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. 251. Interconnection.
``Sec. 252. Procedures for negotiation, arbitration, and approval of agreements.
``Sec. 253. Removal of barriers to entry.
``Sec. 254. Universal service.
``Sec. 255. Access by persons with disabilities.
``Sec. 256. Coordination for interconnectivity.
``Sec. 257. Market entry barriers proceeding.
``Sec. 258. Illegal changes in subscriber carrier selections.
``Sec. 259. Infrastructure sharing.
``Sec. 260. Provision of telemessaging service.
``Sec. 261. Effect on other requirements.''
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
``Sec. 271. Bell operating company entry into interLATA services.
``Sec. 272. Separate affiliate; safeguards.
``Sec. 273. Manufacturing by Bell operating companies.
``Sec. 274. Electronic publishing by Bell operating companies.
``Sec. 275. Alarm monitoring services.
``Sec. 276. Provision of payphone service.''
TITLE II--BROADCAST SERVICES
Sec. 201. Broadcast spectrum flexibility.
``Sec. 336. 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. 365. 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. 651. Regulatory treatment of video programming services.
``Sec. 652. Prohibition on buy outs.
``Sec. 653. Establishment of open video systems.''
Sec. 303. Preemption of franchising authority regulation of telecommunications services.
Sec. 304. Competitive availability of navigation devices.
``Sec. 629. Competitive availability of navigation devices.''
Sec. 305. Video programming accessibility.
``Sec. 713. Video programming accessibility.''
TITLE IV--REGULATORY REFORM
Sec. 401. Regulatory forbearance.
``Sec. 10. Competition in provision of telecommunications service.''
Sec. 402. Biennial review of regulations; regulatory relief.
``Sec. 11. Regulatory reform.''
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. 640. Scrambling of cable channels for nonsubscribers.''
Sec. 505. Scrambling of sexually explicit adult video service programming.
``Sec. 641. 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.
``Sec. 230. Protection for private blocking and screening of offensive material.''
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. 222. 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. 714. 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: Provided, That--
``(1) section 11 of this Act shall not prohibit the ownership of an interest in the
business of one or more exempt telecommunications companies by a registered holding
company (regardless of activities engaged in or where facilities owned or operated by
such exempt telecommunications companies are located), and such ownership by a
registered holding company shall be deemed consistent with the operation of an
integrated public utility system;
``(2) the ownership of an interest in the business of one or more exempt
telecommunications companies by a registered holding company (regardless of activities
engaged in or where facilities owned or operated by such exempt telecommunications
companies are located) shall be considered as reasonably incidental, or economically
necessary or appropriate, to the operations of an integrated public utility system;
``(3) the Commission shall have no jurisdiction under this Act over, and there
shall be no restriction or approval required under this Act with respect to (A) the issue or
sale of a security by a registered holding company for purposes of financing the
acquisition of an exempt telecommunications company, or (B) the guarantee of a security
of an exempt telecommunications company by a registered holding company; and
``(4) except for costs that should be fairly and equitably allocated among
companies that are associate companies of a registered holding company, the
Commission shall have no jurisdiction under this Act over the sales, service, and
construction contracts between an exempt telecommunications company and a registered
holding company, its affiliates and associate companies.
``(f) Reporting Obligations Concerning Investments and Activities of
Registered Public-Utility Holding Company Systems.--
``(1) Obligations to report information.--Any registered holding company or
subsidiary thereof that acquires or holds the securities, or an interest in the business, of an
exempt telecommunications company shall file with the Commission such information as
the Commission, by rule, may prescribe concerning--
``(A) investments and activities by the registered holding company, or any
subsidiary thereof, with respect to exempt telecommunications companies, and
``(B) any activities of an exempt telecommunications company within the
holding company system,
that are reasonably likely to have a material impact on the financial or operational
condition of the holding company system.
``(2) Authority to require additional information.--If, based on reports
provided to the Commission pursuant to paragraph (1) of this subsection or other
available information, the Commission reasonably concludes that it has concerns
regarding the financial or operational condition of any registered holding company or any
subsidiary thereof (including an exempt telecommunications company), the Commission
may require such registered holding company to make additional reports and provide
additional information.
``(3) Authority to limit disclosure of information.--Notwithstanding any
other provision of law, the Commission shall not be compelled to disclose any
information required to be reported under this subsection. Nothing in this subsection shall
authorize the Commission to withhold the information from Congress, or prevent the
Commission from complying with a request for information from any other Federal or
State department or agency requesting the information for purposes within the scope of
its jurisdiction. For purposes of section 552 of title 5, United States Code, this subsection
shall be considered a statute described in subsection (b)(3)(B) of such section 552.
``(g) Assumption of Liabilities.--Any public utility company that is an associate
company, or an affiliate, of a registered holding company and that is subject to the jurisdiction of
a State commission with respect to its retail electric or gas rates shall not issue any security for
the purpose of financing the acquisition, ownership, or operation of an exempt
telecommunications company. Any public utility company that is an associate company, or an
affiliate, of a registered holding company and that is subject to the jurisdiction of a State
commission with respect to its retail electric or gas rates shall not assume any obligation or
liability as guarantor, endorser, surety, or otherwise by the public utility company in respect of
any security of an exempt telecommunications company.
``(h) Pledging or Mortgaging of Assets.--Any public utility company that is an
associate company, or affiliate, of a registered holding company and that is subject to the
jurisdiction of a State commission with respect to its retail electric or gas rates shall not pledge,
mortgage, or otherwise use as collateral any assets of the public utility company or assets of any
subsidiary company thereof for the benefit of an exempt telecommunications company.
``(i) Protection Against Abusive Affiliate Transactions.--A public utility
company may enter into a contract to purchase services or products described in subsection (a)(1)
from an exempt telecommunications company that is an affiliate or associate company of the
public utility company only if--
``(1) every State commission having jurisdiction over the retail rates of such
public utility company approves such contract; or
``(2) such public utility company is not subject to State commission retail rate
regulation and the purchased services or products--
``(A) would not be resold to any affiliate or associate company; or
``(B) would be resold to an affiliate or associate company and every State
commission having jurisdiction over the retail rates of such affiliate or associate
company makes the determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case in which the State or the State
commission concerned publishes a notice that the State or State commission waives its authority
under this subsection.
``(j) Nonpreemption of Rate Authority.--Nothing in this Act shall preclude the
Federal Energy Regulatory Commission or a State commission from exercising its jurisdiction
under otherwise applicable law to determine whether a public utility company may recover in
rates the costs of products or services purchased from or sold to an associate company or affiliate
that is an exempt telecommunications company, regardless of whether such costs are incurred
through the direct or indirect purchase or sale of products or services from such associate
company or affiliate.
``(k) Reciprocal Arrangements Prohibited.--Reciprocal arrangements among
companies that are not affiliates or associate companies of each other that are entered into in
order to avoid the provisions of this section are prohibited.
``(l) Books and Records.--(1) Upon written order of a State commission, a State
commission may examine the books, accounts, memoranda, contracts, and records of--
``(A) a public utility company subject to its regulatory authority under State law;
``(B) any exempt telecommunications company selling products or services to
such public utility company or to an associate company of such public utility company;
and
``(C) any associate company or affiliate of an exempt telecommunications
company which sells products or services to a public utility company referred to in
subparagraph (A),
wherever located, if such examination is required for the effective discharge of the State
commission's regulatory responsibilities affecting the provision of electric or gas service in
connection with the activities of such exempt telecommunications company.
``(2) Where a State commission issues an order pursuant to paragraph (1), the State
commission shall not publicly disclose trade secrets or sensitive commercial information.
``(3) Any United States district court located in the State in which the State commission
referred to in paragraph (1) is located shall have jurisdiction to enforce compliance with this
subsection.
``(4) Nothing in this section shall--
``(A) preempt applicable State law concerning the provision of records and other
information; or
``(B) in any way limit rights to obtain records and other information under Federal
law, contracts, or otherwise.
``(m) Independent Audit Authority for State Commissions.--
``(1) State may order audit.--Any State commission with jurisdiction over a
public utility company that--------
``(A) is an associate company of a registered holding company; and
``(B) transacts business, directly or indirectly, with a subsidiary company,
an affiliate or an associate company that is an exempt telecommunications
company,
may order an independent audit to be performed, no more frequently than on an annual
basis, of all matters deemed relevant by the selected auditor that reasonably relate to retail
rates: Provided, That such matters relate, directly or indirectly, to transactions or transfers
between the public utility company subject to its jurisdiction and such exempt
telecommunications company.
``(2) Selection of firm to conduct audit.--(A) If a State commission orders an
audit in accordance with paragraph (1), the public utility company and the State
commission shall jointly select, within 60 days, a firm to perform the audit. The firm
selected to perform the audit shall possess demonstrated qualifications relating to---
``(i) competency, including adequate technical training and professional
proficiency in each discipline necessary to carry out the audit; and
``(ii) independence and objectivity, including that the firm be free from
personal or external impairments to independence, and should assume an
independent position with the State commission and auditee, making certain that
the audit is based upon an impartial consideration of all pertinent facts and
responsible opinions.
``(B) The public utility company and the exempt telecommunications company
shall cooperate fully with all reasonable requests necessary to perform the audit and the
public utility company shall bear all costs of having the audit performed.
``(3) Availability of auditor's report.--The auditor's report shall be provided
to the State commission not later than 6 months after the selection of the auditor, and
provided to the public utility company not later than 60 days thereafter.
``(n) Applicability of Telecommunications Regulation.--Nothing in this section
shall affect the authority of the Federal Communications Commission under the
Communications Act of 1934, or the authority of State commissions under State laws concerning
the provision of telecommunications services, to regulate the activities of an exempt
telecommunications company.''.
SEC. 104. NONDISCRIMINATION PRINCIPLE.
Section 1 (47 U.S.C. 151) is amended by inserting after ``to all the people of the United
States'' the following: ``, without discrimination on the basis of race, color, religion, national
origin, or sex,''.
Subtitle B--Special Provisions Concerning Bell Operating
Companies
SEC. 151. BELL OPERATING COMPANY PROVISIONS.
(a) Establishment of Part III of Title II.--Title II is amended by adding at the end of
part II (as added by section 101) the following new part:
``PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING
COMPANIES
``SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.
``(a) General Limitation.--Neither a Bell operating company, nor any affiliate of a Bell
operating company, may provide interLATA services except as provided in this section.
``(b) InterLATA Services to Which This Section Applies.--
``(1) In-region services.--A Bell operating company, or any affiliate of that Bell
operating company, may provide interLATA services originating in any of its in-region
States (as defined in subsection (i)) if the Commission approves the application of such
company for such State under subsection (d)(3).
``(2) Out-of-region services.--A Bell operating company, or any affiliate of
that Bell operating company, may provide interLATA services originating outside its in-region States after the date of enactment of the Telecommunications Act of 1996, subject
to subsection (j).
``(3) Incidental interlata services.--A Bell operating company, or any
affiliate of a Bell operating company, may provide incidental interLATA services (as
defined in subsection (g)) originating in any State after the date of enactment of the
Telecommunications Act of 1996.
``(4) Termination.--Nothing in this section prohibits a Bell operating company
or any of its affiliates from providing termination for interLATA services, subject to
subsection (j).
``(c) Requirements for Providing Certain In-Region InterLATA Services.--
``(1) Agreement or statement.--A Bell operating company meets the
requirements of this paragraph if it meets the requirements of subparagraph (A) or
subparagraph (B) of this paragraph for each State for which the authorization is sought.
``(A) Presence of a facilities-based competitor.--A Bell operating
company meets the requirements of this subparagraph if it has entered into one or
more binding agreements that have been approved under section 252 specifying
the terms and conditions under which the Bell operating company is providing
access and interconnection to its network facilities for the network facilities of one
or more unaffiliated competing providers of telephone exchange service (as
defined in section 3(47)(A), but excluding exchange access) to residential and
business subscribers. For the purpose of this subparagraph, such telephone
exchange service may be offered by such competing providers either exclusively
over their own telephone exchange service facilities or predominantly over their
own telephone exchange service facilities in combination with the resale of the
telecommunications services of another carrier. For the purpose of this
subparagraph, services provided pursuant to subpart K of part 22 of the
Commission's regulations (47 C.F.R. 22.901 et seq.) shall not be considered to be
telephone exchange services.
``(B) Failure to request access.--A Bell operating company meets the
requirements of this subparagraph if, after 10 months after the date of enactment
of the Telecommunications Act of 1996, no such provider has requested the
access and interconnection described in subparagraph (A) before the date which is
3 months before the date the company makes its application under subsection
(d)(1), and a statement of the terms and conditions that the company generally
offers to provide such access and interconnection has been approved or permitted
to take effect by the State commission under section 252(f). For purposes of this
subparagraph, a Bell operating company shall be considered not to have received
any request for access and interconnection if the State commission of such State
certifies that the only provider or providers making such a request have (i) failed
to negotiate in good faith as required by section 252, or (ii) violated the terms of
an agreement approved under section 252 by the provider's failure to comply,
within a reasonable period of time, with the implementation schedule contained in
such agreement.
``(2) Specific interconnection requirements.--
``(A) Agreement required.--A Bell operating company meets the
requirements of this paragraph if, within the State for which the authorization is
sought--
``(i)(I) such company is providing access and interconnection
pursuant to one or more agreements described in paragraph (1)(A), or
``(II) such company is generally offering access and
interconnection pursuant to a statement described in paragraph (1)(B), and
``(ii) such access and interconnection meets the requirements of
subparagraph (B) of this paragraph.
``(B) Competitive checklist.--Access or interconnection provided or
generally offered by a Bell operating company to other telecommunications
carriers meets the requirements of this subparagraph if such access and
interconnection includes each of the following:
``(i) Interconnection in accordance with the requirements of
sections 251(c)(2) and 252(d)(1).
``(ii) Nondiscriminatory access to network elements in accordance
with the requirements of sections 251(c)(3) and 252(d)(1).
``(iii) Nondiscriminatory access to the poles, ducts, conduits, and
rights-of-way owned or controlled by the Bell operating company at just
and reasonable rates in accordance with the requirements of section 224.
``(iv) Local loop transmission from the central office to the
customer's premises, unbundled from local switching or other services.
``(v) Local transport from the trunk side of a wireline local
exchange carrier switch unbundled from switching or other services.
``(vi) Local switching unbundled from transport, local loop
transmission, or other services.
``(vii) Nondiscriminatory access to--
``(I) 911 and E911 services;
``(II) directory assistance services to allow the other
carrier's customers to obtain telephone numbers; and
``(III) operator call completion services.
``(viii) White pages directory listings for customers of the other
carrier's telephone exchange service.
``(ix) Until the date by which telecommunications numbering
administration guidelines, plan, or rules are established, nondiscriminatory
access to telephone numbers for assignment to the other carrier's telephone
exchange service customers. After that date, compliance with such
guidelines, plan, or rules.
``(x) Nondiscriminatory access to databases and associated
signaling necessary for call routing and completion.
``(xi) Until the date by which the Commission issues regulations
pursuant to section 251 to require number portability, interim
telecommunications number portability through remote call forwarding,
direct inward dialing trunks, or other comparable arrangements, with as
little impairment of functioning, quality, reliability, and convenience as
possible. After that date, full compliance with such regulations.
``(xii) Nondiscriminatory access to such services or information as
are necessary to allow the requesting carrier to implement local dialing
parity in accordance with the requirements of section 251(b)(3).
``(xiii) Reciprocal compensation arrangements in accordance with
the requirements of section 252(d)(2).
``(xiv) Telecommunications services are available for resale in
accordance with the requirements of sections 251(c)(4) and 252(d)(3).
``(d) Administrative Provisions.--
``(1) Application to commission.--On and after the date of enactment of the
Telecommunications Act of 1996, a Bell operating company or its affiliate may apply to
the Commission for authorization to provide interLATA services originating in any in-region State. The application shall identify each State for which the authorization is
sought.
``(2) Consultation.--
``(A) Consultation with the attorney general.--The Commission
shall notify the Attorney General promptly of any application under paragraph (1).
Before making any determination under this subsection, the Commission shall
consult with the Attorney General, and if the Attorney General submits any
comments in writing, such comments shall be included in the record of the
Commission's decision. In consulting with and submitting comments to the
Commission under this paragraph, the Attorney General shall provide to the
Commission an evaluation of the application using any standard the Attorney
General considers appropriate. The Commission shall give substantial weight to
the Attorney General's evaluation, but such evaluation shall not have any
preclusive effect on any Commission decision under paragraph (3).
``(B) Consultation with state commissions.--Before making any
determination under this subsection, the Commission shall consult with the State
commission of any State that is the subject of the application in order to verify the
compliance of the Bell operating company with the requirements of subsection
(c).
``(3) Determination.--Not later than 90 days after receiving an application under
paragraph (1), the Commission shall issue a written determination approving or denying
the authorization requested in the application for each State. The Commission shall not
approve the authorization requested in an application submitted under paragraph (1)
unless it finds that--
``(A) the petitioning Bell operating company has met the requirements of
subsection (c)(1) and--
``(i) with respect to access and interconnection provided pursuant
to subsection (c)(1)(A), has fully implemented the competitive checklist in
subsection (c)(2)(B); or
``(ii) with respect to access and interconnection generally offered
pursuant to a statement under subsection (c)(1)(B), such statement offers
all of the items included in the competitive checklist in subsection
(c)(2)(B);
``(B) the requested authorization will be carried out in accordance with the
requirements of section 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,