules are necessary in the public interest as
          the result of competition. The Commission shall repeal or modify
          any regulation it determines to be no longer in the public interest.
            (i) ELIMINATION OF STATUTORY RESTRICTION- Section 613(a) (47
          U.S.C. 533(a)) is amended--
                (1) by striking paragraph (1);
                (2) by redesignating paragraph (2) as subsection (a);
                (3) by redesignating subparagraphs (A) and (B) as paragraphs
              (1) and (2), respectively;
                (4) by striking `and' at the end of paragraph (1) (as so
              redesignated);
                (5) by striking the period at the end of paragraph (2) (as so
              redesignated) and inserting `; and'; and
                (6) by adding at the end the following new paragraph:
                `(3) shall not apply the requirements of this subsection to
              any cable operator in any franchise area in which a cable
              operator is subject to effective competition as determined
              under section 623(l).'.

SEC. 203. TERM OF LICENSES.

            Section 307(c) (47 U.S.C. 307(c)) is amended to read as follows:
            `(c) TERMS OF LICENSES-
                `(1) INITIAL AND RENEWAL LICENSES- Each license granted for
              the operation of a broadcasting station shall be for a term of
              not to exceed 8 years.  Upon application therefor, a renewal of
              such license may be granted from time to time for a term of not
              to exceed 8 years from the date of expiration of the preceding
              license, if the Commission finds that public interest,
              convenience, and necessity would be served thereby.  Consistent
              with the foregoing provisions of this subsection, the
              Commission may by rule prescribe the period or periods for
              which licenses shall be granted and renewed for particular
              classes of stations, but the Commission may not adopt or follow
              any rule which would preclude it, in any case involving a
              station of a particular class, from granting or renewing a
              license for a shorter period than that prescribed for stations
              of such class if, in its judgment, the public interest,
              convenience, or necessity would be served by such action.
                `(2) MATERIALS IN APPLICATION- In order to expedite action on
              applications for renewal of broadcasting station licenses and
              in order to avoid needless expense to applicants for such
              renewals, the Commission shall not require any such applicant
              to file any information which previously has been furnished to
              the Commission or which is not directly material to the
              considerations that affect the granting or denial of such
              application, but the Commission may require any new or
              additional facts it deems necessary to make its findings.
                `(3) CONTINUATION PENDING DECISION- Pending any hearing and
              final decision on such an application and the disposition of
              any petition for rehearing pursuant to section 405, the
              Commission shall continue such license in effect.'.

SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.

            (a) RENEWAL PROCEDURES-
                (1) AMENDMENT- Section 309 (47 U.S.C. 309) is amended by
              adding at the end thereof the following new subsection:
            `(k) BROADCAST STATION RENEWAL PROCEDURES-
                `(1) STANDARDS FOR RENEWAL- If the licensee of a broadcast
              station submits an application to the Commission for renewal of
              such license, the Commission shall grant the application if it
              finds, with respect to that station, during the preceding term
              of its license--
                    `(A) the station has served the public interest,
                  convenience, and necessity;
                    `(B) there have been no serious violations by the
                  licensee of this Act or the rules and regulations of the
                  Commission; and
                    `(C) there have been no other violations by the licensee
                  of this Act or the rules and regulations of the Commission
                  which, taken together, would constitute a pattern of abuse.
                `(2) CONSEQUENCE OF FAILURE TO MEET STANDARD- If any licensee
              of a broadcast station fails to meet the requirements of this
              subsection, the Commission may deny the application for renewal
              in accordance with paragraph (3), or grant such application on
              terms and conditions as are appropriate, including renewal for
              a term less than the maximum otherwise permitted.
                `(3) STANDARDS FOR DENIAL- If the Commission determines,
              after notice and opportunity for a hearing as provided in
              subsection (e), that a licensee has failed to meet the
              requirements specified in paragraph (1) and that no mitigating
              factors justify the imposition of lesser sanctions, the
              Commission shall--
                    `(A) issue an order denying the renewal application filed
                  by such licensee under section 308; and
                    `(B) only thereafter accept and consider such
                  applications for a construction permit as may be filed
                  under section 308 specifying the channel or broadcasting
                  facilities of the former licensee.
                `(4) COMPETITOR CONSIDERATION PROHIBITED- In making the
              determinations specified in paragraph (1) or (2), the
              Commission shall not consider whether the public interest,
              convenience, and necessity might be served by the grant of a
              license to a person other than the renewal applicant.'.
                (2) CONFORMING AMENDMENT- Section 309(d) (47 U.S.C. 309(d))
              is amended by inserting after `with subsection (a)' each place
              it appears the following: `(or subsection (k) in the case of
              renewal of any broadcast station license)'.
            (b) SUMMARY OF COMPLAINTS ON VIOLENT PROGRAMMING- Section 308 (47
          U.S.C.  308) is amended by adding at the end the following new
          subsection:
            `(d) SUMMARY OF COMPLAINTS- Each applicant for the renewal of a
          commercial or noncommercial television license shall attach as an
          exhibit to the application a summary of written comments and
          suggestions received from the public and maintained by the licensee
          (in accordance with Commission regulations) that comment on the
          applicant's programming, if any, and that are characterized by the
          commentor as constituting violent programming.'.
            (c) EFFECTIVE DATE- The amendments made by this section apply to
          applications filed after May 1, 1995.

SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.

            (a) DBS SIGNAL SECURITY- Section 705(e)(4) (47 U.S.C. 605(e)(4))
          is amended by inserting `or direct-to-home satellite services,'
          after `programming,'.
            (b) FCC JURISDICTION OVER DIRECT-TO-HOME SATELLITE SERVICES-
          Section 303 (47 U.S.C. 303) is amended by adding at the end thereof
          the following new subsection:
            `(v) Have exclusive jurisdiction to regulate the provision of
          direct-to-home satellite services. As used in this subsection, the
          term `direct-to-home satellite services' means the distribution or
          broadcasting of programming or services by satellite directly to
          the subscriber's premises without the use of ground receiving or
          distribution equipment, except at the subscriber's premises or in
          the uplink process to the satellite.'.

SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

            Part II of title III is amended by inserting after section 364
          (47 U.S.C. 362) the following new section:
          `SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.
            `Notwithstanding any provision of this Act or any other provision
          of law or regulation, a ship documented under the laws of the
          United States operating in accordance with the Global Maritime
          Distress and Safety System provisions of the Safety of Life at Sea
          Convention shall not be required to be equipped with a radio
          telegraphy station operated by one or more radio officers or
          operators. This section shall take effect for each vessel upon a
          determination by the United States Coast Guard that such vessel has
          the equipment required to implement the Global Maritime Distress
          and Safety System installed and operating in good working
          condition.'.

SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.

            Within 180 days after the date of enactment of this Act, the
          Commission shall, pursuant to section 303 of the Communications Act
          of 1934, promulgate regulations to prohibit restrictions that
          impair a viewer's ability to receive video programming services
          through devices designed for over-the-air reception of television
          broadcast signals, multichannel multipoint distribution service, or
          direct broadcast satellite services.
                                TITLE III--CABLE SERVICES

SEC. 301. CABLE ACT REFORM.

            (a) DEFINITIONS-
                (1) DEFINITION OF CABLE SERVICE- Section 602(6)(B) (47 U.S.C.
              522(6)(B)) is amended by inserting `or use' after `the
              selection'.
                (2) CHANGE IN DEFINITION OF CABLE SYSTEM- Section 602(7) (47
              U.S.C. 522(7)) is amended by striking `(B) a facility that
              serves only subscribers in 1 or more multiple unit dwellings
              under common ownership, control, or management, unless such
              facility or facilities uses any public right-of-way;' and
              inserting `(B) a facility that serves subscribers without using
              any public right-of-way;'.
            (b) RATE DEREGULATION-
                (1) UPPER TIER REGULATION- Section 623(c) (47 U.S.C. 543(c))
              is amended--
                    (A) in paragraph (1)(B), by striking `subscriber,
                  franchising authority, or other relevant State or local
                  government entity' and inserting `franchising authority (in
                  accordance with paragraph (3))';
                    (B) in paragraph (1)(C), by striking `such complaint' and
                  inserting `the first complaint filed with the franchising
                  authority under paragraph (3)'; and
                    (C) by striking paragraph (3) and inserting the following:
                `(3) REVIEW OF RATE CHANGES- The Commission shall review any
              complaint submitted by a franchising authority after the date
              of enactment of the Telecommunications Act of 1996 concerning
              an increase in rates for cable programming services and issue a
              final order within 90 days after it receives such a complaint,
              unless the parties agree to extend the period for such review.
              A franchising authority may not file a complaint under this
              paragraph unless, within 90 days after such increase becomes
              effective it receives subscriber complaints.
                `(4) SUNSET OF UPPER TIER RATE REGULATION- This subsection
              shall not apply to cable programming services provided after
              March 31, 1999.'.
                (2) SUNSET OF UNIFORM RATE STRUCTURE IN MARKETS WITH
              EFFECTIVE COMPETITION- Section 623(d) (47 U.S.C. 543(d)) is
              amended by adding at the end thereof the following: `This
              subsection does not apply to (1) a cable operator with respect
              to the provision of cable service over its cable system in any
              geographic area in which the video programming services offered
              by the operator in that area are subject to effective
              competition, or (2) any video programming offered on a per
              channel or per program basis. Bulk discounts to multiple
              dwelling units shall not be subject to this subsection, except
              that a cable operator of a cable system that is not subject to
              effective competition may not charge predatory prices to a
              multiple dwelling unit. Upon a prima facie showing by a
              complainant that there are reasonable grounds to believe that
              the discounted price is predatory, the cable system shall have
              the burden of showing that its discounted price is not
              predatory.'.
                (3) EFFECTIVE COMPETITION- Section 623(l)(1) (47 U.S.C.
              543(l)(1)) is amended--
                    (A) by striking `or' at the end of subparagraph (B);
                    (B) by striking the period at the end of subparagraph (C)
                  and inserting `; or'; and
                    (C) by adding at the end the following:
                    `(D) a local exchange carrier or its affiliate (or any
                  multichannel video programming distributor using the
                  facilities of such carrier or its affiliate) offers video
                  programming services directly to subscribers by any means
                  (other than direct-to-home satellite services) in the
                  franchise area of an unaffiliated cable operator which is
                  providing cable service in that franchise area, but only if
                  the video programming services so offered in that area are
                  comparable to the video programming services provided by
                  the unaffiliated cable operator in that area.'.
            (c) GREATER DEREGULATION FOR SMALLER CABLE COMPANIES- Section 623
          (47 U.S.C 543) is amended by adding at the end thereof the following:
            `(m) SPECIAL RULES FOR SMALL COMPANIES-
                `(1) IN GENERAL- Subsections (a), (b), and (c) do not apply
              to a small cable operator with respect to--
                    `(A) cable programming services, or
                    `(B) a basic service tier that was the only service tier
                  subject to regulation as of December 31, 1994,
              in any franchise area in which that operator services 50,000 or
              fewer subscribers.
                `(2) DEFINITION OF SMALL CABLE OPERATOR- For purposes of this
              subsection, the term `small cable operator' means a cable
              operator that, directly or through an affiliate, serves in the
              aggregate fewer than 1 percent of all subscribers in the United
              States and is not affiliated with any entity or entities whose
              gross annual revenues in the aggregate exceed $250,000,000.'.
            (d) MARKET DETERMINATIONS-
                (1) MARKET DETERMINATIONS; EXPEDITED DECISIONMAKING- Section
              614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--
                    (A) by striking `in the manner provided in section
                  73.3555(d)(3)(i) of title 47, Code of Federal Regulations,
                  as in effect on May 1, 1991,' in clause (i) and inserting
                  `by the Commission by regulation or order using, where
                  available, commercial publications which delineate
                  television markets based on viewing patterns,'; and
                    (B) by striking clause (iv) and inserting the following:
                        `(iv) Within 120 days after the date on which a
                      request is filed under this subparagraph (or 120 days
                      after the date of enactment of the Telecommunications
                      Act of 1996, if later), the Commission shall grant or
                      deny the request.'.
                (2) APPLICATION TO PENDING REQUESTS- The amendment made by
              paragraph (1) shall apply to--
                    (A) any request pending under section 614(h)(1)(C) of the
                  Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the
                  date of enactment of this Act; and
                    (B) any request filed under that section after that date.
            (e) TECHNICAL STANDARDS- Section 624(e) (47 U.S.C. 544(e)) is
          amended by striking the last two sentences and inserting the
          following: `No State or franchising authority may prohibit,
          condition, or restrict a cable system's use of any type of
          subscriber equipment or any transmission technology.'.
            (f) CABLE EQUIPMENT COMPATIBILITY- Section 624A (47 U.S.C. 544A)
          is amended--
                (1) in subsection (a) by striking `and' at the end of
              paragraph (2), by striking the period at the end of paragraph
              (3) and inserting `; and'; and by adding at the end the
              following new paragraph:
                `(4) compatibility among televisions, video cassette
              recorders, and cable systems can be assured with narrow
              technical standards that mandate a minimum degree of common
              design and operation, leaving all features, functions,
              protocols, and other product and service options for selection
              through open competition in the market.';
                (2) in subsection (c)(1)--
                    (A) by redesignating subparagraphs (A) and (B) as
                  subparagraphs (B) and (C), respectively; and
                    (B) by inserting before such redesignated subparagraph
                  (B) the following new subparagraph:
                    `(A) the need to maximize open competition in the market
                  for all features, functions, protocols, and other product
                  and service options of converter boxes and other cable
                  converters unrelated to the descrambling or decryption of
                  cable television signals;'; and
                (3) in subsection (c)(2)--
                    (A) by redesignating subparagraphs (D) and (E) as
                  subparagraphs (E) and (F), respectively; and
                    (B) by inserting after subparagraph (C) the following new
                  subparagraph:
                    `(D) to ensure that any standards or regulations
                  developed under the authority of this section to ensure
                  compatibility between televisions, video cassette
                  recorders, and cable systems do not affect features,
                  functions, protocols, and other product and service options
                  other than those specified in paragraph (1)(B), including
                  telecommunications interface equipment, home automation
                  communications, and computer network services;'.
            (g) SUBSCRIBER NOTICE- Section 632 (47 U.S.C. 552) is amended--
                (1) by redesignating subsection (c) as subsection (d); and
                (2) by inserting after subsection (b) the following new
              subsection:
            `(c) SUBSCRIBER NOTICE- A cable operator may provide notice of
          service and rate changes to subscribers using any reasonable
          written means at its sole discretion. Notwithstanding section
          623(b)(6) or any other provision of this Act, a cable operator
          shall not be required to provide prior notice of any rate change
          that is the result of a regulatory fee, franchise fee, or any other
          fee, tax, assessment, or charge of any kind imposed by any Federal
          agency, State, or franchising authority on the transaction between
          the operator and the subscriber.'.
            (h) PROGRAM ACCESS- Section 628 (47 U.S.C. 548) is amended by
          adding at the end the following:
            `(j) COMMON CARRIERS- Any provision that applies to a cable
          operator under this section shall apply to a common carrier or its
          affiliate that provides video programming by any means directly to
          subscribers.  Any such provision that applies to a satellite cable
          programming vendor in which a cable operator has an attributable
          interest shall apply to any satellite cable programming vendor in
          which such common carrier has an attributable interest. For the
          purposes of this subsection, two or fewer common officers or
          directors shall not by itself establish an attributable interest by
          a common carrier in a satellite cable programming vendor (or its
          parent company).'.
            (i) ANTITRAFFICKING- Section 617 (47 U.S.C. 537) is amended--
                (1) by striking subsections (a) through (d); and
                (2) in subsection (e), by striking `(e)' and all that follows
              through `a franchising authority' and inserting `A franchising
              authority'.
            (j) AGGREGATION OF EQUIPMENT COSTS- Section 623(a) (47 U.S.C.
          543(a)) is amended by adding at the end the following new paragraph:
                `(7) AGGREGATION OF EQUIPMENT COSTS-
                    `(A) IN GENERAL- The Commission shall allow cable
                  operators, pursuant to any rules promulgated under
                  subsection (b)(3), to aggregate, on a franchise, system,
                  regional, or company level, their equipment costs into
                  broad categories, such as converter boxes, regardless of
                  the varying levels of functionality of the equipment within
                  each such broad category. Such aggregation shall not be
                  permitted with respect to equipment used by subscribers who
                  receive only a rate regulated basic service tier.
                    `(B) REVISION TO COMMISSION RULES; FORMS- Within 120 days
                  of the date of enactment of the Telecommunications Act of
                  1996, the Commission shall issue revisions to the
                  appropriate rules and forms necessary to implement
                  subparagraph (A).'.
            (k) TREATMENT OF PRIOR YEAR LOSSES-
                (1) AMENDMENT- Section 623 (48 U.S.C. 543) is amended by
              adding at the end thereof the following:
            `(n) TREATMENT OF PRIOR YEAR LOSSES- Notwithstanding any other
          provision of this section or of section 612, losses associated with
          a cable system (including losses associated with the grant or award
          of a franchise) that were incurred prior to September 4, 1992, with
          respect to a cable system that is owned and operated by the
          original franchisee of such system shall not be disallowed, in
          whole or in part, in the determination of whether the rates for any
          tier of service or any type of equipment that is subject to
          regulation under this section are lawful.'.
                (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall
              take effect on the date of enactment of this Act and shall be
              applicable to any rate proposal filed on or after September 4,
              1993, upon which no final action has been taken by December 1,
              1995.

SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

            (a) PROVISIONS FOR REGULATION OF CABLE SERVICE PROVIDED BY
          TELEPHONE COMPANIES- Title VI (47 U.S.C. 521 et seq.) is amended by
          adding at the end the following new part:
           `PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

`SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERVICES.

            `(a) LIMITATIONS ON CABLE REGULATION-
                `(1) RADIO-BASED SYSTEMS- To the extent that a common carrier
              (or any other person) is providing video programming to
              subscribers using radio communication, such carrier (or other
              person) shall be subject to the requirements of title III and
              section 652, but shall not otherwise be subject to the
              requirements of this title.
                `(2) COMMON CARRIAGE OF VIDEO TRAFFIC- To the extent that a
              common carrier is providing transmission of video programming
              on a common carrier basis, such carrier shall be subject to the
              requirements of title II and section 652, but shall not
              otherwise be subject to the requirements of this title. This
              paragraph shall not affect the treatment under section
              602(7)(C) of a facility of a common carrier as a cable system.
                `(3) CABLE SYSTEMS AND OPEN VIDEO SYSTEMS- To the extent that
              a common carrier is providing video programming to its
              subscribers in any manner other than that described in
              paragraphs (1) and (2)--
                    `(A) such carrier shall be subject to the requirements of
                  this title, unless such programming is provided by means of
                  an open video system for which the Commission has approved
                  a certification under section 653; or
                    `(B) if such programming is provided by means of an open
                  video system for which the Commission has approved a
                  certification under section 653, such carrier shall be
                  subject to the requirements of this part, but shall be
                  subject to parts I through IV of this title only as
                  provided in 653(c).
                `(4) ELECTION TO OPERATE AS OPEN VIDEO SYSTEM- A common
              carrier that is providing video programming in a manner
              described in paragraph (1) or (2), or a combination thereof,
              may elect to provide such programming by means of an open video
              system that complies with section 653. If the Commission
              approves such carrier's certification under section 653, such
              carrier shall be subject to the requirements of this part, but
              shall be subject to parts I through IV of this title only as
              provided in 653(c).
            `(b) LIMITATIONS ON INTERCONNECTION OBLIGATIONS- A local exchange
          carrier that provides cable service through an open video system or
          a cable system shall not be required, pursuant to title II of this
          Act, to make capacity available on a nondiscriminatory basis to any
          other person for the provision of cable service directly to
          subscribers.
            `(c) ADDITIONAL REGULATORY RELIEF- A common carrier shall not be
          required to obtain a certificate under section 214 with respect to
          the establishment or operation of a system for the delivery of
          video programming.

`SEC. 652. PROHIBITION ON BUY OUTS.

            `(a) ACQUISITIONS BY CARRIERS- No local exchange carrier or any
          affiliate of such carrier owned by, operated by, controlled by, or
          under common control with such carrier may purchase or otherwise
          acquire directly or indirectly more than a 10 percent financial
          interest, or any management interest, in any cable operator
          providing cable service within the local exchange carrier's
          telephone service area.
            `(b) ACQUISITIONS BY CABLE OPERATORS- No cable operator or
          affiliate of a cable operator that is owned by, operated by,
          controlled by, or under common ownership with such cable operator
          may purchase or otherwise acquire, directly or indirectly, more
          than a 10 percent financial interest, or any management interest,
          in any local exchange carrier providing telephone exchange service
          within such cable operator's franchise area.
            `(c) JOINT VENTURES- A local exchange carrier and a cable
          operator whose telephone service area and cable franchise area,
          respectively, are in the same market may not enter into any joint
          venture or partnership to provide video programming directly to
          subscribers or to provide telecommunications services within such
          market.
            `(d) EXCEPTIONS-
                `(1) RURAL SYSTEMS- Notwithstanding subsections (a), (b), and
              (c) of this section, a local exchange carrier (with respect to
              a cable system located in its telephone service area) and a
              cable operator (with respect to the facilities of a local
              exchange carrier used to provide telephone exchange service in
              its cable franchise area) may obtain a controlling interest in,
              management interest in, or enter into a joint venture or
              partnership with the operator of such system or facilities for
              the use of such system or facilities to the extent that--
                    `(A) such system or facilities only serve incorporated or
                  unincorporated--
                        `(i) places or territories that have fewer than
                      35,000 inhabitants; and
                        `(ii) are outside an urbanized area, as defined by
                      the Bureau of the Census; and
                    `(B) in the case of a local exchange carrier, such
                  system, in the aggregate with any other system in which
                  such carrier has an interest, serves less than 10 percent
                  of the households in the telephone service area of such
                  carrier.
                `(2) JOINT USE- Notwithstanding subsection (c), a local
              exchange carrier may obtain, with the concurrence of the cable
              operator on the rates, terms, and conditions, the use of that
              part of the transmission facilities of a cable system extending
              from the last multi-user terminal to the premises of the end
              user, if such use is reasonably limited in scope and duration,
              as determined by the Commission.
                `(3) ACQUISITIONS IN COMPETITIVE MARKETS- Notwithstanding
              subsections (a) and (c), a local exchange carrier may obtain a
              controlling interest in, or form a joint venture or other
              partnership with, or provide financing to, a cable system
              (hereinafter in this paragraph referred to as `the subject
              cable system'), if--
                    `(A) the subject cable system operates in a television
                  market that is not in the top 25 markets, and such market
                  has more than 1 cable system operator, and the subject
                  cable system is not the cable system with the most
                  subscribers in such television market;
                    `(B) the subject cable system and the cable system with
                  the most subscribers in such television market held on May
                  1, 1995, cable television franchises from the largest
                  municipality in the television market and the boundaries of
                  such franchises were identical on such date;
                    `(C) the subject cable system is not owned by or under
                  common ownership or control of any one of the 50 cable
                  system operators with the most subscribers as such
                  operators existed on May 1, 1995; and
                    `(D) the system with the most subscribers in the
                  television market is owned by or under common ownership or
                  control of any one of the 10 largest cable system operators
                  as such operators existed on May 1, 1995.
                `(4) EXEMPT CABLE SYSTEMS- Subsection (a) does not apply to
              any cable system if--
                    `(A) the cable system serves no more than 17,000 cable
                  subscribers, of which no less than 8,000 live within an
                  urban area, and no less than 6,000 live within a
                  nonurbanized area as of June 1, 1995;
                    `(B) the cable system is not owned by, or under common
                  ownership or control with, any of the 50 largest cable
                  system operators in existence on June 1, 1995; and
                    `(C) the cable system operates in a television market
                  that was not in the top 100 television markets as of June
                  1, 1995.
                `(5) SMALL CABLE SYSTEMS IN NONURBAN AREAS- Notwithstanding
              subsections (a) and (c), a local exchange carrier with less
              than $100,000,000 in annual operating revenues (or any
              affiliate of such carrier owned by, operated by, controlled by,
              or under common control with such carrier) may purchase or
              otherwise acquire more than a 10 percent financial interest in,
              or any management interest in, or enter into a joint venture or
              partnership with, any cable system within the local exchange
              carrier's telephone service area that serves no more than
              20,000 cable subscribers, if no more than 12,000 of those
              subscribers live within an urbanized area, as defined by the
              Bureau of the Census.
                `(6) WAIVERS- The Commission may waive the restrictions of
              subsections (a), (b), or (c) only if--
                    `(A) the Commission determines that, because of the
                  nature of the market served by the affected cable system or
                  facilities used to provide telephone exchange service--
                        `(i) the affected cable operator or local exchange
                      carrier would be subjected to undue economic distress
                      by the enforcement of such provisions;
                        `(ii) the system or facilities would not be
                      economically viable if such provisions were enforced; or
                        `(iii) the anticompetitive effects of the proposed
                      transaction are clearly outweighed in the public
                      interest by the probable effect of the transaction in
                      meeting the convenience and needs of the community to
                      be served; and
                    `(B) the local franchising authority approves of such
                  waiver.
            `(e) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this
          section, the term `telephone service area' when used in connection
          with a common carrier subject in whole or in part to title II of
          this Act means the area within which such carrier provided
          telephone exchange service as of January 1, 1993, but if any common
          carrier after such date transfers its telephone exchange service
          facilities to another common carrier, the area to which such
          facilities provide telephone exchange service shall be treated as
          part of the telephone service area of the acquiring common carrier
          and not of the selling common carrier.

`SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.

            `(a) OPEN VIDEO SYSTEMS-
                `(1) CERTIFICATES OF COMPLIANCE- A local exchange carrier may
              provide cable service to its cable service subscribers in its
              telephone service area through an open video system that
              complies with this section. To the extent permitted by such
              regulations as the Commission may prescribe consistent with the
              public interest, convenience, and necessity, an operator of a
              cable system or any other person may provide video programming
              through an open video system that complies with this section.
              An operator of an open video system shall qualify for reduced
              regulatory burdens under subsection (c) of this section if the
              operator of such system certifies to the Commission that such
              carrier complies with the Commission's regulations under
              subsection (b) and the Commission approves such certification.
              The Commission shall publish notice of the receipt of any such
              certification and shall act to approve or disapprove any such
              certification within 10 days after receipt of such certification.
                `(2) DISPUTE RESOLUTION- The Commission shall have the
              authority to resolve disputes under this section and the
              regulations prescribed thereunder. Any such dispute shall be
              resolved within 180 days after notice of such dispute is
              submitted to the Commission. At that time or subsequently in a
              separate damages proceeding, the Commission may, in the case of
              any violation of this section, require carriage, award damages
              to any person denied carriage, or any combination of such
              sanctions.  Any aggrieved party may seek any other remedy
              available under this Act.
            `(b) COMMISSION ACTIONS-
                `(1) REGULATIONS REQUIRED- Within 6 months after the date of
              enactment of the Telecommunications Act of 1996, the Commission
              shall complete all actions necessary (including any
              reconsideration) to prescribe regulations that--
                    `(A) except as required pursuant to section 611, 614, or
                  615, prohibit an operator of an open video system from
                  discriminating among video programming providers with
                  regard to carriage on its open video system, and ensure
                  that the rates, terms, and conditions for such carriage are
                  just and reasonable, and are not unjustly or unreasonably
                  discriminatory;
                    `(B) if demand exceeds the channel capacity of the open
                  video system, prohibit an operator of an open video system
                  and its affiliates from selecting the video programming
                  services for carriage on more than one-third of the
                  activated channel capacity on such system, but nothing in
                  this subparagraph shall be construed to limit the number of
                  channels that the carrier and its affiliates may offer to
                  provide directly to subscribers;
                    `(C) permit an operator of an open video system to carry
                  on only one channel any video programming service that is
                  offered by more than one video programming provider
                  (including the local exchange carrier's video programming
                  affiliate):   Provided,   That
                  subscribers have ready and immediate access to any such
                  video programming service;
                    `(D) extend to the distribution of video programming over
                  open video systems the Commission's regulations concerning
                  sports exclusivity (47 C.F.R. 76.67), network
                  nonduplication (47 C.F.R. 76.92 et seq.), and syndicated
                  exclusivity (47 C.F.R. 76.151 et seq.); and
                    `(E)(i) prohibit an operator of an open video system from
                  unreasonably discriminating in favor of the operator or its
                  affiliates with regard to material or information
                  (including advertising) provided by the operator to
                  subscribers for the purposes of selecting programming on
                  the open video system, or in the way such material or
                  information is presented to subscribers;
                    `(ii) require an operator of an open video system to
                  ensure that video programming providers or copyright
                  holders (or both) are able suitably and uniquely to
                  identify their programming services to subscribers;
                    `(iii) if such identification is transmitted as part of
                  the programming signal, require the carrier to transmit
                  such identification without change or alteration; and
                    `(iv) prohibit an operator of an open video system from
                  omitting television broadcast stations or other
                  unaffiliated video programming services carried on such
                  system from any navigational device, guide, or menu.
                `(2) CONSUMER ACCESS- Subject to the requirements of
              paragraph (1) and the regulations thereunder, nothing in this
              section prohibits a common carrier or its affiliate from
              negotiating mutually agreeable terms and conditions with
              over-the-air broadcast stations and other unaffiliated video
              programming providers to allow consumer access to their signals
              on any level or screen of any gateway, menu, or other program
              guide, whether provided by the carrier or its affiliate.
            `(c) REDUCED REGULATORY BURDENS FOR OPEN VIDEO SYSTEMS-
                `(1) IN GENERAL- Any provision that applies to a cable
              operator under--
                    `(A) sections 613 (other than subsection (a) thereof),
                  616, 623(f), 628, 631, and 634 of this title, shall apply,
                    `(B) sections 611, 614, and 615 of this title, and
                  section 325 of title III, shall apply in accordance with
                  the regulations prescribed under paragraph (2), and
                    `(C) sections 612 and 617, and parts III and IV (other
                  than sections 623(f), 628, 631, and 634), of this title
                  shall not apply,
              to any operator of an open video system for which the
              Commission has approved a certification under this section.
                `(2) IMPLEMENTATION-
                    `(A) COMMISSION ACTION- In the rulemaking proceeding to
                  prescribe the regulations required by subsection (b)(1),
                  the Commission shall, to the extent possible, impose
                  obligations that are no greater or lesser than the
                  obligations contained in the provisions described in
                  paragraph (1)(B) of this subsection. The Commission shall
                  complete all action (including any reconsideration) to
                  prescribe such regulations no later than 6 months after the
                  date of enactment of the Telecommunications Act of 1996.
                    `(B) FEES- An operator of an open video system under this
                  part may be subject to the payment of fees on the gross
                  revenues of the operator for the provision of cable service
                  imposed by a local franchising authority or other
                  governmental entity, in lieu of the franchise fees
                  permitted under section 622. The rate at which such fees
                  are imposed shall not exceed the rate at which franchise
                  fees are imposed on any cable operator transmitting video
                  programming in the franchise area, as determined in
                  accordance with regulations prescribed by the Commission.
                  An operator of an open video system may designate that
                  portion of a subscriber's bill attributable to the fee
                  under this subparagraph as a separate item on the bill.
                `(3) REGULATORY STREAMLINING- With respect to the
              establishment and operation of an open video system, the
              requirements of this section shall apply in lieu of, and not in
              addition to, the requirements of title II.
                `(4) TREATMENT AS CABLE OPERATOR- Nothing in this Act
              precludes a video programming provider making use of an open
              video system from being treated as an operator of a cable
              system for purposes of section 111 of title 17, United States
              Code.
            `(d) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this
          section, the term `telephone service area' when used in connection
          with a common carrier subject in whole or in part to title II of
          this Act means the area within which such carrier is offering
          telephone exchange service.'.
            (b) CONFORMING AND TECHNICAL AMENDMENTS-
                (1) REPEAL- Subsection (b) of section 613 (47 U.S.C. 533(b))
              is repealed.
                (2) DEFINITIONS- Section 602 (47 U.S.C. 531) is amended--
                    (A) in paragraph (7), by striking `, or (D)' and
                  inserting the following: `, unless the extent of such use
                  is solely to provide interactive on-demand services; (D) an
                  open video system that complies with section 653 of this
                  title; or (E)';
                    (B) by redesignating paragraphs (12) through (19) as
                  paragraphs (13) through (20), respectively; and
                    (C) by inserting after paragraph (11) the following new
                  paragraph:
                `(12) the term `interactive on-demand services' means a
              service providing video programming to subscribers over
              switched networks on an on-demand, point-to-point basis, but
              does not include services providing video programming
              prescheduled by the programming provider;'.
                (3) TERMINATION OF VIDEO-DIALTONE REGULATIONS- The
              Commission's regulations and policies with respect to video
              dialtone requirements issued in CC Docket No. 87-266 shall
              cease to be effective on the date of enactment of this Act.
              This paragraph shall not be construed to require the
              termination of any video-dialtone system that the Commission
              has approved before the date of enactment of this Act.

SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF TELECOMMUNICATIONS SERVICES.

            (a) PROVISION OF TELECOMMUNICATIONS SERVICES BY A CABLE OPERATOR-
          Section 621(b) (47 U.S.C. 541(b)) is amended by adding at the end
          thereof the following new paragraph:
            `(3)(A) If a cable operator or affiliate thereof is engaged in
          the provision of telecommunications services--
                `(i) such cable operator or affiliate shall not be required
              to obtain a franchise under this title for the provision of
              telecommunications services; and
                `(ii) the provisions of this title shall not apply to such
              cable operator or affiliate for the provision of
              telecommunications services.
            `(B) A franchising authority may not impose any requirement under
          this title that has the purpose or effect of prohibiting, limiting,
          restricting, or conditioning the provision of a telecommunications
          service by a cable operator or an affiliate thereof.
            `(C) A franchising authority may not order a cable operator or
          affiliate thereof--
                `(i) to discontinue the provision of a telecommunications
              service, or
                `(ii) to discontinue the operation of a cable system, to the
              extent such cable system is used for the provision of a
              telecommunications service, by reason of the failure of such
              cable operator or affiliate thereof to obtain a franchise or
              franchise renewal under this title with respect to the
              provision of such telecommunications service.
            `(D) Except as otherwise permitted by sections 611 and 612, a
          franchising authority may not require a cable operator to provide
          any telecommunications service or facilities, other than
          institutional networks, as a condition of the initial grant of a
          franchise, a franchise renewal, or a transfer of a franchise.'.
            (b) FRANCHISE FEES- Section 622(b) (47 U.S.C. 542(b)) is amended
          by inserting `to provide cable services' immediately before the
          period at the end of the first sentence thereof.

SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

            Part III of title VI is amended by inserting after section 628
          (47 U.S.C. 548) the following new section:

`SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

            `(a) COMMERCIAL CONSUMER AVAILABILITY OF EQUIPMENT USED TO ACCESS
          SERVICES PROVIDED BY MULTICHANNEL VIDEO PROGRAMMING DISTRIBUTORS-
          The Commission shall, in consultation with appropriate industry
          standard-setting organizations, adopt regulations to assure the
          commercial availability, to consumers of multichannel video
          programming and other services offered over multichannel video
          programming systems, of converter boxes, interactive communications
          equipment, and other equipment used by consumers to access
          multichannel video programming and other services offered over
          multichannel video programming systems, from manufacturers,
          retailers, and other vendors not affiliated with any multichannel
          video programming distributor. Such regulations shall not prohibit
          any multichannel video programming distributor from also offering
          converter boxes, interactive communications equipment, and other
          equipment used by consumers to access multichannel video
          programming and other services offered over multichannel video
          programming systems, to consumers, if the system operator's charges
          to consumers for such devices and equipment are separately stated
          and not subsidized by charges for any such service.
            `(b) PROTECTION OF SYSTEM SECURITY- The Commission shall not
          prescribe regulations under subsection (a) which would jeopardize
          security of multichannel video programming and other services
          offered over multichannel video programming systems, or impede the
          legal rights of a provider of such services to prevent theft of
          service.
            `(c) WAIVER- The Commission shall waive a regulation adopted
          under subsection (a) for a limited time upon an appropriate showing
          by a provider of multichannel video programming and other services
          offered over multichannel video programming systems, or an
          equipment provider, that such waiver is necessary to assist the
          development or introduction of a new or improved multichannel video
          programming or other service offered over multichannel video
          programming systems, technology, or products. Upon an appropriate
          showing, the Commission shall grant any such waiver request within
          90 days of any application filed under this subsection, and such
          waiver shall be effective for all service providers and products in
          that category and for all providers of services and products.
            `(d) AVOIDANCE OF REDUNDANT REGULATIONS-
                `(1) COMMERCIAL AVAILABILITY DETERMINATIONS- Determinations
              made or regulations prescribed by the Commission with respect
              to commercial availability to consumers of converter boxes,
              interactive communications equipment, and other equipment used
              by consumers to access multichannel video programming and other
              services offered over multichannel video programming systems,
              before the date of enactment of the Telecommunications Act of
              1996 shall fulfill the requirements of this section.
                `(2) REGULATIONS- Nothing in this section affects section
              64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e))
              or other Commission regulations governing interconnection and
              competitive provision of customer premises equipment used in
              connection with basic common carrier communications services.
            `(e) SUNSET- The regulations adopted under this section shall
          cease to apply when the Commission determines that--
                `(1) the market for the multichannel video programming
              distributors is fully competitive;
                `(2) the market for converter boxes, and interactive
              communications equipment, used in conjunction with that service
              is fully competitive; and
                `(3) elimination of the regulations would promote competition
              and the public interest.
            `(f) COMMISSION'S AUTHORITY- Nothing in this section shall be
          construed as expanding or limiting any authority that the
          Commission may have under law in effect before the date of
          enactment of the Telecommunications Act of 1996.'.

SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.

            Title VII is amended by inserting after section 712 (47 U.S.C.
          612) the following new section:

`SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.

            `(a) COMMISSION INQUIRY- Within 180 days after the date of
          enactment of the Telecommunications Act of 1996, the Federal
          Communications Commission shall complete an inquiry to ascertain
          the level at which video programming is closed captioned. Such
          inquiry shall examine the extent to which existing or previously
          published programming is closed captioned, the size of the video
          programming provider or programming owner providing closed
          captioning, the size of the market served, the relative audience
          shares achieved, or any other related factors. The Commission shall
          submit to the Congress a report on the results of such inquiry.
            `(b) ACCOUNTABILITY CRITERIA- Within 18 months after such date of
          enactment, the Commission shall prescribe such regulations as are
          necessary to implement this section. Such regulations shall ensure
          that--
                `(1) video programming first published or exhibited after the
              effective date of such regulations is fully accessible through
              the provision of closed captions, except as provided in
              subsection (d); and
                `(2) video programming providers or owners maximize the
              accessibility of video programming first published or exhibited
              prior to the effective date of such regulations through the
              provision of closed captions, except as provided in subsection
              (d).
            `(c) DEADLINES FOR CAPTIONING- Such regulations shall include an
          appropriate schedule of deadlines for the provision of closed
          captioning of video programming.
            `(d) EXEMPTIONS- Notwithstanding subsection (b)--
                `(1) the Commission may exempt by regulation programs,
              classes of programs, or services for which the Commission has
              determined that the provision of closed captioning would be
              economically burdensome to the provider or owner of such
              programming;
                `(2) a provider of video programming or the owner of any
              program carried by the provider shall not be obligated to
              supply closed captions if such action would be inconsistent
              with contracts in effect on the date of enactment of the
              Telecommunications Act of 1996, except that nothing in this
              section shall be construed to relieve a video programming
              provider of its obligations to provide services required by
              Federal law; and
                `(3) a provider of video programming or program owner may
              petition the Commission for an exemption from the requirements
              of this section, and the Commission may grant such petition
              upon a showing that the requirements contained in this section
              would result in an undue burden.
            `(e) UNDUE BURDEN- The term `undue burden' means significant
          difficulty or expense. In determining whether the closed captions
          necessary to comply with the requirements of this paragraph would
          result in an undue economic burden, the factors to be considered
          include--
                `(1) the nature and cost of the closed captions for the
              programming;
                `(2) the impact on the operation of the provider or program
              owner;
                `(3) the financial resources of the provider or program
              owner; and
                `(4) the type of operations of the provider or program owner.
            `(f) VIDEO DESCRIPTIONS INQUIRY- Within 6 months after the date
          of enactment of the Telecommunications Act of 1996, the Commission
          shall commence an inquiry to examine the use of video descriptions
          on video programming in order to ensure the accessibility of video
          programming to persons with visual impairments, and report to
          Congress on its findings.  The Commission's report shall assess
          appropriate methods and schedules for phasing video descriptions
          into the marketplace, technical and quality standards for video
          descriptions, a definition of programming for which video
          descriptions would apply, and other technical and legal issues that
          the Commission deems appropriate.
            `(g) VIDEO DESCRIPTION- For purposes of this section, `video
          description' means the insertion of audio narrated descriptions of
          a television program's key visual elements into natural pauses
          between the program's dialogue.
            `(h) PRIVATE RIGHTS OF ACTIONS PROHIBITED- Nothing in this
          section shall be construed to authorize any private right of action
          to enforce any requirement of this section or any regulation
          thereunder. The Commission shall have exclusive jurisdiction with
          respect to any complaint under this section.'.
                               TITLE IV--REGULATORY REFORM

SEC. 401. REGULATORY FORBEARANCE.

            Title I is amended by inserting after section 9 (47 U.S.C. 159)
          the following new section:

`SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.

            `(a) REGULATORY FLEXIBILITY- Notwithstanding section 332(c)(1)(A)
          of this Act, the Commission shall forbear from applying any
          regulation or any provision of this Act to a telecommunications
          carrier or telecommunications service, or class of
          telecommunications carriers or telecommunications services, in any
          or some of its or their geographic markets, if the Commission
          determines that--
                `(1) enforcement of such regulation or provision is not
              necessary to ensure that the charges, practices,
              classifications, or regulations by, for, or in connection with
              that telecommunications carrier or telecommunications service
              are just and reasonable and are not unjustly or unreasonably
              discriminatory;
                `(2) enforcement of such regulation or provision is not
              necessary for the protection of consumers; and
                `(3) forbearance from applying such provision or regulation
              is consistent with the public interest.
            `(b) COMPETITIVE EFFECT TO BE WEIGHED- In making the
          determination under subsection (a)(3), the Commission shall
          consider whether forbearance from enforcing the provision or
          regulation will promote competitive market conditions, including
          the extent to which such forbearance will enhance competition among
          providers of telecommunications services. If the Commission
          determines that such forbearance will promote competition among
          providers of telecommunications services, that determination may be
          the basis for a Commission finding that forbearance is in the
          public interest.
            `(c) PETITION FOR FORBEARANCE- Any telecommunications carrier, or
          class of telecommunications carriers, may submit a petition to the
          Commission requesting that the Commission exercise the authority
          granted under this section with respect to that carrier or those
          carriers, or any service offered by that carrier or carriers. Any
          such petition shall be deemed granted if the Commission does not
          deny the petition for failure to meet the requirements for
          forbearance under subsection (a) within one year after the
          Commission receives it, unless the one-year period is extended by
          the Commission. The Commission may extend the initial one-year
          period by an additional 90 days if the Commission finds that an
          extension is necessary to meet the requirements of subsection (a).
          The Commission may grant or deny a petition in whole or in part and
          shall explain its decision in writing.
            `(d) LIMITATION- Except as provided in section 251(f), the
          Commission may not forbear from applying the requirements of
          section 251(c) or 271 under subsection (a) of this section until it
          determines that those requirements have been fully implemented.
            `(e) STATE ENFORCEMENT AFTER COMMISSION FORBEARANCE- A State
          commission may not continue to apply or enforce any provision of
          this Act that the Commission has determined to forbear from
          applying under subsection (a).'.

SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.

            (a) BIENNIAL REVIEW- Title I is amended by inserting after
          section 10 (as added by section 401) the following new section:

`SEC. 11. REGULATORY REFORM.

            `(a) BIENNIAL REVIEW OF REGULATIONS- In every even-numbered year
          (beginning with 1998), the Commission--
                `(1) shall review all regulations issued under this Act in
              effect at the time of the review that apply to the operations
              or activities of any provider of telecommunications service; and
                `(2) shall determine whether any such regulation is no longer
              necessary in the public interest as the result of meaningful
              economic competition between providers of such service.
            `(b) EFFECT OF DETERMINATION- The Commission shall repeal or
          modify any regulation it determines to be no longer necessary in
          the public interest.'.
            (b) REGULATORY RELIEF-
                (1) Streamlined procedures for changes in charges,
              classifications, regulations, or practices-
                    (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
                        (i) by striking `12 months' the first place it
                      appears in paragraph (2)(A) and inserting `5 months';
                        (ii) by striking `effective,' and all that follows in
                      paragraph (2)(A) and inserting `effective.'; and
                        (iii) by adding at the end thereof the following:
                `(3) A local exchange carrier may file with the Commission a
              new or revised charge, classification, regulation, or practice
              on a streamlined basis. Any such charge, classification,
              regulation, or practice shall be deemed lawful and shall be
              effective 7 days (in the case of a reduction in rates) or 15
              days (in the case of an increase in rates) after the date on
              which it is filed with the Commission unless the Commission
              takes action under paragraph (1) before the end of that 7-day
              or 15-day period, as is appropriate.'.
                    (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
                        (i) by striking `12 months' the first place it
                      appears in paragraph (1) and inserting `5 months'; and
                        (ii) by striking `filed,' and all that follows in
                      paragraph (1) and inserting `filed.'.
                (2) EXTENSIONS OF LINES UNDER SECTION 214; ARMIS REPORTS- The
              Commission shall permit any common carrier--
                    (A) to be exempt from the requirements of section 214 of
                  the Communications Act of 1934 for the extension of any
                  line; and
                    (B) to file cost allocation manuals and ARMIS reports
                  annually, to the extent such carrier is required to file
                  such manuals or reports.
                (3) FORBEARANCE AUTHORITY NOT LIMITED- Nothing in this
              subsection shall be construed to limit the authority of the
              Commission to waive, modify, or forbear from applying any of
              the requirements to which reference is made in paragraph (1)
              under any other provision of this Act or other law.
                (4) EFFECTIVE DATE OF AMENDMENTS- The amendments made by
              paragraph (1) of this subsection shall apply with respect to
              any charge, classification, regulation, or practice filed on or
              after one year after the date of enactment of this Act.
            (c) CLASSIFICATION OF CARRIERS- In classifying carriers according
          to section 32.11 of its regulations (47 C.F.R. 32.11) and in
          establishing reporting requirements pursuant to part 43 of its
          regulations (47 C.F.R. part 43) and section 64.903 of its
          regulations (47 C.F.R. 64.903), the Commission shall adjust the
          revenue requirements to account for inflation as of the release
          date of the Commission's Report and Order in CC Docket No. 91-141,
          and annually thereafter. This subsection shall take effect on the
          date of enactment of this Act.

SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS AND FUNCTIONS.

            (a) MODIFICATION OF AMATEUR RADIO EXAMINATION PROCEDURES- Section
          4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
                (1) in subparagraph (A)--
                    (A) by inserting `or administering' after `for purposes
                  of preparing';
                    (B) by inserting `of' after `than the class'; and
                    (C) by inserting `or administered' after `for which the
                  examination is being prepared';
                (2) by striking subparagraph (B);
                (3) in subparagraph (H), by striking `(A), (B), and (C)' and
              inserting `(A) and (B)';
                (4) in subparagraph (J)--
                    (A) by striking `or (B)'; and
                    (B) by striking the last sentence; and
                (5) by redesignating subparagraphs (C) through (J) as
              subparagraphs (B) through (I), respectively.
            (b) AUTHORITY TO DESIGNATE ENTITIES TO INSPECT- Section 4(f)(3)
          (47 U.S.C. 154(f)(3)) is amended by inserting before the period at
          the end the following: `: and   Provided further,  
          That, in the alternative, an entity designated by the
          Commission may make the inspections referred to in this paragraph'.
            (c) EXPEDITING INSTRUCTIONAL TELEVISION FIXED SERVICE PROCESSING-
          Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by striking the
          last sentence and inserting the following: `Except for cases
          involving the authorization of service in the instructional
          television fixed service, or as otherwise provided in this Act,
          nothing in this paragraph shall authorize the Commission to provide
          for the conduct, by any person or persons other than persons
          referred to in paragraph (2) or (3) of section 556(b) of title 5,
          United States Code, of any hearing to which such section applies.'.
            (d) REPEAL SETTING OF DEPRECIATION RATES- The first sentence of
          section 220(b) (47 U.S.C. 220(b)) is amended by striking `shall
          prescribe for such carriers' and inserting `may prescribe, for such
          carriers as it determines to be appropriate,'.
            (e) USE OF INDEPENDENT AUDITORS- Section 220(c) (47 U.S.C.
          220(c)) is amended by adding at the end thereof the following: `The
          Commission may obtain the services of any person licensed to
          provide public accounting services under the law of any State to
          assist with, or conduct, audits under this section. While so
          employed or engaged in conducting an audit for the Commission under
          this section, any such person shall have the powers granted the
          Commission under this subsection and shall be subject to subsection
          (f) in the same manner as if that person were an employee of the
          Commission.'.
            (f) DELEGATION OF EQUIPMENT TESTING AND CERTIFICATION TO PRIVATE
          LABORATORIES- Section 302 (47 U.S.C. 302) is amended by adding at
          the end the following:
            `(e) The Commission may--
                `(1) authorize the use of private organizations for testing
              and certifying the compliance of devices or home electronic
              equipment and systems with regulations promulgated under this
              section;
                `(2) accept as prima facie evidence of such compliance the
              certification by any such organization; and
                `(3) establish such qualifications and standards as it deems
              appropriate for such private organizations, testing, and
              certification.'.
            (g) MAKING LICENSE MODIFICATION UNIFORM- Section 303(f) (47
          U.S.C. 303(f)) is amended by striking `unless, after a public
          hearing,' and inserting `unless'.
            (h) ELIMINATE FCC JURISDICTION OVER GOVERNMENT-OWNED SHIP RADIO
          STATIONS-
                (1) Section 305 (47 U.S.C. 305) is amended by striking
              subsection (b) and redesignating subsections (c) and (d) as (b)
              and (c), respectively.
                (2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking
              `except a vessel of the United States Maritime Administration,
              the Inland and Coastwise Waterways Service, or the Panama Canal
              Company,'.
            (i) PERMIT OPERATION OF DOMESTIC SHIP AND AIRCRAFT RADIOS WITHOUT
          LICENSE- Section 307(e) (47 U.S.C.  307(e)) is amended to read as
          follows:
            `(e)(1) Notwithstanding any license requirement established in
          this Act, if the Commission determines that such authorization
          serves the public interest, convenience, and necessity, the
          Commission may by rule authorize the operation of radio stations
          without individual licenses in the following radio services: (A)
          the citizens band radio service; (B) the radio control service; (C)
          the aviation radio service for aircraft stations operated on
          domestic flights when such aircraft are not otherwise required to
          carry a radio station; and (D) the maritime radio service for ship
          stations navigated on domestic voyages when such ships are not
          otherwise required to carry a radio station.
            `(2) Any radio station operator who is authorized by the
          Commission to operate without an individual license shall comply
          with all other provisions of this Act and with rules prescribed by
          the Commission under this Act.
            `(3) For purposes of this subsection, the terms `citizens band
          radio service', `radio control service', `aircraft station' and
          `ship station' shall have the meanings given them by the Commission
          by rule.'.
            (j) EXPEDITED LICENSING FOR FIXED MICROWAVE SERVICE- Section
          309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking subparagraph
          (A) and redesignating subparagraphs (B) through (G) as
          subparagraphs (A) through (F), respectively.
            (k) FOREIGN DIRECTORS- Section 310(b) (47 U.S.C. 310(b)) is
          amended--
                (1) in paragraph (3), by striking `of which any officer or
              director is an alien or'; and
                (2) in paragraph (4), by striking `of which any officer or
              more than one-fourth of the directors are aliens, or'.
            (l) LIMITATION ON SILENT STATION AUTHORIZATIONS- Section 312 (47
          U.S.C. 312) is amended by adding at the end the following:
            `(g) If a broadcasting station fails to transmit broadcast
          signals for any consecutive 12-month period, then the station
          license granted for the operation of that broadcast station expires
          at the end of that period, notwithstanding any provision, term, or
          condition of the license to the contrary.'.
            (m) MODIFICATION OF CONSTRUCTION PERMIT REQUIREMENT- Section
          319(d) is amended by striking the last two sentences and inserting
          the following: `With respect to any broadcasting station, the
          Commission shall not have any authority to waive the requirement of
          a permit for construction, except that the Commission may by
          regulation determine that a permit shall not be required for minor
          changes in the facilities of authorized broadcast stations. With
          respect to any other station or class of stations, the Commission
          shall not waive the requirement for a construction permit unless
          the Commission determines that the public interest, convenience,
          and necessity would be served by such a waiver.'.
            (n) CONDUCT OF INSPECTIONS- Section 362(b) (47 U.S.C. 362(b)) is
          amended to read as follows:
            `(b) Every ship of the United States that is subject to this part
          shall have the equipment and apparatus prescribed therein inspected
          at least once each year by the Commission or an entity designated
          by the Commission. If, after such inspection, the Commission is
          satisfied that all relevant provisions of this Act and the station
          license have been complied with, the fact shall be so certified on
          the station license by the Commission. The Commission  shall make
          such additional inspections at frequent intervals as the Commission
          determines may be necessary to ensure compliance with the
          requirements of this Act. The Commission may, upon a finding that
          the public interest could be served thereby--
                `(1) waive the annual inspection required under this section
              for a period of up to 90 days for the sole purpose of enabling
              a vessel to complete its voyage and proceed to a port in the
              United States where an inspection can be held; or
                `(2) waive the annual inspection required under this section
              for a vessel that is in compliance with the radio provisions of
              the Safety Convention and that is operating solely in waters
              beyond the jurisdiction of the United States:   Provided, 
              That such inspection shall be performed
              within 30 days of such vessel's return to the United States.'.
            (o) INSPECTION BY OTHER ENTITIES- Section 385 (47 U.S.C. 385) is
          amended--
                (1) by inserting `or an entity designated by the Commission'
              after `The Commission'; and
                (2) by adding at the end thereof the following: `In
              accordance with such other provisions of law as apply to
              Government contracts, the Commission may enter into contracts
              with any person for the purpose of carrying out such
              inspections and certifying compliance with those requirements,
              and may, as part of any such contract, allow any such person to
              accept reimbursement from the license holder for travel and
              expense costs of any employee conducting an inspection or
              certification.'.
                             TITLE V--OBSCENITY AND VIOLENCE
               SUBTITLE A--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF
                              TELECOMMUNICATIONS FACILITIES

SEC. 501. SHORT TITLE.

            This title may be cited as the `Communications Decency Act of
          1996'.

SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES UNDER THE COMMUNICATIONS ACT OF 1934.

            Section 223 (47 U.S.C. 223) is amended--
                (1) by striking subsection (a) and inserting in lieu thereof:
            `(a) Whoever--
                `(1) in interstate or foreign communications--
                    `(A) by means of a telecommunications device knowingly--
                        `(i) makes, creates, or solicits, and
                        `(ii) initiates the transmission of,
                  any comment, request, suggestion, proposal, image, or other
                  communication which is obscene, lewd, lascivious, filthy,
                  or indecent, with intent to annoy, abuse, threaten, or
                  harass another person;
                    `(B) by means of a telecommunications device knowingly--
                        `(i) makes, creates, or solicits, and
                        `(ii) initiates the transmission of,
                  any comment, request, suggestion, proposal, image, or other
                  communication which is obscene or indecent, knowing that
                  the recipient of the communication is under 18 years of
                  age, regardless of whether the maker of such communication
                  placed the call or initiated the communication;
                    `(C) makes a telephone call or utilizes a
                  telecommunications device, whether or not conversation or
                  communication ensues, without disclosing his identity and
                  with intent to annoy, abuse, threaten, or harass any person
                  at the called number or who receives the communications;
                    `(D) makes or causes the telephone of another repeatedly
                  or continuously to ring, with intent to harass any person
                  at the called number; or
                    `(E) makes repeated telephone calls or repeatedly
                  initiates communication with a telecommunications device,
                  during which conversation or communication ensues, solely
                  to harass any person at the called number or who receives
                  the communication; or
                `(2) knowingly permits any telecommunications facility under
              his control to be used for any activity prohibited by paragraph
              (1) with the intent that it be used for such activity,
          shall be fined under title 18, United States Code, or imprisoned
          not more than two years, or both.'; and
                (2) by adding at the end the following new subsections:
            `(d) Whoever--
                `(1) in interstate or foreign communications knowingly--
                    `(A) uses an interactive computer service to send to a
                  specific person or persons under 18 years of age, or
                    `(B) uses any interactive computer service to display in
                  a manner available to a person under 18 years of age,
              any comment, request, suggestion, proposal, image, or other
              communication that, in context, depicts or describes, in terms
              patently offensive as measured by contemporary community
              standards, sexual or excretory activities or organs, regardless
              of whether the user of such service placed the call or
              initiated the communication; or
                `(2) knowingly permits any telecommunications facility under
              such person's control to be used for an activity prohibited by
              paragraph (1) with the intent that it be used for such activity,
          shall be fined under title 18, United States Code, or imprisoned
          not more than two years, or both.
            `(e) In addition to any other defenses available by law:
                `(1) No person shall be held to have violated subsection (a)
              or (d) solely for providing access or connection to or from a
              facility, system, or network not under that person's control,
              including transmission, downloading, intermediate storage,
              access software, or other related capabilities that are
              incidental to providing such access or connection that does not
              include the creation of the content of the communication.
                `(2) The defenses provided by paragraph (1) of this
              subsection shall not be applicable to a person who is a
              conspirator with an entity actively involved in the creation or
              knowing distribution of communications that violate this
              section, or who knowingly advertises the availability of such
              communications.
                `(3) The defenses provided in paragraph (1) of this
              subsection shall not be applicable to a person who provides
              access or connection to a facility, system, or network engaged
              in the violation of this section that is owned or controlled by
              such person.
                `(4) No employer shall be held liable under this section for
              the actions of an employee or agent unless the employee's or
              agent's conduct is within the scope of his or her employment or
              agency and the employer (A) having knowledge of such conduct,
              authorizes or ratifies such conduct, or (B) recklessly
              disregards such conduct.
                `(5) It is a defense to a prosecution under subsection
              (a)(1)(B) or (d), or under subsection (a)(2) with respect to
              the use of a facility for an activity under subsection
              (a)(1)(B) that a person--
                    `(A) has taken, in good faith, reasonable, effective, and
                  appropriate actions under the circumstances to restrict or
                  prevent access by minors to a communication specified in
                  such subsections, which may involve any appropriate
                  measures to restrict minors from such communications,
                  including any method which is feasible under available
                  technology; or
                    `(B) has restricted access to such communication by
                  requiring use of a verified credit card, debit account,
                  adult access code, or adult personal identification number.
                `(6) The Commission may describe measures which are
              reasonable, effective, and appropriate to restrict access to
              prohibited communications under subsection (d). Nothing in this
              section authorizes the Commission to enforce, or is intended to
              provide the Commission with the authority to approve, sanction,
              or permit, the use of such measures. The Commission shall have
              no enforcement authority over the failure to utilize such
              measures. The Commission shall not endorse specific products
              relating to such measures. The use of such measures shall be
              admitted as evidence of good faith efforts for purposes of
              paragraph (5) in any action arising under subsection (d).
              Nothing in this section shall be construed to treat interactive
              computer services as common carriers or telecommunications
              carriers.
            `(f)(1) No cause of action may be brought in any court or
          administrative agency against any person on account of any activity
          that is not in violation of any law punishable by criminal or civil
          penalty, and that the person has taken in good faith to implement a
          defense authorized under this section or otherwise to restrict or
          prevent the transmission of, or access to, a communication
          specified in this section.
            `(2) No State or local government may impose any liability for
          commercial activities or actions by commercial entities, nonprofit
          libraries, or institutions of higher education in connection with
          an activity or action described in subsection (a)(2) or (d) that is
          inconsistent with the treatment of those activities or actions
          under this section:   Provided, however  , That
          nothing herein shall preclude any State or local government from
          enacting and enforcing complementary oversight, liability, and
          regulatory systems, procedures, and requirements, so long as such
          systems, procedures, and requirements govern only intrastate
          services and do not result in the imposition of inconsistent
          rights, duties or obligations on the provision of interstate
          services. Nothing in this subsection shall preclude any State or
          local government from governing conduct not covered by this section.
            `(g) Nothing in subsection (a), (d), (e), or (f) or in the
          defenses to prosecution under subsection (a) or (d) shall be
          construed to affect or limit the application or enforcement of any
          other Federal law.
            `(h) For purposes of this section--
                `(1) The use of the term `telecommunications device' in this
              section--
                    `(A) shall not impose new obligations on broadcasting
                  station licensees and cable operators covered by obscenity
                  and indecency provisions elsewhere in this Act; and
                    `(B) does not include an interactive computer service.
                `(2) The term `interactive computer service' has the meaning
              provided in section 230(e)(2).
                `(3) The term `access software' means software (including
              client or server software) or enabling tools that do not create
              or provide the content of the communication but that allow a
              user to do any one or more of the following:
                    `(A) filter, screen, allow, or disallow content;
                    `(B) pick, choose, analyze, or digest content; or
                    `(C) transmit, receive, display, forward, cache, search,
                  subset, organize, reorganize, or translate content.
                `(4) The term `institution of higher education' has the
              meaning provided in section 1201 of the Higher Education Act of
              1965 (20 U.S.C. 1141).
                `(5) The term `library' means a library eligible for
              participation in State-based plans for funds under title III of
              the Library Services and Construction Act (20 U.S.C. 355e et
              seq.).'.

SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.

            Section 639 (47 U.S.C. 559) is amended by striking `not more than
          $10,000' and inserting `under title 18, United States Code,'.

SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

            Part IV of title VI (47 U.S.C. 551 et seq.) is amended by adding
          at the end the following:

`SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

            `(a) SUBSCRIBER REQUEST- Upon request by a cable service
          subscriber, a cable operator shall, without charge, fully scramble
          or otherwise fully block the audio and video programming of each
          channel carrying such programming so that one not a subscriber does
          not receive it.
            `(b) DEFINITION- As used in this section, the term `scramble'
          means to rearrange the content of the signal of the programming so
          that the programming cannot be viewed or heard in an understandable
          manner.'.

SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE PROGRAMMING.

            (a) REQUIREMENT- Part IV of title VI (47 U.S.C. 551 et seq.), as
          amended by this Act, is further amended by adding at the end the
          following:

`SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE PROGRAMMING.

            `(a) REQUIREMENT- In providing sexually explicit adult
          programming or other programming that is indecent on any channel of
          its service primarily dedicated to sexually-oriented programming, a
          multichannel video programming distributor shall fully scramble or
          otherwise fully block the video and audio portion of such channel
          so that one not a subscriber to such channel or programming does
          not receive it.
            `(b) IMPLEMENTATION- Until a multichannel video programming
          distributor complies with the requirement set forth in subsection
          (a), the distributor shall limit the access of children to the
          programming referred to in that subsection by not providing such
          programming during the hours of the day (as determined by the
          Commission) when a significant number of children are likely to
          view it.
            `(c) DEFINITION- As used in this section, the term `scramble'
          means to rearrange the content of the signal of the programming so
          that the programming cannot be viewed or heard in an understandable
          manner.'.
            (b) EFFECTIVE DATE- The amendment made by subsection (a) shall
          take effect 30 days after the date of enactment of this Act.

SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.

            (a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL CHANNELS- Section
          611(e) (47 U.S.C. 531(e)) is amended by inserting before the period
          the following: `, except a cable operator may refuse to transmit
          any public access program or portion of a public access program
          which contains obscenity, indecency, or nudity'.
            (b) CABLE CHANNELS FOR COMMERCIAL USE- Section 612(c)(2) (47
          U.S.C. 532(c)(2)) is amended by striking `an operator' and
          inserting `a cable operator may refuse to transmit any leased
          access program or portion of a leased access program which contains
          obscenity, indecency, or nudity and'.

SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMUNICATION OF OBSCENE MATERIALS THROUGH THE USE OF COMPUTERS.

            (a) IMPORTATION OR TRANSPORTATION- Section 1462 of title 18,
          United States Code, is amended--
                (1) in the first undesignated paragraph, by inserting `or
              interactive computer service (as defined in section 230(e)(2)
              of the Communications Act of 1934)' after `carrier'; and
                (2)  in the second undesignated paragraph--
                    (A) by inserting `or receives,' after `takes';
                    (B) by inserting `or interactive computer service (as
                  defined in section 230(e)(2) of the Communications Act of
                  1934)' after `common carrier'; and
                    (C) by inserting `or importation' after `carriage'.
            (b) TRANSPORTATION FOR PURPOSES OF SALE OR DISTRIBUTION- The
          first undesignated paragraph of section 1465 of title 18, United
          States Code, is amended--
                (1) by striking `transports in' and inserting `transports or
              travels in, or uses a facility or means of,';
                (2) by inserting `or an interactive computer service (as
              defined in section 230(e)(2) of the Communications Act of 1934)
              in or affecting such commerce' after `foreign commerce' the
              first place it appears;
                (3) by striking `, or knowingly travels in' and all that
              follows through `obscene material in interstate or foreign
              commerce,' and inserting `of'.
            (c) INTERPRETATION- The amendments made by this section are
          clarifying and shall not be interpreted to limit or repeal any
          prohibition contained in sections 1462 and 1465 of title 18, United
          States Code, before such amendment, under the rule established in
          United States v. Alpers, 338 U.S. 680 (1950).

SEC. 508. COERCION AND ENTICEMENT OF MINORS.

            Section 2422 of title 18, United States Code, is amended--
                (1) by inserting `(a)' before `Whoever knowingly'; and
                (2) by adding at the end the following:
            `(b) Whoever, using any facility or means of interstate or
          foreign commerce, including the mail, or within the special
          maritime and territorial jurisdiction of the United States,
          knowingly persuades, induces, entices, or coerces any individual
          who has not attained the age of 18 years to engage in prostitution
          or any sexual act for which any person may be criminally
          prosecuted, or attempts to do so, shall be fined under this title
          or imprisoned not more than 10 years, or both.'.

SEC. 509. ONLINE FAMILY EMPOWERMENT.

            Title II of the Communications Act of 1934 (47 U.S.C. 201 et
          seq.) is amended by adding at the end the following new section:

`SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF OFFENSIVE MATERIAL.

            `(a) FINDINGS- The Congress finds the following:
                `(1) The rapidly developing array of Internet and other
              interactive computer services available to individual Americans
              represent an extraordinary advance in the availability of
              educational and informational resources to our citizens.
                `(2) These services offer users a great degree of control
              over the information that they receive, as well as the
              potential for even greater control in the future as technology
              develops.
                `(3) The Internet and other interactive computer services
              offer a forum for a true diversity of political discourse,
              unique opportunities for cultural development, and myriad
              avenues for intellectual activity.
                `(4) The Internet and other interactive computer services
              have flourished, to the benefit of all Americans, with a
              minimum of government regulation.
                `(5) Increasingly Americans are relying on interactive media
              for a variety of political, educational, cultural, and
              entertainment services.
            `(b) POLICY- It is the policy of the United States--
                `(1) to promote the continued development of the Internet and
              other interactive computer services and other interactive media;
                `(2) to preserve the vibrant and competitive free market that
              presently exists for the Internet and other interactive
              computer services,  unfettered by Federal or State regulation;
                `(3) to encourage the development of technologies which
              maximize user control over what information is received by
              individuals, families, and schools who use the Internet and
              other interactive computer services;
                `(4) to remove disincentives for the development and
              utilization of blocking and filtering technologies that empower
              parents to restrict their children's access to objectionable or
              inappropriate online material; and
                `(5) to ensure vigorous enforcement of Federal criminal laws
              to deter and punish trafficking in obscenity, stalking, and
              harassment by means of computer.
            `(c) PROTECTION FOR `GOOD SAMARITAN' BLOCKING AND SCREENING OF
          OFFENSIVE MATERIAL-
                `(1) TREATMENT OF PUBLISHER OR SPEAKER- No provider or user
              of an interactive computer service shall be treated as the
              publisher or speaker of any information provided by another
              information content provider.
                `(2) CIVIL LIABILITY- No provider or user of an interactive
              computer service shall be held liable on account of--
                    `(A) any action voluntarily taken in good faith to
                  restrict access to or availability of material that the
                  provider or user considers to be obscene, lewd, lascivious,
                  filthy, excessively violent, harassing, or otherwise
                  objectionable, whether or not such material is
                  constitutionally protected; or
                    `(B) any action taken to enable or make available to
                  information content providers or others the technical means
                  to restrict access to material described in paragraph (1).
            `(d) EFFECT ON OTHER LAWS-
                `(1) NO EFFECT ON CRIMINAL LAW- Nothing in this section shall
              be construed to impair the enforcement of section 223 of this
              Act, chapter 71 (relating to obscenity) or 110 (relating to
              sexual exploitation of children) of title 18, United States
              Code, or any other Federal criminal statute.
                `(2) NO EFFECT ON INTELLECTUAL PROPERTY LAW- Nothing in this
              section shall be construed to limit or expand any law
              pertaining to intellectual property.
                `(3) STATE LAW- Nothing in this section shall be construed to
              prevent any State from enforcing any State law that is
              consistent with this section. No cause of action may be brought
              and no liability may be imposed under any State or local law
              that is inconsistent with this section.
                `(4) NO EFFECT ON COMMUNICATIONS PRIVACY LAW- Nothing in this
              section shall be construed to limit the application of the
              Electronic Communications Privacy Act of 1986 or any of the
              amendments made by such Act, or any similar State law.
            `(e) DEFINITIONS- As used in this section:
                `(1) INTERNET- The term `Internet' means the international
              computer network of both Federal and non-Federal interoperable
              packet switched data networks.
                `(2) INTERACTIVE COMPUTER SERVICE- The term `interactive
              computer service' means any information service, system, or
              access software provider that provides or enables computer
              access by multiple users to a computer server, including
              specifically a service or system that provides access to the
              Internet and such systems operated or services offered by
              libraries or educational institutions.
                `(3) INFORMATION CONTENT PROVIDER- The term `information
              content provider' means any person or entity that is
              responsible, in whole or in part, for the creation or
              development of information provided through the Internet or any
              other interactive computer service.
                `(4) ACCESS SOFTWARE PROVIDER- The term `access software
              provider' means a provider of software (including client or
              server software), or enabling tools that do any one or more of
              the following:
                    `(A) filter, screen, allow, or disallow content;
                    `(B) pick, choose, analyze, or digest content; or
                    `(C) transmit, receive, display, forward, cache, search,
                  subset, organize, reorganize, or translate content.'.
                                  SUBTITLE B--VIOLENCE

SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.

            (a) FINDINGS- The Congress makes the following findings:
                (1) Television influences children's perception of the values
              and behavior that are common and acceptable in society.
                (2) Television station operators, cable television system
              operators, and video programmers should follow practices in
              connection with video programming that take into consideration
              that television broadcast and cable programming has established
              a uniquely pervasive presence in the lives of American children.
                (3) The average American child is exposed to 25 hours of
              television each week and some children are exposed to as much
              as 11 hours of television a day.
                (4) Studies have shown that children exposed to violent video
              programming at a young age have a higher tendency for violent
              and aggressive behavior later in life than children not so
              exposed, and that children exposed to violent video programming
              are prone to assume that acts of violence are acceptable
              behavior.
                (5) Children in the United States are, on average, exposed to
              an estimated 8,000 murders and 100,000 acts of violence on
              television by the time the child completes elementary school.
                (6) Studies indicate that children are affected by the
              pervasiveness and casual treatment of sexual material on
              television, eroding the ability of parents to develop
              responsible attitudes and behavior in their children.
                (7) Parents express grave concern over violent and sexual
              video programming and strongly support technology that would
              give them greater control to block video programming in the
              home that they consider harmful to their children.
                (8) There is a compelling governmental interest in empowering
              parents to limit the negative influences of video programming
              that is harmful to children.
                (9) Providing parents with timely information about the
              nature of upcoming video programming and with the technological
              tools that allow them easily to block violent, sexual, or other
              programming that they believe harmful to their children is a
              nonintrusive and narrowly tailored means of achieving that
              compelling governmental interest.
            (b) ESTABLISHMENT OF TELEVISION RATING CODE-
                (1) AMENDMENT- Section 303 (47 U.S.C. 303) is amended by
              adding at the end the following:
            `(w) Prescribe--
                `(1) on the basis of recommendations from an advisory
              committee established by the Commission in accordance with
              section 551(b)(2) of the Telecommunications Act of 1996,
              guidelines and recommended procedures for the identification
              and rating of video programming that contains sexual, violent,
              or other indecent material about which parents should be
              informed before it is displayed to children:  
              Provided,   That nothing in this paragraph shall be
              construed to authorize any rating of video programming on the
              basis of its political or religious content; and
                `(2) with respect to any video programming that has been
              rated, and in consultation with the television industry, rules
              requiring distributors of such video programming to transmit
              such rating to permit parents to block the display of video
              programming that they have determined is inappropriate for
              their children.'.
                (2) ADVISORY COMMITTEE REQUIREMENTS- In establishing an
              advisory committee for purposes of the amendment made by
              paragraph (1) of this subsection, the Commission shall--
                    (A) ensure that such committee is composed of parents,
                  television broadcasters, television programming producers,
                  cable operators, appropriate public interest groups, and
                  other interested individuals from the private sector and is
                  fairly balanced in terms of political affiliation, the
                  points of view represented, and the functions to be
                  performed by the committee;
                    (B) provide to the committee such staff and resources as
                  may be necessary to permit it to perform its functions
                  efficiently and promptly; and
                    (C) require the committee to submit a final report of its
                  recommendations within one year after the date of the
                  appointment of the initial members.
            (c) REQUIREMENT FOR MANUFACTURE OF TELEVISIONS THAT BLOCK
          PROGRAMS- Section 303 (47 U.S.C. 303), as amended by subsection
          (a), is further amended by adding at the end the following:
            `(x) Require, in the case of an apparatus designed to receive
          television signals that are shipped in interstate commerce or
          manufactured in the United States and that have a picture screen 13
          inches or greater in size (measured diagonally), that such
          apparatus be equipped with a feature designed to enable viewers to
          block display of all programs with a common rating, except as
          otherwise permitted by regulations pursuant to section 330(c)(4).'.
            (d) SHIPPING OF TELEVISIONS THAT BLOCK PROGRAMS-
                (1) REGULATIONS- Section 330 (47 U.S.C. 330) is amended--
                    (A) by redesignating subsection (c) as subsection (d); and
                    (B) by adding after subsection (b) the following new
                  subsection (c):
            `(c)(1) Except as provided in paragraph (2), no person shall ship
          in interstate commerce or manufacture in the United States any
          apparatus described in section 303(x) of this Act except in
          accordance with rules prescribed by the Commission pursuant to the
          authority granted by that section.
            `(2) This subsection shall not apply to carriers transporting
          apparatus referred to in paragraph (1) without trading in it.
            `(3) The rules prescribed by the Commission under this subsection
          shall provide for the oversight by the Commission of the adoption
          of standards by industry for blocking technology. Such rules shall
          require that all such apparatus be able to receive the rating
          signals which have been transmitted by way of line 21 of the
          vertical blanking interval and which conform to the signal and
          blocking specifications established by industry under the
          supervision of the Commission.
            `(4) As new video technology is developed, the Commission shall
          take such action as the Commission determines appropriate to ensure
          that blocking service continues to be available to consumers. If
          the Commission determines that an alternative blocking technology
          exists that--
                `(A) enables parents to block programming based on
              identifying programs without ratings,
                `(B) is available to consumers at a cost which is comparable
              to the cost of technology that allows parents to block
              programming based on common ratings, and
                `(C) will allow parents to block a broad range of programs on
              a multichannel system as effectively and as easily as
              technology that allows parents to block programming based on
              common ratings,
          the Commission shall amend the rules prescribed pursuant to section
          303(x) to require that the apparatus described in such section be
          equipped with either the blocking technology described in such
          section or the alternative blocking technology described in this
          paragraph.'.
                (2) CONFORMING AMENDMENT- Section 330(d), as redesignated by
              subsection (d)(1)(A), is amended by striking `section 303(s),
              and section 303(u)' and inserting in lieu thereof `and sections
              303(s), 303(u), and 303(x)'.
            (e) APPLICABILITY AND EFFECTIVE DATES-
                (1) APPLICABILITY OF RATING PROVISION- The amendment made by
              subsection (b) of this section shall take effect 1 year after
              the date of enactment of this Act, but only if the Commission
              determines, in consultation with appropriate public interest
              groups and interested individuals from the private sector, that
              distributors of video programming have not, by such date--
                    (A) established voluntary rules for rating video
                  programming that contains sexual, violent, or other
                  indecent material about which parents should be informed
                  before it is displayed to children, and such rules are
                  acceptable to the Commission; and
                    (B) agreed voluntarily to broadcast signals that contain
                  ratings of such programming.
                (2) EFFECTIVE DATE OF MANUFACTURING PROVISION- In prescribing
              regulations to implement the amendment made by subsection (c),
              the Federal Communications Commission shall, after consultation
              with the television manufacturing industry, specify the
              effective date for the applicability of the requirement to the
              apparatus covered by such amendment, which date shall not be
              less than two years after the date of enactment of this Act.

SEC. 552. TECHNOLOGY FUND.

            It is the policy of the United States to encourage broadcast
          television, cable, satellite, syndication, other video programming
          distributors, and relevant related industries (in consultation with
          appropriate public interest groups and interested individuals from
          the private sector) to--
                (1) establish a technology fund to encourage television and
              electronics equipment manufacturers to facilitate the
              development of technology which would empower parents to block
              programming they deem inappropriate for their children and to
              encourage the availability thereof to low income parents;
                (2) report to the viewing public on the status of the
              development of affordable, easy to use blocking technology; and
                (3) establish and promote effective procedures, standards,
              systems, advisories, or other mechanisms for ensuring that
              users have easy and complete access to the information
              necessary to effectively utilize blocking technology and to
              encourage the availability thereof to low income parents.
                               SUBTITLE C--JUDICIAL REVIEW

SEC. 561. EXPEDITED REVIEW.

            (a) THREE-JUDGE DISTRICT COURT HEARING- Notwithstanding any other
          provision of law, any civil action challenging the
          constitutionality, on its face, of this title or any amendment made
          by this title, or any provision thereof, shall be heard by a
          district court of 3 judges convened pursuant to the provisions of
          section 2284 of title 28, United States Code.
            (b) APPELLATE REVIEW- Notwithstanding any other provision of law,
          an interlocutory or final judgment, decree, or order of the court
          of 3 judges in an action under subsection (a) holding this title or
          an amendment made by this title, or any provision thereof,
          unconstitutional shall be reviewable as a matter of right by direct
          appeal to the Supreme Court. Any such appeal shall be filed not
          more than 20 days after entry of such judgment, decree, or order.
                             TITLE VI--EFFECT ON OTHER LAWS

SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.

            (a) APPLICABILITY OF AMENDMENTS TO FUTURE CONDUCT-
                (1) AT&T CONSENT DECREE- Any conduct or activity that was,
              before the date of enactment of this Act, subject to any
              restriction or obligation imposed by the AT&T Consent Decree
              shall, on and after such date, be subject to the restrictions
              and obligations imposed by the Communications Act of 1934 as
              amended by this Act and shall not be subject to the
              restrictions and the obligations imposed by such Consent Decree.
                (2) GTE CONSENT DECREE- Any conduct or activity that was,
              before the date of enactment of this Act, subject to any
              restriction or obligation imposed by the GTE Consent Decree
              shall, on and after such date, be subject to the restrictions
              and obligations imposed by the Communications Act of 1934 as
              amended by this Act and shall not be subject to the
              restrictions and the obligations imposed by such Consent Decree.
                (3) MCCAW CONSENT DECREE- Any conduct or activity that was,
              before the date of enactment of this Act, subject to any
              restriction or obligation imposed by the McCaw Consent Decree
              shall, on and after such date, be subject to the restrictions
              and obligations imposed by the Communications Act of 1934 as
              amended by this Act and subsection (d) of this section and
              shall not be subject to the restrictions and the obligations
              imposed by such Consent Decree.
            (b) ANTITRUST LAWS-
                (1) SAVINGS CLAUSE- Except as provided in paragraphs (2) and
              (3), nothing in this Act or the amendments made by this Act
              shall be construed to modify, impair, or supersede the
              applicability of any of the antitrust laws.
                (2) REPEAL- Subsection (a) of section 221 (47 U.S.C. 221(a))
              is repealed.
                (3) CLAYTON ACT- Section 7 of the Clayton Act (15 U.S.C. 18)
              is amended in the last paragraph by striking `Federal
              Communications Commission,'.
            (c) FEDERAL, STATE, AND LOCAL LAW-
                (1) NO IMPLIED EFFECT- This Act and the amendments made by
              this Act shall not be construed to modify, impair, or supersede
              Federal, State, or local law unless expressly so provided in
              such Act or amendments.
                (2) STATE TAX SAVINGS PROVISION- Notwithstanding paragraph
              (1), nothing in this Act or the amendments made by this Act
              shall be construed to modify, impair, or supersede, or
              authorize the modification, impairment, or supersession of, any
              State or local law pertaining to taxation, except as provided
              in sections 622 and 653(c) of the Communications Act of 1934
              and section 602 of this Act.
            (d) COMMERCIAL MOBILE SERVICE JOINT MARKETING- Notwithstanding
          section 22.903 of the Commission's regulations (47 C.F.R. 22.903)
          or any other Commission regulation, a Bell operating company or any
          other company may, except as provided in sections 271(e)(1) and s272
          of the Communications Act of 1934 as amended by this Act as they
          relate to wireline service, jointly market and sell commercial
          mobile services in conjunction with telephone exchange service,
          exchange access, intraLATA telecommunications service, interLATA
          telecommunications service, and information services.
            (e) DEFINITIONS- As used in this section:
                (1) AT&T CONSENT DECREE- The term `AT&T Consent Decree' means
              the order entered August 24, 1982, in the antitrust action
              styled United States v. Western Electric, Civil Action No.
              82-0192, in the United States District Court for the District
              of Columbia, and includes any judgment or order with respect to
              such action entered on or after August 24, 1982.
                (2) GTE CONSENT DECREE- The term `GTE Consent Decree' means
              the order entered December 21, 1984, as restated January 11,
              1985, in the action styled United States v. GTE Corp., Civil
              Action No. 83-1298, in the United States District Court for the
              District of Columbia, and any judgment or order with respect to
              such action entered on or after December 21, 1984.
                (3) MCCAW CONSENT DECREE- The term `McCaw Consent Decree'
              means the proposed consent decree filed on July 15, 1994, in
              the antitrust action styled United States v. AT&T Corp. and
              McCaw Cellular Communications, Inc., Civil Action No. 94-01555,
              in the United States District Court for the District of
              Columbia. Such term includes any stipulation that the parties
              will abide by the terms of such proposed consent decree until
              it is entered and any order entering such proposed consent
              decree.
                (4) ANTITRUST LAWS- The term `antitrust laws' has the meaning
              given it in subsection (a) of the first section of the Clayton
              Act (15 U.S.C. 12(a)), except that such term includes the Act
              of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.),
              commonly known as the Robinson-Patman Act, and section 5 of the
              Federal Trade Commission Act (15 U.S.C. 45) to the extent that
              such section 5 applies to unfair methods of competition.

SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO DIRECT-TO-HOME SERVICES.

            (a) PREEMPTION- A provider of direct-to-home satellite service
          shall be exempt from the collection or remittance, or both, of any
          tax or fee imposed by any local taxing jurisdiction on
          direct-to-home satellite service.
            (b) DEFINITIONS- For the purposes of this section--
                (1) DIRECT-TO-HOME SATELLITE SERVICE- The term
              `direct-to-home satellite service' means only programming
              transmitted or broadcast by satellite directly to the
              subscribers' premises without the use of ground receiving or
              distribution equipment, except at the subscribers' premises or
              in the uplink process to the satellite.
                (2) PROVIDER OF DIRECT-TO-HOME SATELLITE SERVICE- For
              purposes of this section, a `provider of direct-to-home
              satellite service' means a person who transmits, broadcasts,
              sells, or distributes direct-to-home satellite service.
                (3) LOCAL TAXING JURISDICTION- The term `local taxing
              jurisdiction' means any municipality, city, county, township,
              parish, transportation district, or assessment jurisdiction, or
              any other local jurisdiction in the territorial jurisdiction of
              the  United States with the authority to impose a tax or fee,
              but does not include a State.
                (4) STATE- The term `State' means any of the several States,
              the District of Columbia, or any territory or possession of the
              United States.
                (5) TAX OR FEE- The terms `tax' and `fee' mean any local
              sales tax, local use tax, local intangible tax, local income
              tax, business license tax, utility tax, privilege tax, gross
              receipts tax, excise tax, franchise fees, local
              telecommunications tax, or any other tax, license, or fee that
              is imposed for the privilege of doing business, regulating, or
              raising revenue for a local taxing jurisdiction.
            (c) PRESERVATION OF STATE AUTHORITY- This section shall not be
          construed to prevent taxation of a provider of direct-to-home
          satellite service by a State or to prevent a local taxing
          jurisdiction from receiving revenue derived from a tax or fee
          imposed and collected by a State.
                           TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMATION OR SERVICES PROVIDED OVER TOLL-FREE TELEPHONE CALLS.

            (a) PREVENTION OF UNFAIR BILLING PRACTICES-
                (1) IN GENERAL- Section 228(c) (47 U.S.C. 228(c)) is amended--
                    (A) by striking out subparagraph (C) of paragraph (7) and
                  inserting in lieu thereof the following:
                    `(C) the calling party being charged for information
                  conveyed during the call unless--
                        `(i) the calling party has a written agreement
                      (including an agreement transmitted through electronic
                      medium) that meets the requirements of paragraph (8); or
                        `(ii) the calling party is charged for the
                      information in accordance with paragraph (9); or';
                    (B)(i) by striking `or' at the end of subparagraph (C) of
                  such paragraph;
                    (ii) by striking the period at the end of subparagraph
                  (D) of such paragraph and inserting a semicolon and `or'; and
                    (iii) by adding at the end thereof the following:
                    `(E) the calling party being assessed, by virtue of being
                  asked to connect or otherwise transfer to a pay-per-call
                  service, a charge for the call.'; and
                    (C) by adding at the end the following new paragraphs:
                `(8) SUBSCRIPTION AGREEMENTS FOR BILLING FOR INFORMATION
              PROVIDED VIA TOLL-FREE CALLS-
                    `(A) IN GENERAL- For purposes of paragraph (7)(C)(i), a
                  written subscription does not meet the requirements of this
                  paragraph unless the agreement specifies the material terms
                  and conditions under which the information is offered and
                  includes--
                        `(i) the rate at which charges are assessed for the
                      information;
                        `(ii) the information provider's name;
                        `(iii) the information provider's business address;
                        `(iv) the information provider's regular business
                      telephone number;
                        `(v) the information provider's agreement to notify
                      the subscriber at least one billing cycle in advance of
                      all future changes in the rates charged for the
                      information; and
                        `(vi) the subscriber's choice of payment method,
                      which may be by direct remit, debit, prepaid account,
                      phone bill, or credit or calling card.
                    `(B) BILLING ARRANGEMENTS- If a subscriber elects,
                  pursuant to subparagraph (A)(vi), to pay by means of a
                  phone bill--
                        `(i) the agreement shall clearly explain that the
                      subscriber will be assessed for calls made to the
                      information service from the subscriber's phone line;
                        `(ii) the phone bill shall include, in prominent
                      type, the following disclaimer:
            `Common carriers may not disconnect local or long distance
          telephone service for failure to pay disputed charges for
          information services.'; and
                        `(iii) the phone bill shall clearly list the 800
                      number dialed.
                    `(C) USE OF PINS TO PREVENT UNAUTHORIZED USE- A written
                  agreement does not meet the requirements of this paragraph
                  unless it--
                        `(i) includes a unique personal identification number
                      or other subscriber-specific identifier and requires a
                      subscriber to use this number or identifier to obtain
                      access to the information provided and includes
                      instructions on its use; and
                        `(ii) assures that any charges for services accessed
                      by use of the subscriber's personal identification
                      number or subscriber-specific identifier be assessed to
                      subscriber's source of payment elected pursuant to
                      subparagraph (A)(vi).
                    `(D) EXCEPTIONS- Notwithstanding paragraph (7)(C), a
                  written agreement that meets the requirements of this
                  paragraph is not required--
                        `(i) for calls utilizing telecommunications devices
                      for the deaf;
                        `(ii) for directory services provided by a common
                      carrier or its affiliate or by a local exchange carrier
                      or its affiliate; or
                        `(iii) for any purchase of goods or of services that
                      are not information services.
                    `(E) TERMINATION OF SERVICE- On receipt by a common
                  carrier of a complaint by any person that an information
                  provider is in violation of the provisions of this section,
                  a carrier shall--
                        `(i) promptly investigate the complaint; and
                        `(ii) if the carrier reasonably determines that the
                      complaint is valid, it may terminate the provision of
                      service to an information provider unless the provider
                      supplies evidence of a written agreement that meets the
                      requirements of this section.
                    `(F) TREATMENT OF REMEDIES- The remedies provided in this
                  paragraph are in addition to any other remedies that are
                  available under title V of this Act.
                `(9) CHARGES BY CREDIT, PREPAID, DEBIT, CHARGE, OR CALLING
              CARD IN ABSENCE OF AGREEMENT- For purposes of paragraph
              (7)(C)(ii), a calling party is not charged in accordance with
              this paragraph unless the calling party is charged by means of
              a credit, prepaid, debit, charge, or calling card and the
              information service provider includes in response to each call
              an introductory disclosure message that--
                    `(A) clearly states that there is a charge for the call;
                    `(B) clearly states the service's total cost per minute
                  and any other fees for the service or for any service to
                  which the caller may be transferred;
                    `(C) explains that the charges must be billed on either a
                  credit, prepaid, debit, charge, or calling card;
                    `(D) asks the caller for the card number;
                    `(E) clearly states that charges for the call begin at
                  the end of the introductory message; and
                    `(F) clearly states that the caller can hang up at or
                  before the end of the introductory message without
                  incurring any charge whatsoever.
                `(10) BYPASS OF INTRODUCTORY DISCLOSURE MESSAGE- The
              requirements of paragraph (9) shall not apply to calls from
              repeat callers using a bypass mechanism to avoid listening to
              the introductory message:   Provided,  
              That information providers shall disable such a bypass
              mechanism after the institution of any price increase and for a
              period of time determined to be sufficient by the Federal Trade
              Commission to give callers adequate and sufficient notice of a
              price increase.
                `(11) DEFINITION OF CALLING CARD- As used in this subsection,
              the term `calling card' means an identifying number or code
              unique to the individual, that is issued to the individual by a
              common carrier and enables the individual to be charged by
              means of a phone bill for charges incurred independent of where
              the call originates.'.
                (2) REGULATIONS- The Federal Communications Commission shall
              revise its regulations to comply with the amendment made by
              paragraph (1) not later than 180 days after the date of
              enactment of this Act.
                (3) EFFECTIVE DATE- The amendments made by paragraph (1)
              shall take effect on the date of enactment of this Act.
            (b) CLARIFICATION OF `PAY-PER-CALL SERVICES'-
                (1) TELEPHONE DISCLOSURE AND DISPUTE RESOLUTION ACT- Section
              204(1) of the Telephone Disclosure and Dispute Resolution Act
              (15 U.S.C. 5714(1)) is amended to read as follows:
                `(1) The term `pay-per-call services' has the meaning
              provided in section 228(i) of the Communications Act of 1934,
              except that the Commission by rule may, notwithstanding
              subparagraphs (B) and (C) of section 228(i)(1) of such Act,
              extend such definition to other similar services providing
              audio information or audio entertainment if the Commission
              determines that such services are susceptible to the unfair and
              deceptive practices that are prohibited by the rules prescribed
              pursuant to section 201(a).'.
                (2) COMMUNICATIONS ACT- Section 228(i)(2) (47 U.S.C.
              228(i)(2)) is amended by striking `or any service the charge
              for which is tariffed,'.

SEC. 702. PRIVACY OF CUSTOMER INFORMATION.

            Title II is amended by inserting after section 221 (47 U.S.C.
          221) the following new section:

`SEC. 222. PRIVACY OF CUSTOMER INFORMATION.

            `(a) IN GENERAL- Every telecommunications carrier has a duty to
          protect the confidentiality of proprietary information of, and
          relating to, other telecommunication carriers, equipment
          manufacturers, and customers, including telecommunication carriers
          reselling telecommunications services provided by a
          telecommunications carrier.
            `(b) CONFIDENTIALITY OF CARRIER INFORMATION- A telecommunications
          carrier that receives or obtains proprietary information from
          another carrier for purposes of providing any telecommunications
          service shall use such information only for such purpose, and shall
          not use such information for its own marketing efforts.
            `(c) CONFIDENTIALITY OF CUSTOMER PROPRIETARY NETWORK INFORMATION-
                `(1) PRIVACY REQUIREMENTS FOR TELECOMMUNICATIONS CARRIERS-
              Except as required by law or with the approval of the customer,
              a telecommunications carrier that receives or obtains customer
              proprietary network information by virtue of its provision of a
              telecommunications service shall only use, disclose, or permit
              access to individually identifiable customer proprietary
              network information in its provision of (A) the
              telecommunications service from which such information is
              derived, or (B) services necessary to, or used in, the
              provision of such telecommunications service, including the
              publishing of directories.
                `(2) DISCLOSURE ON REQUEST BY CUSTOMERS- A telecommunications
              carrier shall disclose customer proprietary network
              information, upon affirmative written request by the customer,
              to any person designated by the customer.
                `(3) AGGREGATE CUSTOMER INFORMATION- A telecommunications
              carrier that receives or obtains customer proprietary network
              information by virtue of its provision of a telecommunications
              service may use, disclose, or permit access to aggregate
              customer information other than for the purposes described in
              paragraph (1). A local exchange carrier may use, disclose, or
              permit access to aggregate customer information other than for
              purposes described in paragraph (1) only if it provides such
              aggregate information to other carriers or persons on
              reasonable and nondiscriminatory terms and conditions upon
              reasonable request therefor.
            `(d) EXCEPTIONS- Nothing in this section prohibits a
          telecommunications carrier from using, disclosing, or permitting
          access to customer proprietary network information obtained from
          its customers, either directly or indirectly through its agents--
                `(1) to initiate, render, bill, and collect for
              telecommunications services;
                `(2) to protect the rights or property of the carrier, or to
              protect users of those services and other carriers from
              fraudulent, abusive, or unlawful use of, or subscription to,
              such services; or
                `(3) to provide any inbound telemarketing, referral, or
              administrative services to the customer for the duration of the
              call, if such call was initiated by the customer and the
              customer approves of the use of such information to provide
              such service.
            `(e) SUBSCRIBER LIST INFORMATION- Notwithstanding subsections
          (b), (c), and (d), a telecommunications carrier that provides
          telephone exchange service shall provide subscriber list
          information gathered in its capacity as a provider of such service
          on a timely and unbundled basis, under nondiscriminatory and
          reasonable rates, terms, and conditions, to any person upon request
          for the purpose of publishing directories in any format.
            `(f) DEFINITIONS- As used in this section:
                `(1) CUSTOMER PROPRIETARY NETWORK INFORMATION- The term
              `customer proprietary network information' means--
                    `(A) information that relates to the quantity, technical
                  configuration, type, destination, and amount of use of a
                  telecommunications service subscribed to by any customer of
                  a telecommunications carrier, and that is made available to
                  the carrier by the customer solely by virtue of the
                  carrier-customer relationship; and
                    `(B) information contained in the bills pertaining to
                  telephone exchange service or telephone toll service
                  received by a customer of a carrier;
              except that such term does not include subscriber list
              information.
                `(2) AGGREGATE INFORMATION- The term `aggregate customer
              information' means collective data that relates to a group or
              category of services or customers, from which individual
              customer identities and characteristics have been removed.
                `(3) SUBSCRIBER LIST INFORMATION- The term `subscriber list
              information' means any information--
                    `(A) identifying the listed names of subscribers of a
                  carrier and such subscribers' telephone numbers, addresses,
                  or primary advertising classifications (as such
                  classifications are assigned at the time of the
                  establishment of such service), or any combination of such
                  listed names, numbers, addresses, or classifications; and
                    `(B) that the carrier or an affiliate has published,
                  caused to be published, or accepted for publication in any
                  directory format.'.

SEC. 703. POLE ATTACHMENTS.

            Section 224 (47 U.S.C. 224) is amended--
                (1) in subsection (a)(1), by striking the first sentence and
              inserting the following: `The term `utility' means any person
              who is a local exchange carrier or an electric, gas, water,
              steam, or other public utility, and who owns or controls poles,
              ducts, conduits, or rights-of-way used, in whole or in part,
              for any wire communications.';
                (2) in subsection (a)(4), by inserting after `system' the
              following: `or provider of telecommunications service';
                (3) by inserting after subsection (a)(4) the following:
                `(5) For purposes of this section, the term
              `telecommunications carrier' (as defined in section 3 of this
              Act) does not include any incumbent local exchange carrier as
              defined in section 251(h).';
                (4) by inserting after `conditions' in subsection (c)(1) a
              comma and the following: `or access to poles, ducts, conduits,
              and rights-of-way as provided in subsection (f),';
                (5) in subsection (c)(2)(B), by striking `cable television
              services' and inserting `the services offered via such
              attachments';
                (6) by inserting after subsection (d)(2) the following:
            `(3) This subsection shall apply to the rate for any pole
          attachment used by a cable television system solely to provide
          cable service. Until the effective date of the regulations required
          under subsection (e), this subsection shall also apply to the rate
          for any pole attachment used by a cable system or any
          telecommunications carrier (to the extent such carrier is not a
          party to a pole attachment agreement) to provide any
          telecommunications service.'; and
                (7) by adding at the end thereof the following:
            `(e)(1) The Commission shall, no later than 2 years after the
          date of enactment of the Telecommunications Act of 1996, prescribe
          regulations in accordance with this subsection to govern the
          charges for pole attachments used by telecommunications carriers to
          provide telecommunications services, when the parties fail to
          resolve a dispute over such charges. Such regulations shall ensure
          that a utility charges just, reasonable, and nondiscriminatory
          rates for pole attachments.
            `(2) A utility shall apportion the cost of providing space on a
          pole, duct, conduit, or right-of-way other than the usable space
          among entities so that such apportionment equals two-thirds of the
          costs of providing space other than the usable space that would be
          allocated to such entity under an equal apportionment of such costs
          among all attaching entities.
            `(3) A utility shall apportion the cost of providing usable space
          among all entities according to the percentage of usable space
          required for each entity.
            `(4) The regulations required under paragraph (1) shall become
          effective 5 years after the date of enactment of the
          Telecommunications Act of 1996. Any increase in the rates for pole
          attachments that result from the adoption of the regulations
          required by this subsection shall be phased in equal annual
          increments over a period of 5 years beginning on the effective date
          of such regulations.
            `(f)(1) A utility shall provide a cable television system or any
          telecommunications carrier with nondiscriminatory access to any
          pole, duct, conduit, or right-of-way owned or controlled by it.
            `(2) Notwithstanding paragraph (1), a utility providing electric
          service may deny a cable television system or any
          telecommunications carrier access to its poles, ducts, conduits, or
          rights-of-way, on a non-discriminatory basis where there is
          insufficient capacity and for reasons of safety, reliability and
          generally applicable engineering purposes.
            `(g) A utility that engages in the provision of
          telecommunications services or cable services shall impute to its
          costs of providing such services (and charge any affiliate,
          subsidiary, or associate company engaged in the provision of such
          services) an equal amount to the pole attachment rate for which
          such company would be liable under this section.
            `(h) Whenever the owner of a pole, duct, conduit, or right-of-way
          intends to modify or alter such pole, duct, conduit, or
          right-of-way, the owner shall provide written notification of such
          action to any entity that has obtained an attachment to such
          conduit or right-of-way so that such entity may have a reasonable
          opportunity to add to or modify its existing attachment. Any entity
          that adds to or modifies its existing attachment after receiving
          such notification shall bear a proportionate share of the costs
          incurred by the owner in making such pole, duct, conduit, or
          right-of-way accessible.
            `(i) An entity that obtains an attachment to a pole, conduit, or
          right-of-way shall not be required to bear any of the costs of
          rearranging or replacing its attachment, if such rearrangement or
          replacement is required as a result of an additional attachment or
          the modification of an existing attachment sought by any other
          entity (including the owner of such pole, duct, conduit, or
          right-of-way).'.

SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.

            (a) NATIONAL WIRELESS TELECOMMUNICATIONS SITING POLICY- Section
          332(c) (47 U.S.C. 332(c)) is amended by adding at the end the
          following new paragraph:
                `(7) PRESERVATION OF LOCAL ZONING AUTHORITY-
                    `(A) GENERAL AUTHORITY- Except as provided in this
                  paragraph, nothing in this Act shall limit or affect the
                  authority of a State or local government or instrumentality
                  thereof over decisions regarding the placement,
                  construction, and modification of personal wireless service
                  facilities.
                    `(B) LIMITATIONS-
                        `(i) The regulation of the placement, construction,
                      and modification of personal wireless service
                      facilities by any State or local government or
                      instrumentality thereof--
            `(I) shall not unreasonably discriminate among providers of
          functionally equivalent services; and
            `(II) shall not prohibit or have the effect of prohibiting the
          provision of personal wireless services.
                        `(ii) A State or local government or instrumentality
                      thereof shall act on any request for authorization to
                      place, construct, or modify personal wireless service
                      facilities within a reasonable period of time after the
                      request is duly filed with such government or
                      instrumentality, taking into account the nature and
                      scope of such request.
                        `(iii) Any decision by a State or local government or
                      instrumentality thereof to deny a request to place,
                      construct, or modify personal wireless service
                      facilities shall be in writing and supported by
                      substantial evidence contained in a written record.
                        `(iv) No State or local government or instrumentality
                      thereof may regulate the placement, construction, and
                      modification of personal wireless service facilities on
                      the basis of the environmental effects of radio
                      frequency emissions to the extent that such facilities
                      comply with the Commission's regulations concerning
                      such emissions.
                        `(v) Any person adversely affected by any final
                      action or failure to act by a State or local government
                      or any instrumentality thereof that is inconsistent
                      with this subparagraph may, within 30 days after such
                      action or failure to act, commence an action in any
                      court of competent jurisdiction. The court shall hear
                      and decide such action on an expedited basis. Any
                      person adversely affected by an act or failure to act
                      by a State or local government or any instrumentality
                      thereof that is inconsistent with clause (iv) may
                      petition the Commission for relief.
                    `(C) DEFINITIONS- For purposes of this paragraph--
                        `(i) the term `personal wireless services' means
                      commercial mobile services, unlicensed wireless
                      services, and common carrier wireless exchange access
                      services;
                        `(ii) the term `personal wireless service facilities'
                      means facilities for the provision of personal wireless
                      services; and
                        `(iii) the term `unlicensed wireless service' means
                      the offering of telecommunications services using duly
                      authorized devices which do not require individual
                      licenses, but does not mean the provision of
                      direct-to-home satellite services (as defined in
                      section 303(v)).'.
            (b) RADIO FREQUENCY EMISSIONS- Within 180 days after the
          enactment of this Act, the Commission shall complete action in ET
          Docket 93-62 to prescribe and make effective rules regarding the
          environmental effects of radio frequency emissions.
            (c) AVAILABILITY OF PROPERTY- Within 180 days of the enactment of
          this Act, the President or his designee shall prescribe procedures
          by which Federal departments and agencies may make available on a
          fair, reasonable, and nondiscriminatory basis, property,
          rights-of-way, and easements under their control for the placement
          of new telecommunications services that are dependent, in whole or
          in part, upon the utilization of Federal spectrum rights for the
          transmission or reception of such services. These procedures may
          establish a presumption that requests for the use of property,
          rights-of-way, and easements by duly authorized providers should be
          granted absent unavoidable direct conflict with the department or
          agency's mission, or the current or planned use of the property,
          rights-of-way, and easements in question. Reasonable fees may be
          charged to providers of such telecommunications services for use of
          property, rights-of-way, and easements. The Commission shall
          provide technical support to States to encourage them to make
          property, rights-of-way, and easements under their jurisdiction
          available for such purposes.

SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CARRIERS.

            Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the end
          the following new paragraph:
                `(8) MOBILE SERVICES ACCESS- A person engaged in the
              provision of commercial mobile services, insofar as such person
              is so engaged, shall not be required to provide equal access to
              common carriers for the provision of telephone toll services.
              If the Commission determines that subscribers to such services
              are denied access to the provider of telephone toll services of
              the subscribers' choice, and that such denial is contrary to
              the public interest, convenience, and necessity, then the
              Commission shall prescribe regulations to afford subscribers
              unblocked access to the provider of telephone toll services of
              the subscribers' choice through the use of a carrier
              identification code assigned to such provider or other
              mechanism. The requirements for unblocking shall not apply to
              mobile satellite services unless the Commission finds it to be
              in the public interest to apply such requirements to such
              services.'.

SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.

            (a) IN GENERAL- The Commission and each State commission with
          regulatory jurisdiction over telecommunications services shall
          encourage the deployment on a reasonable and timely basis of
          advanced telecommunications capability to all Americans (including,
          in particular, elementary and secondary schools and classrooms) by
          utilizing, in a manner consistent with the public interest,
          convenience, and necessity, price cap regulation, regulatory
          forbearance, measures that promote competition in the local
          telecommunications market, or other regulating methods that remove
          barriers to infrastructure investment.
            (b) INQUIRY- The Commission shall, within 30 months after the
          date of enactment of this Act, and regularly thereafter, initiate a
          notice of inquiry concerning the availability of advanced
          telecommunications capability to all Americans (including, in
          particular, elementary and secondary schools and classrooms) and
          shall complete the inquiry within 180 days after its initiation. In
          the inquiry, the Commission shall determine whether advanced
          telecommunications capability is being deployed to all Americans in
          a reasonable and timely fashion. If the Commission's determination
          is negative, it shall take immediate action to accelerate
          deployment of such capability by removing barriers to
          infrastructure investment and by promoting competition in the
          telecommunications market.
            (c) DEFINITIONS- For purposes of this subsection:
                (1) ADVANCED TELECOMMUNICATIONS CAPABILITY- The term
              `advanced telecommunications capability' is defined, without
              regard to any transmission media or technology, as high-speed,
              switched, broadband telecommunications capability that enables
              users to originate and receive high-quality voice, data,
              graphics, and video telecommunications using any technology.
                (2) ELEMENTARY AND SECONDARY SCHOOLS- The term `elementary
              and secondary schools' means elementary and secondary schools,
              as defined in paragraphs (14) and (25), respectively, of
              section 14101 of the Elementary and Secondary Education Act of
              1965 (20 U.S.C. 8801).

SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.

            (a) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Section 309(j)(8)
          (47 U.S.C. 309(j)(8)) is amended by adding at the end the following
          new subparagraph:
                    `(C) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Any
                  deposits the Commission may require for the qualification
                  of any person to bid in a system of competitive bidding
                  pursuant to this subsection shall be deposited in an
                  interest bearing account at a financial institution
                  designated for purposes of this subsection by the
                  Commission (after consultation with the Secretary of the
                  Treasury). Within 45 days following the conclusion of the
                  competitive bidding--
                        `(i) the deposits of successful bidders shall be paid
                      to the Treasury;
                        `(ii) the deposits of unsuccessful bidders shall be
                      returned to such bidders; and
                        `(iii) the interest accrued to the account shall be
                      transferred to the Telecommunications Development Fund
                      established pursuant to section 714 of this Act.'.
            (b) ESTABLISHMENT AND OPERATION OF FUND- Title VII is amended by
          inserting after section 713 (as added by section 305) the following
          new section:

`SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.

            `(a) PURPOSE OF SECTION- It is the purpose of this section--
                `(1) to promote access to capital for small businesses in
              order to enhance competition in the telecommunications industry;
                `(2) to stimulate new technology development, and promote
              employment and training; and
                `(3) to support universal service and promote delivery of
              telecommunications services to underserved rural and urban areas.
            `(b) ESTABLISHMENT OF FUND- There is hereby established a body
          corporate to be known as the Telecommunications Development Fund,
          which shall have succession until dissolved. The Fund shall
          maintain its principal office in the District of Columbia and shall
          be deemed, for purposes of venue and jurisdiction in civil actions,
          to be a resident and citizen thereof.
            `(c) BOARD OF DIRECTORS-
                `(1) COMPOSITION OF BOARD; CHAIRMAN- The Fund shall have a
              Board of Directors which shall consist of 7 persons appointed
              by the Chairman of the Commission. Four of such directors shall
              be representative of the private sector and three of such
              directors shall be representative of the Commission, the Small
              Business Administration, and the Department of the Treasury,
              respectively. The Chairman of the Commission shall appoint one
              of the representatives of the private sector to serve as
              chairman of the Fund within 30 days after the date of enactment
              of this section, in order to facilitate rapid creation and
              implementation of the Fund. The directors shall include members
              with experience in a number of the following areas: finance,
              investment banking, government banking, communications law and
              administrative practice, and public policy.
                `(2) TERMS OF APPOINTED AND ELECTED MEMBERS- The directors
              shall be eligible to serve for terms of 5 years, except of the
              initial members, as designated at the time of their appointment--
                    `(A) 1 shall be eligible to service for a term of 1 year;
                    `(B) 1 shall be eligible to service for a term of 2 years;
                    `(C) 1 shall be eligible to service for a term of 3 years;
                    `(D) 2 shall be eligible to service for a term of 4
                  years; and
                    `(E) 2 shall be eligible to service for a term of 5 years
                  (1 of whom shall be the Chairman).
              Directors may continue to serve until their successors have
              been appointed and have qualified.
                `(3) MEETINGS AND FUNCTIONS OF THE BOARD- The Board of
              Directors shall meet at the call of its Chairman, but at least
              quarterly. The Board shall determine the general policies which
              shall govern the operations of the Fund. The Chairman of the
              Board shall, with the approval of the Board, select, appoint,
              and compensate qualified persons to fill the offices as may be
              provided for in the bylaws, with such functions, powers, and
              duties as may be prescribed by the bylaws or by the Board of
              Directors, and such persons shall be the officers of the Fund
              and shall discharge all such functions, powers, and duties.
            `(d) ACCOUNTS OF THE FUND- The Fund shall maintain its accounts
          at a financial institution designated for purposes of this section
          by the Chairman of the Board (after consultation with the
          Commission and the Secretary of the Treasury). The accounts of the
          Fund shall consist of--
                `(1) interest transferred pursuant to section 309(j)(8)(C) of
              this Act;
                `(2) such sums as may be appropriated to the Commission for
              advances to the Fund;
                `(3) any contributions or donations to the Fund that are
              accepted by the Fund; and
                `(4) any repayment of, or other payment made with respect to,
              loans, equity, or other extensions of credit made from the Fund.
            `(e) USE OF THE FUND- All moneys deposited into the accounts of
          the Fund shall be used solely for--
                `(1) the making of loans, investments, or other extensions of
              credits to eligible small businesses in accordance with
              subsection (f);
                `(2) the provision of financial advice to eligible small
              businesses;
                `(3) expenses for the administration and management of the
              Fund (including salaries, expenses, and the rental or purchase
              of office space for the fund);
                `(4) preparation of research, studies, or financial analyses;
              and
                `(5) other services consistent with the purposes of this
              section.
            `(f) LENDING AND CREDIT OPERATIONS- Loans or other extensions of
          credit from the Fund shall be made available in accordance with the
          requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661
          et seq.) and any other applicable law to an eligible small business
          on the basis of--
                `(1) the analysis of the business plan of the eligible small
              business;
                `(2) the reasonable availability of collateral to secure the
              loan or credit extension;
                `(3) the extent to which the loan or credit extension
              promotes the purposes of this section; and
                `(4) other lending policies as defined by the Board.
            `(g) RETURN OF ADVANCES- Any advances appropriated pursuant to
          subsection (d)(2) shall be disbursed upon such terms and conditions
          (including conditions relating to the time or times of repayment)
          as are specified in any appropriations Act providing such advances.
            `(h) GENERAL CORPORATE POWERS- The Fund shall have power--
                `(1) to sue and be sued, complain and defend, in its
              corporate name and through its own counsel;
                `(2) to adopt, alter, and use the corporate seal, which shall
              be judicially noticed;
                `(3) to adopt, amend, and repeal by its Board of Directors,
              bylaws, rules, and regulations as may be necessary for the
              conduct of its business;
                `(4) to conduct its business, carry on its operations, and
              have officers and exercise the power granted by this section in
              any State without regard to any qualification or similar
              statute in any State;
                `(5) to lease, purchase, or otherwise acquire, own, hold,
              improve, use, or otherwise deal in and with any property, real,
              personal, or mixed, or any interest therein, wherever situated,
              for the purposes of the Fund;
                `(6) to accept gifts or donations of services, or of
              property, real, personal, or mixed, tangible or intangible, in
              aid of any of the purposes of the Fund;
                `(7) to sell, convey, mortgage, pledge, lease, exchange, and
              otherwise dispose of its property and assets;
                `(8) to appoint such officers, attorneys, employees, and
              agents as may be required, to determine their qualifications,
              to define their duties, to fix their salaries, require bonds
              for them, and fix the penalty thereof; and
                `(9) to enter into contracts, to execute instruments, to
              incur liabilities, to make loans and equity investment, and to
              do all things as are necessary or incidental to the proper
              management of its affairs and the proper conduct of its business.
            `(i) ACCOUNTING, AUDITING, AND REPORTING- The accounts of the
          Fund shall be audited annually. Such audits shall be conducted in
          accordance with generally accepted auditing standards by
          independent certified public accountants. A report of each such
          audit shall be furnished to the Secretary of the Treasury and the
          Commission. The representatives of the Secretary and the Commission
          shall have access to all books, accounts, financial records,
          reports, files, and all other papers, things, or property belonging
          to or in use by the Fund and necessary to facilitate the audit.
            `(j) REPORT ON AUDITS BY TREASURY- A report of each such audit
          for a fiscal year shall be made by the Secretary of the Treasury to
          the President and to the Congress not later than 6 months following
          the close of such fiscal year. The report shall set forth the scope
          of the audit and shall include a statement of assets and
          liabilities, capital and surplus or deficit; a statement of surplus
          or deficit analysis; a statement of income and expense; a statement
          of sources and application of funds; and such comments and
          information as may be deemed necessary to keep the President and
          the Congress informed of the operations and financial condition of
          the Fund, together with such recommendations with respect thereto
          as the Secretary may deem advisable.
            `(k) DEFINITIONS- As used in this section:
                `(1) ELIGIBLE SMALL BUSINESS- The term `eligible small
              business' means business enterprises engaged in the
              telecommunications industry that have $50,000,000 or less in
              annual revenues, on average over the past 3 years prior to
              submitting the application under this section.
                `(2) FUND- The term `Fund' means the Telecommunications
              Development Fund established pursuant to this section.
                `(3) TELECOMMUNICATIONS INDUSTRY- The term
              `telecommunications industry' means communications businesses
              using regulated or unregulated facilities or services and
              includes broadcasting, telecommunications, cable, computer,
              data transmission, software, programming, advanced messaging,
              and electronics businesses.'.

SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

            (a) FINDINGS; PURPOSE-
                (1) FINDINGS- The Congress finds as follows:
                    (A) CORPORATION- There has been established in the
                  District of Columbia a private, nonprofit corporation known
                  as the National Education Technology Funding Corporation
                  which is not an agency or independent establishment of the
                  Federal Government.
                    (B) BOARD OF DIRECTORS- The Corporation is governed by a
                  Board of Directors, as prescribed in the Corporation's
                  articles of incorporation, consisting of 15 members, of
                  which--
                        (i) five members are representative of public
                      agencies representative of schools and public libraries;
                        (ii) five members are representative of State
                      government, including persons knowledgeable about State
                      finance, technology and education; and
                        (iii) five members are representative of the private
                      sector, with expertise in network technology, finance
                      and management.
                    (C) CORPORATE PURPOSES- The purposes of the Corporation,
                  as set forth in its articles of incorporation, are--
                        (i) to leverage resources and stimulate private
                      investment in education technology infrastructure;
                        (ii) to designate State education technology agencies
                      to receive loans, grants or other forms of assistance
                      from the Corporation;
                        (iii) to establish criteria for encouraging States to--
            (I) create, maintain, utilize and upgrade interactive high
          capacity networks capable of providing audio, visual and data
          communications for elementary schools, secondary schools and public
          libraries;
            (II) distribute resources to assure equitable aid to all
          elementary schools and secondary schools in the State and achieve
          universal access to network technology; and
            (III) upgrade the delivery and development of learning through
          innovative technology-based instructional tools and applications;
                        (iv) to provide loans, grants and other forms of
                      assistance to State education technology agencies, with
                      due regard for providing a fair balance among types of
                      school districts and public libraries assisted and the
                      disparate needs of such districts and libraries;
                        (v) to leverage resources to provide maximum aid to
                      elementary schools, secondary schools and public
                      libraries; and
                        (vi) to encourage the development of education
                      telecommunications and information technologies through
                      public-private ventures, by serving as a clearinghouse
                      for information on new education technologies, and by
                      providing technical assistance, including assistance to
                      States, if needed, to establish State education
                      technology agencies.
                (2) PURPOSE- The purpose of this section is to recognize the
              Corporation as a nonprofit corporation operating under the laws
              of the District of Columbia, and to provide authority for
              Federal departments and agencies to provide assistance to the
              Corporation.
            (b) DEFINITIONS- For the purpose of this section--
                (1) the term `Corporation' means the National Education
              Technology Funding Corporation described in subsection (a)(1)(A);
                (2) the terms `elementary school' and `secondary school' have
              the same meanings given such terms in section 14101 of the
              Elementary and Secondary Education Act of 1965; and
                (3) the term `public library' has the same meaning given such
              term in section 3 of the Library Services and Construction Act.
            (c) ASSISTANCE FOR EDUCATION TECHNOLOGY PURPOSES-
                (1) RECEIPT BY CORPORATION- Notwithstanding any other
              provision of law, in order to carry out the corporate purposes
              described in subsection (a)(1)(C), the Corporation shall be
              eligible to receive discretionary grants, contracts, gifts,
              contributions, or technical assistance from any Federal
              department or agency, to the extent otherwise permitted by law.
                (2) AGREEMENT- In order to receive any assistance described
              in paragraph (1) the Corporation shall enter into an agreement
              with the Federal department or agency providing such
              assistance, under which the Corporation agrees--
                    (A) to use such assistance to provide funding and
                  technical assistance only for activities which the Board of
                  Directors of the Corporation determines are consistent with
                  the corporate purposes described in subsection (a)(1)(C);
                    (B) to review the activities of State education
                  technology agencies and other entities receiving assistance
                  from the Corporation to assure that the corporate purposes
                  described in subsection (a)(1)(C) are carried out;
                    (C) that no part of the assets of the Corporation shall
                  accrue to the benefit of any member of the Board of
                  Directors of the Corporation, any officer or employee of
                  the Corporation, or any other individual, except as salary
                  or reasonable compensation for services;
                    (D) that the Board of Directors of the Corporation will
                  adopt policies and procedures to prevent conflicts of
                  interest;
                    (E) to maintain a Board of Directors of the Corporation
                  consistent with subsection (a)(1)(B);
                    (F) that the Corporation, and any entity receiving the
                  assistance from the Corporation, are subject to the
                  appropriate oversight procedures of the Congress; and
                    (G) to comply with--
                        (i) the audit requirements described in subsection
                      (d); and
                        (ii) the reporting and testimony requirements
                      described in subsection (e).
                (3) CONSTRUCTION- Nothing in this section shall be construed
              to establish the Corporation as an agency or independent
              establishment of the Federal Government, or to establish the
              members of the Board of Directors of the Corporation, or the
              officers and employees of the Corporation, as officers or
              employees of the Federal Government.
            (d) AUDITS-
                (1) AUDITS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS-
                    (A) IN GENERAL- The Corporation's financial statements
                  shall be audited annually in accordance with generally
                  accepted auditing standards by independent certified public
                  accountants who are certified by a regulatory authority of
                  a State or other political subdivision of the United
                  States. The audits shall be conducted at the place or
                  places where the accounts of the Corporation are normally
                  kept. All books, accounts, financial records, reports,
                  files, and all other papers, things, or property belonging
                  to or in use by the Corporation and necessary to facilitate
                  the audit shall be made available to the person or persons
                  conducting the audits, and full facilities for verifying
                  transactions with the balances or securities held by
                  depositories, fiscal agents, and custodians shall be
                  afforded to such person or persons.
                    (B) REPORTING REQUIREMENTS- The report of each annual
                  audit described in subparagraph (A) shall be included in
                  the annual report required by subsection (e)(1).
                (2) RECORDKEEPING REQUIREMENTS; AUDIT AND EXAMINATION OF
              BOOKS-
                    (A) RECORDKEEPING REQUIREMENTS- The Corporation shall
                  ensure that each recipient of assistance from the
                  Corporation keeps--
                        (i) separate accounts with respect to such assistance;
                        (ii) such records as may be reasonably necessary to
                      fully disclose--
            (I) the amount and the disposition by such recipient of the
          proceeds of such assistance;
            (II) the total cost of the project or undertaking in connection
          with which such assistance is given or used; and
            (III) the amount and nature of that portion of the cost of the
          project or undertaking supplied by other sources; and
                        (iii) such other records as will facilitate an
                      effective audit.
                    (B) AUDIT AND EXAMINATION OF BOOKS- The Corporation shall
                  ensure that the Corporation, or any of the Corporation's
                  duly authorized representatives, shall have access for the
                  purpose of audit and examination to any books, documents,
                  papers, and records of any recipient of assistance from the
                  Corporation that are pertinent to such assistance.
                  Representatives of the Comptroller General shall also have
                  such access for such purpose.
            (e) ANNUAL REPORT; TESTIMONY TO THE CONGRESS-
                (1) ANNUAL REPORT- Not later than April 30 of each year, the
              Corporation shall publish an annual report for the preceding
              fiscal year and submit that report to the President and the
              Congress. The report shall include a comprehensive and detailed
              evaluation of the Corporation's operations, activities,
              financial condition, and accomplishments under this section and
              may include such recommendations as the Corporation deems
              appropriate.
                (2) TESTIMONY BEFORE CONGRESS- The members of the Board of
              Directors, and officers, of the Corporation shall be available
              to testify before appropriate committees of the Congress with
              respect to the report described in paragraph (1), the report of
              any audit made by the Comptroller General pursuant to this
              section, or any other matter which any such committee may
              determine appropriate.

SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS SERVICES FOR MEDICAL PURPOSES.

            The Secretary of Commerce, in consultation with the Secretary of
          Health and Human Services and other appropriate departments and
          agencies, shall submit a report to the Committee on Commerce of the
          House of Representatives and the Committee on Commerce, Science,
          and Transportation of the Senate concerning the activities of the
          Joint Working Group on Telemedicine, together with any findings
          reached in the studies and demonstrations on telemedicine funded by
          the Public Health Service or other Federal agencies. The report
          shall examine questions related to patient safety, the efficacy and
          quality of the services provided, and other legal, medical, and
          economic issues related to the utilization of advanced
          telecommunications services for medical purposes. The report shall
          be submitted to the respective committees by January 31, 1997.

SEC. 710. AUTHORIZATION OF APPROPRIATIONS.

            (a) IN GENERAL- In addition to any other sums authorized by law,
          there are authorized to be appropriated to the Federal
          Communications Commission such sums as may be necessary to carry
          out this Act and the amendments made by this Act.
            (b) EFFECT ON FEES- For the purposes of section 9(b)(2) (47
          U.S.C. 159(b)(2)), additional amounts appropriated pursuant to
          subsection (a) shall be construed to be changes in the amounts
          appropriated for the performance of activities described in section
          9(a) of the Communications Act of 1934.
            (c) FUNDING AVAILABILITY- Section 309(j)(8)(B) (47 U.S.C.
          309(j)(8)(B)) is amended by adding at the end the following new
          sentence: `Such offsetting collections are authorized to remain
          available until expended.'.

Speaker of the House of Representatives.
Vice President of the United States and President of the Senate.