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              ** Telecommunications Act of 1996 **
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--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.
 [Italic->]   Be it enacted by the Senate and House of
Representatives of the United States of America in Congress
assembled, [<-Italic]
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. 1. Short title; references.
Sec. 2. Table of contents.
Sec. 3. Definitions.
                 TITLE I--TELECOMMUNICATION SERVICES
               SUBTITLE A--TELECOMMUNICATIONS SERVICES
Sec. 101. Establishment of part II of title II.
            `PART II--DEVELOPMENT OF COMPETITIVE MARKETS
Sec. 102. Eligible telecommunications carriers.
Sec. 103. Exempt telecommunications companies.
Sec. 104. Nondiscrimination principle.
 SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
Sec. 151. Bell operating company provisions.
  `PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
                    TITLE II--BROADCAST SERVICES
Sec. 201. Broadcast spectrum flexibility.
Sec. 202. Broadcast ownership.
Sec. 203. Term of licenses.
Sec. 204. Broadcast license renewal procedures.
Sec. 205. Direct broadcast satellite service.
Sec. 206. Automated ship distress and safety systems.
Sec. 207. Restrictions on over-the-air reception devices.
                      TITLE III--CABLE SERVICES
Sec. 301. Cable Act reform.
Sec. 302. Cable service provided by telephone companies.
 `PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES
Sec. 303. Preemption of franchising authority regulation of
    telecommunications services.
Sec. 304. Competitive availability of navigation devices.
Sec. 305. Video programming accessibility.
                     TITLE IV--REGULATORY REFORM
Sec. 401. Regulatory forbearance.
Sec. 402. Biennial review of regulations; regulatory relief.
Sec. 403. Elimination of unnecessary Commission regulations and
    functions.
                   TITLE V--OBSCENITY AND VIOLENCE
     SUBTITLE A--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF
                    TELECOMMUNICATIONS FACILITIES
Sec. 501. Short title.
Sec. 502. Obscene or harassing use of telecommunications facilities
    under the Communications Act of 1934.
Sec. 503. Obscene programming on cable television.
Sec. 504. Scrambling of cable channels for nonsubscribers.
Sec. 505. Scrambling of sexually explicit adult video service
    programming.
Sec. 506. Cable operator refusal to carry certain programs.
Sec. 507. Clarification of current laws regarding communication of
    obscene materials through the use of computers.
Sec. 508. Coercion and enticement of minors.
Sec. 509. Online family empowerment.
                        SUBTITLE B--VIOLENCE
Sec. 551. Parental choice in television programming.
Sec. 552. Technology fund.
                     SUBTITLE C--JUDICIAL REVIEW
Sec. 561. Expedited review.
                   TITLE VI--EFFECT ON OTHER LAWS
Sec. 601. Applicability of consent decrees and other law.
Sec. 602. Preemption of local taxation with respect to
    direct-to-home services.
                 TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. Prevention of unfair billing practices for information or
    services provided over toll-free telephone calls.
Sec. 702. Privacy of customer information.
Sec. 703. Pole attachments.
Sec. 704. Facilities siting; radio frequency emission standards.
Sec. 705. Mobile services direct access to long distance carriers.
Sec. 706. Advanced telecommunications incentives.
Sec. 707. Telecommunications Development Fund.
Sec. 708. National Education Technology Funding Corporation.
Sec. 709. Report on the use of advanced telecommunications services
    for medical purposes.
Sec. 710. Authorization of appropriations.
SEC. 3. DEFINITIONS.
  (a) ADDITIONAL DEFINITIONS- Section 3 (47 U.S.C. 153) is amended--
      (1) in subsection (r)--
          (A) by inserting `(A)' after `means'; and
          (B) by inserting before the period at the end the
        following: `, or (B) comparable service provided through a
        system of switches, transmission equipment, or other
        facilities (or combination thereof) by which a subscriber
        can originate and terminate a telecommunications service';
        and
      (2) by adding at the end thereof the following:
      `(33) AFFILIATE- The term `affiliate' means a person that
    (directly or indirectly) owns or controls, is owned or
    controlled by, or is under common ownership or control with,
    another person. For purposes of this paragraph, the term `own'
    means to own an equity interest (or the equivalent thereof) of
    more than 10 percent.
      `(34) AT&T CONSENT DECREE- The term `AT&T Consent Decree'
    means the order entered August 24, 1982, in the antitrust 
    action styled United States v. Western Electric, Civil Action
    No. 82-0192, in the United States District Court for the
    District of Columbia, and includes any judgment or order with
    respect to such action entered on or after August 24, 1982.
      `(35) BELL OPERATING COMPANY- The term `Bell operating
    company'--
          `(A) means any of the following companies: 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:  [Italic->] 
Provided,  [<-Italic] That--
      `(1) section 11 of this Act shall not prohibit the ownership
    of an interest in the business of one or more exempt
    telecommunications companies by a registered holding company
    (regardless of activities engaged in or where facilities owned
    or operated by such exempt telecommunications companies are
    located), and such ownership by a registered holding company
    shall be deemed consistent with the operation of an integrated
    public utility system;
      `(2) the ownership of an interest in the business of one or
    more exempt telecommunications companies by a registered 
    holding company (regardless of activities engaged in or where
    facilities owned or operated by such exempt telecommunications
    companies are located) shall be considered as reasonably
    incidental, or economically necessary or appropriate, to the
    operations of an integrated public utility system;
      `(3) the Commission shall have no jurisdiction under this Act
    over, and there shall be no restriction or approval required
    under this Act with respect to (A) the issue or sale of a
    security by a registered holding company for purposes of
    financing the acquisition of an exempt telecommunications
    company, or (B) the guarantee of a security of an exempt
    telecommunications company by a registered holding company; and
      `(4) except for costs that should be fairly and equitably
    allocated among companies that are associate companies of a
    registered holding company, the Commission shall have no
    jurisdiction under this Act over the sales, service, and
    construction contracts between an exempt telecommunications
    company and a registered holding company, its affiliates and
    associate companies.
  `(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND ACTIVITIES
OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYSTEMS-
      `(1) OBLIGATIONS TO REPORT INFORMATION- Any registered 
    holding company or subsidiary thereof that acquires or holds 
    the securities, or an interest in the business, of an exempt
    telecommunications company shall file with the Commission such
    information as the Commission, by rule, may prescribe
    concerning--
          `(A) investments and activities by the registered holding
        company, or any subsidiary thereof, with respect to exempt
        telecommunications companies, and
          `(B) any activities of an exempt telecommunications
        company within the holding company system,
    that are reasonably likely to have a material impact on the
    financial or operational condition of the holding company system.
      `(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION- If, based 
    on reports provided to the Commission pursuant to paragraph (1)
    of this subsection or other available information, the
    Commission reasonably concludes that it has concerns regarding
    the financial or operational condition of any registered 
    holding company or any subsidiary thereof (including an exempt
    telecommunications company), the Commission may require such
    registered holding company to make additional reports and
    provide additional information.
      `(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION-
    Notwithstanding any other provision of law, the Commission 
    shall not be compelled to disclose any information required to
    be reported under this subsection. Nothing in this subsection
    shall authorize the Commission to withhold the information from
    Congress, or prevent the Commission from complying with a
    request for information from any other Federal or State
    department or agency requesting the information for purposes
    within the scope of its jurisdiction. For purposes of section
    552 of title 5, United States Code, this subsection shall be
    considered a statute described in subsection (b)(3)(B) of such
    section 552.
  `(g) ASSUMPTION OF LIABILITIES- Any public utility company that 
is an associate company, or an affiliate, of a registered holding
company and that is subject to the jurisdiction of a State
commission with respect to its retail electric or gas rates shall
not issue any security for the purpose of financing the 
acquisition, ownership, or operation of an exempt 
telecommunications company. Any public utility company that is an
associate company, or an affiliate, of a registered holding company
and that is subject to the jurisdiction of a State commission with
respect to its retail electric or gas rates shall not assume any
obligation or liability as guarantor, endorser, surety, or 
otherwise by the public utility company in respect of any security
of an exempt telecommunications company.
  `(h) PLEDGING OR MORTGAGING OF ASSETS- Any public utility company
that is an associate company, or affiliate, of a registered holding
company and that is subject to the jurisdiction of a State
commission with respect to its retail electric or gas rates shall
not pledge, mortgage, or otherwise use as collateral any assets of
the public utility company or assets of any subsidiary company
thereof for the benefit of an exempt telecommunications company.
  `(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS- A public
utility company may enter into a contract to purchase services or
products described in subsection (a)(1) from an exempt
telecommunications company that is an affiliate or associate 
company of the public utility company only if--
      `(1) every State commission having jurisdiction over the
    retail rates of such public utility company approves such
    contract; or
      `(2)  such public utility company is not subject to State
    commission retail rate regulation and the purchased services or
    products--
          `(A) would not be resold to any affiliate or associate
        company; or
          `(B) would be resold to an affiliate or associate company
        and every State commission having jurisdiction over the
        retail rates of such affiliate or associate company makes
        the determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case in
which the State or the State commission concerned publishes a 
notice that the State or State commission waives its authority 
under this subsection.
  `(j) NONPREEMPTION OF RATE AUTHORITY- Nothing in this Act shall
preclude the Federal Energy Regulatory Commission or a State
commission from exercising its jurisdiction under otherwise
applicable law to determine whether a public utility company may
recover in rates the costs of products or services purchased from 
or sold to an associate company or affiliate that is an exempt
telecommunications company, regardless of whether such costs are
incurred through the direct or indirect purchase or sale of 
products or services from such associate company or affiliate.
  `(k) RECIPROCAL ARRANGEMENTS PROHIBITED- Reciprocal arrangements
among companies that are not affiliates or associate companies of
each other that are entered into in order to avoid the provisions 
of this section are prohibited.
  `(l) BOOKS AND RECORDS- (1) Upon written order of a State
commission, a State commission may examine the books, accounts,
memoranda, contracts, and records of--
      `(A) a public utility company subject to its regulatory
    authority under State law;
      `(B) any exempt telecommunications company selling products 
    or services to such public utility company or to an associate
    company of such public utility company; and
      `(C) any associate company or affiliate of an exempt
    telecommunications company which sells products or services to 
    a public utility company referred to in subparagraph (A),
wherever located, if such examination is required for the effective
discharge of the State commission's regulatory responsibilities
affecting the provision of electric or gas service in connection
with the activities of such exempt telecommunications company.
  `(2) Where a State commission issues an order pursuant to
paragraph (1), the State commission shall not publicly disclose
trade secrets or sensitive commercial information.
  `(3) Any United States district court located in the State in
which the State commission referred to in paragraph (1) is located
shall have jurisdiction to enforce compliance with this subsection.
  `(4) Nothing in this section shall--
      `(A) preempt applicable State law concerning the provision of
    records and other information; or
      `(B) in any way limit rights to obtain records and other
    information under Federal law, contracts, or otherwise.
  `(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS- 
      `(1) STATE MAY ORDER AUDIT- Any State commission with
    jurisdiction over a public utility company that--
          `(A) is an associate company of a registered holding
        company; and
          `(B) transacts business, directly or indirectly, with a
        subsidiary company, an affiliate or an associate company
        that is an exempt telecommunications company,
    may order an independent audit to be performed, no more
    frequently than on an annual basis, of all matters deemed
    relevant by the selected auditor that reasonably relate to
    retail rates:  [Italic->] Provided [<-Italic] , That such
    matters relate, directly or indirectly, to transactions or
    transfers between the public utility company subject to its
    jurisdiction and such exempt telecommunications company.
      `(2) SELECTION OF FIRM TO CONDUCT AUDIT- (A) If a State
    commission orders an audit in accordance with paragraph (1), 
    the public utility company and the State commission shall
    jointly select, within 60 days, a firm to perform the audit. 
    The firm selected to perform the audit shall possess
    demonstrated qualifications relating to--
          `(i) competency, including adequate technical training 
        and professional proficiency in each discipline necessary 
        to carry out the audit; and
          `(ii) independence and objectivity, including that the
        firm be free from personal or external impairments to
        independence, and should assume an independent position 
        with the State commission and auditee, making certain that
        the audit is based upon an impartial consideration of all
        pertinent facts and responsible opinions.
      `(B) The public utility company and the exempt
    telecommunications company shall cooperate fully with all
    reasonable requests necessary to perform the audit and the
    public utility company shall bear all costs of having the audit
    performed.
      `(3) AVAILABILITY OF AUDITOR'S REPORT- The auditor's report
    shall be provided to the State commission not later than 6
    months after the selection of the auditor, and provided to the
    public utility company not later than 60 days thereafter.
  `(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION- Nothing in
this section shall affect the authority of the Federal
Communications Commission under the Communications Act of 1934, or
the authority of State commissions under State laws concerning the
provision of telecommunications services, to regulate the 
activities of an exempt telecommunications company.'.
SEC. 104. NONDISCRIMINATION PRINCIPLE.
   Section 1 (47 U.S.C.  151) is amended by inserting after `to all
the people of the United States' the following: `, without
discrimination on the basis of race, color, religion, national
origin, or sex,'.
 SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
SEC. 151. BELL OPERATING COMPANY PROVISIONS.
  (a) ESTABLISHMENT OF PART III OF TITLE II- Title II is amended by
adding at the end of part II (as added by section 101) the 
following new part:
  `PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
`SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.
  `(a) GENERAL LIMITATION- Neither a Bell operating company, nor 
any affiliate of a Bell operating company, may provide interLATA
services except as provided in this section.
  `(b) INTERLATA SERVICES TO WHICH THIS SECTION APPLIES- 
      `(1) IN-REGION SERVICES- A Bell operating company, or any
    affiliate of that Bell operating company, may provide interLATA
    services originating in any of its in-region States (as defined
    in subsection (i)) if the Commission approves the application 
    of such company for such State under subsection (d)(3).
      `(2) OUT-OF-REGION SERVICES- A Bell operating company, or any
    affiliate of that Bell operating company, may provide interLATA
    services originating outside its in-region States after the 
    date of enactment of the Telecommunications Act of 1996, 
    subject to subsection (j).
      `(3) INCIDENTAL INTERLATA SERVICES- A Bell operating company,
    or any affiliate of a Bell operating company, may provide
    incidental interLATA services (as defined in subsection (g))
    originating in any State after the date of enactment of the
    Telecommunications Act of 1996.
      `(4) TERMINATION- Nothing in this section prohibits a Bell
    operating company or any of its affiliates from providing
    termination for interLATA services, subject to subsection (j).
  `(c) REQUIREMENTS FOR PROVIDING CERTAIN IN-REGION INTERLATA
SERVICES-
      `(1) AGREEMENT OR STATEMENT- A Bell operating company meets
    the requirements of this paragraph if it meets the requirements
    of subparagraph (A) or subparagraph (B) of this paragraph for
    each State for which the authorization is sought.
          `(A) PRESENCE OF A FACILITIES-BASED COMPETITOR- A Bell
        operating company meets the requirements of this
        subparagraph if it has entered into one or more binding
        agreements that have been approved under section 252
        specifying the terms and conditions under which the Bell
        operating company is providing access and interconnection 
        to its network facilities for the network facilities of one
        or more unaffiliated competing providers of telephone
        exchange service (as defined in section 3(47)(A), but
        excluding exchange access) to residential and business
        subscribers. For the purpose of this subparagraph, such
        telephone exchange service may be offered by such competing
        providers either exclusively over their own telephone
        exchange service facilities or predominantly over their own
        telephone exchange service facilities in combination with
        the resale of the telecommunications services of another
        carrier. For the purpose of this subparagraph, services
        provided pursuant to subpart K of part 22 of the
        Commission's regulations (47 C.F.R. 22.901 et seq.) shall
        not be considered to be telephone exchange services.
          `(B) FAILURE TO REQUEST ACCESS- A Bell operating company
        meets the requirements of this subparagraph if, after 10
        months after the date of enactment of the 
        Telecommunications Act of 1996, no such provider has
        requested the access and interconnection described in
        subparagraph (A) before the date which is 3 months before
        the date the company makes its application under subsection
        (d)(1), and a statement of the terms and conditions that 
        the company generally offers to provide such access and
        interconnection has been approved or permitted to take
        effect by the State commission under section 252(f).  For
        purposes of this subparagraph, a Bell operating company
        shall be considered not to have received any request for
        access and interconnection if the State commission of such
        State certifies that the only provider or providers making
        such a request have (i) failed to negotiate in good faith 
        as required by section 252, or (ii) violated the terms of 
        an agreement approved under section 252 by the provider's
        failure to comply, within a reasonable period of time, with
        the implementation schedule contained in such agreement.
      `(2) SPECIFIC INTERCONNECTION REQUIREMENTS- 
          `(A) AGREEMENT REQUIRED- A Bell operating company meets
        the requirements of this paragraph if, within the State for
        which the authorization is sought--
              `(i)(I) such company is providing access and
            interconnection pursuant to one or more agreements
            described in paragraph (1)(A), or
              `(II) such company is generally offering access and
            interconnection pursuant to a statement described in
            paragraph (1)(B), and
              `(ii) such access and interconnection meets the
            requirements of subparagraph (B) of this paragraph.
          `(B) COMPETITIVE CHECKLIST- Access or interconnection
        provided or generally offered by a Bell operating company 
        to other telecommunications carriers meets the requirements
        of this subparagraph if such access and interconnection
        includes each of the following:
              `(i) Interconnection in accordance with the
            requirements of sections 251(c)(2) and 252(d)(1).
              `(ii) Nondiscriminatory access to network elements in
            accordance with the requirements of sections 251(c)(3)
            and 252(d)(1).
              `(iii) Nondiscriminatory access to the poles, ducts,
            conduits, and rights-of-way owned or controlled by the
            Bell operating company at just and reasonable rates in
            accordance  with the requirements of section 224.
              `(iv) Local loop transmission from the central office
            to the customer's premises, unbundled from local
            switching or other services.
              `(v) Local transport from the trunk side of a 
            wireline local exchange carrier switch unbundled from
            switching or other services.
              `(vi) Local switching unbundled from transport, local
            loop transmission, or other services.
              `(vii) Nondiscriminatory access to--
  `(I) 911 and E911 services;
  `(II) directory assistance services to allow the other carrier's
customers to obtain telephone numbers; and
  `(III) operator call completion services.
              `(viii) White pages directory listings for customers
            of the other carrier's telephone exchange service.
              `(ix) Until the date by which telecommunications
            numbering administration guidelines, plan, or rules are
            established, nondiscriminatory access to telephone
            numbers for assignment to the other carrier's telephone
            exchange service customers. After that date, compliance
            with such guidelines, plan, or rules.
              `(x) Nondiscriminatory access to databases and
            associated signaling necessary for call routing and
            completion.
              `(xi) Until the date by which the Commission issues
            regulations pursuant to section 251 to require number
            portability, interim telecommunications number
            portability through remote call forwarding, direct
            inward dialing trunks, or other comparable 
            arrangements, with as little impairment of functioning,
            quality, reliability, and convenience as possible. 
            After that date, full compliance with such regulations.
              `(xii) Nondiscriminatory access to such services or
            information as are necessary to allow the requesting
            carrier to implement local dialing parity in accordance
            with the requirements of section 251(b)(3).
              `(xiii) Reciprocal compensation arrangements in
            accordance with the requirements of section 252(d)(2).
              `(xiv) Telecommunications services are available for
            resale in accordance with the requirements of sections
            251(c)(4) and 252(d)(3).
  `(d) ADMINISTRATIVE PROVISIONS- 
      `(1) APPLICATION TO COMMISSION- On and after the date of
    enactment of the Telecommunications Act of 1996, a Bell
    operating company or its affiliate may apply to the Commission
    for authorization to provide interLATA services originating in
    any in-region State. The application shall identify each State
    for which the authorization is sought.
      `(2) CONSULTATION- 
          `(A) CONSULTATION WITH THE ATTORNEY GENERAL- The
        Commission shall notify the Attorney General promptly of 
        any application under paragraph (1). Before making any
        determination under this subsection, the Commission shall
        consult with the Attorney General, and if the Attorney
        General submits any comments in writing, such comments 
        shall be included in the record of the Commission's
        decision. In consulting with and submitting comments to the
        Commission under this paragraph, the Attorney General shall
        provide to the Commission an evaluation of the application
        using any standard the Attorney General considers
        appropriate. The Commission shall give substantial weight 
        to the Attorney General's evaluation, but such evaluation
        shall not have any preclusive effect on any Commission
        decision under paragraph (3).
          `(B) CONSULTATION WITH STATE COMMISSIONS- Before making
        any determination under this subsection, the Commission
        shall consult with the State commission of any State that 
        is the subject of the application in order to verify the
        compliance of the Bell operating company with the
        requirements of subsection (c).
      `(3) DETERMINATION- Not later than 90 days after receiving an
    application under paragraph (1), the Commission shall issue a
    written determination approving or denying the authorization
    requested in the application for each State. The Commission
    shall not approve the authorization requested in an application
    submitted under paragraph (1) unless it finds that--
          `(A) the petitioning Bell operating company has met the
        requirements of subsection (c)(1) and--
              `(i) with respect to access and interconnection
            provided pursuant to subsection (c)(1)(A), has fully
            implemented the competitive checklist in subsection
            (c)(2)(B); or
              `(ii) with respect to access and interconnection
            generally offered pursuant to a statement under
            subsection (c)(1)(B), such statement offers all of the
            items included in the competitive checklist in
            subsection (c)(2)(B);
          `(B) the requested authorization will be carried out in
        accordance with the requirements of section 272; and
          `(C) the requested authorization is consistent with the
        public interest, convenience, and necessity.
    The Commission shall state the basis for its approval or denial
    of the application.
      `(4) LIMITATION ON COMMISSION- The Commission may not, by 
    rule or otherwise, limit or extend the terms used in the
    competitive checklist set forth in subsection (c)(2)(B).
      `(5) PUBLICATION- Not later than 10 days after issuing a
    determination under paragraph (3), the Commission shall publish
    in the Federal Register a brief description of the determination.
      `(6) ENFORCEMENT OF CONDITIONS- 
          `(A) COMMISSION AUTHORITY- If at any time after the
        approval of an application under paragraph (3), the
        Commission determines that a Bell operating company has
        ceased to meet any of the conditions required for such
        approval, the Commission may, after notice and opportunity
        for a hearing--
              `(i) issue an order to such company to correct the
            deficiency;
              `(ii) impose a penalty on such company pursuant to
            title V; or
              `(iii) suspend or revoke such approval.
          `(B) RECEIPT AND REVIEW OF COMPLAINTS- The Commission
        shall establish procedures for the review of complaints
        concerning failures by Bell operating companies to meet
        conditions required for approval under paragraph (3). 
        Unless the parties otherwise agree, the Commission shall 
        act on such complaint within 90 days.
  `(e) LIMITATIONS- 
      `(1) JOINT MARKETING OF LOCAL AND LONG DISTANCE SERVICES-
    Until a Bell operating company is authorized pursuant to
    subsection (d) to provide interLATA services in an in-region
    State, or until 36 months have passed since the date of
    enactment of the Telecommunications Act of 1996, whichever is
    earlier, a telecommunications carrier that serves greater than 
    5 percent of the Nation's presubscribed access lines may not
    jointly market in such State telephone exchange service 
    obtained from such company pursuant to section 251(c)(4) with
    interLATA services offered by that telecommunications carrier.
      `(2) INTRALATA TOLL DIALING PARITY- 
          `(A) PROVISION REQUIRED- A Bell operating company granted
        authority to provide interLATA services under subsection 
        (d) shall provide intraLATA toll dialing parity throughout
        that State coincident with its exercise of that authority.
          `(B) LIMITATION- Except for single-LATA States and States
        that have issued an order by December 19, 1995, requiring a
        Bell operating company to implement intraLATA toll dialing
        parity, a State may not require a Bell operating company to
        implement intraLATA toll dialing parity in that State 
        before a Bell operating company has been granted authority
        under this section to provide interLATA services 
        originating in that State or before 3 years after the date
        of enactment of the Telecommunications Act of 1996,
        whichever is earlier. Nothing in this subparagraph 
        precludes a State from issuing an order requiring intraLATA
        toll dialing parity in that State prior to either such date
        so long as such order does not take effect until after the
        earlier of either such dates.
  `(f) EXCEPTION FOR PREVIOUSLY AUTHORIZED ACTIVITIES- Neither
subsection (a) nor section 273 shall prohibit a Bell operating
company or affiliate from engaging, at any time after the date of
enactment of the Telecommunications Act of 1996, in any activity to
the extent authorized by, and subject to the terms and conditions
contained in, an order entered by the United States District Court
for the District of Columbia pursuant to section VII or VIII(C) of
the AT&T Consent Decree if such order was entered on or before such
date of enactment, to the extent such order is not reversed or
vacated on appeal. Nothing in this subsection shall be construed to
limit, or to impose terms or conditions on, an activity in which a
Bell operating company is otherwise authorized to engage under any
other provision of this section.
  `(g) DEFINITION OF INCIDENTAL INTERLATA SERVICES- For purposes of
this section, the term `incidental interLATA services' means the
interLATA provision by a Bell operating company or its affiliate--
      `(1)(A) of audio programming, video programming, or other
    programming services to subscribers to such services of such
    company or affiliate;
      `(B) of the capability for interaction by such subscribers to
    select or respond to such audio programming, video programming,
    or other programming services;
      `(C) to distributors of audio programming or video 
    programming that such company or affiliate owns or controls, or
    is licensed by the copyright owner of such programming (or by 
    an assignee of such owner) to distribute; or
      `(D) of alarm monitoring services;
      `(2) of two-way interactive video services or Internet
    services over dedicated facilities to or for elementary and
    secondary schools as defined in section 254(h)(5);
      `(3) of commercial mobile services in accordance with section
    332(c) of this Act and with the regulations prescribed by the
    Commission pursuant to paragraph (8) of such section;
      `(4) of a service that permits a customer that is located in
    one LATA to retrieve stored information from, or file
    information for storage in, information storage facilities of
    such company that are located in another LATA;
      `(5) of signaling information used in connection with the
    provision of telephone exchange services or exchange access by 
    a local exchange carrier; or
      `(6) of network control signaling information to, and receipt
    of such signaling information from, common carriers offering
    interLATA services at any location within the area in which 
    such Bell operating company provides telephone exchange 
    services or exchange access.
  `(h) LIMITATIONS- The provisions of subsection (g) are intended 
to be narrowly construed. The interLATA services provided under
subparagraph (A), (B), or (C) of subsection (g)(1) are limited to
those interLATA transmissions incidental to the provision by a Bell
operating company or its affiliate of video, audio, and other
programming services that the company or its affiliate is engaged 
in providing to the public.  The Commission shall ensure that the
provision of services authorized under subsection (g) by a Bell
operating company or its affiliate will not adversely affect
telephone exchange service ratepayers or competition in any
telecommunications market.
  `(i) ADDITIONAL DEFINITIONS- As used in this section--
      `(1) IN-REGION STATE- The term `in-region State' means a 
    State in which a Bell operating company or any of its 
    affiliates was authorized to provide wireline telephone 
    exchange service pursuant to the reorganization plan approved
    under the AT&T Consent Decree, as in effect on the day before
    the date of enactment of the Telecommunications Act of 1996.
      `(2) AUDIO PROGRAMMING SERVICES- The term `audio programming
    services' means programming provided by, or generally 
    considered to be comparable to programming provided by, a radio
    broadcast station.
      `(3) VIDEO PROGRAMMING SERVICES; OTHER PROGRAMMING SERVICES-
    The terms `video programming service' and `other programming
    services' have the same meanings as such terms have under
    section 602 of this Act.
  `(j) CERTAIN SERVICE APPLICATIONS TREATED AS IN-REGION SERVICE
APPLICATIONS- For purposes of this section, a Bell operating 
company application to provide 800 service, private line service, 
or their equivalents that--
      `(1) terminate in an in-region State of that Bell operating
    company, and
      `(2) allow the called party to determine the interLATA carrier,
shall be considered an in-region service subject to the 
requirements of subsection (b)(1).
`SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.
  `(a) SEPARATE AFFILIATE REQUIRED FOR COMPETITIVE ACTIVITIES- 
      `(1) IN GENERAL- A Bell operating company (including any
    affiliate) which is a local exchange carrier that is subject to
    the requirements of section 251(c) may not provide any service
    described in paragraph (2) unless it provides that service
    through one or more affiliates that--
          `(A) are separate from any operating company entity that
        is subject to the requirements of section 251(c); and
          `(B) meet the requirements of subsection (b).
      `(2) SERVICES FOR WHICH A SEPARATE AFFILIATE IS REQUIRED- The
    services for which a separate affiliate is required by 
    paragraph (1) are:
          `(A) Manufacturing activities (as defined in section
        273(h)).
          `(B) Origination of interLATA telecommunications 
        services, other than--
              `(i) incidental interLATA services described in
            paragraphs (1), (2), (3), (5), and (6) of section 271(g);
              `(ii) out-of-region services described in section
            271(b)(2); or
              `(iii) previously authorized activities described in
            section 271(f).
          `(C) InterLATA information services, other than 
        electronic publishing (as defined in section 274(h)) and
        alarm monitoring services (as defined in section 275(e)).
  `(b) STRUCTURAL AND TRANSACTIONAL REQUIREMENTS- The separate
affiliate required by this section--
      `(1) shall operate independently from the Bell operating
    company;
      `(2) shall maintain books, records, and accounts in the 
    manner prescribed by the Commission which shall be separate 
    from the books, records, and accounts maintained by the Bell
    operating company of which it is an affiliate;
      `(3) shall have separate officers, directors, and employees
    from the Bell operating company of which it is an affiliate;
      `(4) may not obtain credit under any arrangement that would
    permit a creditor, upon default, to have recourse to the assets
    of the Bell operating company; and
      `(5) shall conduct all transactions with the Bell operating
    company of which it is an affiliate on an arm's length basis
    with any such transactions reduced to writing and available for
    public inspection.
 `(c) NONDISCRIMINATION SAFEGUARDS- In its dealings with its
affiliate described in subsection (a), a Bell operating company--
      `(1) may not discriminate between that company or affiliate
    and any other entity in the provision or procurement of goods,
    services, facilities, and information, or in the establishment
    of standards; and
      `(2) shall account for all transactions with an affiliate
    described in subsection (a) in accordance with accounting
    principles designated or approved by the Commission.
  `(d) BIENNIAL AUDIT- 
      `(1) GENERAL REQUIREMENT- A company required to operate a
    separate affiliate under this section shall obtain and pay for 
    a joint Federal/State audit every 2 years conducted by an
    independent auditor to determine whether such company has
    complied with this section and the regulations promulgated 
    under this section, and particularly whether such company has
    complied with the separate accounting requirements under
    subsection (b).
      `(2) RESULTS SUBMITTED TO COMMISSION; STATE COMMISSIONS- The
    auditor described in paragraph (1) shall submit the results of
    the audit to the Commission and to the State commission of each
    State in which the company audited provides service, which 
    shall make such results available for public inspection. Any
    party may submit comments on the final audit report.
      `(3) ACCESS TO DOCUMENTS- For purposes of conducting audits
    and reviews under this subsection--
          `(A) the independent auditor, the Commission, and the
        State commission shall have access to the financial 
        accounts and records of each company and of its affiliates
        necessary to verify transactions conducted with that 
        company that are relevant to the specific activities
        permitted under this section and that are necessary for the
        regulation of rates;
          `(B) the Commission and the State commission shall have
        access to the working papers and supporting materials of 
        any auditor who performs an audit under this section; and
          `(C) the State commission shall implement appropriate
        procedures to ensure the protection of any proprietary
        information submitted to it under this section.
  `(e) FULFILLMENT OF CERTAIN REQUESTS- A Bell operating company 
and an affiliate that is subject to the requirements of section
251(c)--
      `(1) shall fulfill any requests from an unaffiliated entity
    for telephone exchange service and exchange access within a
    period no longer than the period in which it provides such
    telephone exchange service and exchange access to itself or to
    its affiliates;
      `(2) shall not provide any facilities, services, or
    information concerning its provision of exchange access to the
    affiliate described in subsection (a) unless such facilities,
    services, or information are made available to other providers
    of interLATA services in that market on the same terms and
    conditions;
      `(3) shall charge the affiliate described in subsection (a),
    or impute to itself (if using the access for its provision of
    its own services), an amount for access to its telephone
    exchange service and exchange access that is no less than the
    amount charged to any unaffiliated interexchange carriers for
    such service; and
      `(4) may provide any interLATA or intraLATA facilities or
    services to its interLATA affiliate if such services or
    facilities are made available to all carriers at the same rates
    and on the same terms and conditions, and so long as the costs
    are appropriately allocated.
  `(f) SUNSET- 
      `(1) MANUFACTURING AND LONG DISTANCE- The provisions of this
    section (other than subsection (e)) shall cease to apply with
    respect to the manufacturing activities or the interLATA
    telecommunications services of a Bell operating company 3 years
    after the date such Bell operating company or any Bell 
    operating company affiliate is authorized to provide interLATA
    telecommunications services under section 271(d), unless the
    Commission extends such 3-year period by rule or order.
      `(2) INTERLATA INFORMATION SERVICES- The provisions of this
    section (other than subsection (e)) shall cease to apply with
    respect to the interLATA information services of a Bell
    operating company 4 years after the date of enactment of the
    Telecommunications Act of 1996, unless the Commission extends
    such 4-year period by rule or order.
      `(3) PRESERVATION OF EXISTING AUTHORITY- Nothing in this
    subsection shall be construed to limit the authority of the
    Commission under any other section of this Act to prescribe
    safeguards consistent with the public interest, convenience, 
    and necessity.
  `(g) JOINT MARKETING- 
      `(1) AFFILIATE SALES OF TELEPHONE EXCHANGE SERVICES- A Bell
    operating company affiliate required by this section may not
    market or sell telephone exchange services provided by the Bell
    operating company unless that company permits other entities
    offering the same or similar service to market and sell its
    telephone exchange services.
      `(2) BELL OPERATING COMPANY SALES OF AFFILIATE SERVICES- A
    Bell operating company may not market or sell interLATA service
    provided by an affiliate required by this section within any of
    its in-region States until such company is authorized to 
    provide interLATA services in such State under section 271(d).
      `(3) RULE OF CONSTRUCTION- The joint marketing and sale of
    services permitted under this subsection shall not be 
    considered to violate the nondiscrimination provisions of
    subsection (c).
  `(h) TRANSITION- With respect to any activity in which a Bell
operating company is engaged on the date of enactment of the
Telecommunications Act of 1996, such company shall have one year
from such date of enactment to comply with the requirements of this
section.
`SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.
  `(a) AUTHORIZATION- A Bell operating company may manufacture and
provide telecommunications equipment, and manufacture customer
premises equipment, if the Commission authorizes that Bell 
operating company or any Bell operating company affiliate to 
provide interLATA services under section 271(d), subject to the
requirements of this section and the regulations prescribed
thereunder, except that neither a Bell operating company nor any of
its affiliates may engage in such manufacturing in conjunction with
a Bell operating company not so affiliated or any of its affiliates.
  `(b) COLLABORATION; RESEARCH AND ROYALTY AGREEMENTS- 
      `(1) COLLABORATION- Subsection (a) shall not prohibit a Bell
    operating company from engaging in close collaboration with any
    manufacturer of customer premises equipment or
    telecommunications equipment during the design and development
    of hardware, software, or combinations thereof related to such
    equipment.
      `(2) CERTAIN RESEARCH ARRANGEMENTS; ROYALTY AGREEMENTS-
    Subsection (a) shall not prohibit a Bell operating company from--
          `(A) engaging in research activities related to
        manufacturing, and
          `(B) entering into royalty agreements with manufacturers
        of telecommunications equipment.
  `(c) INFORMATION REQUIREMENTS- 
      `(1) INFORMATION ON PROTOCOLS AND TECHNICAL REQUIREMENTS- 
    Each Bell operating company shall, in accordance with
    regulations prescribed by the Commission, maintain and file 
    with the Commission full and complete information with respect
    to the protocols and technical requirements for connection with
    and use of its telephone exchange service facilities.  Each 
    such company shall report promptly to the Commission any
    material changes or planned changes to such protocols and
    requirements, and the schedule for implementation of such
    changes or planned changes.
      `(2) DISCLOSURE OF INFORMATION- A Bell operating company 
    shall not disclose any information required to be filed under
    paragraph (1) unless that information has been filed promptly,
    as required by regulation by the Commission.
      `(3) ACCESS BY COMPETITORS TO INFORMATION- The Commission may
    prescribe such additional regulations under this subsection as
    may be necessary to ensure that manufacturers have access to 
    the information with respect to the protocols and technical
    requirements for connection with and use of telephone exchange
    service facilities that a Bell operating company makes 
    available to any manufacturing affiliate or any unaffiliated
    manufacturer.
      `(4) PLANNING INFORMATION- Each Bell operating company shall
    provide, to interconnecting carriers providing telephone
    exchange service, timely information on the planned deployment
    of telecommunications equipment.
  `(d) MANUFACTURING LIMITATIONS FOR STANDARD-SETTING ORGANIZATIONS- 
      `(1) APPLICATION TO BELL COMMUNICATIONS RESEARCH OR
    MANUFACTURERS- Bell Communications Research, Inc., or any
    successor entity or affiliate--
          `(A) shall not be considered a Bell operating company or 
        a successor or assign of a Bell operating company at such
        time as it is no longer an affiliate of any Bell operating
        company; and
          `(B) notwithstanding paragraph (3), shall not engage in
        manufacturing telecommunications equipment or customer
        premises equipment as long as it is an affiliate of more
        than 1 otherwise unaffiliated Bell operating company or
        successor or assign of any such company.
    Nothing in this subsection prohibits Bell Communications
    Research, Inc., or any successor entity, from engaging in any
    activity in which it is lawfully engaged on the date of
    enactment of the Telecommunications Act of 1996. Nothing
    provided in this subsection shall render Bell Communications
    Research, Inc., or any successor entity, a common carrier under
    title II of this Act. Nothing in this subsection restricts any
    manufacturer from engaging in any activity in which it is
    lawfully engaged on the date of enactment of the
    Telecommunications Act of 1996.
      `(2) PROPRIETARY INFORMATION- Any entity which establishes
    standards for telecommunications equipment or customer premises
    equipment, or generic network requirements for such equipment,
    or certifies telecommunications equipment or customer premises
    equipment, shall be prohibited from releasing or otherwise 
    using any proprietary information, designated as such by its
    owner, in its possession as a result of such activity, for any
    purpose other than purposes authorized in writing by the owner
    of such information, even after such entity ceases to be so
    engaged.
      `(3) MANUFACTURING SAFEGUARDS- (A) Except as prohibited in
    paragraph (1), and subject to paragraph (6), any entity which
    certifies telecommunications equipment or customer premises
    equipment manufactured by an unaffiliated entity shall only
    manufacture a particular class of telecommunications equipment
    or customer premises equipment for which it is undertaking or
    has undertaken, during the previous 18 months, certification
    activity for such class of equipment through a separate
    affiliate.
      `(B) Such separate affiliate shall--
          `(i) maintain books, records, and accounts separate from
        those of the entity that certifies such equipment,
        consistent with generally acceptable accounting principles;
          `(ii) not engage in any joint manufacturing activities
        with such entity; and
          `(iii) have segregated facilities and separate employees
        with such entity.
      `(C) Such entity that certifies such equipment shall--
          `(i) not discriminate in favor of its manufacturing
        affiliate in the establishment of standards, generic
        requirements, or product certification;
          `(ii) not disclose to the manufacturing affiliate any
        proprietary information that has been received at any time
        from an unaffiliated manufacturer, unless authorized in
        writing by the owner of the information; and
          `(iii) not permit any employee engaged in product
        certification for telecommunications equipment or customer
        premises equipment to engage jointly in sales or marketing
        of any such equipment with the affiliated manufacturer.
      `(4) STANDARD-SETTING ENTITIES- Any entity that is not an
    accredited standards development organization and that
    establishes industry-wide standards for telecommunications
    equipment or customer premises equipment, or industry-wide
    generic network requirements for such equipment, or that
    certifies telecommunications equipment or customer premises
    equipment manufactured by an unaffiliated entity, shall--
          `(A) establish and publish any industry-wide standard 
        for, industry-wide generic requirement for, or any
        substantial modification of an existing industry-wide
        standard or industry-wide generic requirement for,
        telecommunications equipment or customer premises equipment
        only in compliance with the following procedure--
              `(i) such entity shall issue a public notice of its
            consideration of a proposed industry-wide standard or
            industry-wide generic requirement;
              `(ii) such entity shall issue a public invitation to
            interested industry parties to fund and participate in
            such efforts on a reasonable and nondiscriminatory
            basis, administered in such a manner as not to
            unreasonably exclude any interested industry party;
              `(iii) such entity shall publish a text for comment 
            by such parties as have agreed to participate in the
            process pursuant to clause (ii), provide such parties a
            full opportunity to submit comments, and respond to
            comments from such parties;
              `(iv) such entity shall publish a final text of the
            industry-wide standard or industry-wide generic
            requirement, including the comments in their entirety,
            of any funding party which requests to have its 
            comments so published; and
              `(v) such entity shall attempt, prior to publishing a
            text for comment, to agree with the funding parties as 
            a group on a mutually satisfactory dispute resolution
            process which such parties shall utilize as their sole
            recourse in the event of a dispute on technical issues
            as to which there is disagreement between any funding
            party and the entity conducting such activities, except
            that if no dispute resolution process is agreed to by
            all the parties, a funding party may utilize the 
            dispute resolution procedures established pursuant to
            paragraph (5) of this subsection;
          `(B) engage in product certification for
        telecommunications equipment or customer premises equipment
        manufactured by unaffiliated entities only if--
              `(i) such activity is performed pursuant to published
            criteria;
              `(ii) such activity is performed pursuant to 
            auditable criteria; and
              `(iii) such activity is performed pursuant to
            available industry-accepted testing methods and
            standards, where applicable, unless otherwise agreed
            upon by the parties funding and performing such activity;
          `(C) not undertake any actions to monopolize or attempt 
        to monopolize the market for such services; and
          `(D) not preferentially treat its own telecommunications
        equipment or customer premises equipment, or that of its
        affiliate, over that of any other entity in establishing 
        and publishing industry-wide standards or industry-wide
        generic requirements for, and in certification of,
        telecommunications equipment and customer premises equipment.
      `(5) ALTERNATE DISPUTE RESOLUTION- Within 90 days after the
    date of enactment of the Telecommunications Act of 1996, the
    Commission shall prescribe a dispute resolution process to be
    utilized in the event that a dispute resolution process is not
    agreed upon by all the parties when establishing and publishing
    any industry-wide standard or industry-wide generic requirement
    for telecommunications equipment or customer premises 
    equipment, pursuant to paragraph (4)(A)(v). The Commission 
    shall not establish itself as a party to the dispute resolution
    process. Such dispute resolution process shall permit any
    funding party to resolve a dispute with the entity conducting
    the activity that significantly affects such funding party's
    interests, in an open, nondiscriminatory, and unbiased fashion,
    within 30 days after the filing of such dispute. Such disputes
    may be filed within 15 days after the date the funding party
    receives a response to its comments from the entity conducting
    the activity. The Commission shall establish penalties to be
    assessed for delays caused by referral of frivolous disputes to
    the dispute resolution process.
      `(6) SUNSET- The requirements of paragraphs (3) and (4) shall
    terminate for the particular relevant activity when the
    Commission determines that there are alternative sources of
    industry-wide standards, industry-wide generic requirements, or
    product certification for a particular class of
    telecommunications equipment or customer premises equipment
    available in the United States. Alternative sources shall be
    deemed to exist when such sources provide commercially viable
    alternatives that are providing such services to customers. The
    Commission shall act on any application for such a 
    determination within 90 days after receipt of such application,
    and shall receive public comment on such application.
      `(7) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the
    purposes of administering this subsection and the regulations
    prescribed thereunder, the Commission shall have the same
    remedial authority as the Commission has in administering and
    enforcing the provisions of this title with respect to any
    common carrier subject to this Act.
      `(8) DEFINITIONS- For purposes of this subsection:
          `(A) The term `affiliate' shall have the same meaning as
        in section 3 of this Act, except that, for purposes of
        paragraph (1)(B)--
              `(i) an aggregate voting equity interest in Bell
            Communications Research, Inc., of at least 5 percent of
            its total voting equity, owned directly or indirectly 
            by more than 1 otherwise unaffiliated Bell operating
            company, shall constitute an affiliate relationship; and
              `(ii) a voting equity interest in Bell Communications
            Research, Inc., by any otherwise unaffiliated Bell
            operating company of less than 1 percent of Bell
            Communications Research's total voting equity shall not
            be considered to be an equity interest under this
            paragraph.
          `(B) The term `generic requirement' means a description 
        of acceptable product attributes for use by local exchange
        carriers in establishing product specifications for the
        purchase of telecommunications equipment, customer premises
        equipment, and software integral thereto.
          `(C) The term `industry-wide' means activities funded by
        or performed on behalf of local exchange carriers for use 
        in providing wireline telephone exchange service whose
        combined total of deployed access lines in the United 
        States constitutes at least 30 percent of all access lines
        deployed by telecommunications carriers in the United 
        States as of the date of enactment of the 
        Telecommunications Act of 1996.
          `(D) The term `certification' means any technical process
        whereby a party determines whether a product, for use by
        more than one local exchange carrier, conforms with the
        specified requirements pertaining to such product.
          `(E) The term `accredited standards development
        organization' means an entity composed of industry members
        which has been accredited by an institution vested with the
        responsibility for standards accreditation by the industry.
  `(e) BELL OPERATING COMPANY EQUIPMENT PROCUREMENT AND SALES- 
      `(1) NONDISCRIMINATION STANDARDS FOR MANUFACTURING- In the
    procurement or awarding of supply contracts for
    telecommunications equipment, a Bell operating company, or any
    entity acting on its behalf, for the duration of the 
    requirement for a separate subsidiary including manufacturing
    under this Act--
          `(A) shall consider such equipment, produced or supplied
        by unrelated persons; and
          `(B) may not discriminate in favor of equipment produced
        or supplied by an affiliate or related person.
      `(2) PROCUREMENT STANDARDS- Each Bell operating company or 
    any entity acting on its behalf shall make procurement 
    decisions and award all supply contracts for equipment,
    services, and software on the basis of an objective assessment
    of price, quality, delivery, and other commercial factors.
      `(3) NETWORK PLANNING AND DESIGN- A Bell operating company
    shall, to the extent consistent with the antitrust laws, engage
    in joint network planning and design with local exchange
    carriers operating in the same area of interest.  No 
    participant in such planning shall be allowed to delay the
    introduction of new technology or the deployment of facilities
    to provide telecommunications services, and agreement with such
    other carriers shall not be required as a prerequisite for such
    introduction or deployment.
      `(4) SALES RESTRICTIONS- Neither a Bell operating company
    engaged in manufacturing nor a manufacturing affiliate of such 
    a company shall restrict sales to any local exchange carrier of
    telecommunications equipment, including software integral to 
    the operation of such equipment and related upgrades.
      `(5) PROTECTION OF PROPRIETARY INFORMATION- A Bell operating
    company and any entity it owns or otherwise controls shall
    protect the proprietary information submitted for procurement
    decisions from release not specifically authorized by the owner
    of such information.
  `(f) ADMINISTRATION AND ENFORCEMENT AUTHORITY- For the purposes 
of administering and enforcing the provisions of this section and
the regulations prescribed thereunder, the Commission shall have 
the same authority, power, and functions with respect to any Bell
operating company or any affiliate thereof as the Commission has in
administering and enforcing the provisions of this title with
respect to any common carrier subject to this Act.
  `(g) ADDITIONAL RULES AND REGULATIONS- The Commission may
prescribe such additional rules and regulations as the Commission
determines are necessary to carry out the provisions of this
section, and otherwise to prevent discrimination and
cross-subsidization in a Bell operating company's dealings with its
affiliate and with third parties.
  `(h) DEFINITION- As used in this section, the term 
`manufacturing' has the same meaning as such term has under the 
AT&T Consent Decree.
`SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING COMPANIES.
  `(a) LIMITATIONS- No Bell operating company or any affiliate may
engage in the provision of electronic publishing that is
disseminated by means of such Bell operating company's or any of 
its affiliates' basic telephone service, except that nothing in 
this section shall prohibit a separated affiliate or electronic
publishing joint venture operated in accordance with this section
from engaging in the provision of electronic publishing.
  `(b) SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING JOINT VENTURE
REQUIREMENTS- A separated affiliate or electronic publishing joint
venture shall be operated independently from the Bell operating
company. Such separated affiliate or joint venture and the Bell
operating company with which it is affiliated shall--
      `(1) maintain separate books, records, and accounts and
    prepare separate financial statements;
      `(2) not incur debt in a manner that would permit a creditor
    of the separated affiliate or joint venture upon default to 
    have recourse to the assets of the Bell operating company;
      `(3) carry out transactions (A) in a manner consistent with
    such independence, (B) pursuant to written contracts or tariffs
    that are filed with the Commission and made publicly available,
    and (C) in a manner that is auditable in accordance with
    generally accepted auditing standards;
      `(4) value any assets that are transferred directly or
    indirectly from the Bell operating company to a separated
    affiliate or joint venture, and record any transactions by 
    which such assets are transferred, in accordance with such
    regulations as may be prescribed by the Commission or a State
    commission to prevent improper cross subsidies;
      `(5) between a separated affiliate and a Bell operating
    company--
          `(A) have no officers, directors, and employees in common
        after the effective date of this section; and
          `(B) own no property in common;
      `(6) not use for the marketing of any product or service of
    the separated affiliate or joint venture, the name, trademarks,
    or service marks of an existing Bell operating company except
    for names, trademarks, or service marks that are owned by the
    entity that owns or controls the Bell operating company;
      `(7) not permit the Bell operating company--
          `(A) to perform hiring or training of personnel on behalf
        of a separated affiliate;
          `(B) to perform the purchasing, installation, or
        maintenance of equipment on behalf of a separated 
        affiliate, except for telephone service that it provides
        under tariff or contract subject to the provisions of this
        section; or
          `(C) to perform research and development on behalf of a
        separated affiliate;
      `(8) each have performed annually a compliance review--
          `(A) that is conducted by an independent entity for the
        purpose of determining compliance during the preceding
        calendar year with any provision of this section; and
          `(B) the results of which are maintained by the separated
        affiliate or joint venture and the Bell operating company
        for a period of 5 years subject to review by any lawful
        authority; and
      `(9) within 90 days of receiving a review described in
    paragraph (8), file a report of any exceptions and corrective
    action with the Commission and allow any person to inspect and
    copy such report subject to reasonable safeguards to protect 
    any proprietary information contained in such report from being
    used for purposes other than to enforce or pursue remedies 
    under this section.
  `(c) JOINT MARKETING- 
      `(1) IN GENERAL- Except as provided in paragraph (2)--
          `(A) a Bell operating company shall not carry out any
        promotion, marketing, sales, or advertising for or in
        conjunction with a separated affiliate; and
          `(B) a Bell operating company shall not carry out any
        promotion, marketing, sales, or advertising for or in
        conjunction with an affiliate that is related to the
        provision of electronic publishing.
      `(2) PERMISSIBLE JOINT ACTIVITIES- 
          `(A) JOINT TELEMARKETING- A Bell operating company may
        provide inbound telemarketing or referral services related
        to the provision of electronic publishing for a separated
        affiliate, electronic publishing joint venture, affiliate,
        or unaffiliated electronic publisher:  [Italic->] P
        rovided,  [<-Italic] That if such services are provided to 
        a separated affiliate, electronic publishing joint venture,
        or affiliate, such services shall be made available to all
        electronic publishers on request, on nondiscriminatory terms.
          `(B) TEAMING ARRANGEMENTS- A Bell operating company may
        engage in nondiscriminatory teaming or business 
        arrangements to engage in electronic publishing with any
        separated affiliate or with any other electronic publisher
        if (i) the Bell operating company only provides facilities,
        services, and basic telephone service information as
        authorized by this section, and (ii) the Bell operating
        company does not own such teaming or business arrangement.
          `(C) ELECTRONIC PUBLISHING JOINT VENTURES- A Bell
        operating company or affiliate may participate on a
        nonexclusive basis in electronic publishing joint ventures
        with entities that are not a Bell operating company,
        affiliate, or separated affiliate to provide electronic
        publishing services, if the Bell operating company or
        affiliate has not more than a 50 percent direct or indirect
        equity interest (or the equivalent thereof) or the right to
        more than 50 percent of the gross revenues under a revenue
        sharing or royalty agreement in any electronic publishing
        joint venture. Officers and employees of a Bell operating
        company or affiliate participating in an electronic
        publishing joint venture may not have more than 50 percent
        of the voting control over the electronic publishing joint
        venture. In the case of joint ventures with small, local
        electronic publishers, the Commission for good cause shown
        may authorize the Bell operating company or affiliate to
        have a larger equity interest, revenue share, or voting
        control but not to exceed 80 percent. A Bell operating
        company participating in an electronic publishing joint
        venture may provide promotion, marketing, sales, or
        advertising personnel and services to such joint venture.
  `(d) BELL OPERATING COMPANY REQUIREMENT- A Bell operating company
under common ownership or control with a separated affiliate or
electronic publishing joint venture shall provide network access 
and interconnections for basic telephone service to electronic
publishers at just and reasonable rates that are tariffed (so long
as rates for such services are subject to regulation) and that are
not higher on a per-unit basis than those charged for such services
to any other electronic publisher or any separated affiliate 
engaged in electronic publishing.
  `(e) PRIVATE RIGHT OF ACTION- 
      `(1) DAMAGES- Any person claiming that any act or practice of
    any Bell operating company, affiliate, or separated affiliate
    constitutes a violation of this section may file a complaint
    with the Commission or bring suit as provided in section 207 of
    this Act, and such Bell operating company, affiliate, or
    separated affiliate shall be liable as provided in section 206
    of this Act; except that damages may not be awarded for a
    violation that is discovered by a compliance review as required
    by subsection (b)(7) of this section and corrected within 90
    days.
      `(2) CEASE AND DESIST ORDERS- In addition to the provisions 
    of paragraph (1), any person claiming that any act or practice
    of any Bell operating company, affiliate, or separated 
    affiliate constitutes a violation of this section may make
    application to the Commission for an order to cease and desist
    such violation or may make application in any district court of
    the United States of competent jurisdiction for an order
    enjoining such acts or practices or for an order compelling
    compliance with such requirement.
  `(f) SEPARATED AFFILIATE REPORTING REQUIREMENT- Any separated
affiliate under this section shall file with the Commission annual
reports in a form substantially equivalent to the Form 10-K 
required by regulations of the Securities and Exchange Commission.
  `(g) EFFECTIVE DATES- 
      `(1) TRANSITION- Any electronic publishing service being
    offered to the public by a Bell operating company or affiliate
    on the date of enactment of the Telecommunications Act of 1996
    shall have one year from such date of enactment to comply with
    the requirements of this section.
      `(2) SUNSET- The provisions of this section shall not apply 
    to conduct occurring after 4 years after the date of enactment
    of the Telecommunications Act of 1996.
  `(h) DEFINITION OF ELECTRONIC PUBLISHING- 
      `(1) IN GENERAL- The term `electronic publishing' means the
    dissemination, provision, publication, or sale to an
    unaffiliated entity or person, of any one or more of the
    following: news (including sports); entertainment (other than
    interactive games); business, financial, legal, consumer, or
    credit materials; editorials, columns, or features; 
    advertising; photos or images; archival or research material;
    legal notices or public records; scientific, educational,
    instructional, technical, professional, trade, or other 
    literary materials; or other like or similar information.
      `(2) EXCEPTIONS- The term `electronic publishing' shall not
    include the following services:
          `(A) Information access, as that term is defined by the
        AT&T Consent Decree.
          `(B) The transmission of information as a common carrier.
          `(C) The transmission of information as part of a gateway
        to an information service that does not involve the
        generation or alteration of the content of information,
        including data transmission, address translation, protocol
        conversion, billing management, introductory information
        content, and navigational systems that enable users to
        access electronic publishing services, which do not affect
        the presentation of such electronic publishing services to
        users.
          `(D) Voice storage and retrieval services, including 
        voice messaging and electronic mail services.
          `(E) Data processing or transaction processing services
        that do not involve the generation or alteration of the
        content of information.
          `(F) Electronic billing or advertising of a Bell 
        operating company's regulated telecommunications services.
          `(G) Language translation or data format conversion.
          `(H) The provision of information necessary for the
        management, control, or operation of a telephone company
        telecommunications system.
          `(I) The provision of directory assistance that provides
        names, addresses, and telephone numbers and does not 
        include advertising.
          `(J) Caller identification services.
          `(K) Repair and provisioning databases and credit card 
        and billing validation for telephone company operations.
          `(L) 911-E and other emergency assistance databases.
          `(M) Any other network service of a type that is like or
        similar to these network services and that does not involve
        the generation or alteration of the content of information.
          `(N) Any upgrades to these network services that do not
        involve the generation or alteration of the content of
        information.
          `(O) Video programming or full motion video entertainment
        on demand.
  `(i) ADDITIONAL DEFINITIONS- As used in this section--
      `(1) The term `affiliate' means any entity that, directly or
    indirectly, owns or controls, is owned or controlled by, or is
    under common ownership or control with, a Bell operating
    company. Such term shall not include a separated affiliate.
      `(2) The term `basic telephone service' means any wireline
    telephone exchange service, or wireline telephone exchange
    service facility, provided by a Bell operating company in a
    telephone exchange area, except that such term does not include--
          `(A) a competitive wireline telephone exchange service
        provided in a telephone exchange area where another entity
        provides a wireline telephone exchange service that was
        provided on January 1, 1984, or
          `(B) a commercial mobile service.
      `(3) The term `basic telephone service information' means
    network and customer information of a Bell operating company 
    and other information acquired by a Bell operating company as a
    result of its engaging in the provision of basic telephone
    service.
      `(4) The term `control' has the meaning that it has in 17
    C.F.R. 240.12b-2, the regulations promulgated by the Securities
    and Exchange Commission pursuant to the Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) or any successor provision to
    such section.
      `(5) The term `electronic publishing joint venture' means a
    joint venture owned by a Bell operating company or affiliate
    that engages in the provision of electronic publishing which is
    disseminated by means of such Bell operating company's or any 
    of its affiliates' basic telephone service.
      `(6) The term `entity' means any organization, and includes
    corporations, partnerships, sole proprietorships, associations,
    and joint ventures.
      `(7) The term `inbound telemarketing' means the marketing of
    property, goods, or services by telephone to a customer or
    potential customer who initiated the call.
      `(8) The term `own' with respect to an entity means to have a
    direct or indirect equity interest (or the equivalent thereof)
    of more than 10 percent of an entity, or the right to more than
    10 percent of the gross revenues of an entity under a revenue
    sharing or royalty agreement.
      `(9) The term `separated affiliate' means a corporation under
    common ownership or control with a Bell operating company that
    does not own or control a Bell operating company and is not
    owned or controlled by a Bell operating company and that 
    engages in the provision of electronic publishing which is
    disseminated by means of such Bell operating company's or any 
    of its affiliates' basic telephone service.
      `(10) The term `Bell operating company' has the meaning
    provided in section 3, except that such term includes any 
    entity or corporation that is owned or controlled by such a
    company (as so defined) but does not include an electronic
    publishing joint venture owned by such an entity or corporation.
`SEC. 275. ALARM MONITORING SERVICES.
  `(a) DELAYED ENTRY INTO ALARM MONITORING- 
      `(1) PROHIBITION- No Bell operating company or affiliate
    thereof shall engage in the provision of alarm monitoring
    services before the date which is 5 years after the date of
    enactment of the Telecommunications Act of 1996.
      `(2) EXISTING ACTIVITIES- Paragraph (1) does not prohibit or
    limit the provision, directly or through an affiliate, of alarm
    monitoring services by a Bell operating company that was 
    engaged in providing alarm monitoring services as of November
    30, 1995, directly or through an affiliate. Such Bell operating
    company or affiliate may not acquire any equity interest in, or
    obtain financial control of, any unaffiliated alarm monitoring
    service entity after November 30, 1995, and until 5 years after
    the date of enactment of the Telecommunications Act of 1996,
    except that this sentence shall not prohibit an exchange of
    customers for the customers of an unaffiliated alarm monitoring
    service entity.
  `(b) NONDISCRIMINATION- An incumbent local exchange carrier (as
defined in section 251(h)) engaged in the provision of alarm
monitoring services shall--
      `(1) provide nonaffiliated entities, upon reasonable request,
    with the network services it provides to its own alarm
    monitoring operations, on nondiscriminatory terms and
    conditions; and
      `(2) not subsidize its alarm monitoring services either
    directly or indirectly from telephone exchange service
    operations.
  `(c) EXPEDITED CONSIDERATION OF COMPLAINTS- The Commission shall
establish procedures for the receipt and review of complaints
concerning violations of subsection (b) or the regulations
thereunder that result in material financial harm to a provider of
alarm monitoring service. Such procedures shall ensure that the
Commission will make a final determination with respect to any such
complaint within 120 days after receipt of the complaint. If the
complaint contains an appropriate showing that the alleged 
violation occurred, as determined by the Commission in accordance
with such regulations, the Commission shall, within 60 days after
receipt of the complaint, order the incumbent local exchange 
carrier (as defined in section 251(h)) and its affiliates to cease
engaging in such violation pending such final determination.
  `(d) USE OF DATA- A local exchange carrier may not record or use
in any fashion the occurrence or contents of calls received by
providers of alarm monitoring services for the purposes of 
marketing such services on behalf of such local exchange carrier, 
or any other entity. Any regulations necessary to enforce this
subsection shall be issued initially within 6 months after the date
of enactment of the Telecommunications Act of 1996.
  `(e) DEFINITION OF ALARM MONITORING SERVICE- The term `alarm
monitoring service' means a service that uses a device located at a
residence, place of business, or other fixed premises--
      `(1) to receive signals from other devices located at or 
    about such premises regarding a possible threat at such 
    premises to life, safety, or property, from burglary, fire,
    vandalism, bodily injury, or other emergency, and
      `(2) to transmit a signal regarding such threat by means of
    transmission facilities of a local exchange carrier or one of
    its affiliates to a remote monitoring center to alert a person
    at such center of the need to inform the customer or another
    person or police, fire, rescue, security, or public safety
    personnel of such threat,
but does not include a service that uses a medical monitoring 
device attached to an individual for the automatic surveillance of
an ongoing medical condition.
`SEC. 276. PROVISION OF PAYPHONE SERVICE.
  `(a) NONDISCRIMINATION SAFEGUARDS- After the effective date of 
the rules prescribed pursuant to subsection (b), any Bell operating
company that provides payphone service--
      `(1) shall not subsidize its payphone service directly or
    indirectly from its telephone exchange service operations or 
    its exchange access operations; and
      `(2) shall not prefer or discriminate in favor of its 
    payphone service.
  `(b) REGULATIONS- 
      `(1) CONTENTS OF REGULATIONS- In order to promote competition
    among payphone service providers and promote the widespread
    deployment of payphone services to the benefit of the general
    public, within 9 months after the date of enactment of the
    Telecommunications Act of 1996, the Commission shall take all
    actions necessary (including any reconsideration) to prescribe
    regulations that--
          `(A) establish a per call compensation plan to ensure 
        that all payphone service providers are fairly compensated
        for each and every completed intrastate and interstate call
        using their payphone, except that emergency calls and
        telecommunications relay service calls for hearing disabled
        individuals shall not be subject to such compensation;
          `(B) discontinue the intrastate and interstate carrier
        access charge payphone service elements and payments in
        effect on such date of enactment, and all intrastate and
        interstate payphone subsidies from basic exchange and
        exchange access revenues, in favor of a compensation plan 
        as specified in subparagraph (A);
          `(C) prescribe a set of nonstructural safeguards for Bell
        operating company payphone service to implement the
        provisions of paragraphs (1) and (2) of subsection (a),
        which safeguards shall, at a minimum, include the
        nonstructural safeguards equal to those adopted in the
        Computer Inquiry-III (CC Docket No. 90-623) proceeding;
          `(D) provide for Bell operating company payphone service
        providers to have the same right that independent payphone
        providers have to negotiate with the location provider on
        the location provider's selecting and contracting with, 
        and, subject to the terms of any agreement with the 
        location provider, to select and contract with, the 
        carriers that carry interLATA calls from their payphones,
        unless the Commission determines in the rulemaking pursuant
        to this section that it is not in the public interest; and
          `(E) provide for all payphone service providers to have
        the right to negotiate with the location provider on the
        location provider's selecting and contracting with, and,
        subject to the terms of any agreement with the location
        provider, to select and contract with, the carriers that
        carry intraLATA calls from their payphones.
      `(2) PUBLIC INTEREST TELEPHONES- In the rulemaking conducted
    pursuant to paragraph (1), the Commission shall determine
    whether public interest payphones, which are provided in the
    interest of public health, safety, and welfare, in locations
    where there would otherwise not be a payphone, should be
    maintained, and if so, ensure that such public interest
    payphones are supported fairly and equitably.
      `(3) EXISTING CONTRACTS- Nothing in this section shall affect
    any existing contracts between location providers and payphone
    service providers or interLATA or intraLATA carriers that are 
    in force and effect as of the date of enactment of the
    Telecommunications Act of 1996.
  `(c) STATE PREEMPTION- To the extent that any State requirements
are inconsistent with the Commission's regulations, the 
Commission's regulations on such matters shall preempt such State
requirements.
  `(d) DEFINITION- As used in this section, the term `payphone
service' means the provision of public or semi-public pay
telephones, the provision of inmate telephone service in
correctional institutions, and any ancillary services.'.
  (b) REVIEW OF ENTRY DECISIONS- Section 402(b) (47 U.S.C. 402(b))
is amended--
      (1) in paragraph (6), by striking `(3), and (4)' and 
    inserting `(3), (4), and (9)'; and
      (2) by adding at the end the following new paragraph:
  `(9) By any applicant for authority to provide interLATA services
under section 271 of this Act whose application is denied by the
Commission.'.
                    TITLE II--BROADCAST SERVICES
SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.
  Title III is amended by inserting after section 335 (47 U.S.C.
335) the following new section:
`SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.
  `(a) COMMISSION ACTION- If the Commission determines to issue
additional licenses for advanced television services, the
Commission--
      `(1) should limit the initial eligibility for such licenses 
    to persons that, as of the date of such issuance, are licensed
    to operate a television broadcast station or hold a permit to
    construct such a station (or both); and
      `(2) shall adopt regulations that allow the holders of such
    licenses to offer such ancillary or supplementary services on
    designated frequencies as may be consistent with the public
    interest, convenience, and necessity.
  `(b) CONTENTS OF REGULATIONS- In prescribing the regulations
required by subsection (a), the Commission shall--
      `(1) only permit such licensee or permittee to offer 
    ancillary or supplementary services if the use of a designated
    frequency for such services is consistent with the technology 
    or method designated by the Commission for the provision of
    advanced television services;
      `(2) limit the broadcasting of ancillary or supplementary
    services on designated frequencies so as to avoid derogation of
    any advanced television services, including high definition
    television broadcasts, that the Commission may require using
    such frequencies;
      `(3) apply to any other ancillary or supplementary service
    such of the Commission's regulations as are applicable to the
    offering of analogous services by any other person, except that
    no ancillary or supplementary service shall have any rights to
    carriage under section 614 or 615 or be deemed a multichannel
    video programming distributor for purposes of section 628;
      `(4) adopt such technical and other requirements as may be
    necessary or appropriate to assure the quality of the signal
    used to provide advanced television services, and may adopt
    regulations that stipulate the minimum number of hours per day
    that such signal must be transmitted; and
      `(5) prescribe such other regulations as may be necessary for
    the protection of the public interest, convenience, and
    necessity.
  `(c) RECOVERY OF LICENSE- If the Commission grants a license for
advanced television services to a person that, as of the date of
such issuance, is licensed to operate a television broadcast 
station or holds a permit to construct such a station (or both), 
the Commission shall, as a condition of such license, require that
either the additional license or the original license held by the
licensee be surrendered to the Commission for reallocation or
reassignment (or both) pursuant to Commission regulation.
  `(d) PUBLIC INTEREST REQUIREMENT- Nothing in this section shall 
be construed as relieving a television broadcasting station from 
its obligation to serve the public interest, convenience, and
necessity. In the Commission's review of any application for 
renewal of a broadcast license for a television station that
provides ancillary or supplementary services, the television
licensee shall establish that all of its program services on the
existing or advanced television spectrum are in the public 
interest. Any violation of the Commission rules applicable to
ancillary or supplementary services shall reflect upon the
licensee's qualifications for renewal of its license.
  `(e) FEES- 
      `(1) SERVICES TO WHICH FEES APPLY- If the regulations
    prescribed pursuant to subsection (a) permit a licensee to 
    offer ancillary or supplementary services on a designated
    frequency--
          `(A) for which the payment of a subscription fee is
        required in order to receive such services, or
          `(B) for which the licensee directly or indirectly
        receives compensation from a third party in return for
        transmitting material furnished by such third party (other
        than commercial advertisements used to support broadcasting
        for which a subscription fee is not required),
    the Commission shall establish a program to assess and collect
    from the licensee for such designated frequency an annual fee 
    or other schedule or method of payment that promotes the
    objectives described in subparagraphs (A) and (B) of paragraph
    (2).
      `(2) COLLECTION OF FEES- The program required by paragraph 
    (1) shall--
          `(A) be designed (i) to recover for the public a portion
        of the value of the public spectrum resource made available
        for such commercial use, and (ii) to avoid unjust 
        enrichment through the method employed to permit such uses
        of that resource;
          `(B) recover for the public an amount that, to the extent
        feasible, equals but does not exceed (over the term of the
        license) the amount that would have been recovered had such
        services been licensed pursuant to the provisions of 
        section 309(j) of this Act and the Commission's regulations
        thereunder; and
          `(C) be adjusted by the Commission from time to time in
        order to continue to comply with the requirements of this
        paragraph.
      `(3) TREATMENT OF REVENUES- 
          `(A) GENERAL RULE- Except as provided in subparagraph 
        (B), all proceeds obtained pursuant to the regulations
        required by this subsection shall be deposited in the
        Treasury in accordance with chapter 33 of title 31, United
        States Code.
          `(B) RETENTION OF REVENUES- Notwithstanding subparagraph
        (A), the salaries and expenses account of the Commission
        shall retain as an offsetting collection such sums as may 
        be necessary from such proceeds for the costs of developing
        and implementing the program required by this section and
        regulating and supervising advanced television services.
        Such offsetting collections shall be available for
        obligation subject to the terms and conditions of the
        receiving appropriations account, and shall be deposited in
        such accounts on a quarterly basis.
      `(4) REPORT- Within 5 years after the date of enactment of 
    the Telecommunications Act of 1996, the Commission shall report
    to the Congress on the implementation of the program required 
    by this subsection, and shall annually thereafter advise the
    Congress on the amounts collected pursuant to such program.
  `(f) EVALUATION- Within 10 years after the date the Commission
first issues additional licenses for advanced television services,
the Commission shall conduct an evaluation of the advanced
television services program. Such evaluation shall include--
      `(1) an assessment of the willingness of consumers to 
    purchase the television receivers necessary to receive
    broadcasts of advanced television services;
      `(2) an assessment of alternative uses, including public
    safety use, of the frequencies used for such broadcasts; and
      `(3) the extent to which the Commission has been or will be
    able to reduce the amount of spectrum assigned to licensees.
  `(g) DEFINITIONS- As used in this section:
      `(1) ADVANCED TELEVISION SERVICES- The term `advanced
    television services' means television services provided using
    digital or other advanced technology as further defined in the
    opinion, report, and order of the Commission entitled `Advanced
    Television Systems and Their Impact Upon the Existing 
    Television Broadcast Service', MM Docket 87-268, adopted
    September 17, 1992, and successor proceedings.
      `(2) DESIGNATED FREQUENCIES- The term `designated frequency'
    means each of the frequencies designated by the Commission for
    licenses for advanced television services.
      `(3) HIGH DEFINITION TELEVISION- The term `high definition
    television' refers to systems that offer approximately twice 
    the vertical and horizontal resolution of receivers generally
    available on the date of enactment of the Telecommunications 
    Act of 1996, as further defined in the proceedings described in
    paragraph (1) of this subsection.'.
SEC. 202. BROADCAST OWNERSHIP.
  (a) NATIONAL RADIO STATION OWNERSHIP RULE CHANGES REQUIRED- The
Commission shall modify section 73.3555 of its regulations (47
C.F.R. 73.3555) by eliminating any provisions limiting the number 
of AM or FM broadcast stations which may be owned or controlled by
one entity nationally.
  (b) LOCAL RADIO DIVERSITY- 
      (1) APPLICABLE CAPS- The Commission shall revise section
    73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide
    that--
          (A) in a radio market with 45 or more commercial radio
        stations, a party may own, operate, or control up to 8
        commercial radio stations, not more than 5 of which are in
        the same service (AM or FM);
          (B) in a radio market with between 30 and 44 (inclusive)
        commercial radio stations, a party may own, operate, or
        control up to 7 commercial radio stations, not more than 4
        of which are in the same service (AM or FM);
          (C) in a radio market with between 15 and 29 (inclusive)
        commercial radio stations, a party may own, operate, or
        control up to 6 commercial radio stations, not more than 4
        of which are in the same service (AM or FM); and
          (D) in a radio market with 14 or fewer commercial radio
        stations, a party may own, operate, or control up to 5
        commercial radio stations, not more than 3 of which are in
        the same service (AM or FM), except that a party may not
        own, operate, or control more than 50 percent of the
        stations in such market.
      (2) EXCEPTION- Notwithstanding any limitation authorized by
    this subsection, the Commission may permit a person or entity 
    to own, operate, or control, or have a cognizable interest in,
    radio broadcast stations if the Commission determines that such
    ownership, operation, control, or interest will result in an
    increase in the number of radio broadcast stations in operation.
  (c) TELEVISION OWNERSHIP LIMITATIONS- 
      (1) NATIONAL OWNERSHIP LIMITATIONS- The Commission shall
    modify its rules for multiple ownership set forth in section
    73.3555 of its regulations (47 C.F.R. 73.3555)--
          (A) by eliminating the restrictions on the number of
        television stations that a person or entity may directly or
        indirectly own, operate, or control, or have a cognizable
        interest in, nationwide; and
          (B) by increasing the national audience reach limitation
        for television stations to 35 percent.
      (2) LOCAL OWNERSHIP LIMITATIONS- The Commission shall conduct
    a rulemaking proceeding to determine whether to retain, modify,
    or eliminate its limitations on the number of television
    stations that a person or entity may own, operate, or control,
    or have a cognizable interest in, within the same television
    market.
  (d) RELAXATION OF ONE-TO-A-MARKET- With respect to its 
enforcement of its one-to-a-market ownership rules under section
73.3555 of its regulations, the Commission shall extend its waiver
policy to any of the top 50 markets, consistent with the public
interest, convenience, and necessity.
  (e) DUAL NETWORK CHANGES- The Commission shall revise section
73.658(g) of its regulations (47 C.F.R. 658(g)) to permit a
television broadcast station to affiliate with a person or entity
that maintains 2 or more networks of television broadcast stations
unless such dual or multiple networks are composed of--
      (1) two or more persons or entities that, on the date of
    enactment of the Telecommunications Act of 1996, are `networks'
    as defined in section 73.3613(a)(1) of the Commission's
    regulations (47 C.F.R. 73.3613(a)(1)); or
      (2) any network described in paragraph (1) and an
    English-language program distribution service that, on such
    date, provides 4 or more hours of programming per week on a
    national basis pursuant to network affiliation arrangements 
    with local television broadcast stations in markets reaching
    more than 75 percent of television homes (as measured by a
    national ratings service).
  (f) CABLE CROSS OWNERSHIP- 
      (1) ELIMINATION OF RESTRICTIONS- The Commission shall revise
    section 76.501 of its regulations (47 C.F.R. 76.501) to permit 
    a person or entity to own or control a network of broadcast
    stations and a cable system.
      (2) SAFEGUARDS AGAINST DISCRIMINATION- The Commission shall
    revise such regulations if necessary to ensure carriage, 
    channel positioning, and nondiscriminatory treatment of
    nonaffiliated broadcast stations by a cable system described in
    paragraph (1).
  (g) LOCAL MARKETING AGREEMENTS- Nothing in this section shall be
construed to prohibit the origination, continuation, or renewal of
any television local marketing agreement that is in compliance with
the regulations of the Commission.
  (h) FURTHER COMMISSION REVIEW- The Commission shall review its
rules adopted pursuant to this section and all of its ownership
rules biennially as part of its regulatory reform review under
section 11 of the Communications Act of 1934 and shall determine
whether any of such rules are necessary in the public interest as
the result of competition. The Commission shall repeal or modify 
any regulation it determines to be no longer in the public interest.
  (i) ELIMINATION OF STATUTORY RESTRICTION- Section 613(a) (47
U.S.C. 533(a)) is amended--
      (1) by striking paragraph (1);
      (2) by redesignating paragraph (2) as subsection (a);
      (3) by redesignating subparagraphs (A) and (B) as paragraphs
    (1) and (2), respectively;
      (4) by striking `and' at the end of paragraph (1) (as so
    redesignated);
      (5) by striking the period at the end of paragraph (2) (as so
    redesignated) and inserting `; and'; and
      (6) by adding at the end the following new paragraph:
      `(3) shall not apply the requirements of this subsection to
    any cable operator in any franchise area in which a cable
    operator is subject to effective competition as determined 
    under section 623(l).'.
SEC. 203. TERM OF LICENSES.
  Section 307(c) (47 U.S.C. 307(c)) is amended to read as follows:
  `(c) TERMS OF LICENSES- 
      `(1) INITIAL AND RENEWAL LICENSES- Each license granted for
    the operation of a broadcasting station shall be for a term of
    not to exceed 8 years.  Upon application therefor, a renewal of
    such license may be granted from time to time for a term of not
    to exceed 8 years from the date of expiration of the preceding
    license, if the Commission finds that public interest,
    convenience, and necessity would be served thereby.  Consistent
    with the foregoing provisions of this subsection, the 
    Commission may by rule prescribe the period or periods for 
    which licenses shall be granted and renewed for particular
    classes of stations, but the Commission may not adopt or follow
    any rule which would preclude it, in any case involving a
    station of a particular class, from granting or renewing a
    license for a shorter period than that prescribed for stations
    of such class if, in its judgment, the public interest,
    convenience, or necessity would be served by such action.
      `(2) MATERIALS IN APPLICATION- In order to expedite action on
    applications for renewal of broadcasting station licenses and 
    in order to avoid needless expense to applicants for such
    renewals, the Commission shall not require any such applicant 
    to file any information which previously has been furnished to
    the Commission or which is not directly material to the
    considerations that affect the granting or denial of such
    application, but the Commission may require any new or
    additional facts it deems necessary to make its findings.
      `(3) CONTINUATION PENDING DECISION- Pending any hearing and
    final decision on such an application and the disposition of 
    any petition for rehearing pursuant to section 405, the
    Commission shall continue such license in effect.'.
SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.
  (a) RENEWAL PROCEDURES- 
      (1) AMENDMENT- Section 309 (47 U.S.C. 309) is amended by
    adding at the end thereof the following new subsection:
  `(k) BROADCAST STATION RENEWAL PROCEDURES- 
      `(1) STANDARDS FOR RENEWAL- If the licensee of a broadcast
    station submits an application to the Commission for renewal of
    such license, the Commission shall grant the application if it
    finds, with respect to that station, during the preceding term
    of its license--
          `(A) the station has served the public interest,
        convenience, and necessity;
          `(B) there have been no serious violations by the 
        licensee of this Act or the rules and regulations of the
        Commission; and
          `(C) there have been no other violations by the licensee
        of this Act or the rules and regulations of the Commission
        which, taken together, would constitute a pattern of abuse.
      `(2) CONSEQUENCE OF FAILURE TO MEET STANDARD- If any licensee
    of a broadcast station fails to meet the requirements of this
    subsection, the Commission may deny the application for renewal
    in accordance with paragraph (3), or grant such application on
    terms and conditions as are appropriate, including renewal for 
    a term less than the maximum otherwise permitted.
      `(3) STANDARDS FOR DENIAL- If the Commission determines, 
    after notice and opportunity for a hearing as provided in
    subsection (e), that a licensee has failed to meet the
    requirements specified in paragraph (1) and that no mitigating
    factors justify the imposition of lesser sanctions, the
    Commission shall--
          `(A) issue an order denying the renewal application filed
        by such licensee under section 308; and
          `(B) only thereafter accept and consider such 
        applications for a construction permit as may be filed 
        under section 308 specifying the channel or broadcasting
        facilities of the former licensee.
      `(4) COMPETITOR CONSIDERATION PROHIBITED- In making the
    determinations specified in paragraph (1) or (2), the 
    Commission shall not consider whether the public interest,
    convenience, and necessity might be served by the grant of a
    license to a person other than the renewal applicant.'.
      (2) CONFORMING AMENDMENT- Section 309(d) (47 U.S.C. 309(d)) 
    is amended by inserting after `with subsection (a)' each place
    it appears the following: `(or subsection (k) in the case of
    renewal of any broadcast station license)'.
  (b) SUMMARY OF COMPLAINTS ON VIOLENT PROGRAMMING- Section 308 (47
U.S.C.  308) is amended by adding at the end the following new
subsection:
  `(d) SUMMARY OF COMPLAINTS- Each applicant for the renewal of a
commercial or noncommercial television license shall attach as an
exhibit to the application a summary of written comments and
suggestions received from the public and maintained by the licensee
(in accordance with Commission regulations) that comment on the
applicant's programming, if any, and that are characterized by the
commentor as constituting violent programming.'.
  (c) EFFECTIVE DATE- The amendments made by this section apply to
applications filed after May 1, 1995.
SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.
  (a) DBS SIGNAL SECURITY- Section 705(e)(4) (47 U.S.C. 605(e)(4))
is amended by inserting `or direct-to-home satellite services,'
after `programming,'.
  (b) FCC JURISDICTION OVER DIRECT-TO-HOME SATELLITE SERVICES-
Section 303 (47 U.S.C. 303) is amended by adding at the end thereof
the following new subsection:
  `(v) Have exclusive jurisdiction to regulate the provision of
direct-to-home satellite services. As used in this subsection, the
term `direct-to-home satellite services' means the distribution or
broadcasting of programming or services by satellite directly to 
the subscriber's premises without the use of ground receiving or
distribution equipment, except at the subscriber's premises or in
the uplink process to the satellite.'.
SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.
  Part II of title III is amended by inserting after section 364 
(47 U.S.C. 362) the following new section:
`SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.
  `Notwithstanding any provision of this Act or any other provision
of law or regulation, a ship documented under the laws of the 
United States operating in accordance with the Global Maritime
Distress and Safety System provisions of the Safety of Life at Sea
Convention shall not be required to be equipped with a radio
telegraphy station operated by one or more radio officers or
operators. This section shall take effect for each vessel upon a
determination by the United States Coast Guard that such vessel has
the equipment required to implement the Global Maritime Distress 
and Safety System installed and operating in good working
condition.'.
SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.
  Within 180 days after the date of enactment of this Act, the
Commission shall, pursuant to section 303 of the Communications Act
of 1934, promulgate regulations to prohibit restrictions that 
impair a viewer's ability to receive video programming services
through devices designed for over-the-air reception of television
broadcast signals, multichannel multipoint distribution service, or
direct broadcast satellite services.
                      TITLE III--CABLE SERVICES
SEC. 301. CABLE ACT REFORM.
  (a) DEFINITIONS- 
      (1) DEFINITION OF CABLE SERVICE- Section 602(6)(B) (47 U.S.C.
    522(6)(B)) is amended by inserting `or use' after `the
    selection'.
      (2) CHANGE IN DEFINITION OF CABLE SYSTEM- Section 602(7) (47
    U.S.C. 522(7)) is amended by striking `(B) a facility that
    serves only subscribers in 1 or more multiple unit dwellings
    under common ownership, control, or management, unless such
    facility or facilities uses any public right-of-way;' and
    inserting `(B) a facility that serves subscribers without using
    any public right-of-way;'.
  (b) RATE DEREGULATION- 
      (1) UPPER TIER REGULATION- Section 623(c) (47 U.S.C. 543(c))
    is amended--
          (A) in paragraph (1)(B), by striking `subscriber,
        franchising authority, or other relevant State or local
        government entity' and inserting `franchising authority (in
        accordance with paragraph (3))';
          (B) in paragraph (1)(C), by striking `such complaint' and
        inserting `the first complaint filed with the franchising
        authority under paragraph (3)'; and
          (C) by striking paragraph (3) and inserting the following:
      `(3) REVIEW OF RATE CHANGES- The Commission shall review any
    complaint submitted by a franchising authority after the date 
    of enactment of the Telecommunications Act of 1996 concerning 
    an increase in rates for cable programming services and issue a
    final order within 90 days after it receives such a complaint,
    unless the parties agree to extend the period for such review. 
    A franchising authority may not file a complaint under this
    paragraph unless, within 90 days after such increase becomes
    effective it receives subscriber complaints.
      `(4) SUNSET OF UPPER TIER RATE REGULATION- This subsection
    shall not apply to cable programming services provided after
    March 31, 1999.'.
      (2) SUNSET OF UNIFORM RATE STRUCTURE IN MARKETS WITH 
    EFFECTIVE COMPETITION- Section 623(d) (47 U.S.C. 543(d)) is
    amended by adding at the end thereof the following: `This
    subsection does not apply to (1) a cable operator with respect
    to the provision of cable service over its cable system in any
    geographic area in which the video programming services offered
    by the operator in that area are subject to effective
    competition, or (2) any video programming offered on a per
    channel or per program basis. Bulk discounts to multiple
    dwelling units shall not be subject to this subsection, except
    that a cable operator of a cable system that is not subject to
    effective competition may not charge predatory prices to a
    multiple dwelling unit. Upon a prima facie showing by a
    complainant that there are reasonable grounds to believe that
    the discounted price is predatory, the cable system shall have
    the burden of showing that its discounted price is not
    predatory.'.
      (3) EFFECTIVE COMPETITION- Section 623(l)(1) (47 U.S.C.
    543(l)(1)) is amended--
          (A) by striking `or' at the end of subparagraph (B);
          (B) by striking the period at the end of subparagraph (C)
        and inserting `; or'; and
          (C) by adding at the end the following:
          `(D) a local exchange carrier or its affiliate (or any
        multichannel video programming distributor using the
        facilities of such carrier or its affiliate) offers video
        programming services directly to subscribers by any means
        (other than direct-to-home satellite services) in the
        franchise area of an unaffiliated cable operator which is
        providing cable service in that franchise area, but only if
        the video programming services so offered in that area are
        comparable to the video programming services provided by 
        the unaffiliated cable operator in that area.'.
  (c) GREATER DEREGULATION FOR SMALLER CABLE COMPANIES- Section 623
(47 U.S.C 543) is amended by adding at the end thereof the following:
  `(m) SPECIAL RULES FOR SMALL COMPANIES- 
      `(1) IN GENERAL- Subsections (a), (b), and (c) do not apply 
    to a small cable operator with respect to--
          `(A) cable programming services, or
          `(B) a basic service tier that was the only service tier
        subject to regulation as of December 31, 1994,
    in any franchise area in which that operator services 50,000 or
    fewer subscribers.
      `(2) DEFINITION OF SMALL CABLE OPERATOR- For purposes of this
    subsection, the term `small cable operator' means a cable
    operator that, directly or through an affiliate, serves in the
    aggregate fewer than 1 percent of all subscribers in the United
    States and is not affiliated with any entity or entities whose
    gross annual revenues in the aggregate exceed $250,000,000.'.
  (d) MARKET DETERMINATIONS- 
      (1) MARKET DETERMINATIONS; EXPEDITED DECISIONMAKING- Section
    614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--
          (A) by striking `in the manner provided in section
        73.3555(d)(3)(i) of title 47, Code of Federal Regulations,
        as in effect on May 1, 1991,' in clause (i) and inserting
        `by the Commission by regulation or order using, where
        available, commercial publications which delineate
        television markets based on viewing patterns,'; and
          (B) by striking clause (iv) and inserting the following:
              `(iv) Within 120 days after the date on which a
            request is filed under this subparagraph (or 120 days
            after the date of enactment of the Telecommunications
            Act of 1996, if later), the Commission shall grant or
            deny the request.'.
      (2) APPLICATION TO PENDING REQUESTS- The amendment made by
    paragraph (1) shall apply to--
          (A) any request pending under section 614(h)(1)(C) of the
        Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the
        date of enactment of this Act; and
          (B) any request filed under that section after that date.
  (e) TECHNICAL STANDARDS- Section 624(e) (47 U.S.C. 544(e)) is
amended by striking the last two sentences and inserting the
following: `No State or franchising authority may prohibit,
condition, or restrict a cable system's use of any type of
subscriber equipment or any transmission technology.'.
  (f) CABLE EQUIPMENT COMPATIBILITY- Section 624A (47 U.S.C. 544A)
is amended--
      (1) in subsection (a) by striking `and' at the end of
    paragraph (2), by striking the period at the end of paragraph
    (3) and inserting `; and'; and by adding at the end the
    following new paragraph:
      `(4) compatibility among televisions, video cassette
    recorders, and cable systems can be assured with narrow
    technical standards that mandate a minimum degree of common
    design and operation, leaving all features, functions,
    protocols, and other product and service options for selection
    through open competition in the market.';
      (2) in subsection (c)(1)--
          (A) by redesignating subparagraphs (A) and (B) as
        subparagraphs (B) and (C), respectively; and
          (B) by inserting before such redesignated subparagraph 
        (B) the following new subparagraph:
          `(A) the need to maximize open competition in the market
        for all features, functions, protocols, and other product
        and service options of converter boxes and other cable
        converters unrelated to the descrambling or decryption of
        cable television signals;'; and
      (3) in subsection (c)(2)--
          (A) by redesignating subparagraphs (D) and (E) as
        subparagraphs (E) and (F), respectively; and
          (B) by inserting after subparagraph (C) the following new
        subparagraph:
          `(D) to ensure that any standards or regulations 
        developed under the authority of this section to ensure
        compatibility between televisions, video cassette 
        recorders, and cable systems do not affect features,
        functions, protocols, and other product and service options
        other than those specified in paragraph (1)(B), including
        telecommunications interface equipment, home automation
        communications, and computer network services;'.
  (g) SUBSCRIBER NOTICE- Section 632 (47 U.S.C. 552) is amended--
      (1) by redesignating subsection (c) as subsection (d); and
      (2) by inserting after subsection (b) the following new
    subsection:
  `(c) SUBSCRIBER NOTICE- A cable operator may provide notice of
service and rate changes to subscribers using any reasonable 
written means at its sole discretion. Notwithstanding section
623(b)(6) or any other provision of this Act, a cable operator 
shall not be required to provide prior notice of any rate change
that is the result of a regulatory fee, franchise fee, or any other
fee, tax, assessment, or charge of any kind imposed by any Federal
agency, State, or franchising authority on the transaction between
the operator and the subscriber.'.
  (h) PROGRAM ACCESS- Section 628 (47 U.S.C. 548) is amended by
adding at the end the following:
  `(j) COMMON CARRIERS- Any provision that applies to a cable
operator under this section shall apply to a common carrier or its
affiliate that provides video programming by any means directly to
subscribers.  Any such provision that applies to a satellite cable
programming vendor in which a cable operator has an attributable
interest shall apply to any satellite cable programming vendor in
which such common carrier has an attributable interest. For the
purposes of this subsection, two or fewer common officers or
directors shall not by itself establish an attributable interest by
a common carrier in a satellite cable programming vendor (or its
parent company).'.
  (i) ANTITRAFFICKING- Section 617 (47 U.S.C. 537) is amended--
      (1) by striking subsections (a) through (d); and
      (2) in subsection (e), by striking `(e)' and all that follows
    through `a franchising authority' and inserting `A franchising
    authority'.
  (j) AGGREGATION OF EQUIPMENT COSTS- Section 623(a) (47 U.S.C.
543(a)) is amended by adding at the end the following new paragraph:
      `(7) AGGREGATION OF EQUIPMENT COSTS- 
          `(A) IN GENERAL- The Commission shall allow cable
        operators, pursuant to any rules promulgated under
        subsection (b)(3), to aggregate, on a franchise, system,
        regional, or company level, their equipment costs into 
        broad categories, such as converter boxes, regardless of 
        the varying levels of functionality of the equipment within
        each such broad category. Such aggregation shall not be
        permitted with respect to equipment used by subscribers who
        receive only a rate regulated basic service tier.
          `(B) REVISION TO COMMISSION RULES; FORMS- Within 120 days
        of the date of enactment of the Telecommunications Act of
        1996, the Commission shall issue revisions to the
        appropriate rules and forms necessary to implement
        subparagraph (A).'.
  (k) TREATMENT OF PRIOR YEAR LOSSES- 
      (1) AMENDMENT- Section 623 (48 U.S.C. 543) is amended by
    adding at the end thereof the following:
  `(n) TREATMENT OF PRIOR YEAR LOSSES- Notwithstanding any other
provision of this section or of section 612, losses associated with
a cable system (including losses associated with the grant or award
of a franchise) that were incurred prior to September 4, 1992, with
respect to a cable system that is owned and operated by the 
original franchisee of such system shall not be disallowed, in 
whole or in part, in the determination of whether the rates for any
tier of service or any type of equipment that is subject to
regulation under this section are lawful.'.
      (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall
    take effect on the date of enactment of this Act and shall be
    applicable to any rate proposal filed on or after September 4,
    1993, upon which no final action has been taken by December 1,
    1995.
SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.
  (a) PROVISIONS FOR REGULATION OF CABLE SERVICE PROVIDED BY
TELEPHONE COMPANIES- Title VI (47 U.S.C. 521 et seq.) is amended by
adding at the end the following new part:
 `PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES
`SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERVICES.
  `(a) LIMITATIONS ON CABLE REGULATION- 
      `(1) RADIO-BASED SYSTEMS- To the extent that a common carrier
    (or any other person) is providing video programming to
    subscribers using radio communication, such carrier (or other
    person) shall be subject to the requirements of title III and
    section 652, but shall not otherwise be subject to the
    requirements of this title.
      `(2) COMMON CARRIAGE OF VIDEO TRAFFIC- To the extent that a
    common carrier is providing transmission of video programming 
    on a common carrier basis, such carrier shall be subject to the
    requirements of title II and section 652, but shall not
    otherwise be subject to the requirements of this title. This
    paragraph shall not affect the treatment under section 
    602(7)(C) of a facility of a common carrier as a cable system.
      `(3) CABLE SYSTEMS AND OPEN VIDEO SYSTEMS- To the extent that
    a common carrier is providing video programming to its
    subscribers in any manner other than that described in
    paragraphs (1) and (2)--
          `(A) such carrier shall be subject to the requirements of
        this title, unless such programming is provided by means of
        an open video system for which the Commission has approved 
        a certification under section 653; or
          `(B) if such programming is provided by means of an open
        video system for which the Commission has approved a
        certification under section 653, such carrier shall be
        subject to the requirements of this part, but shall be
        subject to parts I through IV of this title only as 
        provided in 653(c).
      `(4) ELECTION TO OPERATE AS OPEN VIDEO SYSTEM- A common
    carrier that is providing video programming in a manner
    described in paragraph (1) or (2), or a combination thereof, 
    may elect to provide such programming by means of an open video
    system that complies with section 653. If the Commission
    approves such carrier's certification under section 653, such
    carrier shall be subject to the requirements of this part, but
    shall be subject to parts I through IV of this title only as
    provided in 653(c).
  `(b) LIMITATIONS ON INTERCONNECTION OBLIGATIONS- A local exchange
carrier that provides cable service through an open video system or
a cable system shall not be required, pursuant to title II of this
Act, to make capacity available on a nondiscriminatory basis to any
other person for the provision of cable service directly to
subscribers.
  `(c) ADDITIONAL REGULATORY RELIEF- A common carrier shall not be
required to obtain a certificate under section 214 with respect to
the establishment or operation of a system for the delivery of 
video programming.
`SEC. 652. PROHIBITION ON BUY OUTS.
  `(a) ACQUISITIONS BY CARRIERS- No local exchange carrier or any
affiliate of such carrier owned by, operated by, controlled by, or
under common control with such carrier may purchase or otherwise
acquire directly or indirectly more than a 10 percent financial
interest, or any management interest, in any cable operator
providing cable service within the local exchange carrier's
telephone service area.
  `(b) ACQUISITIONS BY CABLE OPERATORS- No cable operator or
affiliate of a cable operator that is owned by, operated by,
controlled by, or under common ownership with such cable operator
may purchase or otherwise acquire, directly or indirectly, more 
than a 10 percent financial interest, or any management interest, 
in any local exchange carrier providing telephone exchange service
within such cable operator's franchise area.
  `(c) JOINT VENTURES- A local exchange carrier and a cable 
operator whose telephone service area and cable franchise area,
respectively, are in the same market may not enter into any joint
venture or partnership to provide video programming directly to
subscribers or to provide telecommunications services within such
market.
  `(d) EXCEPTIONS- 
      `(1) RURAL SYSTEMS- Notwithstanding subsections (a), (b), and
    (c) of this section, a local exchange carrier (with respect to 
    a cable system located in its telephone service area) and a
    cable operator (with respect to the facilities of a local
    exchange carrier used to provide telephone exchange service in
    its cable franchise area) may obtain a controlling interest in,
    management interest in, or enter into a joint venture or
    partnership with the operator of such system or facilities for
    the use of such system or facilities to the extent that--
          `(A) such system or facilities only serve incorporated or
        unincorporated--
              `(i) places or territories that have fewer than 
            35,000 inhabitants; and
              `(ii) are outside an urbanized area, as defined by 
            the Bureau of the Census; and
          `(B) in the case of a local exchange carrier, such 
        system, in the aggregate with any other system in which 
        such carrier has an interest, serves less than 10 percent 
        of the households in the telephone service area of such
        carrier.
      `(2) JOINT USE- Notwithstanding subsection (c), a local
    exchange carrier may obtain, with the concurrence of the cable
    operator on the rates, terms, and conditions, the use of that
    part of the transmission facilities of a cable system extending
    from the last multi-user terminal to the premises of the end
    user, if such use is reasonably limited in scope and duration,
    as determined by the Commission.
      `(3) ACQUISITIONS IN COMPETITIVE MARKETS- Notwithstanding
    subsections (a) and (c), a local exchange carrier may obtain a
    controlling interest in, or form a joint venture or other
    partnership with, or provide financing to, a cable system
    (hereinafter in this paragraph referred to as `the subject 
    cable system'), if--
          `(A) the subject cable system operates in a television
        market that is not in the top 25 markets, and such market
        has more than 1 cable system operator, and the subject 
        cable system is not the cable system with the most
        subscribers in such television market;
          `(B) the subject cable system and the cable system with
        the most subscribers in such television market held on May
        1, 1995, cable television franchises from the largest
        municipality in the television market and the boundaries of
        such franchises were identical on such date;
          `(C) the subject cable system is not owned by or under
        common ownership or control of any one of the 50 cable
        system operators with the most subscribers as such 
        operators existed on May 1, 1995; and
          `(D) the system with the most subscribers in the
        television market is owned by or under common ownership or
        control of any one of the 10 largest cable system operators
        as such operators existed on May 1, 1995.
      `(4) EXEMPT CABLE SYSTEMS- Subsection (a) does not apply to
    any cable system if--
          `(A) the cable system serves no more than 17,000 cable
        subscribers, of which no less than 8,000 live within an
        urban area, and no less than 6,000 live within a
        nonurbanized area as of June 1, 1995;
          `(B) the cable system is not owned by, or under common
        ownership or control with, any of the 50 largest cable
        system operators in existence on June 1, 1995; and
          `(C) the cable system operates in a television market 
        that was not in the top 100 television markets as of June 
        1, 1995.
      `(5) SMALL CABLE SYSTEMS IN NONURBAN AREAS- Notwithstanding
    subsections (a) and (c), a local exchange carrier with less 
    than $100,000,000 in annual operating revenues (or any 
    affiliate of such carrier owned by, operated by, controlled by,
    or under common control with such carrier) may purchase or
    otherwise acquire more than a 10 percent financial interest in,
    or any management interest in, or enter into a joint venture or
    partnership with, any cable system within the local exchange
    carrier's telephone service area that serves no more than 
    20,000 cable subscribers, if no more than 12,000 of those
    subscribers live within an urbanized area, as defined by the
    Bureau of the Census.
      `(6) WAIVERS- The Commission may waive the restrictions of
    subsections (a), (b), or (c) only if--
          `(A) the Commission determines that, because of the 
        nature of the market served by the affected cable system or
        facilities used to provide telephone exchange service--
              `(i) the affected cable operator or local exchange
            carrier would be subjected to undue economic distress 
            by the enforcement of such provisions;
              `(ii) the system or facilities would not be
            economically viable if such provisions were enforced; or
              `(iii) the anticompetitive effects of the proposed
            transaction are clearly outweighed in the public
            interest by the probable effect of the transaction in
            meeting the convenience and needs of the community to 
            be served; and
          `(B) the local franchising authority approves of such
        waiver.
  `(e) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this
section, the term `telephone service area' when used in connection
with a common carrier subject in whole or in part to title II of
this Act means the area within which such carrier provided 
telephone exchange service as of January 1, 1993, but if any common
carrier after such date transfers its telephone exchange service
facilities to another common carrier, the area to which such
facilities provide telephone exchange service shall be treated as
part of the telephone service area of the acquiring common carrier
and not of the selling common carrier.
`SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.
  `(a) OPEN VIDEO SYSTEMS- 
      `(1) CERTIFICATES OF COMPLIANCE- A local exchange carrier may
    provide cable service to its cable service subscribers in its
    telephone service area through an open video system that
    complies with this section. To the extent permitted by such
    regulations as the Commission may prescribe consistent with the
    public interest, convenience, and necessity, an operator of a
    cable system or any other person may provide video programming
    through an open video system that complies with this section. 
    An operator of an open video system shall qualify for reduced
    regulatory burdens under subsection (c) of this section if the
    operator of such system certifies to the Commission that such
    carrier complies with the Commission's regulations under
    subsection (b) and the Commission approves such certification.
    The Commission shall publish notice of the receipt of any such
    certification and shall act to approve or disapprove any such
    certification within 10 days after receipt of such certification.
      `(2) DISPUTE RESOLUTION- The Commission shall have the
    authority to resolve disputes under this section and the
    regulations prescribed thereunder. Any such dispute shall be
    resolved within 180 days after notice of such dispute is
    submitted to the Commission. At that time or subsequently in a
    separate damages proceeding, the Commission may, in the case of
    any violation of this section, require carriage, award damages
    to any person denied carriage, or any combination of such
    sanctions.  Any aggrieved party may seek any other remedy
    available under this Act.
  `(b) COMMISSION ACTIONS- 
      `(1) REGULATIONS REQUIRED- Within 6 months after the date of
    enactment of the Telecommunications Act of 1996, the Commission
    shall complete all actions necessary (including any
    reconsideration) to prescribe regulations that--
          `(A) except as required pursuant to section 611, 614, or
        615, prohibit an operator of an open video system from
        discriminating among video programming providers with 
        regard to carriage on its open video system, and ensure 
        that the rates, terms, and conditions for such carriage are
        just and reasonable, and are not unjustly or unreasonably
        discriminatory;
          `(B) if demand exceeds the channel capacity of the open
        video system, prohibit an operator of an open video system
        and its affiliates from selecting the video programming
        services for carriage on more than one-third of the
        activated channel capacity on such system, but nothing in
        this subparagraph shall be construed to limit the number of
        channels that the carrier and its affiliates may offer to
        provide directly to subscribers;
          `(C) permit an operator of an open video system to carry
        on only one channel any video programming service that is
        offered by more than one video programming provider
        (including the local exchange carrier's video programming
        affiliate):  [Italic->] Provided,  [<-Italic] That
        subscribers have ready and immediate access to any such
        video programming service;
          `(D) extend to the distribution of video programming over
        open video systems the Commission's regulations concerning
        sports exclusivity (47 C.F.R. 76.67), network 
        nonduplication (47 C.F.R. 76.92 et seq.), and syndicated
        exclusivity (47 C.F.R. 76.151 et seq.); and
          `(E)(i) prohibit an operator of an open video system from
        unreasonably discriminating in favor of the operator or its
        affiliates with regard to material or information 
        (including advertising) provided by the operator to
        subscribers for the purposes of selecting programming on 
        the open video system, or in the way such material or
        information is presented to subscribers;
          `(ii) require an operator of an open video system to
        ensure that video programming providers or copyright 
        holders (or both) are able suitably and uniquely to 
        identify their programming services to subscribers;
          `(iii) if such identification is transmitted as part of
        the programming signal, require the carrier to transmit 
        such identification without change or alteration; and
          `(iv) prohibit an operator of an open video system from
        omitting television broadcast stations or other 
        unaffiliated video programming services carried on such
        system from any navigational device, guide, or menu.
      `(2) CONSUMER ACCESS- Subject to the requirements of 
    paragraph (1) and the regulations thereunder, nothing in this
    section prohibits a common carrier or its affiliate from
    negotiating mutually agreeable terms and conditions with
    over-the-air broadcast stations and other unaffiliated video
    programming providers to allow consumer access to their signals
    on any level or screen of any gateway, menu, or other program
    guide, whether provided by the carrier or its affiliate.
  `(c) REDUCED REGULATORY BURDENS FOR OPEN VIDEO SYSTEMS- 
      `(1) IN GENERAL- Any provision that applies to a cable
    operator under--
          `(A) sections 613 (other than subsection (a) thereof),
        616, 623(f), 628, 631, and 634 of this title, shall apply,
          `(B) sections 611, 614, and 615 of this title, and 
        section 325 of title III, shall apply in accordance with 
        the regulations prescribed under paragraph (2), and
          `(C) sections 612 and 617, and parts III and IV (other
        than sections 623(f), 628, 631, and 634), of this title
        shall not apply,
    to any operator of an open video system for which the 
    Commission has approved a certification under this section.
      `(2) IMPLEMENTATION- 
          `(A) COMMISSION ACTION- In the rulemaking proceeding to
        prescribe the regulations required by subsection (b)(1), 
        the Commission shall, to the extent possible, impose
        obligations that are no greater or lesser than the
        obligations contained in the provisions described in
        paragraph (1)(B) of this subsection. The Commission shall
        complete all action (including any reconsideration) to
        prescribe such regulations no later than 6 months after the
        date of enactment of the Telecommunications Act of 1996.
          `(B) FEES- An operator of an open video system under this
        part may be subject to the payment of fees on the gross
        revenues of the operator for the provision of cable service
        imposed by a local franchising authority or other
        governmental entity, in lieu of the franchise fees 
        permitted under section 622. The rate at which such fees 
        are imposed shall not exceed the rate at which franchise
        fees are imposed on any cable operator transmitting video
        programming in the franchise area, as determined in
        accordance with regulations prescribed by the Commission. 
        An operator of an open video system may designate that
        portion of a subscriber's bill attributable to the fee 
        under this subparagraph as a separate item on the bill.
      `(3) REGULATORY STREAMLINING- With respect to the
    establishment and operation of an open video system, the
    requirements of this section shall apply in lieu of, and not in
    addition to, the requirements of title II.
      `(4) TREATMENT AS CABLE OPERATOR- Nothing in this Act
    precludes a video programming provider making use of an open
    video system from being treated as an operator of a cable 
    system for purposes of section 111 of title 17, United States
    Code.
  `(d) DEFINITION OF TELEPHONE SERVICE AREA- For purposes of this
section, the term `telephone service area' when used in connection
with a common carrier subject in whole or in part to title II of
this Act means the area within which such carrier is offering
telephone exchange service.'.
  (b) CONFORMING AND TECHNICAL AMENDMENTS- 
      (1) REPEAL- Subsection (b) of section 613 (47 U.S.C. 533(b))
    is repealed.
      (2) DEFINITIONS- Section 602 (47 U.S.C. 531) is amended--
          (A) in paragraph (7), by striking `, or (D)' and 
        inserting the following: `, unless the extent of such use 
        is solely to provide interactive on-demand services; (D) an
        open video system that complies with section 653 of this
        title; or (E)';
          (B) by redesignating paragraphs (12) through (19) as
        paragraphs (13) through (20), respectively; and
          (C) by inserting after paragraph (11) the following new
        paragraph:
      `(12) the term `interactive on-demand services' means a
    service providing video programming to subscribers over 
    switched networks on an on-demand, point-to-point basis, but
    does not include services providing video programming
    prescheduled by the programming provider;'.
      (3) TERMINATION OF VIDEO-DIALTONE REGULATIONS- The
    Commission's regulations and policies with respect to video
    dialtone requirements issued in CC Docket No. 87-266 shall 
    cease to be effective on the date of enactment of this Act. 
    This paragraph shall not be construed to require the 
    termination of any video-dialtone system that the Commission 
    has approved before the date of enactment of this Act.
SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF
                  TELECOMMUNICATIONS SERVICES.
  (a) PROVISION OF TELECOMMUNICATIONS SERVICES BY A CABLE OPERATOR-
Section 621(b) (47 U.S.C. 541(b)) is amended by adding at the end
thereof the following new paragraph:
  `(3)(A) If a cable operator or affiliate thereof is engaged in 
the provision of telecommunications services--
      `(i) such cable operator or affiliate shall not be required 
    to obtain a franchise under this title for the provision of
    telecommunications services; and
      `(ii) the provisions of this title shall not apply to such
    cable operator or affiliate for the provision of
    telecommunications services.
  `(B) A franchising authority may not impose any requirement under
this title that has the purpose or effect of prohibiting, limiting,
restricting, or conditioning the provision of a telecommunications
service by a cable operator or an affiliate thereof.
  `(C) A franchising authority may not order a cable operator or
affiliate thereof--
      `(i) to discontinue the provision of a telecommunications
    service, or
      `(ii) to discontinue the operation of a cable system, to the
    extent such cable system is used for the provision of a
    telecommunications service, by reason of the failure of such
    cable operator or affiliate thereof to obtain a franchise or
    franchise renewal under this title with respect to the 
    provision of such telecommunications service.
  `(D) Except as otherwise permitted by sections 611 and 612, a
franchising authority may not require a cable operator to provide
any telecommunications service or facilities, other than
institutional networks, as a condition of the initial grant of a
franchise, a franchise renewal, or a transfer of a franchise.'.
  (b) FRANCHISE FEES- Section 622(b) (47 U.S.C. 542(b)) is amended
by inserting `to provide cable services' immediately before the
period at the end of the first sentence thereof.
SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.
  Part III of title VI is amended by inserting after section 628 
(47 U.S.C. 548) the following new section:
`SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.
  `(a) COMMERCIAL CONSUMER AVAILABILITY OF EQUIPMENT USED TO ACCESS
SERVICES PROVIDED BY MULTICHANNEL VIDEO PROGRAMMING DISTRIBUTORS-
The Commission shall, in consultation with appropriate industry
standard-setting organizations, adopt regulations to assure the
commercial availability, to consumers of multichannel video
programming and other services offered over multichannel video
programming systems, of converter boxes, interactive communications
equipment, and other equipment used by consumers to access
multichannel video programming and other services offered over
multichannel video programming systems, from manufacturers,
retailers, and other vendors not affiliated with any multichannel
video programming distributor. Such regulations shall not prohibit
any multichannel video programming distributor from also offering
converter boxes, interactive communications equipment, and other
equipment used by consumers to access multichannel video 
programming and other services offered over multichannel video
programming systems, to consumers, if the system operator's charges
to consumers for such devices and equipment are separately stated
and not subsidized by charges for any such service.
  `(b) PROTECTION OF SYSTEM SECURITY- The Commission shall not
prescribe regulations under subsection (a) which would jeopardize
security of multichannel video programming and other services
offered over multichannel video programming systems, or impede the
legal rights of a provider of such services to prevent theft of
service.
  `(c) WAIVER- The Commission shall waive a regulation adopted 
under subsection (a) for a limited time upon an appropriate showing
by a provider of multichannel video programming and other services
offered over multichannel video programming systems, or an 
equipment provider, that such waiver is necessary to assist the
development or introduction of a new or improved multichannel video
programming or other service offered over multichannel video
programming systems, technology, or products. Upon an appropriate
showing, the Commission shall grant any such waiver request within
90 days of any application filed under this subsection, and such
waiver shall be effective for all service providers and products in
that category and for all providers of services and products.
  `(d) AVOIDANCE OF REDUNDANT REGULATIONS- 
      `(1) COMMERCIAL AVAILABILITY DETERMINATIONS- Determinations
    made or regulations prescribed by the Commission with respect 
    to commercial availability to consumers of converter boxes,
    interactive communications equipment, and other equipment used
    by consumers to access multichannel video programming and other
    services offered over multichannel video programming systems,
    before the date of enactment of the Telecommunications Act of
    1996 shall fulfill the requirements of this section.
      `(2) REGULATIONS- Nothing in this section affects section
    64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e))
    or other Commission regulations governing interconnection and
    competitive provision of customer premises equipment used in
    connection with basic common carrier communications services.
  `(e) SUNSET- The regulations adopted under this section shall
cease to apply when the Commission determines that--
      `(1) the market for the multichannel video programming
    distributors is fully competitive;
      `(2) the market for converter boxes, and interactive
    communications equipment, used in conjunction with that service
    is fully competitive; and
      `(3) elimination of the regulations would promote competition
    and the public interest.
  `(f) COMMISSION'S AUTHORITY- Nothing in this section shall be
construed as expanding or limiting any authority that the 
Commission may have under law in effect before the date of 
enactment of the Telecommunications Act of 1996.'.
SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.
  Title VII is amended by inserting after section 712 (47 U.S.C.
612) the following new section:
`SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.
  `(a) COMMISSION INQUIRY- Within 180 days after the date of
enactment of the Telecommunications Act of 1996, the Federal
Communications Commission shall complete an inquiry to ascertain 
the level at which video programming is closed captioned. Such
inquiry shall examine the extent to which existing or previously
published programming is closed captioned, the size of the video
programming provider or programming owner providing closed
captioning, the size of the market served, the relative audience
shares achieved, or any other related factors. The Commission shall
submit to the Congress a report on the results of such inquiry.
  `(b) ACCOUNTABILITY CRITERIA- Within 18 months after such date of
enactment, the Commission shall prescribe such regulations as are
necessary to implement this section. Such regulations shall ensure
that--
      `(1) video programming first published or exhibited after the
    effective date of such regulations is fully accessible through
    the provision of closed captions, except as provided in
    subsection (d); and
      `(2) video programming providers or owners maximize the
    accessibility of video programming first published or exhibited
    prior to the effective date of such regulations through the
    provision of closed captions, except as provided in subsection
    (d).
  `(c) DEADLINES FOR CAPTIONING- Such regulations shall include an
appropriate schedule of deadlines for the provision of closed
captioning of video programming.
  `(d) EXEMPTIONS- Notwithstanding subsection (b)--
      `(1) the Commission may exempt by regulation programs, 
    classes of programs, or services for which the Commission has
    determined that the provision of closed captioning would be
    economically burdensome to the provider or owner of such
    programming;
      `(2) a provider of video programming or the owner of any
    program carried by the provider shall not be obligated to 
    supply closed captions if such action would be inconsistent 
    with contracts in effect on the date of enactment of the
    Telecommunications Act of 1996, except that nothing in this
    section shall be construed to relieve a video programming
    provider of its obligations to provide services required by
    Federal law; and
      `(3) a provider of video programming or program owner may
    petition the Commission for an exemption from the requirements
    of this section, and the Commission may grant such petition 
    upon a showing that the requirements contained in this section
    would result in an undue burden.
  `(e) UNDUE BURDEN- The term `undue burden' means significant
difficulty or expense. In determining whether the closed captions
necessary to comply with the requirements of this paragraph would
result in an undue economic burden, the factors to be considered
include--
      `(1) the nature and cost of the closed captions for the
    programming;
      `(2) the impact on the operation of the provider or program
    owner;
      `(3) the financial resources of the provider or program 
    owner; and
      `(4) the type of operations of the provider or program owner.
  `(f) VIDEO DESCRIPTIONS INQUIRY- Within 6 months after the date 
of enactment of the Telecommunications Act of 1996, the Commission
shall commence an inquiry to examine the use of video descriptions
on video programming in order to ensure the accessibility of video
programming to persons with visual impairments, and report to
Congress on its findings.  The Commission's report shall assess
appropriate methods and schedules for phasing video descriptions
into the marketplace, technical and quality standards for video
descriptions, a definition of programming for which video
descriptions would apply, and other technical and legal issues that
the Commission deems appropriate.
  `(g) VIDEO DESCRIPTION- For purposes of this section, `video
description' means the insertion of audio narrated descriptions of 
a television program's key visual elements into natural pauses
between the program's dialogue.
  `(h) PRIVATE RIGHTS OF ACTIONS PROHIBITED- Nothing in this 
section shall be construed to authorize any private right of action
to enforce any requirement of this section or any regulation
thereunder. The Commission shall have exclusive jurisdiction with
respect to any complaint under this section.'.
                     TITLE IV--REGULATORY REFORM
SEC. 401. REGULATORY FORBEARANCE.
  Title I is amended by inserting after section 9 (47 U.S.C. 159)
the following new section:
`SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.
  `(a) REGULATORY FLEXIBILITY- Notwithstanding section 332(c)(1)(A)
of this Act, the Commission shall forbear from applying any
regulation or any provision of this Act to a telecommunications
carrier or telecommunications service, or class of
telecommunications carriers or telecommunications services, in any
or some of its or their geographic markets, if the Commission
determines that--
      `(1) enforcement of such regulation or provision is not
    necessary to ensure that the charges, practices,
    classifications, or regulations by, for, or in connection with
    that telecommunications carrier or telecommunications service
    are just and reasonable and are not unjustly or unreasonably
    discriminatory;
      `(2) enforcement of such regulation or provision is not
    necessary for the protection of consumers; and
      `(3) forbearance from applying such provision or regulation 
    is consistent with the public interest.
  `(b) COMPETITIVE EFFECT TO BE WEIGHED- In making the 
determination under subsection (a)(3), the Commission shall 
consider whether forbearance from enforcing the provision or
regulation will promote competitive market conditions, including 
the extent to which such forbearance will enhance competition among
providers of telecommunications services. If the Commission
determines that such forbearance will promote competition among
providers of telecommunications services, that determination may be
the basis for a Commission finding that forbearance is in the 
public interest.
  `(c) PETITION FOR FORBEARANCE- Any telecommunications carrier, or
class of telecommunications carriers, may submit a petition to the
Commission requesting that the Commission exercise the authority
granted under this section with respect to that carrier or those
carriers, or any service offered by that carrier or carriers. Any
such petition shall be deemed granted if the Commission does not
deny the petition for failure to meet the requirements for
forbearance under subsection (a) within one year after the
Commission receives it, unless the one-year period is extended by
the Commission. The Commission may extend the initial one-year
period by an additional 90 days if the Commission finds that an
extension is necessary to meet the requirements of subsection (a).
The Commission may grant or deny a petition in whole or in part and
shall explain its decision in writing.
  `(d) LIMITATION- Except as provided in section 251(f), the
Commission may not forbear from applying the requirements of 
section 251(c) or 271 under subsection (a) of this section until it
determines that those requirements have been fully implemented.
  `(e) STATE ENFORCEMENT AFTER COMMISSION FORBEARANCE- A State
commission may not continue to apply or enforce any provision of
this Act that the Commission has determined to forbear from 
applying under subsection (a).'.
SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.
  (a) BIENNIAL REVIEW- Title I is amended by inserting after 
section 10 (as added by section 401) the following new section:
`SEC. 11.  REGULATORY REFORM.
  `(a) BIENNIAL REVIEW OF REGULATIONS- In every even-numbered year
(beginning with 1998), the Commission--
      `(1) shall review all regulations issued under this Act in
    effect at the time of the review that apply to the operations 
    or activities of any provider of telecommunications service; and
      `(2) shall determine whether any such regulation is no longer
    necessary in the public interest as the result of meaningful
    economic competition between providers of such service.
  `(b) EFFECT OF DETERMINATION- The Commission shall repeal or
modify any regulation it determines to be no longer necessary in 
the public interest.'.
  (b) REGULATORY RELIEF- 
      (1) Streamlined procedures for changes in charges,
    classifications, regulations, or practices-
          (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
              (i) by striking `12 months' the first place it 
            appears in paragraph (2)(A) and inserting `5 months';
              (ii) by striking `effective,' and all that follows in
            paragraph (2)(A) and inserting `effective.'; and
              (iii) by adding at the end thereof the following:
      `(3) A local exchange carrier may file with the Commission a
    new or revised charge, classification, regulation, or practice
    on a streamlined basis. Any such charge, classification,
    regulation, or practice shall be deemed lawful and shall be
    effective 7 days (in the case of a reduction in rates) or 15
    days (in the case of an increase in rates) after the date on
    which it is filed with the Commission unless the Commission
    takes action under paragraph (1) before the end of that 7-day 
    or 15-day period, as is appropriate.'.
          (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
              (i) by striking `12 months' the first place it 
            appears in paragraph (1) and inserting `5 months'; and
              (ii) by striking `filed,' and all that follows in
            paragraph (1) and inserting `filed.'.
      (2) EXTENSIONS OF LINES UNDER SECTION 214; ARMIS REPORTS- The
    Commission shall permit any common carrier--
          (A) to be exempt from the requirements of section 214 of
        the Communications Act of 1934 for the extension of any
        line; and
          (B) to file cost allocation manuals and ARMIS reports
        annually, to the extent such carrier is required to file
        such manuals or reports.
      (3) FORBEARANCE AUTHORITY NOT LIMITED- Nothing in this
    subsection shall be construed to limit the authority of the
    Commission to waive, modify, or forbear from applying any of 
    the requirements to which reference is made in paragraph (1)
    under any other provision of this Act or other law.
      (4) EFFECTIVE DATE OF AMENDMENTS- The amendments made by
    paragraph (1) of this subsection shall apply with respect to 
    any charge, classification, regulation, or practice filed on or
    after one year after the date of enactment of this Act.
  (c) CLASSIFICATION OF CARRIERS- In classifying carriers according
to section 32.11 of its regulations (47 C.F.R. 32.11) and in
establishing reporting requirements pursuant to part 43 of its
regulations (47 C.F.R. part 43) and section 64.903 of its
regulations (47 C.F.R. 64.903), the Commission shall adjust the
revenue requirements to account for inflation as of the release 
date of the Commission's Report and Order in CC Docket No. 91-141,
and annually thereafter. This subsection shall take effect on the
date of enactment of this Act.
SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS AND
                  FUNCTIONS.
  (a) MODIFICATION OF AMATEUR RADIO EXAMINATION PROCEDURES- Section
4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
      (1) in subparagraph (A)--
          (A) by inserting `or administering' after `for purposes 
        of preparing';
          (B) by inserting `of' after `than the class'; and
          (C) by inserting `or administered' after `for which the
        examination is being prepared';
      (2) by striking subparagraph (B);
      (3) in subparagraph (H), by striking `(A), (B), and (C)' and
    inserting `(A) and (B)';
      (4) in subparagraph (J)--
          (A) by striking `or (B)'; and
          (B) by striking the last sentence; and
      (5) by redesignating subparagraphs (C) through (J) as
    subparagraphs (B) through (I), respectively.
  (b) AUTHORITY TO DESIGNATE ENTITIES TO INSPECT- Section 4(f)(3)
(47 U.S.C. 154(f)(3)) is amended by inserting before the period at
the end the following: `: and  [Italic->] Provided further,
[<-Italic]  That, in the alternative, an entity designated by the
Commission may make the inspections referred to in this paragraph'.
  (c) EXPEDITING INSTRUCTIONAL TELEVISION FIXED SERVICE PROCESSING-
Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by striking the
last sentence and inserting the following: `Except for cases
involving the authorization of service in the instructional
television fixed service, or as otherwise provided in this Act,
nothing in this paragraph shall authorize the Commission to provide
for the conduct, by any person or persons other than persons
referred to in paragraph (2) or (3) of section 556(b) of title 5,
United States Code, of any hearing to which such section applies.'.
  (d) REPEAL SETTING OF DEPRECIATION RATES- The first sentence of
section 220(b) (47 U.S.C. 220(b)) is amended by striking `shall
prescribe for such carriers' and inserting `may prescribe, for such
carriers as it determines to be appropriate,'.
  (e) USE OF INDEPENDENT AUDITORS- Section 220(c) (47 U.S.C. 
220(c)) is amended by adding at the end thereof the following: `The
Commission may obtain the services of any person licensed to 
provide public accounting services under the law of any State to
assist with, or conduct, audits under this section. While so
employed or engaged in conducting an audit for the Commission under
this section, any such person shall have the powers granted the
Commission under this subsection and shall be subject to subsection
(f) in the same manner as if that person were an employee of the
Commission.'.
  (f) DELEGATION OF EQUIPMENT TESTING AND CERTIFICATION TO PRIVATE
LABORATORIES- Section 302 (47 U.S.C. 302) is amended by adding at
the end the following:
  `(e) The Commission may--
      `(1) authorize the use of private organizations for testing
    and certifying the compliance of devices or home electronic
    equipment and systems with regulations promulgated under this
    section;
      `(2) accept as prima facie evidence of such compliance the
    certification by any such organization; and
      `(3) establish such qualifications and standards as it deems
    appropriate for such private organizations, testing, and
    certification.'.
  (g) MAKING LICENSE MODIFICATION UNIFORM- Section 303(f) (47 
U.S.C. 303(f)) is amended by striking `unless, after a public
hearing,' and inserting `unless'.
  (h) ELIMINATE FCC JURISDICTION OVER GOVERNMENT-OWNED SHIP RADIO
STATIONS-
      (1) Section 305 (47 U.S.C. 305) is amended by striking
    subsection (b) and redesignating subsections (c) and (d) as (b)
    and (c), respectively.
      (2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking
    `except a vessel of the United States Maritime Administration,
    the Inland and Coastwise Waterways Service, or the Panama Canal
    Company,'.
  (i) PERMIT OPERATION OF DOMESTIC SHIP AND AIRCRAFT RADIOS WITHOUT
LICENSE- Section 307(e) (47 U.S.C.  307(e)) is amended to read as
follows:
  `(e)(1) Notwithstanding any license requirement established in
this Act, if the Commission determines that such authorization
serves the public interest, convenience, and necessity, the
Commission may by rule authorize the operation of radio stations
without individual licenses in the following radio services: (A) 
the citizens band radio service; (B) the radio control service; (C)
the aviation radio service for aircraft stations operated on
domestic flights when such aircraft are not otherwise required to
carry a radio station; and (D) the maritime radio service for ship
stations navigated on domestic voyages when such ships are not
otherwise required to carry a radio station.
  `(2) Any radio station operator who is authorized by the
Commission to operate without an individual license shall comply
with all other provisions of this Act and with rules prescribed by
the Commission under this Act.
  `(3) For purposes of this subsection, the terms `citizens band
radio service', `radio control service', `aircraft station' and
`ship station' shall have the meanings given them by the Commission
by rule.'.
  (j) EXPEDITED LICENSING FOR FIXED MICROWAVE SERVICE- Section
309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking subparagraph
(A) and redesignating subparagraphs (B) through (G) as 
subparagraphs (A) through (F), respectively.
  (k) FOREIGN DIRECTORS- Section 310(b) (47 U.S.C. 310(b)) is
amended--
      (1) in paragraph (3), by striking `of which any officer or
    director is an alien or'; and
      (2) in paragraph (4), by striking `of which any officer or
    more than one-fourth of the directors are aliens, or'.
  (l) LIMITATION ON SILENT STATION AUTHORIZATIONS- Section 312 (47
U.S.C. 312) is amended by adding at the end the following:
  `(g) If a broadcasting station fails to transmit broadcast 
signals for any consecutive 12-month period, then the station
license granted for the operation of that broadcast station expires
at the end of that period, notwithstanding any provision, term, or
condition of the license to the contrary.'.
  (m) MODIFICATION OF CONSTRUCTION PERMIT REQUIREMENT- Section
319(d) is amended by striking the last two sentences and inserting
the following: `With respect to any broadcasting station, the
Commission shall not have any authority to waive the requirement of
a permit for construction, except that the Commission may by
regulation determine that a permit shall not be required for minor
changes in the facilities of authorized broadcast stations. With
respect to any other station or class of stations, the Commission
shall not waive the requirement for a construction permit unless 
the Commission determines that the public interest, convenience, 
and necessity would be served by such a waiver.'.
  (n) CONDUCT OF INSPECTIONS- Section 362(b) (47 U.S.C. 362(b)) is
amended to read as follows:
  `(b) Every ship of the United States that is subject to this part
shall have the equipment and apparatus prescribed therein inspected
at least once each year by the Commission or an entity designated 
by the Commission. If, after such inspection, the Commission is
satisfied that all relevant provisions of this Act and the station
license have been complied with, the fact shall be so certified on
the station license by the Commission. The Commission  shall make
such additional inspections at frequent intervals as the Commission
determines may be necessary to ensure compliance with the
requirements of this Act. The Commission may, upon a finding that
the public interest could be served thereby--
      `(1) waive the annual inspection required under this section
    for a period of up to 90 days for the sole purpose of enabling 
    a vessel to complete its voyage and proceed to a port in the
    United States where an inspection can be held; or
      `(2) waive the annual inspection required under this section
    for a vessel that is in compliance with the radio provisions of
    the Safety Convention and that is operating solely in waters
    beyond the jurisdiction of the United States:  [Italic->]
    Provided,  [<-Italic] That such inspection shall be performed
    within 30 days of such vessel's return to the United States.'.
  (o) INSPECTION BY OTHER ENTITIES- Section 385 (47 U.S.C. 385) is
amended--
      (1) by inserting `or an entity designated by the Commission'
    after `The Commission'; and
      (2) by adding at the end thereof the following: `In 
    accordance with such other provisions of law as apply to
    Government contracts, the Commission may enter into contracts
    with any person for the purpose of carrying out such 
    inspections and certifying compliance with those requirements,
    and may, as part of any such contract, allow any such person to
    accept reimbursement from the license holder for travel and
    expense costs of any employee conducting an inspection or
    certification.'.
                   TITLE V--OBSCENITY AND VIOLENCE
     SUBTITLE A--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF
                    TELECOMMUNICATIONS FACILITIES
SEC. 501. SHORT TITLE.
  This title may be cited as the `Communications Decency Act of
1996'.
SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES
                  UNDER THE COMMUNICATIONS ACT OF 1934.
  Section 223 (47 U.S.C. 223) is amended--
      (1) by striking subsection (a) and inserting in lieu thereof:
  `(a) Whoever--
      `(1) in interstate or foreign communications--
          `(A) by means of a telecommunications device knowingly--
              `(i) makes, creates, or solicits, and
              `(ii) initiates the transmission of,
        any comment, request, suggestion, proposal, image, or other
        communication which is obscene, lewd, lascivious, filthy, 
        or indecent, with intent to annoy, abuse, threaten, or
        harass another person;
          `(B) by means of a telecommunications device knowingly--
              `(i) makes, creates, or solicits, and
              `(ii) initiates the transmission of,
        any comment, request, suggestion, proposal, image, or other
        communication which is obscene or indecent, knowing that 
        the recipient of the communication is under 18 years of 
        age, regardless of whether the maker of such communication
        placed the call or initiated the communication;
          `(C) makes a telephone call or utilizes a
        telecommunications device, whether or not conversation or
        communication ensues, without disclosing his identity and
        with intent to annoy, abuse, threaten, or harass any person
        at the called number or who receives the communications;
          `(D) makes or causes the telephone of another repeatedly
        or continuously to ring, with intent to harass any person 
        at the called number; or
          `(E) makes repeated telephone calls or repeatedly
        initiates communication with a telecommunications device,
        during which conversation or communication ensues, solely 
        to harass any person at the called number or who receives
        the communication; or
      `(2) knowingly permits any telecommunications facility under
    his control to be used for any activity prohibited by paragraph
    (1) with the intent that it be used for such activity,
shall be fined under title 18, United States Code, or imprisoned 
not more than two years, or both.'; and
      (2) by adding at the end the following new subsections:
  `(d) Whoever--
      `(1) in interstate or foreign communications knowingly--
          `(A) uses an interactive computer service to send to a
        specific person or persons under 18 years of age, or
          `(B) uses any interactive computer service to display in 
        a manner available to a person under 18 years of age,
    any comment, request, suggestion, proposal, image, or other
    communication that, in context, depicts or describes, in terms
    patently offensive as measured by contemporary community
    standards, sexual or excretory activities or organs, regardless
    of whether the user of such service placed the call or 
    initiated the communication; or
      `(2) knowingly permits any telecommunications facility under
    such person's control to be used for an activity prohibited by
    paragraph (1) with the intent that it be used for such activity,
shall be fined under title 18, United States Code, or imprisoned 
not more than two years, or both.
  `(e) In addition to any other defenses available by law:
      `(1) No person shall be held to have violated subsection (a)
    or (d) solely for providing access or connection to or from a
    facility, system, or network not under that person's control,
    including transmission, downloading, intermediate storage,
    access software, or other related capabilities that are
    incidental to providing such access or connection that does not
    include the creation of the content of the communication.
      `(2) The defenses provided by paragraph (1) of this 
    subsection shall not be applicable to a person who is a
    conspirator with an entity actively involved in the creation or
    knowing distribution of communications that violate this
    section, or who knowingly advertises the availability of such
    communications.
      `(3) The defenses provided in paragraph (1) of this 
    subsection shall not be applicable to a person who provides
    access or connection to a facility, system, or network engaged
    in the violation of this section that is owned or controlled by
    such person.
      `(4) No employer shall be held liable under this section for
    the actions of an employee or agent unless the employee's or
    agent's conduct is within the scope of his or her employment or
    agency and the employer (A) having knowledge of such conduct,
    authorizes or ratifies such conduct, or (B) recklessly
    disregards such conduct.
      `(5) It is a defense to a prosecution under subsection
    (a)(1)(B) or (d), or under subsection (a)(2) with respect to 
    the use of a facility for an activity under subsection 
    (a)(1)(B) that a person--
          `(A) has taken, in good faith, reasonable, effective, and
        appropriate actions under the circumstances to restrict or
        prevent access by minors to a communication specified in
        such subsections, which may involve any appropriate 
        measures to restrict minors from such communications,
        including any method which is feasible under available
        technology; or
          `(B) has restricted access to such communication by
        requiring use of a verified credit card, debit account,
        adult access code, or adult personal identification number.
      `(6) The Commission may describe measures which are
    reasonable, effective, and appropriate to restrict access to
    prohibited communications under subsection (d). Nothing in this
    section authorizes the Commission to enforce, or is intended to
    provide the Commission with the authority to approve, sanction,
    or permit, the use of such measures. The Commission shall have
    no enforcement authority over the failure to utilize such
    measures. The Commission shall not endorse specific products
    relating to such measures. The use of such measures shall be
    admitted as evidence of good faith efforts for purposes of
    paragraph (5) in any action arising under subsection (d).
    Nothing in this section shall be construed to treat interactive
    computer services as common carriers or telecommunications
    carriers.
  `(f)(1) No cause of action may be brought in any court or
administrative agency against any person on account of any activity
that is not in violation of any law punishable by criminal or civil
penalty, and that the person has taken in good faith to implement a
defense authorized under this section or otherwise to restrict or
prevent the transmission of, or access to, a communication 
specified in this section.
  `(2) No State or local government may impose any liability for
commercial activities or actions by commercial entities, nonprofit
libraries, or institutions of higher education in connection with 
an activity or action described in subsection (a)(2) or (d) that is
inconsistent with the treatment of those activities or actions 
under this section:  [Italic->] Provided, however [<-Italic] , That
nothing herein shall preclude any State or local government from
enacting and enforcing complementary oversight, liability, and
regulatory systems, procedures, and requirements, so long as such
systems, procedures, and requirements govern only intrastate
services and do not result in the imposition of inconsistent 
rights, duties or obligations on the provision of interstate
services. Nothing in this subsection shall preclude any State or
local government from governing conduct not covered by this section.
  `(g) Nothing in subsection (a), (d), (e), or (f) or in the
defenses to prosecution under subsection (a) or (d) shall be
construed to affect or limit the application or enforcement of any
other Federal law.
  `(h) For purposes of this section--
      `(1) The use of the term `telecommunications device' in this
    section--
          `(A) shall not impose new obligations on broadcasting
        station licensees and cable operators covered by obscenity
        and indecency provisions elsewhere in this Act; and
          `(B) does not include an interactive computer service.
      `(2) The term `interactive computer service' has the meaning
    provided in section 230(e)(2).
      `(3) The term `access software' means software (including
    client or server software) or enabling tools that do not create
    or provide the content of the communication but that allow a
    user to do any one or more of the following:
          `(A) filter, screen, allow, or disallow content;
          `(B) pick, choose, analyze, or digest content; or
          `(C) transmit, receive, display, forward, cache, search,
        subset, organize, reorganize, or translate content.
      `(4) The term `institution of higher education' has the
    meaning provided in section 1201 of the Higher Education Act of
    1965 (20 U.S.C. 1141).
      `(5) The term `library' means a library eligible for
    participation in State-based plans for funds under title III of
    the Library Services and Construction Act (20 U.S.C. 355e et
    seq.).'.
SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.
  Section 639 (47 U.S.C. 559) is amended by striking `not more than
$10,000' and inserting `under title 18, United States Code,'.
SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.
  Part IV of title VI (47 U.S.C. 551 et seq.) is amended by adding
at the end the following:
`SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.
  `(a) SUBSCRIBER REQUEST- Upon request by a cable service
subscriber, a cable operator shall, without charge, fully scramble
or otherwise fully block the audio and video programming of each
channel carrying such programming so that one not a subscriber does
not receive it.
  `(b) DEFINITION- As used in this section, the term `scramble'
means to rearrange the content of the signal of the programming so
that the programming cannot be viewed or heard in an understandable
manner.'.
SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE
                  PROGRAMMING.
  (a) REQUIREMENT- Part IV of title VI (47 U.S.C. 551 et seq.), as
amended by this Act, is further amended by adding at the end the
following:
`SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE
                  PROGRAMMING.
  `(a) REQUIREMENT- In providing sexually explicit adult 
programming or other programming that is indecent on any channel of
its service primarily dedicated to sexually-oriented programming, a
multichannel video programming distributor shall fully scramble or
otherwise fully block the video and audio portion of such channel 
so that one not a subscriber to such channel or programming does 
not receive it.
  `(b) IMPLEMENTATION- Until a multichannel video programming
distributor complies with the requirement set forth in subsection
(a), the distributor shall limit the access of children to the
programming referred to in that subsection by not providing such
programming during the hours of the day (as determined by the
Commission) when a significant number of children are likely to 
view it.
  `(c) DEFINITION- As used in this section, the term `scramble'
means to rearrange the content of the signal of the programming so
that the programming cannot be viewed or heard in an understandable
manner.'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall
take effect 30 days after the date of enactment of this Act.
SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.
  (a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL CHANNELS- Section 
611(e) (47 U.S.C. 531(e)) is amended by inserting before the period
the following: `, except a cable operator may refuse to transmit 
any public access program or portion of a public access program
which contains obscenity, indecency, or nudity'.
  (b) CABLE CHANNELS FOR COMMERCIAL USE- Section 612(c)(2) (47
U.S.C. 532(c)(2)) is amended by striking `an operator' and 
inserting `a cable operator may refuse to transmit any leased 
access program or portion of a leased access program which contains
obscenity, indecency, or nudity and'.
SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMUNICATION OF
                  OBSCENE MATERIALS THROUGH THE USE OF COMPUTERS.
  (a) IMPORTATION OR TRANSPORTATION- Section 1462 of title 18,
United States Code, is amended--
      (1) in the first undesignated paragraph, by inserting `or
    interactive computer service (as defined in section 230(e)(2) 
    of the Communications Act of 1934)' after `carrier'; and
      (2)  in the second undesignated paragraph--
          (A) by inserting `or receives,' after `takes';
          (B) by inserting `or interactive computer service (as
        defined in section 230(e)(2) of the Communications Act of
        1934)' after `common carrier'; and
          (C) by inserting `or importation' after `carriage'.
  (b) TRANSPORTATION FOR PURPOSES OF SALE OR DISTRIBUTION- The 
first undesignated paragraph of section 1465 of title 18, United
States Code, is amended--
      (1) by striking `transports in' and inserting `transports or
    travels in, or uses a facility or means of,';
      (2) by inserting `or an interactive computer service (as
    defined in section 230(e)(2) of the Communications Act of 1934)
    in or affecting such commerce' after `foreign commerce' the
    first place it appears;
      (3) by striking `, or knowingly travels in' and all that
    follows through `obscene material in interstate or foreign
    commerce,' and inserting `of'.
  (c) INTERPRETATION- The amendments made by this section are
clarifying and shall not be interpreted to limit or repeal any
prohibition contained in sections 1462 and 1465 of title 18, United
States Code, before such amendment, under the rule established in
United States v. Alpers, 338 U.S. 680 (1950).
SEC. 508. COERCION AND ENTICEMENT OF MINORS.
  Section 2422 of title 18, United States Code, is amended--
      (1) by inserting `(a)' before `Whoever knowingly'; and
      (2) by adding at the end the following:
  `(b) Whoever, using any facility or means of interstate or 
foreign commerce, including the mail, or within the special 
maritime and territorial jurisdiction of the United States,
knowingly persuades, induces, entices, or coerces any individual 
who has not attained the age of 18 years to engage in prostitution
or any sexual act for which any person may be criminally 
prosecuted, or attempts to do so, shall be fined under this title 
or imprisoned not more than 10 years, or both.'.
SEC. 509. ONLINE FAMILY EMPOWERMENT.
  Title II of the Communications Act of 1934 (47 U.S.C. 201 et 
seq.) is amended by adding at the end the following new section:
`SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF
                  OFFENSIVE MATERIAL.
  `(a) FINDINGS- The Congress finds the following:
      `(1) The rapidly developing array of Internet and other
    interactive computer services available to individual Americans
    represent an extraordinary advance in the availability of
    educational and informational resources to our citizens.
      `(2) These services offer users a great degree of control 
    over the information that they receive, as well as the 
    potential for even greater control in the future as technology
    develops.
      `(3) The Internet and other interactive computer services
    offer a forum for a true diversity of political discourse,
    unique opportunities for cultural development, and myriad
    avenues for intellectual activity.
      `(4) The Internet and other interactive computer services 
    have flourished, to the benefit of all Americans, with a 
    minimum of government regulation.
      `(5) Increasingly Americans are relying on interactive media
    for a variety of political, educational, cultural, and
    entertainment services.
  `(b) POLICY- It is the policy of the United States--
      `(1) to promote the continued development of the Internet and
    other interactive computer services and other interactive media;
      `(2) to preserve the vibrant and competitive free market that
    presently exists for the Internet and other interactive 
    computer services,  unfettered by Federal or State regulation;
      `(3) to encourage the development of technologies which
    maximize user control over what information is received by
    individuals, families, and schools who use the Internet and
    other interactive computer services;
      `(4) to remove disincentives for the development and
    utilization of blocking and filtering technologies that empower
    parents to restrict their children's access to objectionable or
    inappropriate online material; and
      `(5) to ensure vigorous enforcement of Federal criminal laws
    to deter and punish trafficking in obscenity, stalking, and
    harassment by means of computer.
  `(c) PROTECTION FOR `GOOD SAMARITAN' BLOCKING AND SCREENING OF
OFFENSIVE MATERIAL-
      `(1) TREATMENT OF PUBLISHER OR SPEAKER- No provider or user 
    of an interactive computer service shall be treated as the
    publisher or speaker of any information provided by another
    information content provider.
      `(2) CIVIL LIABILITY- No provider or user of an interactive
    computer service shall be held liable on account of--
          `(A) any action voluntarily taken in good faith to
        restrict access to or availability of material that the
        provider or user considers to be obscene, lewd, lascivious,
        filthy, excessively violent, harassing, or otherwise
        objectionable, whether or not such material is
        constitutionally protected; or
          `(B) any action taken to enable or make available to
        information content providers or others the technical means
        to restrict access to material described in paragraph (1).
  `(d) EFFECT ON OTHER LAWS- 
      `(1) NO EFFECT ON CRIMINAL LAW- Nothing in this section shall
    be construed to impair the enforcement of section 223 of this
    Act, chapter 71 (relating to obscenity) or 110 (relating to
    sexual exploitation of children) of title 18, United States
    Code, or any other Federal criminal statute.
      `(2) NO EFFECT ON INTELLECTUAL PROPERTY LAW- Nothing in this
    section shall be construed to limit or expand any law 
    pertaining to intellectual property.
      `(3) STATE LAW- Nothing in this section shall be construed to
    prevent any State from enforcing any State law that is
    consistent with this section. No cause of action may be brought
    and no liability may be imposed under any State or local law
    that is inconsistent with this section.
      `(4) NO EFFECT ON COMMUNICATIONS PRIVACY LAW- Nothing in this
    section shall be construed to limit the application of the
    Electronic Communications Privacy Act of 1986 or any of the
    amendments made by such Act, or any similar State law.
  `(e) DEFINITIONS- As used in this section:
      `(1) INTERNET- The term `Internet' means the international
    computer network of both Federal and non-Federal interoperable
    packet switched data networks.
      `(2) INTERACTIVE COMPUTER SERVICE- The term `interactive
    computer service' means any information service, system, or
    access software provider that provides or enables computer
    access by multiple users to a computer server, including
    specifically a service or system that provides access to the
    Internet and such systems operated or services offered by
    libraries or educational institutions.
      `(3) INFORMATION CONTENT PROVIDER- The term `information
    content provider' means any person or entity that is
    responsible, in whole or in part, for the creation or
    development of information provided through the Internet or any
    other interactive computer service.
      `(4) ACCESS SOFTWARE PROVIDER- The term `access software
    provider' means a provider of software (including client or
    server software), or enabling tools that do any one or more of
    the following:
          `(A) filter, screen, allow, or disallow content;
          `(B) pick, choose, analyze, or digest content; or
          `(C) transmit, receive, display, forward, cache, search,
        subset, organize, reorganize, or translate content.'.
                        SUBTITLE B--VIOLENCE
SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.
  (a) FINDINGS- The Congress makes the following findings:
      (1) Television influences children's perception of the values
    and behavior that are common and acceptable in society.
      (2) Television station operators, cable television system
    operators, and video programmers should follow practices in
    connection with video programming that take into consideration
    that television broadcast and cable programming has established
    a uniquely pervasive presence in the lives of American children.
      (3) The average American child is exposed to 25 hours of
    television each week and some children are exposed to as much 
    as 11 hours of television a day.
      (4) Studies have shown that children exposed to violent video
    programming at a young age have a higher tendency for violent
    and aggressive behavior later in life than children not so
    exposed, and that children exposed to violent video programming
    are prone to assume that acts of violence are acceptable
    behavior.
      (5) Children in the United States are, on average, exposed to
    an estimated 8,000 murders and 100,000 acts of violence on
    television by the time the child completes elementary school.
      (6) Studies indicate that children are affected by the
    pervasiveness and casual treatment of sexual material on
    television, eroding the ability of parents to develop
    responsible attitudes and behavior in their children.
      (7) Parents express grave concern over violent and sexual
    video programming and strongly support technology that would
    give them greater control to block video programming in the 
    home that they consider harmful to their children.
      (8) There is a compelling governmental interest in empowering
    parents to limit the negative influences of video programming
    that is harmful to children.
      (9) Providing parents with timely information about the 
    nature of upcoming video programming and with the technological
    tools that allow them easily to block violent, sexual, or other
    programming that they believe harmful to their children is a
    nonintrusive and narrowly tailored means of achieving that
    compelling governmental interest.
  (b) ESTABLISHMENT OF TELEVISION RATING CODE- 
      (1) AMENDMENT- Section 303 (47 U.S.C. 303) is amended by
    adding at the end the following:
  `(w) Prescribe--
      `(1) on the basis of recommendations from an advisory
    committee established by the Commission in accordance with
    section 551(b)(2) of the Telecommunications Act of 1996,
    guidelines and recommended procedures for the identification 
    and rating of video programming that contains sexual, violent,
    or other indecent material about which parents should be
    informed before it is displayed to children:  [Italic->]
    Provided,  [<-Italic] That nothing in this paragraph shall be
    construed to authorize any rating of video programming on the
    basis of its political or religious content; and
      `(2) with respect to any video programming that has been
    rated, and in consultation with the television industry, rules
    requiring distributors of such video programming to transmit
    such rating to permit parents to block the display of video
    programming that they have determined is inappropriate for 
    their children.'.
      (2) ADVISORY COMMITTEE REQUIREMENTS- In establishing an
    advisory committee for purposes of the amendment made by
    paragraph (1) of this subsection, the Commission shall--
          (A) ensure that such committee is composed of parents,
        television broadcasters, television programming producers,
        cable operators, appropriate public interest groups, and
        other interested individuals from the private sector and is
        fairly balanced in terms of political affiliation, the
        points of view represented, and the functions to be
        performed by the committee;
          (B) provide to the committee such staff and resources as
        may be necessary to permit it to perform its functions
        efficiently and promptly; and
          (C) require the committee to submit a final report of its
        recommendations within one year after the date of the
        appointment of the initial members.
  (c) REQUIREMENT FOR MANUFACTURE OF TELEVISIONS THAT BLOCK
PROGRAMS- Section 303 (47 U.S.C. 303), as amended by subsection 
(a), is further amended by adding at the end the following:
  `(x) Require, in the case of an apparatus designed to receive
television signals that are shipped in interstate commerce or
manufactured in the United States and that have a picture screen 13
inches or greater in size (measured diagonally), that such 
apparatus be equipped with a feature designed to enable viewers to
block display of all programs with a common rating, except as
otherwise permitted by regulations pursuant to section 330(c)(4).'.
  (d) SHIPPING OF TELEVISIONS THAT BLOCK PROGRAMS- 
      (1) REGULATIONS- Section 330 (47 U.S.C. 330) is amended--
          (A) by redesignating subsection (c) as subsection (d); and
          (B) by adding after subsection (b) the following new
        subsection (c):
  `(c)(1) Except as provided in paragraph (2), no person shall ship
in interstate commerce or manufacture in the United States any
apparatus described in section 303(x) of this Act except in
accordance with rules prescribed by the Commission pursuant to the
authority granted by that section.
  `(2) This subsection shall not apply to carriers transporting
apparatus referred to in paragraph (1) without trading in it.
  `(3) The rules prescribed by the Commission under this subsection
shall provide for the oversight by the Commission of the adoption 
of standards by industry for blocking technology. Such rules shall
require that all such apparatus be able to receive the rating
signals which have been transmitted by way of line 21 of the
vertical blanking interval and which conform to the signal and
blocking specifications established by industry under the
supervision of the Commission.
  `(4) As new video technology is developed, the Commission shall
take such action as the Commission determines appropriate to ensure
that blocking service continues to be available to consumers. If 
the Commission determines that an alternative blocking technology
exists that--
      `(A) enables parents to block programming based on 
    identifying programs without ratings,
      `(B) is available to consumers at a cost which is comparable
    to the cost of technology that allows parents to block
    programming based on common ratings, and
      `(C) will allow parents to block a broad range of programs on
    a multichannel system as effectively and as easily as 
    technology that allows parents to block programming based on
    common ratings,
the Commission shall amend the rules prescribed pursuant to section
303(x) to require that the apparatus described in such section be
equipped with either the blocking technology described in such
section or the alternative blocking technology described in this
paragraph.'.
      (2) CONFORMING AMENDMENT- Section 330(d), as redesignated by
    subsection (d)(1)(A), is amended by striking `section 303(s),
    and section 303(u)' and inserting in lieu thereof `and sections
    303(s), 303(u), and 303(x)'.
  (e) APPLICABILITY AND EFFECTIVE DATES- 
      (1) APPLICABILITY OF RATING PROVISION- The amendment made by
    subsection (b) of this section shall take effect 1 year after
    the date of enactment of this Act, but only if the Commission
    determines, in consultation with appropriate public interest
    groups and interested individuals from the private sector, that
    distributors of video programming have not, by such date--
          (A) established voluntary rules for rating video
        programming that contains sexual, violent, or other 
        indecent material about which parents should be informed
        before it is displayed to children, and such rules are
        acceptable to the Commission; and
          (B) agreed voluntarily to broadcast signals that contain
        ratings of such programming.
      (2) EFFECTIVE DATE OF MANUFACTURING PROVISION- In prescribing
    regulations to implement the amendment made by subsection (c),
    the Federal Communications Commission shall, after consultation
    with the television manufacturing industry, specify the
    effective date for the applicability of the requirement to the
    apparatus covered by such amendment, which date shall not be
    less than two years after the date of enactment of this Act.
SEC. 552. TECHNOLOGY FUND.
  It is the policy of the United States to encourage broadcast
television, cable, satellite, syndication, other video programming
distributors, and relevant related industries (in consultation with
appropriate public interest groups and interested individuals from
the private sector) to--
      (1) establish a technology fund to encourage television and
    electronics equipment manufacturers to facilitate the
    development of technology which would empower parents to block
    programming they deem inappropriate for their children and to
    encourage the availability thereof to low income parents;
      (2) report to the viewing public on the status of the
    development of affordable, easy to use blocking technology; and
      (3) establish and promote effective procedures, standards,
    systems, advisories, or other mechanisms for ensuring that 
    users have easy and complete access to the information 
    necessary to effectively utilize blocking technology and to
    encourage the availability thereof to low income parents.
                     SUBTITLE C--JUDICIAL REVIEW
SEC. 561. EXPEDITED REVIEW.
  (a) THREE-JUDGE DISTRICT COURT HEARING- Notwithstanding any other
provision of law, any civil action challenging the
constitutionality, on its face, of this title or any amendment made
by this title, or any provision thereof, shall be heard by a
district court of 3 judges convened pursuant to the provisions of
section 2284 of title 28, United States Code.
  (b) APPELLATE REVIEW- Notwithstanding any other provision of law,
an interlocutory or final judgment, decree, or order of the court 
of 3 judges in an action under subsection (a) holding this title or
an amendment made by this title, or any provision thereof,
unconstitutional shall be reviewable as a matter of right by direct
appeal to the Supreme Court. Any such appeal shall be filed not 
more than 20 days after entry of such judgment, decree, or order.
                   TITLE VI--EFFECT ON OTHER LAWS
SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.
  (a) APPLICABILITY OF AMENDMENTS TO FUTURE CONDUCT- 
      (1) AT&T CONSENT DECREE- Any conduct or activity that was,
    before the date of enactment of this Act, subject to any
    restriction or obligation imposed by the AT&T Consent Decree
    shall, on and after such date, be subject to the restrictions
    and obligations imposed by the Communications Act of 1934 as
    amended by this Act and shall not be subject to the 
    restrictions and the obligations imposed by such Consent Decree.
      (2) GTE CONSENT DECREE- Any conduct or activity that was,
    before the date of enactment of this Act, subject to any
    restriction or obligation imposed by the GTE Consent Decree
    shall, on and after such date, be subject to the restrictions
    and obligations imposed by the Communications Act of 1934 as
    amended by this Act and shall not be subject to the 
    restrictions and the obligations imposed by such Consent Decree.
      (3) MCCAW CONSENT DECREE- Any conduct or activity that was,
    before the date of enactment of this Act, subject to any
    restriction or obligation imposed by the McCaw Consent Decree
    shall, on and after such date, be subject to the restrictions
    and obligations imposed by the Communications Act of 1934 as
    amended by this Act and subsection (d) of this section and 
    shall not be subject to the restrictions and the obligations
    imposed by such Consent Decree.
  (b) ANTITRUST LAWS- 
      (1) SAVINGS CLAUSE- Except as provided in paragraphs (2) and
    (3), nothing in this Act or the amendments made by this Act
    shall be construed to modify, impair, or supersede the
    applicability of any of the antitrust laws.
      (2) REPEAL- Subsection (a) of section 221 (47 U.S.C. 221(a))
    is repealed.
      (3) CLAYTON ACT- Section 7 of the Clayton Act (15 U.S.C. 18)
    is amended in the last paragraph by striking `Federal
    Communications Commission,'.
  (c) FEDERAL, STATE, AND LOCAL LAW- 
      (1) NO IMPLIED EFFECT- This Act and the amendments made by
    this Act shall not be construed to modify, impair, or supersede
    Federal, State, or local law unless expressly so provided in
    such Act or amendments.
      (2) STATE TAX SAVINGS PROVISION- Notwithstanding paragraph
    (1), nothing in this Act or the amendments made by this Act
    shall be construed to modify, impair, or supersede, or 
    authorize the modification, impairment, or supersession of, any
    State or local law pertaining to taxation, except as provided 
    in sections 622 and 653(c) of the Communications Act of 1934 
    and section 602 of this Act.
  (d) COMMERCIAL MOBILE SERVICE JOINT MARKETING- Notwithstanding
section 22.903 of the Commission's regulations (47 C.F.R. 22.903) 
or any other Commission regulation, a Bell operating company or any
other company may, except as provided in sections 271(e)(1) and 272
of the Communications Act of 1934 as amended by this Act as they
relate to wireline service, jointly market and sell commercial
mobile services in conjunction with telephone exchange service,
exchange access, intraLATA telecommunications service, interLATA
telecommunications service, and information services.
  (e) DEFINITIONS- As used in this section:
      (1) AT&T CONSENT DECREE- The term `AT&T Consent Decree' means
    the order entered August 24, 1982, in the antitrust action
    styled United States v. Western Electric, Civil Action No.
    82-0192, in the United States District Court for the District 
    of Columbia, and includes any judgment or order with respect to
    such action entered on or after August 24, 1982.
      (2) GTE CONSENT DECREE- The term `GTE Consent Decree' means
    the order entered December 21, 1984, as restated January 11,
    1985, in the action styled United States v. GTE Corp., Civil
    Action No. 83-1298, in the United States District Court for the
    District of Columbia, and any judgment or order with respect to
    such action entered on or after December 21, 1984.
      (3) MCCAW CONSENT DECREE- The term `McCaw Consent Decree'
    means the proposed consent decree filed on July 15, 1994, in 
    the antitrust action styled United States v. AT&T Corp. and
    McCaw Cellular Communications, Inc., Civil Action No. 94-01555,
    in the United States District Court for the District of
    Columbia. Such term includes any stipulation that the parties
    will abide by the terms of such proposed consent decree until 
    it is entered and any order entering such proposed consent
    decree.
      (4) ANTITRUST LAWS- The term `antitrust laws' has the meaning
    given it in subsection (a) of the first section of the Clayton
    Act (15 U.S.C. 12(a)), except that such term includes the Act 
    of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.), 
    commonly known as the Robinson-Patman Act, and section 5 of the
    Federal Trade Commission Act (15 U.S.C. 45) to the extent that
    such section 5 applies to unfair methods of competition.
SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO
                  DIRECT-TO-HOME SERVICES.
  (a) PREEMPTION- A provider of direct-to-home satellite service
shall be exempt from the collection or remittance, or both, of any
tax or fee imposed by any local taxing jurisdiction on
direct-to-home satellite service.
  (b) DEFINITIONS- For the purposes of this section--
      (1) DIRECT-TO-HOME SATELLITE SERVICE- The term 
    `direct-to-home satellite service' means only programming
    transmitted or broadcast by satellite directly to the
    subscribers' premises without the use of ground receiving or
    distribution equipment, except at the subscribers' premises or
    in the uplink process to the satellite.
      (2) PROVIDER OF DIRECT-TO-HOME SATELLITE SERVICE- For 
    purposes of this section, a `provider of direct-to-home
    satellite service' means a person who transmits, broadcasts,
    sells, or distributes direct-to-home satellite service.
      (3) LOCAL TAXING JURISDICTION- The term `local taxing
    jurisdiction' means any municipality, city, county, township,
    parish, transportation district, or assessment jurisdiction, or
    any other local jurisdiction in the territorial jurisdiction of
    the  United States with the authority to impose a tax or fee,
    but does not include a State.
      (4) STATE- The term `State' means any of the several States,
    the District of Columbia, or any territory or possession of the
    United States.
      (5) TAX OR FEE- The terms `tax' and `fee' mean any local 
    sales tax, local use tax, local intangible tax, local income
    tax, business license tax, utility tax, privilege tax, gross
    receipts tax, excise tax, franchise fees, local
    telecommunications tax, or any other tax, license, or fee that
    is imposed for the privilege of doing business, regulating, or
    raising revenue for a local taxing jurisdiction.
  (c) PRESERVATION OF STATE AUTHORITY- This section shall not be
construed to prevent taxation of a provider of direct-to-home
satellite service by a State or to prevent a local taxing
jurisdiction from receiving revenue derived from a tax or fee
imposed and collected by a State.
                 TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMATION OR
                  SERVICES PROVIDED OVER TOLL-FREE TELEPHONE CALLS.
  (a) PREVENTION OF UNFAIR BILLING PRACTICES- 
      (1) IN GENERAL- Section 228(c) (47 U.S.C. 228(c)) is amended--
          (A) by striking out subparagraph (C) of paragraph (7) and
        inserting in lieu thereof the following:
          `(C) the calling party being charged for information
        conveyed during the call unless--
              `(i) the calling party has a written agreement
            (including an agreement transmitted through electronic
            medium) that meets the requirements of paragraph (8); or
              `(ii) the calling party is charged for the 
            information in accordance with paragraph (9); or';
          (B)(i) by striking `or' at the end of subparagraph (C) of
        such paragraph;
          (ii) by striking the period at the end of subparagraph 
        (D) of such paragraph and inserting a semicolon and `or'; and
          (iii) by adding at the end thereof the following:
          `(E) the calling party being assessed, by virtue of being
        asked to connect or otherwise transfer to a pay-per-call
        service, a charge for the call.'; and
          (C) by adding at the end the following new paragraphs:
      `(8) SUBSCRIPTION AGREEMENTS FOR BILLING FOR INFORMATION
    PROVIDED VIA TOLL-FREE CALLS-
          `(A) IN GENERAL- For purposes of paragraph (7)(C)(i), a
        written subscription does not meet the requirements of this
        paragraph unless the agreement specifies the material terms
        and conditions under which the information is offered and
        includes--
              `(i) the rate at which charges are assessed for the
            information;
              `(ii) the information provider's name;
              `(iii) the information provider's business address;
              `(iv) the information provider's regular business
            telephone number;
              `(v) the information provider's agreement to notify
            the subscriber at least one billing cycle in advance of
            all future changes in the rates charged for the
            information; and
              `(vi) the subscriber's choice of payment method, 
            which may be by direct remit, debit, prepaid account,
            phone bill, or credit or calling card.
          `(B) BILLING ARRANGEMENTS- If a subscriber elects,
        pursuant to subparagraph (A)(vi), to pay by means of a 
        phone bill--
              `(i) the agreement shall clearly explain that the
            subscriber will be assessed for calls made to the
            information service from the subscriber's phone line;
              `(ii) the phone bill shall include, in prominent 
            type, the following disclaimer:
  `Common carriers may not disconnect local or long distance
telephone service for failure to pay disputed charges for
information services.'; and
              `(iii) the phone bill shall clearly list the 800
            number dialed.
          `(C) USE OF PINS TO PREVENT UNAUTHORIZED USE- A written
        agreement does not meet the requirements of this paragraph
        unless it--
              `(i) includes a unique personal identification number
            or other subscriber-specific identifier and requires a
            subscriber to use this number or identifier to obtain
            access to the information provided and includes
            instructions on its use; and
              `(ii) assures that any charges for services accessed
            by use of the subscriber's personal identification
            number or subscriber-specific identifier be assessed to
            subscriber's source of payment elected pursuant to
            subparagraph (A)(vi).
          `(D) EXCEPTIONS- Notwithstanding paragraph (7)(C), a
        written agreement that meets the requirements of this
        paragraph is not required--
              `(i) for calls utilizing telecommunications devices
            for the deaf;
              `(ii) for directory services provided by a common
            carrier or its affiliate or by a local exchange carrier
            or its affiliate; or
              `(iii) for any purchase of goods or of services that
            are not information services.
          `(E) TERMINATION OF SERVICE- On receipt by a common
        carrier of a complaint by any person that an information
        provider is in violation of the provisions of this section,
        a carrier shall--
              `(i) promptly investigate the complaint; and
              `(ii) if the carrier reasonably determines that the
            complaint is valid, it may terminate the provision of
            service to an information provider unless the provider
            supplies evidence of a written agreement that meets the
            requirements of this section.
          `(F) TREATMENT OF REMEDIES- The remedies provided in this
        paragraph are in addition to any other remedies that are
        available under title V of this Act.
      `(9) CHARGES BY CREDIT, PREPAID, DEBIT, CHARGE, OR CALLING
    CARD IN ABSENCE OF AGREEMENT- For purposes of paragraph
    (7)(C)(ii), a calling party is not charged in accordance with
    this paragraph unless the calling party is charged by means of 
    a credit, prepaid, debit, charge, or calling card and the
    information service provider includes in response to each call
    an introductory disclosure message that--
          `(A) clearly states that there is a charge for the call;
          `(B) clearly states the service's total cost per minute
        and any other fees for the service or for any service to
        which the caller may be transferred;
          `(C) explains that the charges must be billed on either a
        credit, prepaid, debit, charge, or calling card;
          `(D) asks the caller for the card number;
          `(E) clearly states that charges for the call begin at 
        the end of the introductory message; and
          `(F) clearly states that the caller can hang up at or
        before the end of the introductory message without 
        incurring any charge whatsoever.
      `(10) BYPASS OF INTRODUCTORY DISCLOSURE MESSAGE- The
    requirements of paragraph (9) shall not apply to calls from
    repeat callers using a bypass mechanism to avoid listening to
    the introductory message:  [Italic->] Provided,  [<-Italic] 
    That information providers shall disable such a bypass 
    mechanism after the institution of any price increase and for a
    period of time determined to be sufficient by the Federal Trade
    Commission to give callers adequate and sufficient notice of a
    price increase.
      `(11) DEFINITION OF CALLING CARD- As used in this subsection,
    the term `calling card' means an identifying number or code
    unique to the individual, that is issued to the individual by a
    common carrier and enables the individual to be charged by 
    means of a phone bill for charges incurred independent of where
    the call originates.'.
      (2) REGULATIONS- The Federal Communications Commission shall
    revise its regulations to comply with the amendment made by
    paragraph (1) not later than 180 days after the date of
    enactment of this Act.
      (3) EFFECTIVE DATE- The amendments made by paragraph (1) 
    shall take effect on the date of enactment of this Act.
  (b) CLARIFICATION OF `PAY-PER-CALL SERVICES'- 
      (1) TELEPHONE DISCLOSURE AND DISPUTE RESOLUTION ACT- Section
    204(1) of the Telephone Disclosure and Dispute Resolution Act
    (15 U.S.C. 5714(1)) is amended to read as follows:
      `(1) The term `pay-per-call services' has the meaning 
    provided in section 228(i) of the Communications Act of 1934,
    except that the Commission by rule may, notwithstanding
    subparagraphs (B) and (C) of section 228(i)(1) of such Act,
    extend such definition to other similar services providing 
    audio information or audio entertainment if the Commission
    determines that such services are susceptible to the unfair and
    deceptive practices that are prohibited by the rules prescribed
    pursuant to section 201(a).'.
      (2) COMMUNICATIONS ACT- Section 228(i)(2) (47 U.S.C.
    228(i)(2)) is amended by striking `or any service the charge 
    for which is tariffed,'.
SEC. 702. PRIVACY OF CUSTOMER INFORMATION.
  Title II is amended by inserting after section 221 (47 U.S.C. 
221) the following new section:
`SEC. 222. PRIVACY OF CUSTOMER INFORMATION.
  `(a) IN GENERAL- Every telecommunications carrier has a duty to
protect the confidentiality of proprietary information of, and
relating to, other telecommunication carriers, equipment
manufacturers, and customers, including telecommunication carriers
reselling telecommunications services provided by a
telecommunications carrier.
  `(b) CONFIDENTIALITY OF CARRIER INFORMATION- A telecommunications
carrier that receives or obtains proprietary information from
another carrier for purposes of providing any telecommunications
service shall use such information only for such purpose, and shall
not use such information for its own marketing efforts.
  `(c) CONFIDENTIALITY OF CUSTOMER PROPRIETARY NETWORK INFORMATION- 
      `(1) PRIVACY REQUIREMENTS FOR TELECOMMUNICATIONS CARRIERS-
    Except as required by law or with the approval of the customer,
    a telecommunications carrier that receives or obtains customer
    proprietary network information by virtue of its provision of a
    telecommunications service shall only use, disclose, or permit
    access to individually identifiable customer proprietary 
    network information in its provision of (A) the
    telecommunications service from which such information is
    derived, or (B) services necessary to, or used in, the 
    provision of such telecommunications service, including the
    publishing of directories.
      `(2) DISCLOSURE ON REQUEST BY CUSTOMERS- A telecommunications
    carrier shall disclose customer proprietary network 
    information, upon affirmative written request by the customer,
    to any person designated by the customer.
      `(3) AGGREGATE CUSTOMER INFORMATION- A telecommunications
    carrier that receives or obtains customer proprietary network
    information by virtue of its provision of a telecommunications
    service may use, disclose, or permit access to aggregate
    customer information other than for the purposes described in
    paragraph (1). A local exchange carrier may use, disclose, or
    permit access to aggregate customer information other than for
    purposes described in paragraph (1) only if it provides such
    aggregate information to other carriers or persons on 
    reasonable and nondiscriminatory terms and conditions upon
    reasonable request therefor.
  `(d) EXCEPTIONS- Nothing in this section prohibits a
telecommunications carrier from using, disclosing, or permitting
access to customer proprietary network information obtained from 
its customers, either directly or indirectly through its agents--
      `(1) to initiate, render, bill, and collect for
    telecommunications services;
      `(2) to protect the rights or property of the carrier, or to
    protect users of those services and other carriers from
    fraudulent, abusive, or unlawful use of, or subscription to,
    such services; or
      `(3) to provide any inbound telemarketing, referral, or
    administrative services to the customer for the duration of the
    call, if such call was initiated by the customer and the
    customer approves of the use of such information to provide 
    such service.
  `(e) SUBSCRIBER LIST INFORMATION- Notwithstanding subsections 
(b), (c), and (d), a telecommunications carrier that provides
telephone exchange service shall provide subscriber list 
information gathered in its capacity as a provider of such service
on a timely and unbundled basis, under nondiscriminatory and
reasonable rates, terms, and conditions, to any person upon request
for the purpose of publishing directories in any format.
  `(f) DEFINITIONS- As used in this section:
      `(1) CUSTOMER PROPRIETARY NETWORK INFORMATION- The term
    `customer proprietary network information' means--
          `(A) information that relates to the quantity, technical
        configuration, type, destination, and amount of use of a
        telecommunications service subscribed to by any customer of
        a telecommunications carrier, and that is made available to
        the carrier by the customer solely by virtue of the
        carrier-customer relationship; and
          `(B) information contained in the bills pertaining to
        telephone exchange service or telephone toll service
        received by a customer of a carrier;
    except that such term does not include subscriber list
    information.
      `(2) AGGREGATE INFORMATION- The term `aggregate customer
    information' means collective data that relates to a group or
    category of services or customers, from which individual
    customer identities and characteristics have been removed.
      `(3) SUBSCRIBER LIST INFORMATION- The term `subscriber list
    information' means any information--
          `(A) identifying the listed names of subscribers of a
        carrier and such subscribers' telephone numbers, addresses,
        or primary advertising classifications (as such
        classifications are assigned at the time of the
        establishment of such service), or any combination of such
        listed names, numbers, addresses, or classifications; and
          `(B) that the carrier or an affiliate has published,
        caused to be published, or accepted for publication in any
        directory format.'.
SEC. 703. POLE ATTACHMENTS.
  Section 224 (47 U.S.C. 224) is amended--
      (1) in subsection (a)(1), by striking the first sentence and
    inserting the following: `The term `utility' means any person
    who is a local exchange carrier or an electric, gas, water,
    steam, or other public utility, and who owns or controls poles,
    ducts, conduits, or rights-of-way used, in whole or in part, 
    for any wire communications.';
      (2) in subsection (a)(4), by inserting after `system' the
    following: `or provider of telecommunications service';
      (3) by inserting after subsection (a)(4) the following:
      `(5) For purposes of this section, the term
    `telecommunications carrier' (as defined in section 3 of this
    Act) does not include any incumbent local exchange carrier as
    defined in section 251(h).';
      (4) by inserting after `conditions' in subsection (c)(1) a
    comma and the following: `or access to poles, ducts, conduits,
    and rights-of-way as provided in subsection (f),';
      (5) in subsection (c)(2)(B), by striking `cable television
    services' and inserting `the services offered via such
    attachments';
      (6) by inserting after subsection (d)(2) the following:
  `(3) This subsection shall apply to the rate for any pole
attachment used by a cable television system solely to provide 
cable service. Until the effective date of the regulations required
under subsection (e), this subsection shall also apply to the rate
for any pole attachment used by a cable system or any
telecommunications carrier (to the extent such carrier is not a
party to a pole attachment agreement) to provide any
telecommunications service.'; and
      (7) by adding at the end thereof the following:
  `(e)(1) The Commission shall, no later than 2 years after the 
date of enactment of the Telecommunications Act of 1996, prescribe
regulations in accordance with this subsection to govern the 
charges for pole attachments used by telecommunications carriers to
provide telecommunications services, when the parties fail to
resolve a dispute over such charges. Such regulations shall ensure
that a utility charges just, reasonable, and nondiscriminatory 
rates for pole attachments.
  `(2) A utility shall apportion the cost of providing space on a
pole, duct, conduit, or right-of-way other than the usable space
among entities so that such apportionment equals two-thirds of the
costs of providing space other than the usable space that would be
allocated to such entity under an equal apportionment of such costs
among all attaching entities.
  `(3) A utility shall apportion the cost of providing usable space
among all entities according to the percentage of usable space
required for each entity.
  `(4) The regulations required under paragraph (1) shall become
effective 5 years after the date of enactment of the
Telecommunications Act of 1996. Any increase in the rates for pole
attachments that result from the adoption of the regulations
required by this subsection shall be phased in equal annual
increments over a period of 5 years beginning on the effective date
of such regulations.
  `(f)(1) A utility shall provide a cable television system or any
telecommunications carrier with nondiscriminatory access to any
pole, duct, conduit, or right-of-way owned or controlled by it.
  `(2) Notwithstanding paragraph (1), a utility providing electric
service may deny a cable television system or any 
telecommunications carrier access to its poles, ducts, conduits, or
rights-of-way, on a non-discriminatory basis where there is
insufficient capacity and for reasons of safety, reliability and
generally applicable engineering purposes.
  `(g) A utility that engages in the provision of 
telecommunications services or cable services shall impute to its
costs of providing such services (and charge any affiliate,
subsidiary, or associate company engaged in the provision of such
services) an equal amount to the pole attachment rate for which 
such company would be liable under this section.
  `(h) Whenever the owner of a pole, duct, conduit, or right-of-way
intends to modify or alter such pole, duct, conduit, or
right-of-way, the owner shall provide written notification of such
action to any entity that has obtained an attachment to such 
conduit or right-of-way so that such entity may have a reasonable
opportunity to add to or modify its existing attachment. Any entity
that adds to or modifies its existing attachment after receiving
such notification shall bear a proportionate share of the costs
incurred by the owner in making such pole, duct, conduit, or
right-of-way accessible.
  `(i) An entity that obtains an attachment to a pole, conduit, or
right-of-way shall not be required to bear any of the costs of
rearranging or replacing its attachment, if such rearrangement or
replacement is required as a result of an additional attachment or
the modification of an existing attachment sought by any other
entity (including the owner of such pole, duct, conduit, or
right-of-way).'.
SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.
  (a) NATIONAL WIRELESS TELECOMMUNICATIONS SITING POLICY- Section
332(c) (47 U.S.C. 332(c)) is amended by adding at the end the
following new paragraph:
      `(7) PRESERVATION OF LOCAL ZONING AUTHORITY- 
          `(A) GENERAL AUTHORITY- Except as provided in this
        paragraph, nothing in this Act shall limit or affect the
        authority of a State or local government or instrumentality
        thereof over decisions regarding the placement,
        construction, and modification of personal wireless service
        facilities.
          `(B) LIMITATIONS- 
              `(i) The regulation of the placement, construction,
            and modification of personal wireless service 
            facilities by any State or local government or
            instrumentality thereof--
  `(I) shall not unreasonably discriminate among providers of
functionally equivalent services; and
  `(II) shall not prohibit or have the effect of prohibiting the
provision of personal wireless services.
              `(ii) A State or local government or instrumentality
            thereof shall act on any request for authorization to
            place, construct, or modify personal wireless service
            facilities within a reasonable period of time after the
            request is duly filed with such government or
            instrumentality, taking into account the nature and
            scope of such request.
              `(iii) Any decision by a State or local government or
            instrumentality thereof to deny a request to place,
            construct, or modify personal wireless service
            facilities shall be in writing and supported by
            substantial evidence contained in a written record.
              `(iv) No State or local government or instrumentality
            thereof may regulate the placement, construction, and
            modification of personal wireless service facilities on
            the basis of the environmental effects of radio
            frequency emissions to the extent that such facilities
            comply with the Commission's regulations concerning 
            such emissions.
              `(v) Any person adversely affected by any final 
            action or failure to act by a State or local government
            or any instrumentality thereof that is inconsistent 
            with this subparagraph may, within 30 days after such
            action or failure to act, commence an action in any
            court of competent jurisdiction. The court shall hear
            and decide such action on an expedited basis. Any 
            person adversely affected by an act or failure to act 
            by a State or local government or any instrumentality
            thereof that is inconsistent with clause (iv) may
            petition the Commission for relief.
          `(C) DEFINITIONS- For purposes of this paragraph--
              `(i) the term `personal wireless services' means
            commercial mobile services, unlicensed wireless
            services, and common carrier wireless exchange access
            services;
              `(ii) the term `personal wireless service facilities'
            means facilities for the provision of personal wireless
            services; and
              `(iii) the term `unlicensed wireless service' means
            the offering of telecommunications services using duly
            authorized devices which do not require individual
            licenses, but does not mean the provision of
            direct-to-home satellite services (as defined in 
            section 303(v)).'.
  (b) RADIO FREQUENCY EMISSIONS- Within 180 days after the 
enactment of this Act, the Commission shall complete action in ET
Docket 93-62 to prescribe and make effective rules regarding the
environmental effects of radio frequency emissions.
  (c) AVAILABILITY OF PROPERTY- Within 180 days of the enactment of
this Act, the President or his designee shall prescribe procedures
by which Federal departments and agencies may make available on a
fair, reasonable, and nondiscriminatory basis, property,
rights-of-way, and easements under their control for the placement
of new telecommunications services that are dependent, in whole or
in part, upon the utilization of Federal spectrum rights for the
transmission or reception of such services. These procedures may
establish a presumption that requests for the use of property,
rights-of-way, and easements by duly authorized providers should be
granted absent unavoidable direct conflict with the department or
agency's mission, or the current or planned use of the property,
rights-of-way, and easements in question. Reasonable fees may be
charged to providers of such telecommunications services for use of
property, rights-of-way, and easements. The Commission shall 
provide technical support to States to encourage them to make
property, rights-of-way, and easements under their jurisdiction
available for such purposes.
SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CARRIERS.
  Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the end
the following new paragraph:
      `(8) MOBILE SERVICES ACCESS- A person engaged in the 
    provision of commercial mobile services, insofar as such person
    is so engaged, shall not be required to provide equal access to
    common carriers for the provision of telephone toll services. 
    If the Commission determines that subscribers to such services
    are denied access to the provider of telephone toll services of
    the subscribers' choice, and that such denial is contrary to 
    the public interest, convenience, and necessity, then the
    Commission shall prescribe regulations to afford subscribers
    unblocked access to the provider of telephone toll services of
    the subscribers' choice through the use of a carrier
    identification code assigned to such provider or other
    mechanism. The requirements for unblocking shall not apply to
    mobile satellite services unless the Commission finds it to be
    in the public interest to apply such requirements to such
    services.'.
SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.
  (a) IN GENERAL- The Commission and each State commission with
regulatory jurisdiction over telecommunications services shall
encourage the deployment on a reasonable and timely basis of
advanced telecommunications capability to all Americans (including,
in particular, elementary and secondary schools and classrooms) by
utilizing, in a manner consistent with the public interest,
convenience, and necessity, price cap regulation, regulatory
forbearance, measures that promote competition in the local
telecommunications market, or other regulating methods that remove
barriers to infrastructure investment.
  (b) INQUIRY- The Commission shall, within 30 months after the 
date of enactment of this Act, and regularly thereafter, initiate a
notice of inquiry concerning the availability of advanced
telecommunications capability to all Americans (including, in
particular, elementary and secondary schools and classrooms) and
shall complete the inquiry within 180 days after its initiation. In
the inquiry, the Commission shall determine whether advanced
telecommunications capability is being deployed to all Americans in
a reasonable and timely fashion. If the Commission's determination
is negative, it shall take immediate action to accelerate 
deployment of such capability by removing barriers to 
infrastructure investment and by promoting competition in the
telecommunications market.
  (c) DEFINITIONS- For purposes of this subsection:
      (1) ADVANCED TELECOMMUNICATIONS CAPABILITY- The term 
    `advanced telecommunications capability' is defined, without
    regard to any transmission media or technology, as high-speed,
    switched, broadband telecommunications capability that enables
    users to originate and receive high-quality voice, data,
    graphics, and video telecommunications using any technology.
      (2) ELEMENTARY AND SECONDARY SCHOOLS- The term `elementary 
    and secondary schools' means elementary and secondary schools,
    as defined in paragraphs (14) and (25), respectively, of 
    section 14101 of the Elementary and Secondary Education Act of
    1965 (20 U.S.C. 8801).
SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.
  (a) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Section 309(j)(8)
(47 U.S.C. 309(j)(8)) is amended by adding at the end the following
new subparagraph:
          `(C) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS- Any
        deposits the Commission may require for the qualification 
        of any person to bid in a system of competitive bidding
        pursuant to this subsection shall be deposited in an
        interest bearing account at a financial institution
        designated for purposes of this subsection by the 
        Commission (after consultation with the Secretary of the
        Treasury). Within 45 days following the conclusion of the
        competitive bidding--
              `(i) the deposits of successful bidders shall be paid
            to the Treasury;
              `(ii) the deposits of unsuccessful bidders shall be
            returned to such bidders; and
              `(iii) the interest accrued to the account shall be
            transferred to the Telecommunications Development Fund
            established pursuant to section 714 of this Act.'.
  (b) ESTABLISHMENT AND OPERATION OF FUND- Title VII is amended by
inserting after section 713 (as added by section 305) the following
new section:
`SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.
  `(a) PURPOSE OF SECTION- It is the purpose of this section--
      `(1) to promote access to capital for small businesses in
    order to enhance competition in the telecommunications industry;
      `(2) to stimulate new technology development, and promote
    employment and training; and
      `(3) to support universal service and promote delivery of
    telecommunications services to underserved rural and urban areas.
  `(b) ESTABLISHMENT OF FUND- There is hereby established a body
corporate to be known as the Telecommunications Development Fund,
which shall have succession until dissolved. The Fund shall 
maintain its principal office in the District of Columbia and shall
be deemed, for purposes of venue and jurisdiction in civil actions,
to be a resident and citizen thereof.
  `(c) BOARD OF DIRECTORS- 
      `(1) COMPOSITION OF BOARD; CHAIRMAN- The Fund shall have a
    Board of Directors which shall consist of 7 persons appointed 
    by the Chairman of the Commission. Four of such directors shall
    be representative of the private sector and three of such
    directors shall be representative of the Commission, the Small
    Business Administration, and the Department of the Treasury,
    respectively. The Chairman of the Commission shall appoint one
    of the representatives of the private sector to serve as
    chairman of the Fund within 30 days after the date of enactment
    of this section, in order to facilitate rapid creation and
    implementation of the Fund. The directors shall include members
    with experience in a number of the following areas: finance,
    investment banking, government banking, communications law and
    administrative practice, and public policy.
      `(2) TERMS OF APPOINTED AND ELECTED MEMBERS- The directors
    shall be eligible to serve for terms of 5 years, except of the
    initial members, as designated at the time of their appointment--
          `(A) 1 shall be eligible to service for a term of 1 year;
          `(B) 1 shall be eligible to service for a term of 2 years;
          `(C) 1 shall be eligible to service for a term of 3 years;
          `(D) 2 shall be eligible to service for a term of 4 
        years; and
          `(E) 2 shall be eligible to service for a term of 5 years
        (1 of whom shall be the Chairman).
    Directors may continue to serve until their successors have 
    been appointed and have qualified.
      `(3) MEETINGS AND FUNCTIONS OF THE BOARD- The Board of
    Directors shall meet at the call of its Chairman, but at least
    quarterly. The Board shall determine the general policies which
    shall govern the operations of the Fund. The Chairman of the
    Board shall, with the approval of the Board, select, appoint,
    and compensate qualified persons to fill the offices as may be
    provided for in the bylaws, with such functions, powers, and
    duties as may be prescribed by the bylaws or by the Board of
    Directors, and such persons shall be the officers of the Fund
    and shall discharge all such functions, powers, and duties.
  `(d) ACCOUNTS OF THE FUND- The Fund shall maintain its accounts 
at a financial institution designated for purposes of this section
by the Chairman of the Board (after consultation with the 
Commission and the Secretary of the Treasury). The accounts of the
Fund shall consist of--
      `(1) interest transferred pursuant to section 309(j)(8)(C) of
    this Act;
      `(2) such sums as may be appropriated to the Commission for
    advances to the Fund;
      `(3) any contributions or donations to the Fund that are
    accepted by the Fund; and
      `(4) any repayment of, or other payment made with respect to,
    loans, equity, or other extensions of credit made from the Fund.
  `(e) USE OF THE FUND- All moneys deposited into the accounts of
the Fund shall be used solely for--
      `(1) the making of loans, investments, or other extensions of
    credits to eligible small businesses in accordance with
    subsection (f);
      `(2) the provision of financial advice to eligible small
    businesses;
      `(3) expenses for the administration and management of the
    Fund (including salaries, expenses, and the rental or purchase
    of office space for the fund);
      `(4) preparation of research, studies, or financial analyses;
    and
      `(5) other services consistent with the purposes of this
    section.
  `(f) LENDING AND CREDIT OPERATIONS- Loans or other extensions of
credit from the Fund shall be made available in accordance with the
requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661
et seq.) and any other applicable law to an eligible small business
on the basis of--
      `(1) the analysis of the business plan of the eligible small
    business;
      `(2) the reasonable availability of collateral to secure the
    loan or credit extension;
      `(3) the extent to which the loan or credit extension 
    promotes the purposes of this section; and
      `(4) other lending policies as defined by the Board.
  `(g) RETURN OF ADVANCES- Any advances appropriated pursuant to
subsection (d)(2) shall be disbursed upon such terms and conditions
(including conditions relating to the time or times of repayment) 
as are specified in any appropriations Act providing such advances.
  `(h) GENERAL CORPORATE POWERS- The Fund shall have power--
      `(1) to sue and be sued, complain and defend, in its 
    corporate name and through its own counsel;
      `(2) to adopt, alter, and use the corporate seal, which shall
    be judicially noticed;
      `(3) to adopt, amend, and repeal by its Board of Directors,
    bylaws, rules, and regulations as may be necessary for the
    conduct of its business;
      `(4) to conduct its business, carry on its operations, and
    have officers and exercise the power granted by this section in
    any State without regard to any qualification or similar 
    statute in any State;
      `(5) to lease, purchase, or otherwise acquire, own, hold,
    improve, use, or otherwise deal in and with any property, real,
    personal, or mixed, or any interest therein, wherever situated,
    for the purposes of the Fund;
      `(6) to accept gifts or donations of services, or of 
    property, real, personal, or mixed, tangible or intangible, in
    aid of any of the purposes of the Fund;
      `(7) to sell, convey, mortgage, pledge, lease, exchange, and
    otherwise dispose of its property and assets;
      `(8) to appoint such officers, attorneys, employees, and
    agents as may be required, to determine their qualifications, 
    to define their duties, to fix their salaries, require bonds 
    for them, and fix the penalty thereof; and
      `(9) to enter into contracts, to execute instruments, to 
    incur liabilities, to make loans and equity investment, and to
    do all things as are necessary or incidental to the proper
    management of its affairs and the proper conduct of its business.
  `(i) ACCOUNTING, AUDITING, AND REPORTING- The accounts of the 
Fund shall be audited annually. Such audits shall be conducted in
accordance with generally accepted auditing standards by 
independent certified public accountants. A report of each such
audit shall be furnished to the Secretary of the Treasury and the
Commission. The representatives of the Secretary and the Commission
shall have access to all books, accounts, financial records,
reports, files, and all other papers, things, or property belonging
to or in use by the Fund and necessary to facilitate the audit.
  `(j) REPORT ON AUDITS BY TREASURY- A report of each such audit 
for a fiscal year shall be made by the Secretary of the Treasury to
the President and to the Congress not later than 6 months following
the close of such fiscal year. The report shall set forth the scope
of the audit and shall include a statement of assets and
liabilities, capital and surplus or deficit; a statement of surplus
or deficit analysis; a statement of income and expense; a statement
of sources and application of funds; and such comments and
information as may be deemed necessary to keep the President and 
the Congress informed of the operations and financial condition of
the Fund, together with such recommendations with respect thereto 
as the Secretary may deem advisable.
  `(k) DEFINITIONS- As used in this section:
      `(1) ELIGIBLE SMALL BUSINESS- The term `eligible small
    business' means business enterprises engaged in the
    telecommunications industry that have $50,000,000 or less in
    annual revenues, on average over the past 3 years prior to
    submitting the application under this section.
      `(2) FUND- The term `Fund' means the Telecommunications
    Development Fund established pursuant to this section.
      `(3) TELECOMMUNICATIONS INDUSTRY- The term 
    `telecommunications industry' means communications businesses
    using regulated or unregulated facilities or services and
    includes broadcasting, telecommunications, cable, computer, 
    data transmission, software, programming, advanced messaging,
    and electronics businesses.'.
SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.
  (a) FINDINGS; PURPOSE- 
      (1) FINDINGS- The Congress finds as follows:
          (A) CORPORATION- There has been established in the
        District of Columbia a private, nonprofit corporation known
        as the National Education Technology Funding Corporation
        which is not an agency or independent establishment of the
        Federal Government.
          (B) BOARD OF DIRECTORS- The Corporation is governed by a
        Board of Directors, as prescribed in the Corporation's
        articles of incorporation, consisting of 15 members, of
        which--
              (i) five members are representative of public 
            agencies representative of schools and public libraries;
              (ii) five members are representative of State
            government, including persons knowledgeable about State
            finance, technology and education; and
              (iii) five members are representative of the private
            sector, with expertise in network technology, finance
            and management.
          (C) CORPORATE PURPOSES- The purposes of the Corporation,
        as set forth in its articles of incorporation, are--
              (i) to leverage resources and stimulate private
            investment in education technology infrastructure;
              (ii) to designate State education technology agencies
            to receive loans, grants or other forms of assistance
            from the Corporation;
              (iii) to establish criteria for encouraging States to--
  (I) create, maintain, utilize and upgrade interactive high
capacity networks capable of providing audio, visual and data
communications for elementary schools, secondary schools and public
libraries;
  (II) distribute resources to assure equitable aid to all
elementary schools and secondary schools in the State and achieve
universal access to network technology; and
  (III) upgrade the delivery and development of learning through
innovative technology-based instructional tools and applications;
              (iv) to provide loans, grants and other forms of
            assistance to State education technology agencies, with
            due regard for providing a fair balance among types of
            school districts and public libraries assisted and the
            disparate needs of such districts and libraries;
              (v) to leverage resources to provide maximum aid to
            elementary schools, secondary schools and public
            libraries; and
              (vi) to encourage the development of education
            telecommunications and information technologies through
            public-private ventures, by serving as a clearinghouse
            for information on new education technologies, and by
            providing technical assistance, including assistance to
            States, if needed, to establish State education
            technology agencies.
      (2) PURPOSE- The purpose of this section is to recognize the
    Corporation as a nonprofit corporation operating under the laws
    of the District of Columbia, and to provide authority for
    Federal departments and agencies to provide assistance to the
    Corporation.
  (b) DEFINITIONS- For the purpose of this section--
      (1) the term `Corporation' means the National Education
    Technology Funding Corporation described in subsection (a)(1)(A);
      (2) the terms `elementary school' and `secondary school' have
    the same meanings given such terms in section 14101 of the
    Elementary and Secondary Education Act of 1965; and
      (3) the term `public library' has the same meaning given such
    term in section 3 of the Library Services and Construction Act.
  (c) ASSISTANCE FOR EDUCATION TECHNOLOGY PURPOSES- 
      (1) RECEIPT BY CORPORATION- Notwithstanding any other
    provision of law, in order to carry out the corporate purposes
    described in subsection (a)(1)(C), the Corporation shall be
    eligible to receive discretionary grants, contracts, gifts,
    contributions, or technical assistance from any Federal
    department or agency, to the extent otherwise permitted by law.
      (2) AGREEMENT- In order to receive any assistance described 
    in paragraph (1) the Corporation shall enter into an agreement
    with the Federal department or agency providing such 
    assistance, under which the Corporation agrees--
          (A) to use such assistance to provide funding and
        technical assistance only for activities which the Board of
        Directors of the Corporation determines are consistent with
        the corporate purposes described in subsection (a)(1)(C);
          (B) to review the activities of State education 
        technology agencies and other entities receiving assistance
        from the Corporation to assure that the corporate purposes
        described in subsection (a)(1)(C) are carried out;
          (C) that no part of the assets of the Corporation shall
        accrue to the benefit of any member of the Board of
        Directors of the Corporation, any officer or employee of 
        the Corporation, or any other individual, except as salary
        or reasonable compensation for services;
          (D) that the Board of Directors of the Corporation will
        adopt policies and procedures to prevent conflicts of
        interest;
          (E) to maintain a Board of Directors of the Corporation
        consistent with subsection (a)(1)(B);
          (F) that the Corporation, and any entity receiving the
        assistance from the Corporation, are subject to the
        appropriate oversight procedures of the Congress; and
          (G) to comply with--
              (i) the audit requirements described in subsection
            (d); and
              (ii) the reporting and testimony requirements
            described in subsection (e).
      (3) CONSTRUCTION- Nothing in this section shall be construed
    to establish the Corporation as an agency or independent
    establishment of the Federal Government, or to establish the
    members of the Board of Directors of the Corporation, or the
    officers and employees of the Corporation, as officers or
    employees of the Federal Government.
  (d) AUDITS- 
      (1) AUDITS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS- 
          (A) IN GENERAL- The Corporation's financial statements
        shall be audited annually in accordance with generally
        accepted auditing standards by independent certified public
        accountants who are certified by a regulatory authority of 
        a State or other political subdivision of the United 
        States. The audits shall be conducted at the place or 
        places where the accounts of the Corporation are normally
        kept. All books, accounts, financial records, reports,
        files, and all other papers, things, or property belonging
        to or in use by the Corporation and necessary to facilitate
        the audit shall be made available to the person or persons
        conducting the audits, and full facilities for verifying
        transactions with the balances or securities held by
        depositories, fiscal agents, and custodians shall be
        afforded to such person or persons.
          (B) REPORTING REQUIREMENTS- The report of each annual
        audit described in subparagraph (A) shall be included in 
        the annual report required by subsection (e)(1).
      (2) RECORDKEEPING REQUIREMENTS; AUDIT AND EXAMINATION OF
    BOOKS-
          (A) RECORDKEEPING REQUIREMENTS- The Corporation shall
        ensure that each recipient of assistance from the
        Corporation keeps--
              (i) separate accounts with respect to such assistance;
              (ii) such records as may be reasonably necessary to
            fully disclose--
  (I) the amount and the disposition by such recipient of the
proceeds of such assistance;
  (II) the total cost of the project or undertaking in connection
with which such assistance is given or used; and
  (III) the amount and nature of that portion of the cost of the
project or undertaking supplied by other sources; and
              (iii) such other records as will facilitate an
            effective audit.
          (B) AUDIT AND EXAMINATION OF BOOKS- The Corporation shall
        ensure that the Corporation, or any of the Corporation's
        duly authorized representatives, shall have access for the
        purpose of audit and examination to any books, documents,
        papers, and records of any recipient of assistance from the
        Corporation that are pertinent to such assistance.
        Representatives of the Comptroller General shall also have
        such access for such purpose.
  (e) ANNUAL REPORT; TESTIMONY TO THE CONGRESS- 
      (1) ANNUAL REPORT- Not later than April 30 of each year, the
    Corporation shall publish an annual report for the preceding
    fiscal year and submit that report to the President and the
    Congress. The report shall include a comprehensive and detailed
    evaluation of the Corporation's operations, activities,
    financial condition, and accomplishments under this section and
    may include such recommendations as the Corporation deems
    appropriate.
      (2) TESTIMONY BEFORE CONGRESS- The members of the Board of
    Directors, and officers, of the Corporation shall be available
    to testify before appropriate committees of the Congress with
    respect to the report described in paragraph (1), the report of
    any audit made by the Comptroller General pursuant to this
    section, or any other matter which any such committee may
    determine appropriate.
SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS SERVICES
                  FOR MEDICAL PURPOSES.
  The Secretary of Commerce, in consultation with the Secretary of
Health and Human Services and other appropriate departments and
agencies, shall submit a report to the Committee on Commerce of the
House of Representatives and the Committee on Commerce, Science, 
and Transportation of the Senate concerning the activities of the
Joint Working Group on Telemedicine, together with any findings
reached in the studies and demonstrations on telemedicine funded by
the Public Health Service or other Federal agencies. The report
shall examine questions related to patient safety, the efficacy and
quality of the services provided, and other legal, medical, and
economic issues related to the utilization of advanced
telecommunications services for medical purposes. The report shall
be submitted to the respective committees by January 31, 1997.
SEC. 710. AUTHORIZATION OF APPROPRIATIONS.
  (a) IN GENERAL- In addition to any other sums authorized by law,
there are authorized to be appropriated to the Federal
Communications Commission such sums as may be necessary to carry 
out this Act and the amendments made by this Act.
  (b) EFFECT ON FEES- For the purposes of section 9(b)(2) (47 
U.S.C. 159(b)(2)), additional amounts appropriated pursuant to
subsection (a) shall be construed to be changes in the amounts
appropriated for the performance of activities described in section
9(a) of the Communications Act of 1934.
  (c) FUNDING AVAILABILITY- Section 309(j)(8)(B) (47 U.S.C.
309(j)(8)(B)) is amended by adding at the end the following new
sentence: `Such offsetting collections are authorized to remain
available until expended.'.
Speaker of the House of Representatives.
Vice President of the United States and  
President of the Senate.

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