PRIVACY Forum Archive Document
|
Joint Explanatory Statement of the Committee of Conference Section 1 - Short Title and Section 2 - Table of Contents Senate bill Section 1 provides that the bill may be cited as the "Telecommunications Competition and Deregulation Act of 1995." Section 2 contains a table of contents for the Senate bill. House amendment Section 1 designates the short title as the "Communications Act of 1995." Section 2 contains a table of contents for the House amendment. Conference agreement Section 1 designates the title of the bill as the "Telecommunications Act of 1996." Section 2 contains a table of contents for the conference agreement. Section 3 - Definitions Senate bill Section 8(a) includes definitions of the Modification of the Final Judgment (MFJ), the GTE Consent Decree, and an "integrated telecommunications service provider." An "integrated telecommunications service provider" means a person engaged in the provision of multiple services, such as voice, data, image, graphics, and video services, which make common use of all or part of the same transmission facilities, switches, signaling, or control devices. Section 8(b) adds several definitions to section 3 of the Communications Act of 1934 (47 U.S.C. 153) ("the Communications Act") including definitions for "local exchange carrier," "telecommunications," "telecommunications service," "telecommunications carrier," "telecommunications number portability," "information service," "rural telephone company," and "service area." New subsection (kk) defines "local exchange carrier" to mean a provider of telephone exchange service or exchange access service. "Telephone exchange service" is already defined in section 3 of the Communications Act. "Telecommunications" is defined in new subsection (ll) to mean the transmission, between or among points specified by the user, of information of the user's choosing including voice, data, image, graphics, and video, without change in the form or content of the information, as sent and received, with or without benefit of any closed transmission medium. The term "telecommunications service" defined in new subsection (mm) of section 3 of the Communications Act means the offering of telecommunications for a fee directly to the public or to such classes of users as to be effectively available to the public, regardless of the facilities used to transmit the telecommunications service. This definition is intended to include commercial mobile service ("CMS"), competitive access services, and alternative local telecommunications services to the extent they are offered to the public or to such classes of users as to be effectively available to the public. Subsection (nn) defines "telecommunications carrier" to mean any provider of telecommunications service, except that the term does not include aggregators of telecommunications services as defined in section 226 of the Communications Act. The definition amends the Communications Act to explicitly provide that a "telecommunications carrier" shall be treated as a common carrier for purposes of the Communications Act, but only to the extent that it is engaged in providing telecommunications services. New subsection (oo) defines "telecommunications number portability" to mean the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another. Number portability allows consumers remaining at the same location to retain their existing telephone numbers when switching from one telecommunications carrier to another. New subsection (pp) defines "information service" similar to the Federal Communications Commission's ("the Commission") definition of "enhanced services." The Senate intends that the Commission would have the continued flexibility to modify its definition and rules pertaining to enhanced services as technology changes. Subsection (rr) adds a definition of "rural telephone company" that includes companies that (i) do not serve areas containing any part of an incorporated place of 10,000 or more inhabitants, or any incorporated or unincorporated territory in an urbanized area, or (ii) have fewer than 100,000 access lines in a State. New subsection (ss) adds to the Communications Act a definition of "service area." "Service area" means a geographic area established by the Commission and the States for the purpose of determining universal service obligations and support mechanisms. The service area of a rural telephone company means such company's study area until the Commission and States, based on a recommendation of a Federal-State Joint Board, establish a different definition. House amendment Subsection (a) of section 501 adds new definitions, including for "information service," "telecommunications," "telecommunications service," "telecommunications equipment," "local exchange carrier," "affiliate," "customer premises equipment," "electronic publishing," "exchange area," and "rural telephone company." "Information service" and "telecommunications" are defined based on the definition used in the Modification of Final Judgment. The definition of "telecommunications" refers to transmission "by means of an electromagnetic transmission medium." The term "local exchange carrier" does not include a person insofar as such person is engaged in the provision of CMS under section 332(c) of the Communications Act, except to the extent that the Commission finds that such service as provided by such person in a State is a replacement for a substantial portion of the wireless telephone exchange service within such State. The term "telecommunications service" is defined as those services and facilities offered on a "common carrier" basis, recognizing the distinction between common carrier offerings that are provided to the public or to such classes of users as to be effectively available to a substantial portion of the public, and private services. This section defines the term "rural telephone company" to mean a local exchange carrier (LEC) to the extent that such carrier serves an unincorporated area of less than 10,000 residents, or any territory defined by the Bureau of the Census as a rural area; or if such carrier has fewer than 50,000 access lines; or if such carrier provides telephone exchange service to a local study area with fewer than 100,000 access lines; or if such carrier has less than 15 percent of the access lines in communities of more than 50,000 residents. The definition of a "Bell Operating Company" does not include an entity that owns a former Bell Operating Company's wireless operations that are no longer affiliated with a Bell Operating Company's wireline exchange facilities. Conference agreement Section 3(a) of the conference agreement both amends and adds definitions to section 3 of the Communications Act. The Senate recedes to the House with respect to the definitions of "cable system," "customer premises equipment," "dialing parity," "interLATA service," "LATA," "rural telephone company," and "telecommunications equipment," as well as on the House amendment to the existing definition of "telephone exchange service." The Senate recedes to the House with amendments regarding the definitions of "Bell Operating Company," "exchange access," "information service," and "local exchange carrier." The Senate definition of "Bell Operating Company" was included; however, the conference agreement included the language in the House amendment clarifying that the term the "successor and assign" is limited to those providing wireline telephone exchange service so that Airtouch Communications, a former affiliate of Pacific Telesis that does not provide wireline telephone exchange service, or any other similarly situated former affiliate of a Bell Operating Company ("BOC"), is not included in that definition. The Senate definition of "local exchange carrier" was included to ensure that the Commission could, if future circumstances warrant, include CMS providers which provide telephone exchange service or exchange access in the definition of "local exchange carrier." The House recedes to the Senate with respect to the definitions of "affiliate" and "cable service." The House recedes to the Senate with amendments with respect to the definitions of "number portability," "telecommunications," "telecommunications carrier," and "telecommunications service." The conference agreement includes two new definitions to clarify certain provisions in the Senate bill and the House amendment. The term "AT&T Consent Decree" was substituted for "Modification of Final Judgment" in order to characterize more accurately the intent of the Senate bill and House amendment with respect to the supersession issues addressed in title VI. The term "network element" was included to describe the facilities, such as local loops, equipment, such as switching, and the features, functions, and capabilities that a local exchange carrier must provide for certain purposes under other sections of the conference agreement. The House recedes to the Senate with an amendment with respect to new subsection 3(b) of the conference agreement, which provides that, except where otherwise provided, the terms used in the conference agreement have the same meaning as those terms have in the Communications Act. The Senate recedes to the House amendment with respect to new subsection 3(c) of the conference agreement, which amends section 3 of the Communications Act to reorder the definitions in that section alphabetically and to make other stylistic changes. TITLE I - TELECOMMUNICATIONS SERVICES SUBTITLE A - TELECOMMUNICATIONS SERVICES Section 101 - Interconnection Senate bill The Senate bill creates new sections of the Communications Act to create competitive markets. House amendment The House amendment creates new sections of the Communications Act to create competitive markets. Conference agreement Section 101 of the conference agreement establishes a new "Part II" of title II of the Communications Act. Part II contains new sections 251-261 of the Communications Act to create competitive communications markets. New Section 251 - Interconnection Senate bill New subsection 251(a) imposes a duty on local exchange carriers possessing market power in the provision of telephone exchange service or exchange access service in a particular local area to negotiate in good faith and to provide interconnection with other telecommunications carriers that have requested interconnection for the purpose of providing telephone exchange service or exchange access service. The obligations and procedures prescribed in this section do not apply to interconnection arrangements between local exchange carriers and telecommunications carriers under section 201 of the Communications Act for the purpose of providing interexchange service, and nothing in this section is intended to affect the Commission's access charge rules. Local exchange carriers with market power are required to provide interconnection at reasonable and nondiscriminatory rates. The Commission will determine which local exchange carriers have market power for purposes of this section. In determining market power, the relevant market shall include all providers of telephone exchange service or exchange access service in a local service area, regardless of the technology used to provide such service. The obligation to negotiate interconnection shall apply to a local exchange carrier or a class of local exchange carriers that are determined by the Commission to have market power in providing exchange services. The references to a "class" of carriers are intended to relieve the Commission of the need to make a separate market power determination for each individual carrier. These references are not intended to require the local exchange carriers to engage in negotiations as a class, although subsection 251(a)(2) provides that multilateral negotiations are permitted. However, a local exchange carrier that chooses to participate in multilateral negotia- tions will be subject to an individual obligation to negotiate in good faith and will remain subject to the time limitations contained in this and other provisions of section 251. New section 251 provides two alternative methods for reaching interconnection agreements. New subsection 251(b) provides a list of minimum standards relating to types of interconnection the local exchange carrier must agree to provide, if sought by the telecommunications carrier requesting interconnection. The minimum standards include unbundled access to the network functions and services of the local exchange carrier's network, and unbundled access to the local exchange carrier's telecommunications facilities and information, including databases and signaling, that are necessary for transmission and routing and the interoperability of both carriers' networks. The negotiation process established by this section is intended to resolve questions of economic reasonableness with respect to the interconnection requirements. That is, either the parties resolve the issue or the State will impose conditions for interconnection consistent with section 251 and the Commission's rules. The minimum standards also require interconnection to the local exchange carrier's network that is at least equal in type, quality, and price to the interconnection the carrier provides to any other party, including itself or affiliated companies. At a minimum, the Senate intends that any technically feasible point would be any point at which the local exchange carrier provides access to any other party, including itself or any affiliated entry. Access to poles, ducts, conduits, and rights-of-way owned or controlled by the local exchange carrier is also a minimum standard. Number portability and local dialing parity are included in the minimum standards of subsection 251(b). If requested, a local exchange carrier must take any action under its control to provide interim or final number portability as soon as it is technically feasible. Section 307 of the bill adds new section 261 of the Communications Act which establishes a neutral telecommunications numbering administration and defines interim and final number portability. The Commission will determine when final number portability is technically feasible. A similar requirement applies to local dialing parity. The minimum standards also cover resale or sharing of the local exchange carrier's unbundled telecommunications services and network functions. The carrier is not permitted to attach unreasonable conditions to the resale or sharing of those services or functions. Subsection 251(b) provides certain circumstances where it would not be unreasonable for a State to limit the resale of services included within the definition of universal service. Additional minimum standards relate to reciprocal compensation arrangements, including in-kind exchange of traffic or traffic balance measures, reasonable notice of changes in the information necessary for transmission and routing of services over the carrier's network, and schedules of itemized charges and conditions. Subsection 251(i) requires the Commission to promulgate rules to implement section 251 within 6 months after enactment. If a State fails to carry out its responsibilities under section 251 in accordance with the rules promulgated by the Commission, the Senate intends that the Commission assume the responsibilities of the State in the applicable proceeding or matter. Subsection 251(i) also requires the Commission or a State to waive or modify the requirements of the minimum standards of subsection 251(b) in the case of a rural telephone company, and allows the Commission or a State to waive or modify those requirements in the case of a local exchange carrier with fewer than two percent of the nation's subscriber lines installed in the aggregate nationwide. In order to waive or modify the requirements of subsection 251(b) for such companies or carriers, the Commission or a State must determine that the application of such requirements would result in unfair competition, impose a significant adverse economic impact on users of telecommunications services, be technically infeasible, or otherwise not be in the public interest. The Senate intends that the Commission or a State shall, consistent with the protection of consumers and allowing for competition, use this authority to provide a level playing field, particularly when a company or carrier to which this subsection applies faces competition from a telecommunications carrier that is a large global or nationwide entity that has financial or technological resources that are significantly greater than the resources of the company or carrier. New subsection 251(j) provides that nothing in section 251 precludes a State from imposing requirements on telecommunications carriers with respect to intrastate services that the State determines are necessary to further competition in the provision of telephone exchange service or exchange access service, so long as any such requirements are not inconsistent with the Commission's rules to implement section 251. New subsection 251(k) provides that nothing in section 251 is intended to change or modify the Commission's rules at 47 CFR 69 et seq. regarding the charges that an interexchange carrier pays to local exchange carriers for access to the local exchange carrier's network. The Senate also does not intend that section 251 should affect regulations implemented under section 201 with respect to interconnection between interexchange carriers and local exchange carriers. Section 307 of the bill adds a new section 261 to the Communications Act. New section 261 requires local exchange carriers to provide for number portability and also requires the neutral administration of a nationwide telephone numbering system. Subsection 261(a) requires that, as of the date of enactment, interconnection agreements reached under section 251 must, if requested, provide for interim number portability. Interim number portability may require that calls to or from the subscriber be routed through the local exchange carrier's switch. Some method of call forwarding or similar arrangement could be used to satisfy this requirement. The method of providing interim number portability and the amount of compensation, if any, for providing such service is subject to the negotiated interconnection agreement, pursuant to section 251. Subsection 261(b) provides that final number portability shall be made available, upon request, when the Commission determines that final telecommunications portability is technically feasible. Subsection 261(d) States that the cost of such number portability shall be borne by all providers on a competitively neutral basis. Subsection 261(c) of new section 261 requires that all providers of telephone exchange service or exchange access service comply with the guidelines, rules, or plans, of the entity or entities responsible for administering a nationwide neutral number system. This provision is not intended to affect the Commission's ongoing proceeding on numbering administration. Subsection 261(c)(2) requires that all telecommunications carriers which provide local exchange or exchange access service in the same telephone service area be assigned the same numbering plan area code. House amendment Section 241 of section 101 of the House amendment restates the obligation contained in section 201(a) of the Communications Act on all common carriers to interconnect with the facilities and equipment of other providers of telecommunications services and information services. Section 242(a)(1) sets out the specific requirements of openness and accessibility that apply to LECs as competitors enter the local market and seek access to, and interconnection with, the incumbent's network facilities. Under section 242(a)(2), LECs have the duty to offer unbundled services, elements, features, functions, and capabilities whenever technically feasible. Section 242(a)(3) imposes the duty to offer resale at wholesale rates, which are defined as retail, less the avoided costs. Section 242(a)(4) sets out the duty to provide number portability, to the extent technically feasible. Section 242(a)(5) sets out the duty to provide dialing parity. Section 242(a)(6) sets out the duty to afford access to the poles, ducts, conduits, and rights-of-way of the incumbent carrier, as provided under the pole attachment provisions of the Communications Act. Section 242(a)(7) places the responsibility on local telephone companies not to install network features, functions, and capabilities that violate the requirement of network functionality and accessibility. Section 242(a)(8) places a duty on both parties to negotiate in good faith on all requirements relating to interconnection agreements. Section 242(b)(1) describes the specific terms and conditions for interconnection, compensation, and equal access, which are integral to a competing provider seeking to offer local telephone services over its own facilities. Under section 242(b)(2), any interconnection agreement entered into must provide for mutual and reciprocal recovery of costs, and may include a range of compensation schemes, such as an in-kind exchange of traffic without cash payment (known as bill-and-keep arrangements). Under section 242(b)(3), the LEC has a responsibility to offer reasonable and nondiscriminatory access on an unbundled basis "that is equal in type and quality" to that which it affords itself or any other person. Section 242(b)(4) directs the Commission to establish regulations requiring actual collocation, or physical collocation, of equipment necessary for interconnection at the premises of a LEC, except that virtual collocation is permitted where the LEC demonstrates that actual collocation is not practical for technical reasons or because of space limitations. This section also directs the Commission to establish regulations requiring full compensation to the LEC for costs of providing services related to equal access, interconnection, number portability, and unbundling and requires a carrier, to the extent it provides a telecommunications service or an information service over its own network, to impute to itself the charge for access and interconnection that it charges other persons for providing such services. Subsection 242(c) mandates the manner in which number portability and dialing parity must be provided. This section does not require intraLATA toll dialing parity until a BOC is authorized to offer long distance service. Section 242(d)(1) prohibits a provider from joint marketing of local and interLATA toll service until the BOC in that State is authorized to provide long distance service pursuant to section 245. Section 242(d)(2) grandfathers joint marketing arrangements in place before the date of enactment. Section 242(e) grants to the Commission the authority to waive or modify, in whole or in part, the requirements of section 242 for any carrier that has, in the aggregate nationwide, fewer than 500,000 access lines installed, to the extent that the Commission determines the effect of the requirements would be economically burdensome, or technologically infeasible. Section 242(f) gives State commissions the authority to waive section 242 requirements with respect to rural telephone companies, and subsection 242(g) sets out the time and manner for compliance if the State determines that the exemption should not apply. Conference agreement The conference agreement adopts a new model for interconnection that incorporates provisions from both the Senate bill and House amendment in a new section 251 of the Communications Act. New section 251(a) imposes a general duty to interconnect directly or indirectly between all telecommunications carriers and the duty not to install network features and functions that do not comply with the guidelines and standards established under new sections 255 and 256 of the Communications Act. New section 251(b) imposes several duties on all local exchange carriers, including the "new entrants" into the local exchange market. These include the duties: (1) not to prohibit resale of their service; (2) to provide number portability; (3) to provide dialing parity; (4) to afford access to poles, ducts, conduits, and rights-of-way consistent with the pole attachment provisions in section 224 of the Communications Act; and (5) to establish reciprocal compensation arrangements for the transport and termination of traffic. The conferees note that the duties imposed under section new 251(b) make sense only in the context of a specific request from another telecommunications carriers or any other person who actually seeks to connect with or provide services using the LEC's network. New section 251(c) imposes several additional obligations on incumbent LECs. These include the duties: (1) to negotiate in good faith, subject to the provisions of section 252, binding agreements to provide all of the obligations imposed in new sections 251(b) and 251(c); (2) to provide interconnection at any technically feasible point of the same type and quality it provides to itself, on just, reasonable, and nondiscriminatory terms and conditions; (3) to provide access to network elements on an unbundled basis; (4) to offer resale of its telecommunications services at wholesale rates; (5) to provide reasonable public notice of changes to its network; and (6) to provide physical collocation, or virtual collocation if physical collocation is not practical. New section 251(d) requires the Commission to adopt regulations to implement new section 251 within 6 months, and states that nothing precludes the enforcement of State regulations that are consistent with the requirements of new section 251. New section 251(e) clarifies the Commission's authority for numbering administration. The costs for numbering administration and number portability shall be borne by all providers on a competitively neutral basis. New section 251(f)(1) provides for the exemption of rural telephone companies from the requirements of new subsection (c) until a bona fide request is received that the State commission determines is not unduly economically burdensome, is technically feasible, and is consistent with the universal service provisions of new section 254, except the specific public interest determinations thereunder. The State commission receiving notice of a bona fide request must rule on it within 120 days and, if no exemption is granted, shall establish a schedule for compliance with the request. The exemption is not available where an incumbent cable operator makes a request to an incumbent telephone company providing video programming in the same service area, except where rural telephone companies offer video programming directly to subscribers on the date of enactment. New section 251(f)(2) allows a local exchange carrier with less than 2% of the subscribed access lines nationwide to petition for a suspension or modification of the requirements under new sections 251(b) and 251(c) for the telephone exchange service facilities specified in the petition. The State commission shall grant the petition to the extent that it is necessary to avoid significant adverse impacts on consumers, imposing an undue economic burden or a technically infeasible requirement on the incumbent, and provided that the modification or suspension is in the public interest. The approach of both the Senate bill and the House amendment assumed that Bell Operating Companies ("BOCs") would be required to continue to provide equal access and nondiscrimination to interexchange carriers and information service providers under those parts of the AT&T Consent Decree that would have remained in effect under either approach. Because the new approach completely eliminates the prospective effect of the AT&T Consent Decree, some provision is necessary to keep these requirements in place. By the same token, although not specifically addressed in either the Senate bill or the House amendment, some provision is also needed to ensure that the GTE Operating Companies that provide local exchange services continue to provide equal access and nondiscrimination to interexchange carriers and information service providers. Accordingly, the conference agreement includes a new section 251(g). This section provides that, on and after the date of enactment, each local exchange carrier, to the extent that it provides wireline services, shall have a statutory duty to provide equal access and nondiscrimination to interexchange carriers and information service providers. In the interim, between the date of enactment and the date the Commission promulgates new regulations under this section, the substance of this new statutory duty shall be the equal access and nondiscrimination restrictions and obligations, including receipt of compensation, that applied to the local exchange carrier immediately prior to the date of enactment, regardless of the source. When the Commission promulgates its new regulations, the conferees expect that the Commission will explicitly identify those parts of the interim restrictions and obligations that it is superseding so that there is no confusion as to what restrictions and obligations remain in effect. These interim restrictions and obligations shall be enforceable in the same manner as Commission regulations. Even though the substance of the interim restrictions and obligations on the BOCs and GTE Operating Companies will be taken from the respective consent decrees, these restrictions and obligations shall not be enforceable under either consent decree because the provisions of section 601(a) of the bill eliminate the prospective effect of both consent decrees. The use of the provisions of the respective consent decrees to provide, on an interim basis, the substance of the new statutory duty in no way revives the consent decrees. In particular, the use of the provisions of the GTE consent decree relating to equal access and nondiscrimination on this interim basis should not be construed in any way as recreating or continuing the GTE Consent Decree's prohibition on GTE's or the GTE Operating Companies' entry into the interexchange market. The old consent decree obligations no longer exist with respect to post-enactment conduct, and the new obligations flow only from the statute. These new statutory obligations shall be enforceable only through the means provided under law for the enforcement of Commission regulations. Nothing in this section should be construed as providing any authority for the enforcement of these statutory obligations under either of the consent decrees from which their substance will be taken. Nothing in this section should be construed as requiring any parties to renegotiate any agreements currently in existence unless the new Commission regulations under this section require such renegotiation. New subsection 251(h) provides the definition of "incumbent local telephone carrier." New subsection 251(i) makes clear the conferees' intent that the provisions of new section 251 are in addition to, and in no way limit or affect, the Commission's existing authority regarding interconnection under section 201 of the Communications Act. New Section 252 - Procedures for Negotiation, Arbitration, and Approval of Agreements Senate bill Section 251(c) makes clear that a local exchange carrier may meet its section 251 interconnection obligations by negotiating and entering into a binding agreement that does not reflect the minimum standards listed in section 251(b). Each such negotiated interconnection agreement must include a schedule of itemized charges for each service, facility, or function included in the agreement, and must be submitted to a State under section 251(e). Section 251(d) provides procedures under which any party negotiating an interconnection agreement may ask the State to participate in the negotiations and to arbitrate any differences arising in the negotiations. A State may be asked to arbitrate at any point in the negotiations. In addition to the possibility of arbitration by the State, section 251(d) provides a more formal remedy under which any party may petition the State to intervene in the negotiations. If issues remain unresolved more than 135 days after the date the local exchange carrier received the request to negotiate, any party to the negotiations may petition the State to intervene for the purpose of resolving any issues that remain open in the negotiation. Requests to the State to intervene must be made during the 25 day period that begins 135 days after the local exchange carrier received the negotiation request. The State is required to resolve any open issues and conduct its review of the agreement under section 251(e) not later than 10 months after the date the local exchange carrier received the request to negotiate. In resolving any open issues the solution imposed by a State must be consistent with the Commission's rules to implement this section, the minimum standards required under section 251(b) and the provisions of section 251(d)(6) with respect to any charges imposed. Section 251(e) requires that any interconnection agreement under section 251 must be submitted to the State for approval. The State must approve or reject the agreement and make written findings as to any deficiencies in the agreement. An agreement successfully negotiated under subsection (c) by the parties without regard to the minimum standards set forth in section 251(b) may only be rejected if the State finds the agreement discriminates against a telecommunications carrier that is not a party to the agreement. The State may reject interconnection agreements negotiated under subsection (d) if the State finds the agreement does not meet the minimum standards set forth in subsection 251(b), or if the State finds that implementation of the agreement is not in the public interest. Section 251(f) requires a State to make a copy of each agreement approved by the State under section 251(e) available for public inspection and copying within 10 days after the agreement is approved. Section 251(g) requires a local exchange carrier to make available any service, facility, or function provided under an interconnection agreement to which that local exchange carrier is a party to any other telecommunications carrier that requests such service, facility, or function on the same terms and conditions as are provided in that agreement. Section 251(i) provides that if a State fails to carry out its responsibilities under section 251 in accordance with the rules promulgated by the Commission, the Commission shall assume the responsibilities of the State in the applicable proceeding or matter. House amendment Section 244 of the House amendment requires, within eighteen months, an exchange carrier to file with the State commission in that State in which it is offering service, and with the Commission for interstate services, a statement of terms and conditions confirming that it is in compliance with the section 242 requirements. Section 244(b)(1) provides for State commission review of an exchange carrier's statement and permits a State to impose its own intrastate service standards. Paragraph (2) requires the Commission to conduct a similar review. Under section 244(c), both reviews must be completed within 60 days of the submission of statements to the respective regulatory authorities, or simply be allowed to take effect, as commonly occurs at present with most tariffs. Section 244(c)(2) clarifies that the authority to review the statements does not terminate once they take effect. Section 244(d) allows an exchange carrier to file an agreement as a statement of services under section 244(a). It also permits exchange carriers to enter into subsequent agreements on different terms and conditions, but with two caveats. First, the subsequent agreement must undergo the same review process, and second, it may not be discriminatory with respect to other agreements it has entered into. Finally, subsection (e) sunsets the requirement of filing statements of terms and conditions once the local exchange market is deemed competitive. Conference agreement In new section 252(a), the House recedes to the Senate with an amendment to provide that any party may ask the State to participate during a voluntary negotiation period in the mediation of agreements. Agreements arrived at voluntarily do not need to meet the requirements of new section 251(b) and (c). The House recedes to the Senate on new section 252(b), with an amendment to clarify the role of a State commission in arbitrating and resolving agreements at the request of any of the parties. New section 252(c) requires a State commission to ensure that any resolution of unresolved issues in a negotiation meets the requirements of new section 251 and any regulations to implement that section. To the extent that a State establishes the rates for specific provisions of an agreement, it must do so according to new section 252(d). In addition, a State must provide a schedule for implementation of the terms of the agreement. New section 252(d) combines the pricing standards in the Senate bill and the House amendment. Charges for interconnection under new section 251(c)(2) and for network elements under new section 251(c)(3) are to be determined based on cost and may include a reasonable profit. Charges for transport and termination of traffic pursuant to new section 251(b)(5) are to be based on reciprocal compensation. The wholesale rate for resold telecommunications services under new section 251(c)(4) is to be determined by the State commission on the basis of the retail rate charged to subscribers of such telecommunications services, excluding costs that will be avoided by the incumbent carrier. The House recedes to the Senate on new section 252(e). Agreements arrived at through voluntary negotiation or compulsory arbitration must be approved by the State commission under new section 252(e), which provides a specific timetable for State action, provides Commission authority to act if a State does not, and preserves State authority to enforce State law requirements in agreements approved under this section. The Senate recedes to the House with an amendment to new section 252(f), which permits a BOC to file a statement of the terms and conditions under which it generally offers interconnection and access to network elements. Any such statement must be approved by the State commission. New section 252(g) was included by the conferees to permit a State commission, to the extent practical, to consolidate certain proceedings required under the Communications Act to promote administrative efficiency. New section 252(h) requires that all agreements or statements approved by a State commission be available from such commission for public inspection and copying. New section 252(i) requires a local exchange carrier to make available on the same terms and conditions to any telecommunications carrier that requests it any interconnection, service, or network element that the local exchange carrier provides to any other party under an approved agreement or statement. New section 252(j) states that the term "incumbent local exchange carrier" has the same meaning as that term has in new section 251(h). New Section 253 - Removal of Barriers to Entry Senate bill Section 201(a) adds a new section 254 to the Communications Act and is intended to remove all barriers to entry in the provision of telecommunications services. Subsection (a) of new section 254 preempts any State and local statutes and regulations, or other State and local legal requirements, that may prohibit or have the effect of prohibiting any entity from providing interstate or intrastate telecommunications services. Subsection (b) of section 254 preserves a State's authority to impose, on a competitively neutral basis and consistent with universal service provisions, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. States may not exercise this authority in a way that has the effect of imposing entry barriers or other prohibitions preempted by new section 254(a). Subsection (c) of new section 254 provides that nothing in new section 254 affects the authority of States or local governments to manage the public rights-of-way or to require, on a competitively neutral and nondiscriminatory basis, fair and reasonable compensation for the use of public rights-of-way, on a nondiscriminatory basis, provided any compensation required is publicly disclosed. Subsection (d) requires the Commission, after notice and an opportunity for public comment, to preempt the enforcement of any State or local statutes, regulations or legal requirements that violate or are inconsistent with the prohibition on entry barriers contained in subsections (a) or (b) of section 254. Subsection (e) of new section 254 simply clarifies that new section 254 does not affect the application of section 332(c)(3) of the Communications Act to CMS providers. Section 309 adds a new section 263 to the Communications Act and is intended to permit States to adopt certain statutes or regulations regarding the provision of service by competing telecommunications carriers in rural markets. Such statutes or regulations may be no more restrictive than the criteria set forth in section 309. The Commission is authorized to preempt any State statute or regulation that is inconsistent with the Commission's regulations implementing this section. House amendment The House provisions are identical or similar to subsections 254(a), (b) and (c). The House amendment does not have a similar provision (d) requiring the Commission to preempt State or local barriers to entry, if it makes a determination that they have been erected. Conference agreement The conference agreement adopts the Senate provisions. New section 253(b) clarifies that nothing in this section shall affect the ability of a State to safeguard the rights of consumers. In addition to consumers of telecommunications services, the conferees intend that this includes the consumers of electric, gas, water or steam utilities, to the extent such utilities choose to provide telecommunications services. Existing State laws or regulations that reasonably condition telecommunications activities of a monopoly utility and are designed to protect captive utility ratepayers from the potential harms caused by such activities are not preempted under this section. However, explicit prohibitions on entry by a utility into telecommunications are preempted under this section. The rural markets provision in section 309 of the Senate bill is simplified and moved to this section. The modification clarifies that, without violating the prohibition on barriers to entry, a State may require a competitor seeking to provide service in a rural market to meet the requirements for designation as an eligible telecommunications carrier. That is, the State may require the competitor to offer service and advertise throughout the service area served by a rural telephone company. The provision would not apply if the rural telephone company has obtained an exemption, suspension, or modification under new section 251(f) that effectively prevents a competitor from meeting the eligible telecommunications carrier requirements. In addition, the provision would not apply to providers of CMS. New Section 254 - Universal Service Senate bill Section 103 of the bill establishes a Federal-State Joint Board to review existing universal service support mechanisms and make recommendations regarding steps necessary to preserve and advance this fundamental communications policy goal. Section 103 also adds a new section 253, entitled "Universal Service," to the Communications Act. As new section 253 explicitly provides, the Senate intends that States shall continue to have the primary role in implementing universal service for intrastate services, so long as the level of universal service provided by each State meets the minimum definition of universal service established under new section 253(b) and a State does not take any action inconsistent with the obligation for all telecommunications carriers to contribute to the preservation and advancement of universal service under new section 253(c). Section 103(a) of the bill requires the Commission to institute a Federal-State Joint Board under section 410(c) of the Communications Act to recommend within 9 months of the date of enactment new rules regarding implementation of universal service. Section 103(a) also provides that at least once every four years the Commission is required to institute a new Joint Board proceeding to review the implementation of new section 253 regarding universal service, and to make recommendations regarding any changes that are needed. Section 103(b) of the bill requires the Commission to complete any proceeding to implement the recommendations of the initial Joint Board within one year of the date of enactment of the bill, any other Joint Board on universal service matters within one year of receiving such recommendations. Section 103(c) of the bill simply clarifies that the amendments to the Communications Act made by the Senate bill do not necessarily affect the Commission's existing separations rules for local exchange or interexchange carriers. However, this subsection does not prohibit or restrict the Commission's ability to change those separations rules through an appropriate proceeding. Section 103(d) establishes new section 253 in the Communications Act. New section 253(a) establishes seven principles on which the Joint Board and the Commission shall base policies for the preservation and advancement of universal service. Subsection (b) of new section 253 provides that the Commission shall define universal service, based on recommendations from the public, Congress, and the Joint Board. To ensure that the definition of universal service evolves over time to keep pace with modern life, the subsection requires the Commission to include, at a minimum, any telecommunications service that is subscribed to by a substantial majority of residential customers. Subsection (c) of new section 253 requires all telecommunications carriers to contribute on an equitable and nondiscriminatory basis to the preservation and advancement of universal service. The Commission or a State may require any other telecommunications provider, such as private telecommunications providers, to contribute to the preservation and advancement of universal service, if the public interest so requires. Subsection (d) of new section 253 provides that a State may adopt additional definitions, mechanisms, and standards to preserve and advance universal service within such State, provided that they are not inconsistent with the regulations of the Commission. A State must adopt separate support mechanisms for any additional standards or definitions required by the State. Subsection (e) of new section 253 provides that only telecommunications carriers that are designated as essential telecommunications carriers under new section 214(d) shall be eligible to receive support payments, if any, established by the Commission or a State to preserve and advance universal service. Any such support payments must accurately reflect the amount reasonably necessary to preserve and advance universal service. Subsection (e) is not intended to prohibit support mechanisms that directly help individuals afford universal service. Subsection (f) of new section 253 directs the Commission and the States to make universal service support explicit and to ensure that essential telecommunications carriers are able to provide universal service at just, reasonable and affordable rates. Carriers receiving such support must use it to provide service in the area for which the support was received. Subsection (g) of new section 253 simply incorporates in the Communications Act the existing practice of geographic rate averaging and rate integration for interexchange, or long distance, telecommunications rates to ensure that rural customers continue to receive such service at rates that are comparable to those charged to urban customers. States shall continue to be responsible for enforcing this subsection with respect to intrastate interexchange services, so long as the State rules are not inconsistent with Commission rules and policies on rate averaging. Subsection (h) of new section 253 prohibits telecommunications carriers from subsidizing competitive services with revenues from non-competitive services. The Commission and the States are required to establish any necessary cost allocation rules, accounting safeguards, and other guidelines to ensure that universal service bears no more than a reasonable share (and may bear less than a reasonable share) of the joint and common costs of facilities used to provide both competitive and noncompetitive services. Subsection (i) of new section 253 requires the Commission to submit a report to Congress prior to increasing support for universal service or requiring increased participation by telecommunications carriers. Any such increase cannot take effect until 120 days after the report is submitted to Congress. Subsection (j) of new section 253 states that nothing in new section 253 limits or expands the Commission's authority with respect to universal service. Subsection (k) of new section 253 states that the subsections that provide that all telecommunications carriers shall contribute to universal service, preserve the States' authority to adopt their own definitions and mechanisms, establish eligibility for universal service support, and control the level of universal service support shall take effect one year after the date of enactment of this bill. Section 310 of the Senate bill, known as the Snowe-Rockefeller-Exon-Kerrey Amendment, provides for preferential rates to schools, libraries and rural health care facilities. House amendment Section 247(a) establishes a Federal-State Joint Board, pursuant to section 410(c) of the Communications Act, for the purpose of recommending actions the Commission and the States should take to preserve universal service. Section 247(b) sets forth six principles upon which the Board shall base its policies for the preservation of universal service. Section 247(b)(1) states that any plan adopted should maintain just and reasonable rates. Section 247(b)(2) states that the Joint Board should recommend a definition of the nature and extent of services included within the carriers' obligations to provide universal service. Section 247(b)(3) and (4) state that the plan should provide adequate and sustainable support mechanisms and require equitable and non-discriminatory contributions from all providers to support the plan. The plan should also seek to promote access to advanced telecommunications services and reasonably comparable services between rural and urban areas. Section 247(b)(5) directs that the plan include recommendations to ensure access to advanced telecommunications services for students in elementary and secondary schools. Section 247(c) requires the Joint Board, in defining carrier obligations with respect to universal service pursuant to subsection (b)(2), to consider several factors: (1) the extent to which a telecommunications service has been subscribed to by customers; (2) whether such service is essential to public health, safety, or the public interest; (3) whether such service is deployed in the public switched network; and (4) whether inclusion of such service is otherwise consistent with the public interest, convenience, and necessity. Section 247(d) requires that the Joint Board be convened and report its recommendations within 270 days after enactment. The Commission is required to act on the recommendations within one year. Section 247(e) makes clear that States are free to adopt regulations imposing universal service obligations on intrastate services. Section 247(f) sunsets the Joint Board created by this section five years after enactment. Conference agreement The conference agreement amends the Communications Act to add a new section 254 entitled "Universal Service." The House recedes to the Senate with modifications. New section 254(a) incorporates the provisions of section 103(a) of the Senate bill, with the addition of a State-appointed utility consumer advocate to the Joint Board. The conferees intend that, in making its recommendations to the Commission, the Joint Board will thoroughly review the existing system of Federal universal service support. To the extent possible, the conferees intend that any support mechanisms continued or created under new section 254 should be explicit, rather than implicit as many support mechanisms are today. In addition, the conferees do not view the existing proceeding under Common Carrier Docket 80-286 (regarding Amendment of Part 36 of the Commission's Rules and appointment of a Joint Board) as an appropriate foundation on which to base the proceeding required by new section 254(a). New section 254(b) combines the principles found in both the Senate bill and the House amendment, with the addition of "insular areas" (such as the Pacific Island territories) and "low-income consumers" to the list of consumers to whom access to telecommunications and information services should be provided. New section 254(c) defines universal service as "an evolving level of telecommunications services" established periodically by the Commission. The definition is to take into account advances in telecommunications and information technology, and should be based on a consideration of the four criteria set forth in the subsection. The Commission is given specific authority to alter the definition from time to time, and to provide a different definition for schools, libraries, and health care facilities. New section 254(d) requires that all telecommunications carriers providing interstate telecommunications services shall contribute to the preservation and advancement of universal service. The Commission is given specific authority to exempt a telecommunications carrier or class of telecommunications carriers from this requirement if their contribution would be "de minimis." The conferees intend that this authority would only be used in cases where the administrative cost of collecting contributions from a carrier or carriers would exceed the contribution that carrier would otherwise have to make under the formula for contributions selected by the Commission. This section preserves the Commission's authority to require all providers of interstate telecommunications to contribute, if the public interest requires it, to preserve and advance universal service. New section 254(e) provides that only eligible telecommunications carriers designated under new section 214(e) shall be eligible to receive specific Federal universal service support. Any eligible telecommunications carrier that receives such support shall only use that support to provide, maintain, and upgrade facilities and services for universal service in the area for which the support is received. In keeping with the conferees' intent that all universal service support should be clearly identified, this subsection states that such support should be made explicit and should be sufficient to achieve the purposes of new section 254. The conferees intend that only eligible telecommunications carriers should receive support from specific Federal universal service support mechanisms; however, this restriction should not be construed to prohibit any telecommunications carrier from using any particular method to establish rates or charges for its services to other telecommunications carriers, to the extent such rates or charges are otherwise permissible under the Communications Act or other law. State authority with respect to universal service is specifically preserved under new section 254(f). A State may adopt any measure with respect to universal service that is not inconsistent with the Commission's rules. This subsection also requires all providers of intrastate telecommunications to contribute to universal service within a State in an equitable and non-discriminatory manner, as determined by the State. A State may adopt additional requirements with respect to universal service in that State, so long as those additional requirements do not rely upon or burden Federal universal service support mechanisms. New section 254(g) is intended to incorporate the policies of geographic rate averaging and rate integration of interexchange services in order to ensure that subscribers in rural and high cost areas throughout the Nation are able to continue to receive both intrastate and interstate interexchange services at rates no higher than those paid by urban subscribers. The conferees intend the Commission's rules to require geographic rate averaging and rate integration, and to incorporate the policies contained in the Commission's proceeding entitled "Integration of Rates and Services for the Provision of Communications by Authorized Common Carriers between the United States Mainland and the Offshore Points of Hawaii, Alaska and Puerto Rico/Virgin Islands (61 FCC2d 380 (1976)). The conferees are aware that the Commission has permitted interexchange providers to offer non-averaged rates for specific services in limited circumstances (such as services offered under Tariff 12 contracts), and intend that the Commission, where appropriate, could continue to authorize limited exceptions to the general geographic rate averaging policy using the authority provided by new section 10 of the Communications Act. Further, the conferees expect that the Commission will continue to require that geographically averaged and rate integrated services, and any services for which an exception is granted, be generally available in the area served by a particular provider. In addition, the conferees do not intend that this subsection would require the renegotiation of existing contracts for the provision of telecommunications services. New subsection 254(h) incorporates, with modifications, the provisions of section 310 of the Senate bill. New subsection (h) of section 254 is intended to ensure that health care providers for rural areas, elementary and secondary school classrooms, and libraries have affordable access to modern telecommunications services that will enable them to provide medical and educational services to all parts of the Nation. The ability of K-12 classrooms, libraries and rural health care providers to obtain access to advanced telecommunications services is critical to ensuring that these services are available on a universal basis. The provisions of subsection (h) will help open new worlds of knowledge, learning and education to all Americans -- rich and poor, rural and urban. They are intended, for example, to provide the ability to browse library collections, review the collections of museums, or find new information on the treatment of an illness, to Americans everywhere via schools and libraries. This universal access will assure that no one is barred from benefitting from the power of the Information Age. New subsection (h)(1)(A) provides that any telecommunications carrier shall, upon a bona fide request, provide telecommunications services necessary for the provision of health care services to any health care provider serving persons who reside in rural areas. The rates charged for the service shall be rates that are reasonably comparable to rates charged for similar services in urban areas. It is intended that the rural health care provider receive an affordable rate for the services necessary for the purposes of telemedicine and instruction relating to such services. New subsection (h)(1)(B) requires that any telecommunications carrier shall, upon a bona fide request, provide services for educational purposes included in the definition of universal service under new subsection (c)(3) for elementary and secondary schools and libraries at rates that are less than the amounts charged for similar services to other parties, and are necessary to ensure affordable access to and use of such telecommunications services. A telecommunications carrier providing service under new subsection (h)(1)(B) is permitted either to have the amount of the discount treated as an offset to its obligation to contribute to the mechanisms to preserve and advance universal service; or, to receive reimbursement utilizing the support mechanisms to preserve and advance universal service. Pursuant to new subsection (c)(3), the Commission is authorized to designate a separate definition of universal service applicable only to public institutional telecommunications users. In so doing, the conferees expect the Commission and the Joint Board to take into account the particular needs of hospitals, K-12 schools and libraries. New subsection (h)(2) requires the Commission to establish rules to enhance the availability of advanced telecommunications and information services to public institutional telecommunications users. For example, the Commission could determine that telecommunications and information services that constitute universal service for classrooms and libraries shall include dedicated data links and the ability to obtain access to educational materials, research information, statistics, information on Government services, reports developed by Federal, State, and local governments, and information services which can be carried over the Internet. The Commission also is required to determine under what circumstances a telecommunications carrier may be required to connect public institutional telecommunications users to its network. New subsection (h)(3) clarifies that telecommunications services and network capacity provided to health care providers, schools and libraries may not be resold or transferred for monetary gain. New subsection (h)(4) specifies that the following entities are not eligible to receive discounted rates under this section: for-profit businesses, elementary and secondary schools with endowments of more than $50,000,000, and libraries that are not eligible to participate in State-based applications for Library Services and Technology Funds. New subsection (h)(5) defines the terms "elementary and secondary schools," "health care provider," and "public institutional telecommunications user" as used throughout this subsection. The conferees intend that consortiums of educational institutions providing distance learning to elementary and secondary schools be considered an educational provider for purposes of this section. New subsection (i) states that the Commission and the States should ensure that universal service is available at rates that are just, reasonable and affordable. New subsection 254(j) has been added to clarify that this section is not intended to alter the existing provision of Lifeline Service to needy consumers. The House recedes to the Senate with minor technical modifications on new subsection 254(k), which prohibits cross-subsidization and permits the Commission and the States to establish cost allocation rules for facilities used in the provision of services supported through Federal universal support mechanisms. New Section 255 - Access By Persons With Disabilities Senate bill Section 308(a) of the Senate bill adds a new section 262 to the Communications Act to require that manufacturers of telecommunications equipment and customer premises equipment ensure that equipment is designed, developed, and fabricated to be accessible and usable by individuals with disabilities, if readily achievable. Similarly, providers of telecommunications services must ensure that telecommunications services are accessible to and usable by individuals with disabilities, if readily achievable. In addition, the Commission is required to undertake a study of closed captioning and to promulgate rules to implement section 262. Section 308(b) adds a Commission study of video description. Section 262(a) defines the terms used in this section. New section 262(b) requires manufacturers of telecommunications and customer premises equipment to ensure that such equipment is designed, developed, and fabricated to be accessible to and usable by individuals with disabilities, if readily achievable. New section 262(c) requires providers of telecommunications service to ensure that such service be accessible to and usable by individuals with disabilities, if readily achievable. New section 262(d) requires that whenever the provisions of subsections (b) and (c) are not readily achievable, the manufacturer of telecommunications and customer premises equipment, or the provider of telecommunications service, shall ensure that such equipment or service is compatible with existing peripheral devices or specialized customer premises equipment commonly used by individuals with disabilities to achieve access, if readily achievable. New section 262(e) requires the Architectural and Transportation Barriers Compliance Board ("Board") to develop guidelines for accessibility of telecommunications and customer premises equipment and telecommunication service, as lead agency in consultation with the National Telecommunications and Information Administration (NTIA) and the National Institute of Standards and Technology (NIST), within 1 year of enactment of this Act. The Board shall periodically review and update such guidelines. The Senate has elsewhere assigned responsibility for promulgating regulations for this new section to the Commission. House amendment Section 249(c) of section 101 directs the Commission within one year to establish regulations designed to make network capabilities and services accessible to individuals with disabilities. Section 249(d) prohibits private rights of action, and mandates that all remedies are available only through the Communications Act. Conference agreement The conferees adopt the Senate provisions with several modifications as a new section 255 of the Communications Act. Specifically, the conferees adopted the provisions of subsections (a), (b), (c), (d) and (e) of new section 262 of the Communications Act, as added by the Senate bill. The conferees deleted the provision in subsection (e) of the Senate bill creating roles for NTIA and NIST. In addition, the conferees adopted the provisions of section 249(d) of the House amendment, which states that nothing in this section authorizes any private rights of action. The remedies available under the Communications Act, including the provisions of sections 207 and 208, are available to enforce compliance with the provisions of section 255. New Section 256 - Coordination for Interconnectivity Senate bill Section 107 of the Senate bill concerns the coordination for telecommunications network-level interoperability. The provision permits the Commission to participate, in a manner consistent with its authority and practice prior to the date of enactment of this Act in the development of voluntary industry standards-setting organizations to promote interoperability. The purpose of the provision is to promote nondiscriminatory access to telecommunications networks by the broadest number of users and vendors of communications products and services. House amendment Section 249(a) reaffirms the duty of all common carriers to ensure network functionality. Section 249(b) directs the Commission to establish procedures for Commission oversight of coordinated network planning by common carriers and other providers of telecommunications services. However, the Commission is not given authority to set standards for interconnection. Instead, voluntary industry standard-setting organizations shall establish any standards. The standard-setting process described in this provision applies to interconnection of the public's switched telecommunications networks. It is not intended to apply to telephone equipment or other customer premises equipment (CPE). Nothing in section 249(b) should be construed as limiting or superseding these interconnectivity requirements or the existing authority and responsibilities of the Commission in enforcing them. Conference agreement The conference agreement adopts the Senate provision with minor modifications as a new section 256 of the Communications Act. New Section 257 - Market Entry Barriers Proceeding Senate bill No provision. House amendment Section 250 requires the Commission to adopt rules that identify and eliminate market entry barriers for entrepreneurs and small businesses in the provision and ownership of telecommunications and information services. The Commission must review these rules and report to Congress every three years on how it might prescribe or eliminate rules to promote the purposes of this section. Conference agreement The conference agreement adopts the House provisions with minor modifications as a new section 257 of the Communications Act. New Section 258 - Illegal Changes in Subscriber Carrier Selections Senate bill No provision. House amendment Section 251 requires the Commission to adopt rules to prevent illegal changes in subscriber selections, a practice known as "slamming." The Commission has adopted rules to address problems in the long distance industry of unauthorized changes of a consumer's long distance carrier. The House provision is designed to extend the protections of the current rule to local exchange carriers as well. Conference agreement The conferees adopt the House provision as a new section 258 of the Communications Act. It is the understanding of the conferees that in addition to requiring that the carrier violating the Commission's procedures must reimburse the original carrier for forgone revenues, the Commission's rules should also provide that consumers are made whole. Specifically, the Commission's rules should require that carriers guilty of "slamming" should be held liable for premiums, including travel bonuses, that would otherwise have been earned by telephone subscribers but were not earned due to the violation of the Commission's rules under this section. New Section 259 - Infrastructure Sharing Senate bill Section 106(a) of the Senate bill requires that within one year of the date of enactment, the Commission shall prescribe rules requiring local exchange carriers that were subject to Part 69 of the Commission's rules on the date of enactment to share network facilities, technology, and information with qualifying carriers. The qualifying carrier may request such sharing for the purpose of providing telecommunications services or access to information services in areas where the carrier is designated as an essential telecommunications carrier under new section 214(d). The bill does not grant immunity from the antitrust laws for activities undertaken pursuant to this section. Section 106(b) establishes the terms and conditions of the Commission's regulations. Such regulations shall: (1) not require a local exchange carrier to take any action that is economically unreasonable or contrary to public interest; (2) permit, but not require, joint ownership of facilities among local exchange carriers and qualifying carriers; (3) ensure that the local exchange carrier not be treated as a common carrier for hire with respect to technology, information or facilities shared with the qualifying carrier under this section; (4) ensure that qualifying carriers benefit fully from sharing; (5) establish conditions to promote cooperation; (6) not require a local exchange carrier to share in areas where the local exchange carrier provides telephone exchange service or exchange access service; and (7) require the local exchange carrier to file with the Commission or State, any tariffs, contract or other arrangement showing the rate, terms, and conditions under which such local exchange carrier is complying with the sharing requirements of this section. Subsection (c) requires that local exchange carriers sharing infrastructure must provide information to sharing parties about deployment of services and equipment, including software. Subsection (d) defines those carriers eligible to request infrastructure sharing under this section. House amendment No provision. Conference agreement The conference agreement adopts the Senate provisions as a new section 259 of the Communications Act. New Section 260 - Provision of Telemessaging Service Senate bill Section 311 of the Senate bill adds a new section 265 to the Communications Act, to address certain practices of the BOCs with regard to telemessaging. This section is designed to prohibit cross-subsidization between a BOC's telephone exchange or exchange access services and its telemessaging services. This section prohibits a BOC from discriminating between affiliated and nonaffiliated telemessaging services, under rules set forth by the Commission. If, however, the Commission finds that these safeguards are insufficient, the Commission may require the BOCs to provide telemessaging services through a separate subsidiary. New section 265 directs the Commission to complete, within 18 months after the date of enactment of the bill, a rulemaking proceeding to prescribe regulations to carry out this new section. The Commission also is directed to determine whether, in order to enforce the require- ments of section 265, it is appropriate to require the BOCs to provide telemessaging services through a separate subsidiary that meets the requirements of new section 252, as added to the Communications Act by section 102 of the bill. House amendment Section 273(b) prohibits discrimination by a telephone company in the provision of telemessaging services, either by refusing to provide its competitors with the same network services it provides itself, or by cross-subsidizing from its local telephone service. Section 273(c) establishes procedures for expedited consideration of complaints of violations of subsection (b), requiring the Commission to make a final determination within 120 days after the receipt of a complaint. If a violation is found, the Commission is required to issue a cease and desist order within 60 days. Section 601 establishes a new complaint procedure for violations of the Communications Act and Commission rules and regulations for providers of telemessaging service, or other small businesses providing an information or telecommunications services. This section defines a small business as any business entity, including any affiliate or subsidiary, with fewer than 300 employees. Conference agreement The conference agreement creates a new section 260 in the Communications Act relating specifically to the provision of telemessaging services. This section prohibits local exchange carriers subject to new section 251(c) that are engaged in telemessaging from subsidizing their telemessaging services, either directly or indirectly, from telephone exchange service operations or revenues. It also prohibits such carriers from discriminating against nonaffiliated entities with respect to the terms and conditions of any network services they provide to their own telemessaging operations. This section requires the Commission to establish procedures or regulations thereunder for the expedited receipt and review of complaints alleging discrimination or cross-subsidization that result in material financial harm to providers of telemessaging services. Such procedures shall ensure that the Commission makes a determination regarding any such complaint within 120 days. If the complaint contains an appropriate showing that the alleged violation occurred, the Commission shall, within 60 days of receipt, order such local exchange carrier to cease engaging in such violation. New Section 261 - Effect on Other Requirements Senate bill The Senate bill contains several savings clauses. House amendment The House amendment contains several savings clauses. Conference agreement The conferees included new section 261 of the Communications Act to consolidate savings clauses found in both the Senate bill and the House amendment. New section 261(a) makes clear that the Commission may continue to enforce its existing regulations in fulfilling new part II of title II of the Communications Act, provided they are not inconsistent with that part. New sections 261(b) and (c) preserve State authority to enforce existing regulations and to prescribe additional requirements, so long as those regulations and requirements are not inconsistent with the Communications Act. Section 102 - Eligible Telecommunications Carriers Senate bill Section 104 of the Senate bill amends section 214(d) of the Communications Act by designating the existing text of section 214(d) as paragraph (1) and by adding seven new paragraphs regarding designation of essential telecommunications carriers. The bill provides that the Commission shall designate essential telecommunications carriers for interstate services and the States shall designate such carriers for intrastate services. New paragraph (2) of section 214(d) makes explicit the implicit authority of the Commission or a State to require a common carrier to provide service to any community or portion of a community that requests such service. In the event that more than one common car- rier provides service in an area, and none of the carriers will provide service to a community or portion thereof in that area which requests service, this paragraph gives the Commission or a State the authority to decide which common carrier is best suited to provide such service. If the Commission or a State orders a carrier to provide service to a community or portion thereof under this paragraph, it shall designate such carrier an essential telecommunications carrier. Paragraph (3) of section 214(d) provides that the Commission or a State may designate a common carrier as an essential telecommunications carrier for a particular service area, thus making that carrier eligible for support payments to preserve and advance universal service, if any such payments are established under new section 253 of the Communications Act. Any carrier designated as an essential telecommunications carrier must provide universal service and any additional services specified by the Commission or a State throughout the service area for which the designation is made. In addition, these services must be offered throughout that service area at nondiscriminatory rates established by the Commission or a State, and the carrier must advertise those rates using media of general distribution. New paragraph (4) of section 214(d) allows the Commission to designate more than one common carrier as a communications carrier for a particular service area. In addition, the bill requires a State to make additional findings before designating more than one carrier as an essential telecommunications carrier. To the extent that more than one common carrier is designated as an essential telecommunications carrier, each additional carrier so designated must meet the same requirements with respect to service throughout the same service area at nondiscriminatory rates established by the Commission or a State, as well as the advertisement of those rates. New paragraph (5) of section 214(d) requires the Commission and States to establish rules governing the use of resale by a carrier to meet the requirements for designation as an essential telecommunications carrier, as well as rules to permit a carrier that has been designated as an essential telecommunications carrier to relinquish that designation so long as at least one other carrier also been designated as an essential telecommunications carrier for that area. Paragraph (5) also requires the Commission and the States to provide appropriate rules to govern how quickly an essential telecommunications carrier whose services are be resold may cease service to an area, in order to provide other essential telecommunications carriers adequate notice to extend facilities or to arrange for the purchase of replacement facilities or services. New paragraph (6) of section 214(d) sets forth the penalties applicable to an essential telecommunications carrier with respect to a Commission or State order to provide universal service within a reasonable period of time. In determining what constitutes a reasonable period of time, the bill provides that the Commission or a State must consider the nature of the construction required to provide such service, the time interval that normally would attend such construction and the time needed to obtain regulatory or financial approval. New paragraph (7) of section 214(d) of the Communications Act requires the Commission or a State to designate an essential telecommunications carrier for interexchange services for any unserved community or portion thereof that requests such service. An essential telecommunications carrier designated under this paragraph must provide service at nationwide geographically averaged rates, in the case of interstate services, and geographically averaged rates in the case of intrastate services. The Commission or a State may allow a carrier designated under this paragraph to receive support payments, if any, that may be provided under section 253. New paragraph (8) of section 214(d) grants the Commission authority to promulgate guidelines for the States to implement this section. House amendment No provision. Conference agreement The House recedes to the Senate with an amendment. The conference agreement amends section 214 of the Communications Act by adding a new subsection (e) regarding the provision of universal service and the designation of carriers which are eligible to receive support through the specific Federal universal support mechanisms established under new section 254 of the Communications Act. New section 214(e)(1) states that a common carrier designated as an "eligible telecommunications carrier" shall offer the services included in the definition of universal service throughout the area specified by the State commission, and that such services must be advertised generally throughout that area. Upon designation, a carrier is eligible for any specific support provided under new section 254 for the provision of universal service in the area for which that carrier is designated. Upon its own motion or upon request, a State commission is required under new section 214(e)(2) to designate a common carrier that meets the requirements of new section 214(e)(1) as an eligible telecommunications carrier. If more than one common carrier that meets the requirements of new section 214(e)(1) requests designation as an eligible telecommunications carrier in a particular area, the State commission shall, in the case of areas not served by a rural telephone company, designate all such carriers as eligible. If the area for which a second carrier requests designation as an eligible telecommunications carrier is served by a rural telephone company, then the State commission may only designate an additional carrier as an eligible telecommunications carrier if the State commission first determines that such additional designation is in the public interest. If no common carrier will provide universal service to a community or portion of a community that requests such service, new section 214(e)(3) makes explicit the implicit authority of the Commission, with respect to interstate services, and a State, with respect to intrastate services, to order a common carrier to provide such service. If more than one common carrier provides service in an area and none of those carriers will provide service to a community or portion thereof, this provision gives the Commission or a State the authority to decide which common carrier is best suited to provide service. Any carrier required to provide service under this paragraph shall be designated as an eligible telecommunications carrier under new section 214(e)(1) for the community or portion thereof such carrier is required to serve. For purposes of new section 214(e)(1), the conferees intend that the service area for a carrier designated by the Commission or a State under section 214(e)(3) shall be the community or portion thereof that requests service and for which that carrier is ordered to provide service. New section 214(e)(4) establishes rules for the relinquishment by a carrier of its designation as an eligible telecommunications carrier. A State commission must permit an eligible telecommunications carrier to relinquish that designation if more than one eligible telecommunications carrier serves an area, and must require that the remaining eligible telecommunications carrier or carriers continue to offer universal service to all consumers in that area. The conferees note that a carrier must be permitted to relinquish the designation within one year after the State commission approves the request, and expect that the Commission and the States will adopt appropriate mechanisms to ensure that any additional carrier designated as an eligible telecommunications carrier will be able to acquire or construct any necessary facilities for that area within the time limit set in new section 214(e)(4). New section 214(e)(5) provides the definition of "service area," which in general is determined by a State commission. Section 103 - Exempt Telecommunications Companies Senate bill Sections 102 and 205 contained provisions pertaining to the entry by utility companies into telecommunications and related businesses, and exempting the telecommunications activities of registered holding companies from the Public Utility Holding Company Act (PUHCA). House amendment No provision. Conference agreement The conference agreement amends PUHCA to allow registered holding companies to diversify into telecommunications, information and related services and products. The Commission must determine that a registered holding company is providing telecommunications services, information services and other related services through a single purpose subsidiary, designated an "exempt telecommunications company" (ETC). Prior State approval is required before any utility that is associated with a registered holding company may sell to an ETC any asset in the retail rates of that utility as of December 19, 1995. State approval is also required for a contract when a public utility company seeks to purchase telecommunications products or services from an ETC that is an associate company or affiliate of such public utility unless the State or State commission waives such requirement. The financing and other relationships between ETCs and registered holding companies shall not be subject to prior approval or other restriction by the Securities and Exchange Commission (SEC). However, the SEC shall continue to have jurisdiction to find violations of the federal securities laws (including PUHCA) and to bring enforcement actions related to such violations. The section provides reporting requirements concerning investments and activities of registered public utility holding company systems. Public utility companies are prohibited from assuming the liabilities of an ETC and from pledging or mortgaging the assets of a utility for the benefit of an ETC. State commissions may examine the books and records of the ETC and any public utility company, associate company or affiliate in the registered holding company system as they relate to the activities of the ETC. States may also order an audit of a public utility company that is an associate of an ETC. Nothing in this section affects the ability of the FCC or a State commission to regulate the activities of an ETC. Nothing in PUHCA shall preclude the rate review authority of the Federal Energy Regulatory Commission or a State commission with respect to purchases from or sale to an ETC. The relevant portion of section 102 of the Senate bill is deleted from the conference agreement. Section 104 - Nondiscrimination Principle Senate bill Subsection 103(f) adds new section 253A to the Communications Act concerning exclusion of telecommunications services. New subsection (a) directs the Commission to prohibit any telecommunications carrier from excluding from its services any high-cost area, any rural location or any resident based on the person's income, provided that a carrier may exclude an area if the carrier demonstrates that there will be insufficient demand for the carrier to earn a return over the long term and that providing a service to such area will be less profitable for the carrier than providing the service in areas to which the carrier is already providing or has proposed to provide service. New subsection (b) would direct the Commission to provide for public comment on the adequacy of the carrier's proposed service area. House amendment Section 201 of the House amendment adds new section 653(b)(1) to the Communications Act concerning safeguards on video platforms. Subparagraph (G) of that section prohibits a common carrier from excluding areas from its video platform service area on the basis of the ethnicity, race, or income of the residents of that area, and provides for public comments on the adequacy of the proposed service area on the basis of the standards. Conference agreement The conference agreement in section 104 amends section 1 of the Communications Act by adding a new provision to make clear that a purpose of the Communications Act is to make available service to all the people of the United States "without discrimination on the basis of race, color, religion, national origin, or sex." This amendment to section 1 applies to all entities covered by the Communications Act. SUBTITLE B - SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES Section 151 - Bell Operating Company Provisions Senate bill The Senate bill creates new sections of the Communications Act with respect to special provisions applicable to BOCs. House amendment The House amendment creates new sections of the Communications Act with respect to special provisions applicable to BOCs. Conference agreement Section 151 of the conference agreement establishes a new "Part III" of title II of the Communications Act. Part III contains new sections 271-276 of the Communications Act with respect to special provisions applicable to BOCs. New Section 271 - Bell Operating Company Entry Into InterLATA Services Senate bill Section 221(a) of the Senate bill adds a new section 255 to the Communications Act. Subsection (a) of new section 255 establishes the general requirements for the three different categories of service: in region interLATA; out of region interLATA; and incidental services. New section 255(b) establishes specific interLATA interconnection requirements that must be fully implemented in order for the Commission to provide authorization for a BOC to provide in region interLATA services. The Commission is specifically prohibited from limiting or extending the terms of the "competitive checklist" contained in subsection (b)(2). The competitive checklist is not intended to be a limitation on the interconnection requirements contained in section 251, but rather, at a minimum, be provided by a BOC in any interconnection agreement approved under section 251 to which that company is a party (assuming the other party or parties to that agreement have requested the items included in the checklist) before the Commission may authorize the BOC to provide in region interLATA services. Finally, section 255(b) includes a restriction on the ability of telecommunications carriers that serve greater than five percent of the nation's presubscribed access lines to jointly market local exchange service purchased from a BOC and interLATA service offered by the telecommunications carrier until such time as the BOC is authorized to provide interLATA serv- ices in that telephone exchange area or until three years after the date of enactment, whichever is earlier. New subsection 255(c) provides the process for application by a BOC to provide in region interLATA services, as well as the process for approval or rejection of that application by the Commission and for review by the courts. The application by the BOC must state with particularity the nature and scope of the activity and each product market or service market, as well as the geographic market for which in region interLATA authorization is sought. Within 90 days of receiving an application, the Commission must issue a written determination, after notice and opportunity for a hearing on the record, granting or denying the application in whole or in part. The Commission is required to consult with the Attorney General regarding the application during that 90 day period. The Attorney General may analyze a BOC application under any legal standard (including the Clayton Act, Sherman Act, other antitrust laws, section VIII(C) of the MFJ, Robinson-Patman Act or any other standard). The Commission may only grant an application, or any part of an application, if the Commission finds that the petitioning BOC has fully implemented the competitive checklist in new section 255(b)(2), that the interLATA services will be provided through a separate subsidiary that meets the requirements of new section 252, and that the provision of the requested interLATA services is consistent with the public interest, convenience, and necessity. As noted earlier, the Commission is specifically prohibited from limiting or extending the terms used in the competitive checklist, and the Senate intends that the determination of whether the checklist has been fully implemented should be a straightforward analysis based on ascertainable facts. Likewise, the Senate believes that the Commission should be able to readily determine if the requested services will or will not be provided through a separate subsidiary that meets all of the requirements of section 252. Finally, the Senate notes that the Commission's determination of whether the provision of the requested interLATA services is consistent with the public interest, convenience, and necessity must be based on substantial evidence on the record as a whole. Subsection (c) also requires a BOC which is authorized to provide interLATA services under this subsection to provide intraLATA toll dialing parity throughout the market in which that company is authorized to provide interLATA service. In the event that the Commission finds that the BOC has not provided the required intraLATA toll dialing parity, or fails to continue to provide that parity (except for inadvertent interruptions that are beyond the control of the BOC), then the Commission shall suspend the authorization to provide interLATA services in that market until that company provides or restores the required intraLATA toll dialing parity. Lastly, sub- section (c) provides that a State may not order a BOC to provide intraLATA toll dialing parity before the company is authorized to provide interLATA services in that area or until three years after the date of enactment, whichever is earlier. However, this restriction does not apply to single LATA States or States that have ordered intraLATA toll dialing in that State prior to June 1, 1995. BOCs (including any subsidiary or affiliate) are permitted under new section 255(d) to provide interLATA telecommunications services immediately upon the date of enactment of the bill if those services originate in any area in which that BOC is not the dominant provider of wireline telephone exchange service or exchange access service. New subsection 255(e) establishes the rules for the provision by a BOC of in region InterLATA services that are incidental to the provision of specific services listed in paragraph (1) of subsection (e). This list of specific services is intended to be narrowly construed by the Commission. A BOC must first obtain authorization under new section 255(c) before it may provide any in region InterLATA services not listed in subsection (e)(1). In addition, the BOC may only provide the services specified in subparagraphs (C) and (D) of subsection (e)(1), which in general are information storage and retrieval services, through the use of telecommunications facilities that are leased from an unaffiliated provider of those services until the BOC receives authority to provide InterLATA services under subsection (c). Finally, subsection (e) requires that the provision of incidental services by the BOC shall not adversely affect telephone exchange ratepayers or competition in any telecommunications market. The Senate intends that the Commission will ensure that these requirements are met. New section 255(f) provides that a BOC may provide interLATA service in connection with CMS upon the date of enactment. The terms "interLATA," "audio programming services," "video programming services," and "other programming services" are defined in new section 255(g). House amendment Section 245 provides the method by which a BOC may seek entry to offer interLATA, or long distance, service on a State-by-State basis. Section 245(a) provides that a BOC may file a verification of access and interconnection compliance anytime after six months after the date of enactment. The verification must include, under section 245(a)(1), a State certification of "openness," or the so-called "checklist" requirements, and under section 245(a)(2), either of the following: pursuant to section 245(a)(2)(A), the presence of a facilities-based competitor; or pursuant to section 245(a)(2)(B), a statement of the terms and conditions the BOC would make available under section 244, if no provider had requested access and interconnection within three (3) months prior to the BOC filing under section 245. For purposes of section 245(a)(2)(B), a BOC shall not be considered to have received a request for access and interconnection if a requesting provider failed to bargain in good faith, as required under section 242(a)(8), or if the provider failed to comply, within a reasonable time period, with the requirement under section 242(a)(1) to implement the schedule contained in its access and interconnection agreement. Section 245(b) sets out the "checklist" requirements that must be included in the State certification that the BOC files with the Commission as part of its verification. These checklist requirements include the following: (1) interconnection; (2) unbundling of network elements; (3) resale; (4) number portability; (5) dialing parity; (6) access to conduits and rights-of-way; (7) no State or local barriers to entry; (8) network functionality and accessibility; and (9) good faith negotiations by the BOC. Section 245(c)(1) sets out the Commission review process for interLATA authorization on a Statewide, permanent basis. Under section 245(c)(2), the Commission may conduct a de novo review only if a State commission lacks, under relevant State law, the jurisdiction or authority to make the required certification, fails to act within ninety (90) days of receiving a BOC request for certification, or has attempted to impose a term or condition that exceeds its authority, as limited in section 243. Under section 245(c)(3), the Commission has ninety (90) days to approve, disapprove, or approve with conditions the BOC request, unless the BOC consents to a longer period of time. Under Section 245(c)(4), the Commission must determine that the BOC has complied with each and every one of the requirements. As mandated in section 245(d), the Commission has continuing authority after approving a BOC's application for entry into long distance to review a BOC's compliance with the certification requirements under this section. Section 245(f) prohibits a BOC from providing interLATA service, unless authorized by the Commission. Section 245(f) grandfathers any activity authorized by court order or pending before the court prior to the date of enactment. Section 245(g) creates exceptions for the provision of incidental services. Section 245(g)(1) permits a BOC to engage in interLATA activities related to the provision of cable services. Section 245(g)(2) permits a BOC to offer interLATA services over cable system facilities located outside the BOC's region. Section 245(g)(3) allows a BOC to offer CMS, as defined in section 332(d)(1) of the Communications Act. Section 245(g)(4) allows a BOC to engage in interLATA services relevant to the provision of information services from a central computer. Section 245(g)(5) and (6) allow a BOC to engage in interLATA services related to signaling information integral to the internal operation of the telephone network. Notwithstanding the dialing parity requirements of section 242(a)(5), as provided in section 245(i), a BOC is not required to provide dialing parity for intraLATA toll service ("short haul" long distance) before the BOC is authorized to provide long distance service in that State. Section 245(j) prohibits the Commission from exercising the general authority to forbear from regulation granted to the Commission under section 230 until five years after the date of enactment. Section 245(k) sunsets this section once the Commission and State commission, in the relevant local exchange market, determine that the BOC has become subject to full and open competition. Conference agreement The conference agreement adds a new section 271 to the Communications Act relating to BOC entry into the interLATA market. New section 271(b)(1) requires a BOC to obtain Commission authorization prior to offering interLATA services within its region unless those services are previously authorized, as defined in new section 271(f), or "incidental" to the provision of another service, as defined in new section 271(g), in which case, the interLATA service may be offered after the date of enactment. New section 271(b)(2) permits a BOC to offer out-of-region services immediately after the date of enactment. New section 271(c) sets out the requirements for a BOC's provision of interLATA services originating in an in-region State (as defined in new section 271(i)). In addition to complying with the specific interconnection requirements under new section 271(c)(2), a BOC must satisfy the "in-region" test by virtue of the presence of a facilities-based competitor or competitors under new section 271(c)(1)(A), or by the failure of a facilities-based competitor to request access or interconnection (under new section 251) as required under new section 271(c)(1)(B). This test that the conference agreement adopts comes virtually verbatim from the House amendment. With respect to the facilities-based competitor requirement, the presence of a competitor offering the following services specifically does not suffice to meet the requirement: (1) exchange access; (2) telephone exchange service offered exclusively through the resale of the BOC's telephone exchange service; and (3) cellular service. The competitor must offer telephone exchange service either exclusively over its own facilities or predominantly over its own facilities in combination with the resale of another carrier's service. This conference agreement recognizes that it is unlikely that competitors will have a fully redundant network in place when they initially offer local service, because the investment necessary is so significant. Some facilities and capabilities (e.g., central office switching) will likely need to be obtained from the incumbent local exchange carrier as network elements pursuant to new section 251. Nonetheless, the conference agreement includes the "predominantly over their own telephone exchange service facilities" requirement to ensure a competitor offering service exclusively through the resale of the BOC's telephone exchange service does not qualify, and that an unaffiliated competing provider is present in the market. The House has specifically considered how to describe the facilities-based competitor in new subsection 271(c)(1)(A). While the definition of facilities-based competition has evolved through the legislative process in the House, the Commerce Committee Report (House Report 104-204 Part I) that accompanied H.R. 1555 pointed out that meaningful facilities-based competition is possible, given that cable services are available to more than 95% of United States homes. Some of the initial forays of cable companies into the field of local telephony therefore hold the promise of providing the sort of local residential competition that has consistently been contemplated. For example, large, well established companies such as Time Warner and Jones Intercable are actively pursuing plans to offer local telephone service in significant markets. Similarly, Cablevision has recently entered into an interconnection agreement with New York Telephone with the goal of offering telephony on Long Island to its 650,000 cable subscribers. For purposes of new section 271(c)(1)(A), the BOC must have entered into one or more binding agreements under which it is providing access and interconnection to one or more competitors providing telephone exchange service to residential and business subscribers. The requirement that the BOC "is providing access and interconnection" means that the competitor has implemented the agreement and the competitor is operational. This requirement is important because it will assist the appropriate State commission in providing its consultation and in the explicit factual determination by the Commission under new section 271(d)(2)(B) that the requesting BOC has fully implemented the interconnection agreement elements set out in the "checklist" under new section 271(c)(2). New section 271(c)(1)(B) also is adopted from the House amendment, and it is intended to ensure that a BOC is not effectively prevented from seeking entry into the interLATA services market simply because no facilities-based competitor that meets the criteria set out in new section 271(c)(1)(A) has sought to enter the market. The conference agreement stipulates that a BOC may seek entry under new section 271(c)(1)(B) at any time following 10 months after the date of enactment, provided no qualifying facilities-based competitor has requested access and interconnection under new section 251 by the date that is 3 months prior to the date that the BOC seeks interLATA authorization. Consequently, it is important that the Commission rules to implement new section 251 be promulgated within 6 months after the date of enactment, so that potential competitors will have the benefit of being informed of the Commission rules in requesting access and interconnection before the statutory window in new section 271(c)(1)(B) shuts. New section 271(c)(2) sets out the specific interconnection requirements that comprise the "checklist" that a BOC must satisfy as part of its entry test. In new section 271(d), the conference agreement adopts the basic structure of the Senate bill concerning authorization of BOC entry by the Commission, with a modification to permit the BOC to apply on a State-by-State basis. New section 271(d) sets forth administrative provisions regarding applications for BOC entry under this section. In making an evaluation, the Attorney General may use any appropriate standard, including: (1) the standard included in the House amendment, whether there is a dangerous probability that the BOC or its affiliates would successfully use market power to substantially impede competition in the market such company seeks to enter; (2) the standard contained in section VIII(C) of the AT&T Consent Decree, whether there is no substantial possibility that the BOC or its affiliates could use monopoly power to impede competition in the market such company seeks to enter; or (3) any other standard the Attorney General deems appropriate. New section 271(e)(1) prohibits joint marketing of local services obtained from the BOC under new section 251(c)(4) and long distance service within a State by telecommunications carriers with more than five percent of the Nation's presubscribed access lines for three years after the date of enactment, or until a BOC is authorized to offer interLATA services within that State, whichever is earlier. New section 271(e)(2) requires any BOC authorized to offer interLATA services to provide intraLATA toll dialing parity coincident with its exercise of that interLATA authority. States may not order a BOC to implement toll dialing parity prior to its entry into interLATA service. Any single-LATA State or any State that has issued an order by December 19, 1995, requiring a BOC to implement intraLATA toll dialing parity is grandfathered under this Act. The prohibition against "non-grandfathered" States expires three years after the date of enactment. The conference agreement in new section 271(f) adopts the House provision grandfathering activities under existing waivers. Both the House and Senate bill included separate grandfather provisions for manufacturing in the manufacturing section. The conference agreement combines these separate provisions into one provision covering both interLATA services and manufacturing, and that provision is included in the interLATA section. Because of the new approach to the supersession of the AT&T Consent Decree described below, this section was modified to clarify that requests for waivers pending with the court on the date of enactment are no longer included within this section. Instead, only those waiver requests that have been acted on before the date of enactment will be included. All conduct occurring after the date of enactment will no longer be subject to the AT&T Consent Decree and will be subject to the Communications Act, as amended by the conference agreement. New section 271(g) sets out the "incidental" interLATA activities that the BOCs are permitted to provide upon the date of enactment. New Section 272 - Separate Affiliate; Safeguards Senate bill Section 102 of the Senate bill amends the Communications Act to add a new section 252 to impose separate subsidiary and other safeguards on certain activities of the BOCs. Section 102 requires that to the extent a BOC engages in certain businesses, it must do so through an entity that is separate from any entities that provide telephone exchange service. Subsection 252(b) spells out the structural and transactional requirements that apply to the separate subsidiary, section 252(c) details the nondiscrimination safeguards, section 252(d) requires a biennial audit of compliance with the separate subsidiary requirements, section 252(e) imposes restrictions on joint marketing, and subsection 252(f) sets forth additional requirements with respect to the provision of interLATA services. The activities that must be separated from the entity providing telephone exchange service include telecommunications equipment manufacturing and interLATA telecommunications services, except out-of-region and incidental services (not including information services) and interLATA services that have been authorized by the MFJ court. A BOC also would have to provide alarm monitoring services and certain information services through a separate subsidiary, including cable services and information services which the company was not permitted to offer before July 24, 1991. In a related provision, section 203 of the bill provides that a BOC need not use a separate affiliate to provide video programming services over a common carrier video platform if it complies with certain obligations. Under section 252(e) of this section the BOC entity that provides telephone exchange service may not jointly market the services required to be provided through a separate subsidiary with telephone exchange service in an area until that company is authorized to provide interLATA service under new section 255. In addition, a separate subsidiary required under this section may not jointly market its services with the telephone exchange service provided by its affiliated BOC entity unless such entity allows other unaffiliated entities that offer the same or similar services to those that are offered by the separate subsidiary to also market its telephone exchange services. Additional requirements for the provision of interLATA services are included in new section 252(f). These provisions are intended to reduce litigation by establishing in advance the standard to which a BOC entity that provides telephone exchange service or exchange access service must comply in providing interconnection to an unaffiliated entity. Section 252(g) establishes rules to ensure that the BOCs protect the confidentiality of proprietary information they receive and to prohibit the sharing of such information in aggregate form with any subsidiary or affiliate unless that information is available to all other persons on the same terms and conditions. In general, a BOC may not share with anyone customer-specific proprietary information without the consent of the person to whom it relates. Exceptions to this general rule permit disclosure in response to a court order or to initiate, render, bill and collect for telecommunications services. New subsection 252(h) provides that the Commission may grant exceptions to the requirements of section 252 upon a showing that granting of such exception is necessary for the public interest, convenience, and necessity. The Senate intends this exception authority to be used whenever a requirement of this section is not necessary to protect consumers or to prevent anti-competitive behavior. However, the Senate does not intend that the Commission would grant an exception to the basic separate subsidiary requirements of this section for any service prior to authorizing the provision of interLATA service under section 255 by the BOC seeking the exception to a requirement of this section. Public utility holding companies that engage in the provision of telecommunications services are required to do so through a separate subsidiary under new section 252(i). In addition, a State may require a public utility company that provides telecommunications services to do so through a separate subsidiary. The separate subsidiary for public utility holding companies is required to meet some, but not all, of the structural separation and nondiscriminatory safeguard provisions that are applicable to BOC subsidiaries. Section 252(i) provides that a public utility holding company shall be treated as a BOC for the purpose of those provisions of section 252 that subsection (i) applies to those holding companies. Subsection (b) of section 102 requires the Commission to promulgate any regulations necessary to implement new section 252 of the Communications Act within nine months of the date of enactment of this bill. The subsection also provides that any separate subsidiary estab- lished or designated by a BOC for purposes of complying with new section 252(a) prior to the issuance of the regulations shall be required to comply with the regulations when they are issued. Section 102(c) provides that the amendment to the Communications Act made by this section takes effect on the date of enactment of this bill. House amendment Section 246(a) creates a separate subsidiary requirement for the BOC provision of interLATA telecommunications or information services. Section 246(b) requires transactions between a BOC and its subsidiary to be on an arm's length basis. Sections 246(c) and (d) mandates fully separate operations and property, including books, records, and accounts between the BOC and its subsidiary. Sections 246(e) and (f) prohibit discrimination and cross-subsidies, respectively. Under section 246(k), this provision sunsets eighteen months after the date of enactment. Conference agreement The conference agreement adopts the Senate provisions with several modifications. New section 272 of the Communications Act does not contain the provision in the Senate bill requiring that alarm monitoring services, and the interLATA services that are incidental thereto, be provided through the separate affiliate required by this section. The conferees also accepted the provision in the House amendment that requires a separate affiliate for interLATA information services, other than electronic publishing and alarm monitoring, which permit a customer located in one LATA to retrieve stored information from, or file information for storage in, information storage facilities of such company that are located in another LATA. The conferees deleted the Senate provision providing for Commission exceptions to the requirements of this section. Instead, the conferees adopted a three year "sunset" of the separate affiliate requirement for interLATA services and manufacturing activities. The three year period commences on the date on which the BOC is authorized to offer interLATA services. In addition, the conference agreement provides that the separate affiliate requirement for interLATA information services "sunsets" four years after the date of enactment of the Telecommunications Act of 1996. In any case, the Commission is given authority to extend the separate affiliate requirement by rule or order. New section 272(g)(1) permits the separate affiliate required by this section to jointly market any of its services in conjunction with the telephone exchange services and other services of the BOC so long as the BOC permits other entities offering the same or similar services to sell and market the BOC's telephone exchange services. New section 272(g)(2) permits a BOC, once it has been authorized to provide interLATA service pursuant to new section 271(d), to jointly market its telephone exchange services in conjunction with the interLATA service being offered by the separate affiliate in that State required by this section. New section 272(g)(3) provides that the joint marketing authorized by new sections 272(g)(1) and (g)(2) does not violate the nondiscrimination safeguards in new subsection (e). New Section 273 - Manufacturing by Bell Operating Companies Senate bill Section 222 of the Senate bill adds a new section 256 to the Communications Act to - remove the restrictions on manufacturing imposed by the MFJ on the BOCs under certain conditions, and allows those companies to engage in manufacturing subject to certain safeguards. New section 256(a) permits a BOC, through a separate subsidiary that meets the requirements of new section 252, to engage in the manufacture and provision of telecommuni- cations equipment and the manufacture of customer premises equipment (CPE) as soon as that company receives authorization to provide in region interLATA services under new section 255(c). Subsection (b) of new section 256 requires that a BOC engaged in manufacturing may only do so through a separate subsidiary that meets the requirements of new section 252. New section 256(c) requires that a BOC make available to local exchange carriers telecommunications equipment and any software integral to that equipment that is manufactured by the BOC's affiliate under certain conditions. The manufacturing subsidiary has the obligation to sell telecommunications equipment to an unaffiliated local telephone exchange carrier. This obligation may only be enforced on the manufacturing subsidiary if the local telephone company either does not manufacture equipment (by itself or through an affiliated entity), or it agrees to make available to the BOC any telecommunications equipment (including software integral to such equipment) that the local telephone company manufactures (by itself or through an affiliated en- tity) without discrimination or self-preference as to price, delivery, terms, or conditions. In addition, subsection (c) prohibits a BOC from discriminating with respect to bids for services or equipment, establishing standards or certifying equipment, or the sale of telecommunications equipment and software. A BOC and any entity that the company owns or controls also is required to protect any proprietary information submitted to it with contract bids or with respect to establishing standards or certifying equipment, and may not release that infor- mation to anyone unless specifically authorized to do so by the owner of the proprietary information. New section 256(d) permits a BOC or its subsidiaries or affiliates to engage in close collaboration with any manufacturer of customer premises equipment or telecommunications equipment not affiliated with the BOC during the design and development of hardware, software, or combinations thereof related to customer premises equipment or telecommunications equipment. Subsection (e) requires the Commission to prescribe regulations to require each BOC to file information concerning technical requirements concerning its telephone exchange facilities. Subsection (f) of new section 256 simply authorizes the Commission to prescribe such additional rules and regulations as the Commission determines necessary to carry out the provisions and purposes of section 256. Administration and enforcement of new section 256 are provided for in subsection (g) of that section. Paragraph (1) of new subsection 256(g) makes clear that the Commission has the same authority, power, and functions with respect to the BOC as it has with respect to enforcement or administration of title II for any other common carrier subject to the Communications Act. Paragraph (2) allows any injured party by an act or omission of the BOC or its manufacturing subsidiary which violates the requirements of new section 256 to bring a civil action in any U.S. District Court to recover the full amount of any damages and to obtain any appropriate court order to remedy the violation. In the alternative, the party may seek relief from the Commission pursuant to sections 206 through 209 of the Communications Act. New section 256(h) makes clear that nothing in new section 256 is intended to change the status of Bell Communications Research (Bellcore). Subsection (h) specifically states that nothing in this section permits Bellcore or any successor entity that is jointly owned by any of the BOCs to manufacture or provide telecommunications equipment or manufacture CPE. Subsection (b) of section 222 of the bill permits the BOCs to continue to engage in activities in which they were authorized to engage prior to the date of enactment of the bill. House amendment Section 271(a) allows a BOC to engage in equipment manufacturing when the Commission has approved verifications that a parent BOC, and each BOC within the parent company's region, are in compliance with the access and interconnection requirements of section 242. A BOC may engage in manufacturing only through a separate subsidiary for the first eighteen months after it is authorized. Section 271(b) allows a BOC to engage in close collaboration with manufacturers during the design and development of hardware and software. Notwithstanding subsection (a), a BOC may engage in research and enter royalty agreements. Section 271(c) requires a BOC to file at the Commission all protocol and technical requirements relating to connection with and proposed changes to the network. The BOCs must provide access to this information on a non-discriminatory basis. Section 271(d) prohibits Bell Communications Research, or "Bellcore," from engaging in manufacturing so long as Bellcore is owned by one or more BOC or is involved in equipment standard setting or product certification activities. Section 271(e) requires BOCs to make equipment procurement decisions based on objective commercial criteria, such as price, quality, delivery, and other commercial factors. Section 271(e)(2) prohibits each BOC from restricting sales to any other local telephone company. Section 271(e)(3) requires that the proprietary information which vendors share with BOCs as their transactions are carried out is protected from release not specifically authorized by the owner of such information. Subsection 271(f) provides the Commission with the same enforcement authority with respect to a BOC as with any common carrier. Section 271(g) grandfathers all previously authorized manufacturing related activities. Conference agreement The conference agreement adopts the Senate provisions with modifications as a new section 273 of the Communications Act. The agreement permits a BOC to engage in manufacturing after the Commission authorizes the company to provide interLATA services under new section 271(d) in any in-region State. A BOC and its affiliates may not engage in manufacturing in conjunction with another unaffiliated BOC or any of its affiliates. BOCs may engage in research and enter royalty agreements. The conference agreement includes provisions governing a standards-setting organization such as Bellcore. Additionally, the overall intent of establishing a dispute resolution provision, as contained in new subsection 273(d)(5), is to enable all interested parties to influence the final resolution of the dispute without significantly impairing the efficiency, timeliness, and technical quality of the activity. Further, under new section 273, a BOC may not discriminate in favor of equipment produced or supplied by an affiliate for the duration of a requirement for a manufacturing separate subsidiary under this Act. Each BOC shall make procurement decisions on the basis of an objective assessment of price, quality, delivery, and other commercial factors. New Section 274 - Electronic Publishing by Bell Operating Companies Senate bill The Senate bill included electronic publishing in the provisions applicable to information services under the separate affiliate requirements of section 252 of the Senate bill. House amendment Section 272 sets forth regulatory requirements for BOC participation in electronic publishing. Subsection (a) of this section states generally that a BOC or any affiliate may only engage in electronic publishing through a separate affiliate or an electronic publishing joint venture. Subsection (b)(1) requires the separate affiliate or electronic publishing joint venture to maintain books, records, and accounts separately from those of the BOC. Under subsection (b)(2), the affiliate is prohibited from incurring debt in a manner that would permit a creditor upon default to have recourse to the assets of the BOC. Subsections (b)(3) and (b)(4) govern the manner in which transactions by the affiliate must be carried out, so as to ensure that they are fully auditable. These subsections also govern the valuation of assets transferred to the affiliate to prevent cross subsidies. Subsection (b)(5) prohibits the affiliate and the BOC from having corporate officers or property in common. Under subsection (b)(6), the affiliate is prohibited from using the name or trademarks of the affiliated BOC except where used in common with the entity that owns or controls the BOC. Subsection (b)(7) prohibits a BOC from performing a number of activities on behalf of the affiliate, including the hiring or training of personnel, the provision of equipment, and research and development (R&D). Subsections (b)(8) and (b)(9) require the separate affiliate to have an annual compliance review performed for five years and to file a report of any exceptions and the corrective action taken. These reviews are to be conducted by an independent entity. Subsection (c)(1) prohibits a BOC from engaging in joint marketing of any promotion, marketing, sales or advertising with its affiliate, with certain exceptions. Subsection (c)(2) permits three types of joint activities between a BOC and its electronic publishing affiliate, under specified conditions. Subsection (c)(2)(A) permits a BOC to provide inbound telemarketing or referral services related to the provision of electronic publishing, if the BOC provides the same service on the same terms and conditions, and prices to non-affiliates as to its affiliates. The term "inbound telemarketing or referral services" is defined in subsection (i)(7) to mean "the marketing of property, goods, or services by telephone to a customer or potential customer who initiated the call." Subsection (c)(2)(B) permits a BOC to engage in nondiscriminatory teaming or business arrangements. Subsection (c)(2)(C) permits a BOC to participate in electronic publishing joint ventures, provided that the BOC or affiliate has not more than a 50% (or for small publishers, 80%) direct or indirect equity interest in the publishing joint venture. Subsection (d) provides that a BOC that enters the electronic publishing business through a separated affiliate or joint venture must provide network access and interconnection to electronic publishers at just and reasonable rates that are not higher on a per-unit basis than those charged to any other electronic publisher or any separated affiliate engaged in electronic publishing. Subsection (e) entitles a person claiming a violation of this section to file a complaint with the Commission or to bring a suit as provided in section 207 of the Communications Act. The BOC, affiliate, or separate affiliate is liable for damages for any violation found, unless it is discovered first through the internal compliance review process and corrected within 90 days of such discovery. A person may apply for a cease and desist order, or apply to a district court of the United States for an injunction. Subsection (f) requires separated affiliates to file annual reports with the Commission similar to Form 10-K. Subsection (g)(1) gives the BOC one year from the date of enactment to comply with the requirements of this section. Subsection (g)(2) provides that the provisions of this section cease to apply after June 30, 2000. Conference agreement The conference agreement adopts the House provisions with modifications as a new section 274 of the Communications Act. Subsection (b)(6) of the House provisions, relating to use of trademarks, was modified to make it clear that the separate affiliate or electronic publishing joint venture may not use for marketing the name, trademarks, or service marks of an existing BOC except for names, trademarks, or service marks that are owned by the entity that owns or controls the BOC. Subsection (g)(2) was modified so that the sunset date will be four years after the date of enactment rather than June 30, 2000. New Section 275 - Alarm Monitoring Services Senate bill Section 225 of the Senate bill adds a new section 258 to the Communications Act authorizing a BOC to provide alarm monitoring services four years after the date of enactment if the BOC has been authorized by the Commission to provide in-region interLATA service unless the Commission finds that such provision is not in the public interest. It requires the Commission to establish rules governing the provision of alarm services by a BOC. It provides for expedited consideration of complaints and allows the Commission to use title V remedies. The one exception to this general rule is contained in section 258(f). It provides that the limitations of subsections (a) and (b) do not apply to any alarm monitoring services provided by a BOC that was in that business as of June 1, 1995, as long as certain conditions specified in that subsection are met. House amendment Section 273(a) prohibits a BOC from offering alarm service until six (6) years after the date of enactment, unless a BOC was already providing such service on January 1, 1995. Section 273(b) prohibits discrimination by a telephone company in the provision of alarm services, either by refusing to provide its competitors with the same network services it provides itself, or by cross-subsidizing from its local telephone service. Section 273(c) establishes procedures for expedited consideration of complaints of violations of subsection (b), requiring the Commission to make a final determination within 120 days after the receipt of a complaint. If a violation is found, the Commission is required to issue a cease and desist order within 60 days. Conference agreement The conference agreement adopts the House provisions with modifications as a new section 275 of the Communications Act. The prohibition on BOC entry is shortened to 5 years. The grandfather provision is modified to clarify that new subsection (a) does not prohibit or limit the provision, directly or through an affiliate, of alarm monitoring services by a BOC that was engaged in providing alarm monitoring services as of November 30, 1995, directly or through an affiliate. However, such a BOC may not acquire an equity interest in or obtain financial control of any unaffiliated alarm monitoring services entities from November 30, 1995, until five years after the date of enactment. This section further provides that nothing in the language prohibiting acquisitions or control should be construed to prevent the exchange of customer accounts and related assets with unaffiliated alarm monitoring services entities. The House nondiscrimination provisions are adopted with the clarification that they apply to incumbent local exchange carriers rather than all common carriers. The House provisions on expedited consideration of complaints are adopted with the clarification that they apply to incumbent local exchange carriers rather than all common carriers. The Senate provisions on the use of data by local exchange carriers are adopted with the clarification that they apply to all local exchange carriers. The House definition of "alarm monitoring service" is adopted with the clarification that the definition applies to the transmission of signals by means of the facilities of any local exchange carrier rather than just those of a BOC. New Section 276 - Provision of Payphone Services Senate bill Section 311 of the Senate bill adds a new section 265 to the Communications Act, to address certain practices of the BOCs with regard to telemessaging and payphone services. This section is designed to prohibit cross-subsidization between a BOC's telephone exchange or exchange access services and its payphone and telemessaging services. Existing joint-cost rules are not adequate to prevent such activities. This section prohibits a BOC from discriminating between affiliated and nonaffiliated payphone and telemessaging services, under rules set forth by the Commission. If, however, the Commission finds that these safeguards are insufficient, the Commission may require the BOCs to provide telemessaging services through a separate subsidiary. New section 265 directs the Commission to complete, within 18 months after the date of enactment of the bill, a rulemaking proceeding to prescribe regulations to carry out this new section. The Commission also is directed to determine whether, in order to enforce the require- ments of section 265, it is appropriate to require the BOCs to provide payphone service or telemessaging services through a separate subsidiary that meets the requirements of new section 252. Payphone services are defined to include the provision of telecommunications service through public or semipublic pay telephones, and includes the provision of inmate phone service in correctional institutions. Semipublic payphones are also included within the definition of payphone services. New section 265 prohibits the BOCs from cross-subsidizing and from preferring or discriminating in favor of their own payphone operations. The Commission is directed to conduct rulemaking proceedings to implement new section 265. Nothing in section 265 is intended to limit the authority of the Commission to address these structural issues, or other payphone related issues, under the existing provisions of the Communications Act. House amendment Section 274 directs the Commission to adopt rules that eliminate all discrimination between BOC and independent payphones and all subsidies or cost recovery for BOC payphones from regulated interstate or intrastate exchange or exchange access revenue. The BOC payphone operations will be transferred, at an appropriate valuation, from the regulated accounts associated with local exchange services to the BOC's unregulated books. The Commission's implementing safeguards must be at least equal to those adopted in the Commission's Computer III proceedings. In place of the existing regulatory structure, the Commission is directed to establish a new system whereby all payphone service providers are fairly compensated for every interstate and intrastate call made using their payphones, including, for example, "toll-free" calls to subscribers to 800 and new 888 services and calls dialed by means of carrier access codes. In crafting implementing rules, the Commission is not bound to adhere to existing mechanisms or procedures established for general regulatory purposes in other provisions of the Communications Act. Section 274(b)(1)(D) also makes it possible for independent payphone service providers, as well as BOCs, in all jurisdictions, to select the intraLATA carriers serving their payphones. However, existing contracts and agreements between location providers and payphone service providers, interLATA, or intraLATA carriers are grandfathered. Location providers prospectively also have control over the ultimate choice of interLATA and intraLATA carriers in connection with their choice of payphone service providers. Section 274(b)(2) directs the Commission to determine whether it is necessary to support the maintenance of "public interest payphones." This term refers to payphones at locations where payphone service would not otherwise be available as a result of the operation of the market. Thus, the term does not apply to a payphone located near other payphones, or to a payphone that, even though unprofitable by itself, is provided for a location provider with whom the payphone provider has a contract. Section 274(c) authorizes the Commission to preempt State regulations that are inconsistent with the Commission's regulations under section 274. Conference agreement The conference agreement adopts the House provision with some modifications and a clarification as a new section 276 of the Communications Act. The conferees added to subsection (b)(1)(D) the phrase "unless the Commission determines in the rulemaking that it is not in the public interest." This modification would allow the Commission, if it determines that it is in the public interest, not to allow the BOCs to have the same rights as independent payphone providers in negotiating with the interLATA carriers for their payphones. In addition, the conferees clarify in subsection (b)(1)(E) that the location provider has the ultimate decision-making authority in determining interLATA services in connection with the choice of payphone providers. TITLE II - BROADCAST SERVICES Section 201 - Broadcaster Spectrum Flexibility Senate bill If the Commission, by rule, permits a licensee to provide advanced television services, subsection (a) of section 207 of the Senate bill requires the Commission to adopt rules to permit broadcasters flexibility to use the advanced television spectrum for ancillary or supplementary services. The broadcaster must provide at least one free, over-the-air advanced television broadcast service on that spectrum. Similar rules for existing broadcast spectrum must also be adopted. Paragraph (2) requires that if the licensee offers ancillary or supplementary service for which payment of a subscription fee is required, or is compensated for transmitting material furnished by a third party, then the Commission will collect an annual fee from the licensee. The fee shall be based, in part, on the licensee's total amount of spectrum, and the amount of spectrum used and the amount of time the spectrum is used for those ancillary and supplementary services. The fee, however, cannot exceed the amount, on an annualized basis, paid by licensees providing competing services on spectrum subject to auction. Paragraph (3) states that licensees are not relieved of their public interest requirements. Paragraph (4) defines "advanced television services" as a television service using digital or other advanced technology to enhance audio quality and visual resolution. The paragraph also defines "existing" spectrum as that spectrum used for television broadcast purposes as of the date of enactment. House amendment Section 301 of the House amendment directs the Commission, if the Commission issues licenses for advanced television services, to limit the initial eligibility for such licenses to incumbent broadcast licensees and permittees and authorizes the Commission to adopt regulations that would permit broadcasters to use such spectrum for ancillary or supplementary services. Apart from the restrictions contained herein, this section leaves the final determination of the uses of spectrum assigned to the broadcasters. This section restricts any potential use of spectrum apart from the main channel signal to "ancillary and supplementary" uses, provided the use of a designated frequency for such services is consistent with the technology or method designated by the Commission for the provision of advanced television services. Paragraph (b)(2) requires the Commission to prescribe regulations that avoid the derogation of any advanced television services, including high definition television (HDTV) services. Paragraph (b)(3) clarifies the regulation of ancillary and supplementary services. It requires that Commission regulations that are applicable to such services be applicable to the offering of analogous services by any other person. This section, however, specifically does not confer "must carry" status on any of these ancillary or supplementary services. Paragraph (b)(4) requires the Commission to adopt any technical or other requirements necessary to assure signal quality for ATV services and provides, inter alia, that the Commission may review and update its requirements concerning minimum broadcast hours for television broadcasters for both NTSC and ATV services. Subsection (c) provides that if the Commission issues licenses for advanced television services, it shall precondition such issuance on the requirement that one or the other of the licenses be surrendered to the Commission pursuant to its regulations. Subsection (c) also requires that any license surrendered must be reassigned through competitive bidding. This provision is designed to ensure that licensees' use of 12 megahertz would be for temporary simulcast purposes only, and that, in due course, one of the licensed channels will revert to the Commission for assignment by competitive bidding. Subsection (c) also requires that the Commission must base its decision regarding the surrender of the license on public acceptance of the new technology through obtaining television receivers capable of receiving an ATV signal or on the potential loss of reception for a substantial portion of the public. Subsection (d) requires the Commission to establish a fee program for any ancillary or supplementary services if subscription fees or any other compensation fees apart from commercial advertisements are required in order to receive such services. Subsection (e) requires the Commission to conduct an evaluation within 10 years after the date it issues its licenses for advanced television services. In subsection (f), the House adopts the Commission's definition of high definition television. Conference agreement The conference agreement adopts the House amendment with modifications. The conference agreement retains the requirement in the House amendment that the Commission condition the issuance of a new license of the return, after some period, of either the original broadcast license or the new license. However, the conference agreement leaves to the Commission the determination of when such licenses shall be returned and how to reallocate returned spectrum. With respect to paragraph (b)(3), the conferees do not intend this paragraph to confer must carry status on advanced television or other video services offered on designated frequencies. Under the 1992 Cable Act, that issue is to be the subject of a Commission proceeding under section 614(b)(4)(B) of the Communications Act. Further, the conference agreement also adopts the Senate language that the Act's public interest obligations extend to the new licenses and services. The conference agreement modifies the House amendment to provide that if the Commission decides to issue additional licenses for ATV services, it should limit the initial eligibility to broadcast licensees. Section 202 - Broadcast Ownership Senate bill Section 207(b) of the Senate bill requires the Commission to change its rules regarding the amount of national audience a single broadcast licensee may reach. The current cap is 25% of the nation's television households. The Senate bill raises that to 35%. Section 207 directs the Commission to eliminate its rules regarding the number of radio stations one entity may own, either nationally or within a particular market. The Commission may refuse a transfer of a radio license if it would result in an undue concentration of control or would thereby harm competition. Section 207(b)(3) grandfathers existing television local marketing agreements (LMAs). Section 207(b)(4) eliminates the cable-broadcast crossownership ban in section 613(a) of the Communications Act, and the Commission is also required to review its ownership rules biennially, as part of its overall regulatory review required by new section 259 of the Communications Act. This provision is effective upon enactment. House amendment Section 302 of the House amendment adds a new section 337 to the Communications Act addressing broadcast ownership. Section 337, subject to specified restrictions and consistent with the cross-ownership restrictions of section 613(a) of the Communications Act, prohibits the Commission from prescribing or enforcing any regulation which prohibits or limits, on a national or local basis, a licensee from holding any form of ownership or other interest in two or more broadcast stations or in a broadcast station and any other medium of mass communication. This section also prohibits the Commission from prescribing or enforcing any regulation which prohibits a person or entity from owning, operating or controlling two or more networks of broadcast stations or from owning, operating, or controlling a network of broadcast stations and any other medium of mass communications. Section 337(b)(1) eliminates current limits placed on television audience nationwide and places new limits on ownership of television stations by a single entity at a national audience reach exceeding 35 percent for the year following enactment of this section. This section directs the Commission to conduct a study of the operation of these national ownership limitations and to submit a report to Congress on the development of competition in the television marketplace and the need, if any, to revisit these limitations. Section 337(b)(2) sets forth the circumstances under which one entity may own or operate two television stations in a local market. Subparagraph (B) creates a presumption in favor of UHF/UHF and UHF/VHF combinations. Subparagraph (C) clarifies that the Commission may also permit VHF/VHF combinations where it determines that doing so will not harm competition and diversity. Subsection (c) permits the Commission, under certain circumstances, to consider concentrations of local media interests in proceedings to grant, renew or authorize the assignment of station licenses. In a proceeding to grant, renew, or authorize the assignment of any station license under this title, the Commission may deny the application if the Commission determines that the combination of such station and more than one other non-broadcast media of mass communication would result in an undue concentration of media voices in the respective local market. The Commission shall not grant applications that would result in two or fewer persons or entities controlling all the media of mass communications in the market. There is no requirement that any existing interests be divested, but the Commission may condition the grant of an application to acquire additional media interests. Subsection (d) clarifies that any Commission rule prescribed prior to the date of enactment of this legislation that is inconsistent with the requirements of this section is repealed on the date of enactment. Nothing in subsection (d) is to be construed to prohibit the continuation or renewal of any television local marketing agreement in effect on the date of enactment. Conference agreement Section 202(a) of the conference agreement directs the Commission to modify its multiple ownership rules to eliminate its limitations on the number of radio stations which may be owned or controlled nationally. New subsection (b) directs the Commission to further modify its rules with respect to the number of radio stations a party may own, operate or control in a local market. Subsection (b)(2) provides an exception to the local market limits, where the acquisition or interest in a radio station will result in an increase in the number of radio stations. Subsection 202(c)(1) directs the Commission to modify its multiple ownership rules to eliminate the number of television stations which may be owned or controlled nationally and to increase the national audience reach limitation for television stations to 35 percent. Subsection (c)(2) directs the Commission to conduct a rulemaking proceeding to determine whether its rules restricting ownership of more than one television station in a local market should be retained, modified or eliminated. It is the intention of conferees that, if the Commission revises the multiple ownership rules, it shall permit VHF-VHF combinations only in compelling circumstances. Section 202(d) directs the Commission to extend its waiver policy with respect to its one to a market ownership rules to any of the top fifty markets. The Commission now generally bans crossownerships of radio and television stations in the same market, but has implemented a waiver policy which recognizes the potential for public interest benefits of such combinations when bedrock diversity interested are not threatened. The conferees in adopting subsection (d), intend to extend the benefits of this policy to the top fifty markets. Also, in the Commission's proceeding to review its television ownership rules generally, the Commission is considering whether generally to allow such local crossownerships, including combinations of a television station and more than one radio station in the same service. The conferees expect that the Commission's future implementation of its current radio-television waiver policy, as well as any changes to its rules it may adopt in its pending review, will take into account the increased competition and the need for diversity in today's radio marketplace that is the rationale for subsection (d). Subsection (e) directs the Commission to revise its rules at 47 CFR 73.658(g) to permit a television station to affiliate with a person or entity that maintains two or more networks unless such dual or multiple networks are composed of (1) two or more of the four existing networks (ABC, CBS, NBC, FOX) or, (2) any of the four existing networks and one of the two emerging networks (WBTN, UPN). The conferees do not intend these limitations to apply if such networks are not operated simultaneously, or if there is no substantial overlap in the territory served by the group of stations comprising each such networks. Subsection (f) directs the Commission to revise its rules to permit crossownership interests between a broadcast network and a cable system. If necessary, the Commission is directed to revise its rules to ensure carriage, channel positioning and nondiscriminatory treatment of non-affiliated broadcast stations by cable systems affiliated with a broadcast network. Subsection (g) grandfathers LMAs currently in existence upon enactment of this legislation and allows LMAs in the future, consistent with the Commission's rules. The conferees note the positive contributions of television LMAs and this subsection assures that this legislation does not deprive the public of the benefits of existing LMAs that were otherwise in compliance with Commission regulations on the date of enactment. Subsection (h) directs the Commission to review its rules adopted under section 202 and all of its ownership rules biennially. In its review, the Commission shall determine whether any of its ownership rules, including those adopted pursuant to this section, are necessary in the public interest as the result of competition. Based on its findings in such a review, the Commission is directed to repeal or modify any regulation it determines is no longer in the public interest. Apart from the biennial review required by subsection (h), the conferees are aware that the Commission already has several broadcast deregulation proceedings underway. It is the intention of the conferees that the Commission continue with these proceedings and conclude them in a timely manner. Subsection (i) amends section 613(a) of the Communications Act by repealing the restriction on broadcast-cable crossownership. The conferees do not intend that this repeal of the statutory prohibition should prejudge the outcome of any review by the Commission of its rules. Subsection (i) also amends 613(a) by revising the cable-MMDS crossownership restriction so that it does not apply in any franchise area in which a cable operator faces effective competition. Section 203 - Terms of Licenses Senate bill Section 207 of the Senate bill amends section 307(c) of the Communications Act to increase the term of license renewal for television licenses from five to ten years and for radio licenses from seven to ten years. House amendment Section 306 of the House amendment contains a similar provision but amends section 307(c) of the Communications Act to provide for a seven year license term for all broadcast licenses. Conference agreement The conference agreement adopts the House provisions but extends the license term for broadcast licensees to eight years for both television and radio. Section 204 - Broadcast License Renewal Procedures Senate bill Subsection (d) of section 207 amends the broadcast license renewal procedures. This subsection amends section 309 of the Communications Act by adding a new subsection (k) which gives the incumbent broadcaster the ability to apply for its license renewal without competing applications. A broadcaster would apply for its renewal, and the Commission would grant such a renewal, if, during the preceding term of its license the station has served the public interest, convenience, and necessity, has not made any serious violations of the Communications Act or of the Commission's rules, and has not, through other violations, shown a pattern of abuse. The Commission may not consider whether the granting of a license to a person other than the renewal applicant might serve the public interest, convenience, and necessity prior to its decision to approve or deny the renewal application. Under this section, the Commission has discretion to consider what is a serious violation of the Communications Act. If a licensee does not meet those criteria, the Commission may either deny the renewal, or impose conditions on the renewal. Once the Commission, after conducting a hearing on the record, denies an application for renewal, it is then able to accept applications for a construction permit for the channel or facilities of the former licensee. Subparagraph (4) would require broadcast licensees to attach a summary of comments regarding violent programming to its renewal application. House amendment Section 305 of the House amendment similarly amends section 309 of the Communications Act by adding a new subsection (k) mandating a change in the manner in which broadcast license renewal applications are processed. Subsection (k) allows for Commission consideration of the renewal application of the incumbent broadcast licensee without the contemporaneous consideration of competing applications. Under this subsection, the Commission would grant a renewal application if it finds that the station, during its term, had served the public interest, convenience, and necessity; there had been no serious violations by the licensee of the Communications Act or Commission rules; and there had been no other violations of the Communications Act or Commission rules which, taken together, indicate a pattern of abuse. If the Commission finds that the licensee has failed to meet these requirements, it could deny the renewal application or grant a conditional approval, including renewal for a lesser term. Only after denying a renewal application could the Commission accept and consider competing applications for the license. Conference agreement The conference agreement adopts the House provisions with modifications to include the Senate provision requiring a renewal applicant to attach to its application a summary of comments regarding violent programming. The conference agreement sets the effective date for this section at May 1, 1995. Section 205 - Direct Broadcast Satellite Service Senate bill Section 312(a) of the Senate bill amends section 705(e)(4) of the Communications Act to extend the current legal protection against signal piracy to direct-broadcast services. Section 312(b) amends section 303 of the Communications Act to clarify that the Commission has exclusive jurisdiction over the regulation of direct broadcast satellite (DBS) service. House amendment The House has identical provisions in sections 308 and 311 of the House amendment. Conference agreement The conference agreement adopts the Senate provision with a conforming change to the definition of "direct-to-home." Section 206 - Automated Ship Distress and Safety Systems Senate bill Section 306 of the Senate bill provides that notwithstanding any other provision of the Communications Act, any ship documented under the laws of the United States operating in accordance with the Global Maritime Distress and Safety System provisions of the Safety of Life at Sea Convention is not required to be equipped with a radio telegraphy station operated by one or more radio officers or operators. House amendment This House provision is identical. Conference agreement The conference agreement adopts the Senate provision with a modification placing the provision as an amendment to section 364 of the Communications Act. This provision permits a ship that fully complies with the Global Maritime Distress and Safety System (GMDSS) provisions of the Safety of Life at Sea Convention to be exempted from requirements to carry a radio telegraph station operated by one or more radio operators. Due to the conferees' concern about the proper implementation of the GMDSS, the provision specifies that this exemption shall only take effect upon the United States Coast Guard's determination that the system is fully installed, maintained, and is operating properly on each vessel. Section 207 - Restrictions on Over-The-Air Reception Devices Senate bill No provision. House amendment Section 308 of the House amendment directs the Commission to promulgate rules prohibiting restrictions which inhibit a viewer's ability to receive video programming from over-the-air broadcast stations or direct broadcast satellite services. Conference agreement The conference agreement adopts the House provision with modifications to extend the prohibition to devices that permit reception of multichannel multipoint distribution services. TITLE III - CABLE SERVICES Section 301 - Cable Act Reform Senate bill Section 203(a) of the Senate bill amends the definition of "cable system" in section 602 of the Communications Act. Section 203(b) of section 204 of the bill limits the rate regulation currently imposed by the 1992 Cable Act. Paragraph (1) amends the rate regulation provisions of section 623 of the Communications Act for the expanded tier. First, it eliminates the ability of a single subscriber to initiate a rate complaint proceeding at the Commission. Franchising authorities are the relevant State and local government entities that still retain the ability to initiate a rate proceeding. Second, rates for cable programming services will only be considered unreasonable, and subject to regulation, if the rates substantially exceed the national average for comparable cable programming services. Paragraph (2) amends the definition of effective competition in section 623(l)(1) to allow the provision of video services by a local exchange carrier either through a common carrier video platform, or as a cable operator, in an unaffiliated cable operator's franchise area to satisfy the effective competition test. Section 203(c) eliminates cable rate regulation for small cable operators serving areas of 35,000 or fewer subscribers. Section 203(d) provides that any programming access rules that apply to a cable operator under section 628 of the Communications Act also apply to a telecommunications carrier or its affiliate that provides video programming directly to subscribers. Section 203(e) provides for expedited decisions by the Commission regarding market determinations under section 614 of the Communications Act. Section 203(f) provides that the provisions of this section take effect on the date of enactment. House amendment Section 307(a) of the House amendment amends the definition of "cable service" in section 602(6) of the Communications Act by adding "or use" to the definition, reflecting the evolution of video programming toward interactive services. Subsection (b) prohibits the Commission from requiring the divestiture of, or preventing or restricting the acquisition of, any cable system based solely on the geographic location of the system. Subsection (c) amends section 623(a) of the Communications Act to deregulate equipment, installations, and additional connections furnished to subscribers that receive more than basic cable service when a cable system has effective competition pursuant to section 623(l)(1)(b). Subsection (d) amends section 623(a) of the Communications Act to limit basic tier rate increases by a cable operator to once every six months and permits cable operators to implement such increases after 30 days notice. Subsection (d) limits the franchising authority's scope of review to the incremental change in the basic tier rate effected by a rate increase. Subsection (e) amends section 623(a) of the Communications Act to promote the development of a broadband, two-way telecommunications infrastructure. Under this paragraph, cable operators are permitted to aggregate equipment costs broadly. However, subsection (e) does not permit averaging for equipment used by consumers that subscribe only to basic service tier. Subsection (e) directs the Commission to complete its revisions to current rules necessary to implement this subsection within 120 days. Subsection (f) amends section 623(c) of the Communications Act governing review of complaints by inserting a new paragraph (3) requiring that the Commission receive complaints from three percent of a system's subscribers, or 10 subscribers, whichever is greater, before it initiates a rate case. Subsection (f) extends from 45 days to 90 days the amount of time after a cable programming service rate increase goes into effect that during which subscribers may file a complaint. Pending rate cases will be subject to the new complaint threshold and complaining parties are granted a 90-day extension to bring complaints into conformance with the new complaint threshold requirement. Subsection (f) clarifies that the Commission's scope of review is limited to the last incremental consumer programming service rate increase consistent with the intent of the 1992 Cable Act. Subsection (g) clarifies that a cable operator must comply with the uniform rate structure requirement in section 623(d) of the 1992 Cable Act only with respect to regulated services. Subsection (g) also amends section 623(d) of the Communications Act to exempt bulk discounts to multiple dwelling units ("MDUs") from the uniform rate requirement. Subsection (h) amends section 623(l)(1) of the Communications Act by adding a fourth effective competition test. Under this new test, effective competition for cable programming service tier and subscriber equipment (other than that necessary for receiving the basic service tier) is present: (1) where a common carrier has been authorized to provide video dialtone service in the cable franchise area; (2) where a common carrier has been authorized by the Commission or pursuant to a franchise to provide video programming directly to subscribers in the cable franchise area; or (3) when the Commission completes all actions necessary to prescribe the video platform rules pursuant to section 653(b)(1). When any of these events occurs, the rates for a cable system's cable programming services, as well as equipment, installations, and additional television connections are deregulated. Subsection (h) does not apply to basic cable service. Basic service, including all equipment, additional television connections, and installations furnished to basic-only subscribers, remains subject to regulation until the cable operator meets one of the effective competition tests contained in section 623(l)(1)(A),(B), and (C) of the Communications Act. Subsection (i) amends section 623 of the Communications Act to deregulate the rates for the cable programming service tiers of small companies and the rates for the basic service tier of small company systems that offered only a single tier of service as of December 31, 1994. Subsection (i) does not deregulate the basic tier of small cable systems that offer multiple tiers of cable service. In order to qualify as a "small cable operator," a cable operator must: (1) directly, or through an affiliate, serve in the aggregate fewer than one percent of all cable subscribers nationwide; and (2) not be affiliated with any entity whose annual gross revenues in the aggregate exceed $250,000,000. Subsection (j) amends section 624(e) of the Communications Act by prohibiting States or franchising authorities from regulating in the areas of technical standards, customer equipment, and transmission technologies. Subsection (k) amends section 624A(b)(2) of the Communications Act and directs that no Federal agency, State, or franchising authority may prohibit a cable operator's use of any security system, including scrambling, but permits the Commission to prohibit scrambling of video programming on the broadcast-basic service tier unless scrambling is necessary to prevent signal piracy. Subsection (l) amends section 624A of the Communications Act to direct the Commission to set only minimal standards when implementing regulations to assure compatibility between cable "set-top" boxes, televisions, and video cassette recorders, and to rely on the marketplace for other features, services, and functions to ensure basic compatibility. This subsection clarifies section 624(c)(1)(A) further to ensure that Commission efforts with respect to cable compatibility do not affect unrelated markets, such as computers or home automation communications, or result in a preference for one home automation protocol over another. Subsection (m) amends section 625(d) of the Communications Act by clarifying that a cable operator may move any service off the basic service tier at its discretion, other than the local broadcast signals and access channels required to be carried on the basic service tier under section 623(b)(7)(A) of the Communications Act. Subsection (n) amends section 632 of the Communications Act to provide cable operators with flexibility to use "reasonable" written means to convey rate and service changes to consumers. Notice need not be inserted in the subscriber's bill. Subsection (n) also provides that prior notice is not required for any rate change that is the result of a regulatory fee, franchise fee, or any other fee, tax, assessment or change of any kind imposed by the Government on the transaction between a cable operator and a subscriber. Subsection (o) amends section 623 of the Communications Act to clarify that losses incurred prior to the enactment of the 1992 Cable Act by a cable system owned and operated by the original franchisee may not be disallowed in determination of rate regulation. Conference agreement The conference agreement adopts the House provisions with modifications. It adopts the House provision amending the definition of cable service. The conferees intend the amendment to reflect the evolution of cable to include interactive services such as game channels and information services made available to subscribers by the cable operator, as well as enhanced services. This amendment is not intended to affect Federal or State regulation of telecommunications service offered through cable system facilities, or to cause dial-up access to information services over telephone lines to be classified as a cable service. The conference agreement adopts the Senate provision amending the definition of cable system to clarify that the term does not include a facility that serves subscribers without using any public right-of-way. The conference agreement sunsets regulation of the cable programming services tier on March 31, 1999. The agreement directs the Commission to review a rate increase for an operator's cable programming services tier within 90 days of a complaint. The conference agreement amends the Communications Act's requirements for a uniform rate structure to clarify that such requirements do not apply to (1) a cable operator with respect to the provision of cable service over its cable system in any geographic area in which the video programming services offered by the operator in that area are subject to effective competition, or (2) any video programming offered on a per channel or per program basis. Bulk discounts to multiple dwelling units shall not be subject to the uniform rate requirement except that a cable operator may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory. The conference agreement adopts an amendment to section 623(l) of the Communications Act to expand the effective competition test for deregulating both basic and cable programming service tiers. The test provides that effective competition exists when a telephone company or any multichannel video programming distributor is offering video programming services directly to subscribers by any means in the franchise area of an unaffiliated cable operator provided such service is comparable to that provided by the unaffiliated cable operator. "By any means," includes any medium (other than direct-to-home satellite service) for the delivery of comparable programming, including MMDS, LMDS, an open video system, or a cable system. For purposes of section 623(l)(1)(D) of the Communications Act, "offer" has the same meaning given that term in the Commission's rules as in effect on the date of enactment of the bill. See 47 CFR 76.905(e). The conferees intend that "comparable" requires that the video programming services should include access to at least 12 channels of programming, at least some of which are television broadcasting signals. See 47 CFR 76.905(g). The conference agreement adopts the Senate provision with respect to deregulation of small cable systems with the modification that the franchise area served by such system must reach 50,000 or fewer subscribers. The agreement adopts the House provisions on market determinations, technical standards, cable equipment compatibility, and subscriber notices. The agreement amends section 628 of the Communications Act to extend the program access requirements to satellite cable programming vendors in which a common carrier providing video programming by any means has an attributable interest. This provision clarifies that such common carriers shall not be deemed to have an attributable interest in such programming vendor (or its parent company) solely as a result of the common carrier's holding, or having the right to appoint or elect, two or fewer common officers or directors. The conference agreement amends section 617 of the Communications Act to repeal the anti-trafficking restrictions. The conference agreement adopts the House provisions on equipment aggregation and treatment of prior year losses. The conference agreement also adopts the House provision on cable equipment compatibility. As used in section 624A of the Communications Act, the term "affect" means to produce a material influence upon, or alteration in, such features, functions, protocols, and other product and service options. The conferees intend that the Commission should promptly complete its pending rulemaking on cable equipment compatibility, but not at the risk that premature or overbroad Government standards may interfere in the market-driven process of standardization in technology intensive markets. Section 302 - Cable Service Provided by Telephone Companies Senate bill The Senate bill creates new sections of the Communications Act to provide for the provision of video programming by telephone companies. House amendment The House amendment creates new sections of the Communications Act to provide for the provision of video programming by telephone companies. Conference agreement Section 302 of the conference agreement establishes a new "Part V" of title VI of the Communications Act. Part V contains new sections 651-653 to provide for the provision of video programming by telephone companies. New Section 651 - Regulatory Treatment of Video Programming Services Senate bill Section 202 of the Senate bill eliminates the cable/telephone cross ownership restriction and grants telephone companies the option of providing video programming to subscribers over a cable system or over a video platform. It also states that a BOC need not use a separate affiliate if it provides facilities, services or information to all programmers on the same terms and conditions as it provides to its own operations, and if it does not use telecommunications services to subsidize the provision of video programming. In addition, it states that when a BOC provides cable service as a cable operator, it must do so through a separate affiliate, except that if the cable service is provided using the company's own telephone exchange facilities, it is not required to make capacity available on a nondiscriminatory basis to other video service providers because of such use. House amendment Section 201 of the House amendment permits a common carrier that provides video programming directly to subscribers in its telephone service area, to do so either over a video platform or over a cable system. In addition, it requires the carrier to provide notice to programming providers and to submit detailed information to the Commission concerning its intention to establish capacity for the provision of video programming. Carriers are required to establish channel capacity sufficient to meet all bona fide demand and to expand capacity in response to demand for additional capacity. Conference agreement New section 651 of the Communications Act specifically addresses the regulatory treatment of video programming services provided by telephone companies. Recognizing that there can be different strategies, services and technologies for entering video markets, the conferees agree to multiple entry options to promote competition, to encourage investment in new technologies and to maximize consumer choice of services that best meet their information and entertainment needs. New section 651(a)(1) states that common carriers, or other persons, that use radio communication to provide video programming will be regulated under title III of the Communications Act, and are subject to the requirements of new section 652 of the Communications Act but are not otherwise subject to the requirements of title VI. This will create parity among providers of services using radio communication. New section 651(a)(2) states that when common carriers provide only video transmission on a common carrier basis, they are subject only to title II and to new section 652, and are not otherwise subject to the requirements of title VI merely by engaging in common carrier transport of video programming. New section 651(a)(3) states that common carriers providing video programming to subscribers by any means other than those described in new section 651(a)(1) or (a)(2), are subject to the requirements of title VI, unless such programming is provided by means of an open video system that has been certified by the Commission. New section 651(a)(3) also states that carriers that provide programming using a certified open video system are subject to the requirements of part V, and only those provisions of parts I through IV of title VI as are specifically provided in new section 653(c). Open video systems are not subject to the requirements of title II for the provision of video programming or cable services. Common carriers that provide video programming using radio communication or using common carriage transmission, or a combination of those services, also may choose to provide an open video system. New section 651(a)(4) provides that such systems are subject to the same requirements as other open video systems. New section 651(b) states that a local exchange carrier that provides cable service by means of an open video system, or by means of an integrated cable system utilizing its own telephone exchange facilities, is not required by title II to also make transmission capacity and related services available on a nondiscriminatory basis to any other person for the provision of cable service or video programming directly to subscribers. This provision clarifies that the open video system operator's obligation to provide system capacity and facilities to others is limited to, and governed by, part V and the other requirements specifically provided in new section 653(c). Likewise, a local exchange carrier that utilizes its own telephone exchange facilities and services to provide cable services other than through an open video system is required by such use only to make cable and video programming capacity and facilities available to others for the provision of cable service to the extent provided in parts I through IV of title VI, regardless of whether those facilities also are used to provide telephone exchange service under title II. Similarly, under new section 651(c) common carriers that establish video delivery systems, including cable and open video systems, are not required to obtain section 214 authority prior to establishing or operating such systems. This requirement has served as an obstacle to competitive entry and has disproportionately disadvantaged new competitors. Eliminating this barrier to entry will hasten the development of video competition and will provide consumers with increased program choice. New Section 652 - Prohibition on Buyouts Senate bill Section 202 of the Senate bill adds to section 613(b) of the Communications Act several provisions restricting the ability of a local exchange carrier to acquire more than a 10 percent financial interest or any management interest in a cable operator in its telephone service area and restricting the ability of a cable operator to acquire similar interests in a local exchange carrier in the cable operator's franchise area. It includes certain exceptions for acquisitions in non-urban areas with less than 50,000 inhabitants, and it authorizes the Commission to grant waivers for economic distress, economic viability of the cable system, or where any anticompetitive effects of the proposed transaction are clearly outweighed by the public interest, and where the local franchising authority approves the waiver. The bill directs the Commission to act on such waiver requests within 180 days of filing. The Senate provisions also permit a local exchange carrier, if certain conditions are met, to use excess capacity of a cable company for that portion of the transmission facilities of the cable operator from the last multi-user terminal to the premises of the end user. Section 706 of the Senate bill authorizes a local exchange carrier or any of its affiliates to purchase or otherwise acquire more than 10 percent of the financial interest or any management interest in any cable system in its telephone service area so long as (1) the cable system serves no more than 20,000 cable subscribers and (2) no more than 12,000 of those cable subscribers live in an urbanized area. House amendment Section 655 of the House amendment contains a general prohibition on buy-outs by a common carrier of a cable system within its service territory. Subsection (b) provides exceptions that would permit a common carrier to purchase a cable system or systems under circumstances including the following: (1) the cable system serves a rural area; (2) the total number of subscribers served by such systems adds up to less than ten percent of the households served by the carrier in the telephone service area, and no such system or systems serve a franchise area with more than 35,000 inhabitants for an affiliated system, or more than 50,000 inhabitants for any system that is not affiliated with any system whose franchise area is contiguous; and (3) the exemption would permit a carrier to obtain, by contract with a cable operator, use of the "drop"from the curb to the home that is controlled by the cable company, if such use was reasonably limited in scope and duration as determined by the Commission. The exception under subparagraph (4) is intended to address a market situation where a dominant cable operator that is a large multiple systems operator (MSO) shares a market with a small independent cable system. Subsection (c) also contains the waiver process for the buy-out provision under which the Commission may grant a waiver upon a showing of undue economic distress by the owner of the cable system if a sale to a telephone company is blocked. The Commission is directed to act on a waiver application within 180 days after it is filed. Conference agreement The conference agreement adopts the provisions of the Senate bill limiting acquisitions and prohibiting joint ventures between local exchange companies and cable operators that operate in the same market to provide video programming to subscribers or to provide telecommunications services in such market. Such carriers or cable operators may enter into a joint venture or partnership for other purposes, including the construction of facilities for the provision of such programming or services. With respect to exceptions to these general rules contained in new section 652(a), (b), and (c), the conferees agreed, in general, to take the most restrictive provisions of both the Senate bill and the House amendment in order to maximize competition between local exchange carriers and cable operators within local markets. In new section 652(d)(1) the conference agreement allows a local exchange carrier to obtain a controlling interest in, management interest in, or a joint venture or partnership with a cable system operator for the use of such system located within its telephone service area to the extent that such system or facilities only serve places or territories that have fewer than 35,000 inhabitants and are outside urbanized areas. The agreement further stipulates that such systems in the aggregate serve less than 10 percent of the households in the telephone service area of such local exchange carrier. New section 652(d)(1) also permits a cable operator to obtain a controlling interest in, management interest in, or a joint venture or partnership with a local exchange carrier for the use of such carrier's facilities if such facilities serve places or territories that have fewer than 35,000 inhabitants and are outside of urbanized areas. The agreement contains other very limited exceptions to the general rules contained in new section 652(a), (b), and (c). In new section 652(d)(3) acquisitions would be permitted in competitive markets where a local exchange carrier seeking to obtain a controlling interest or form a joint venture with a cable system may do so if narrowly drawn requirements are met. New section 652(d)(4) provides that new section 652(a) shall not apply to certain cable systems serving less than 17,000 subscribers outside of the top television markets. New section 652(d)(5) of the conference agreement allows a non-Tier I local exchange carrier to obtain more than a ten percent interest in, or to form a joint venture or partnership with, a small cable system that serves no more than 20,000 cable subscribers within the telephone company's service territory, provided that no more than 12,000 of those subscribers live within an urbanized area. The conference agreement also allows for limited joint use of certain cable system facilities. In new section 652(d)(2) the agreement adopts language from the Senate bill that will allow a local exchange carrier to obtain, with the concurrence of the cable operator on the rates, terms and conditions, the use of that part of the transmission facilities of a cable system extending from the last multi-user terminal to the premises of the end user. The agreement stipulates that such joint use is permitted if such use is reasonably limited in scope and duration as determined by the Commission. The conferees also provided for the establishment of a waiver process of the statutory rules. In new section 652(d)(6), the conferees give specific guidance to the Commission with respect to granting waivers. In that regard, the conferees allow the Commission to waive the various restrictions in this section if: the cable company or telephone company would be subjected to undue economic stress, the cable system of local exchange facilities would not be economically viable, the anticompetitive effects of the proposed transaction are clearly outweighed by the public interest, and the local franchising authority approves of such waiver. Finally, new section 652(e) contains a definition of telephone service area for the purposes of this section. New Section 653 - Establishment of Open Video Systems Senate bill Section 202 of the Senate bill amends section 613(b) of the Communications Act to state that nothing precludes a telecommunications carrier from carrying video programming provided by others directly to subscribers over a common carrier video platform. It also states that nothing precludes a video program provider that makes use of a common carrier video platform from being treated as an operator of a cable system for purposes of section 111 of title 17, U.S.C. It also requires providers of common carrier video platform services to provide local broadcast stations, and public, educational and governmental entities, access to platforms for the purpose of transmission of television broadcast programming at rates no higher than the incremental-cost-based rates of providing such access. It states that video program providers may be required to pay fees in lieu of franchise fees, if the fees are competitively neutral and are separately identified in consumer billing. It also states that common carriers are not required to obtain certificates under section 214 in order to construct facilities to provide video programming services. Within 1 year after enactment, the Commission must prescribe regulations that set forth a number of safeguards. Finally, it specifies that the amendment made by subsection (a) takes effect on the date of enactment, while the amendment made by subsection (b) (which states that no section 214 is required to build platform facilities) takes effect 1 year after enactment. House amendment Section 201 of the House amendment adds new section 653 to the Communications Act. Section 653 permits common carriers to establish video platforms but requires them to notify the Commission of their intent to do so; it also specifies the information that must be included in such notification. Carriers establishing platforms are required to establish channel capacity for the provision of video programming in response to bona fide requests for capacity and must notify the Commission if there is a delay in or denial of capacity and are required to construct additional capacity to meet excess demand. The Commission is required to resolve disputes arising from requests for capacity within 180 days of notice of such a dispute. The Commission is given 6 months from the date of enactment to complete all actions necessary (including any reconsideration) to prescribe regulations that -- prohibit carriers from discriminating among video programming providers with regard to carriage on the platform; determine what constitutes a bona fide request for capacity; permit channel sharing; extend regulations concerning sports exclusivity, network nonduplication and syndicated exclusivity to video platforms; require platforms to provide service, transmission and interconnection to unaffiliated programmers that is equivalent to that provided to the common carrier's video affiliate; prohibit unreasonable discrimination in favor of the common carrier's video affiliate concerning material or information needed to select programming; and, prohibit a common carrier from excluding areas from its video platform service area on the basis of ethnicity, race or income. Section 656, as added by the House amendment, sets forth the applicability of parts I through IV of title VI to any video programming affiliate established by a common carrier in accordance with the requirements of part V. Subsection (a) states that, in general, any provision that applies to a cable operator under the following sections also applies to such affiliate -- sections 613 (other than subsection (a)(2)), 616, 617, 628, 631, 632 and 643 of title VI. Sections 611, 612, 614 and 615 of title VI and section 325 of title III also apply to such affiliates in accordance with the regulations prescribed under subsection (b). Parts III and IV (other than sections 628, 631, 632 and 634) of title VI to apply to such affiliates. Subsection (b) addresses implementation. The Commission is required to prescribe regulations to ensure that common carriers that operate video platforms provide: capacity, services, facilities and equipment for public, educational and governmental use; capacity for commercial use; capacity for broadcast television stations; and, an opportunity for commercial broadcast stations to choose between mandatory carriage and reimbursement for retransmission. It also directs the Commission to impose obligations that are no greater or lesser than the corresponding cable operator obligations referenced in subsection (a)(2) of section 656. Finally, this subsection also states that video programming affiliates of common carriers that establish platforms, and multichannel video programming distributors that use such platforms to offer competing service, are subject to the payment of local franchise fees. It adds that such fees are in lieu of fees imposed under section 622 and that the rate of such fees may not exceed the rate at which franchise fees are imposed on cable operators in the same franchise area Conference agreement The conference agreement adds a new section 653 to the Communications Act. The conferees recognize that telephone companies need to be able to choose from among multiple video entry options to encourage entry, and so systems under this section are allowed to tailor services to meet the unique competitive and consumer needs of individual markets. New section 653(a) focuses on the establishment of open video systems by local exchange carriers and provides for reduced regulatory burdens subject to compliance with the provisions of new section 653(b) and Commission certification of a carrier's intent to comply. New section 653(a) also gives the Commission authority to resolve disputes (and award damages), but requires such resolution to occur within 180 days after notice of the dispute is submitted to the Commission. New section 653(b) gives the Commission six months from the date of enactment to complete all actions necessary, including any reconsideration, to prescribe regulations to accomplish the following o except as required by section 611, 614 or 615, to prohibit open video system operators from discriminating among video programmers with regard to carriage, and ensure that the rates, terms and conditions for carriage are just and reasonable and are not unjustly or unreasonably discriminatory; o if demand exceeds channel capacity, to prohibit an open video system operator and its affiliates from selecting the video programming services that occupy more than one-third of the activated channel capacity of the system; but this limitation does not in any way limit the number of channels a carrier and its affiliates may offer to provide directly to subscribers; o to permit an open video system operator to require channel sharing; that is, to carry only one channel of any video programming service that is offered by more than one video programming provider (including the local exchange carrier's video programming affiliate), provided that subscribers have ready and immediate access to any such video programming service; o to extend the Commission's regulations concerning sports exclusivity, network nonduplication and syndicated exclusivity to the distribution of video programming over open video systems, must carry for commercial and noncommercial broadcast stations, and retransmission content; and, o to prohibit an open video system operator from unreasonably discriminating in favor of itself and its affiliates with regard to material or information provided for the purpose of selecting programming or presenting information to subscribers; to require an open video system operator to ensure that video programming providers or copyright holders are able to identify their programming services to subscribers; to require the operator to transmit such identification without change or alteration; and to prohibit an open video system operator from omitting television broadcasters or other unaffiliated video programming services from carriage on any navigational device, guide, or menu. New section 653(c) sets forth the reduced regulatory burdens imposed on open video systems. There are several reasons for streamlining the regulatory obligations of such systems. First, the conferees hope that this approach will encourage common carriers to deploy open video systems and introduce vigorous competition in entertainment and information markets. Second, the conferees recognize that common carriers that deploy open systems will be "new" entrants in established markets and deserve lighter regulatory burdens to level the playing field. Third, the development of competition and the operation of market forces mean that government oversight and regulation can and should be reduced. New section 653(c)(1)(A) states that the following provisions that apply to cable operators also apply to certified operators of open video systems -- sections 613 (other than subsection (a)(2) thereof), 616, 623(f), 628, 631, and 634; new section 653(c)(1)(B) states that the following sections -- 611, 612, 614, and 615, and section 325 of title III -- apply in accordance with regulations prescribed under paragraph (2); and, new section 653(c)(1)(C) states that sections 612 and 617, and parts III and IV (other than sections 623(f), 628, 631, and 634), of this title do not apply. With respect to the rulemaking proceeding required by new section 653(b)(1), new section 653(c)(2)(A) requires that the Commission shall, to the extent possible, impose obligations that are no greater or lesser than the obligations contained in the provisions described in new section 653(c)(1)(B). New section 653(c)(2)(B) states that open video system operators may be subject to fees imposed by local franchising authorities, but that such fees are in lieu of fees required under section 622. A State governmental authority could also impose taxes, fees or other assessments in lieu of franchise or franchise-like fees imposed by municipalities. In another effort to ensure parity among video providers, the conferees state that such fees may only be assessed on revenues derived from comparable cable services and the rate at which such fees are imposed on operators of open video systems may not exceed the rate at which franchise fees are imposed on any cable operator in the corresponding franchise area. Open system operators would have the same flexibility as their cable operator competitors to state separately these fees on their customer bills. The conferees intend that an operator of an open video system under this part shall be subject, to the extent permissible under State and local law, to the authority of a local government to manage its public rights-of-way in a nondiscriminatory and competitively neutral manner. New section 653(c)(3) is a further attempt to ensure that operators of open video systems are not burdened with unreasonable regulatory obligations. It states that the requirements of new section 653 are intended to operate in lieu of, and not in addition to, the requirements of title II. The conferees do not intend that the Commission impose title II-like regulation under the authority of this section. Rules and regulations adopted by the Commission pursuant to its jurisdiction under title II should not be merged with or added to the rules and regulations governing open video systems, which will be subject to new section 653, not title II. Section 302(b)(3) of the conference agreement specifically repeals the Commission's video dialtone rules. Those rules implemented a rigid common carrier regime, including the Commission's customer premises equipment and Computer III rules, and thereby created substantial obstacles to the actual operation of open video systems. New section 653(c)(4) provides that nothing in the Communications Act precludes a video programming provider making use of an open video system from being treated as an operator of a cable system for purposes of section 111 of title 17, United States Code. New section 653(d) contains the definition of the term telephone service area' to be used in conjunction with the provisions of new section 653. Section 302(b) of the conference agreement contains technical and conforming amendments. Paragraph (1) repeals subsection (b) of section 613 of the Communications Act (47 U.S.C.533(b)). Paragraph (2) amends paragraph (7) of section 602 of the Communications Act to clarify that the provision solely of interactive on-demand services over a common carrier facility or the provision of an open video system does not render the facility a cable system and redesignates paragraphs (12) through (19) as (13) through (20) and, inserts paragraph (12), defining "interactive on-demand services." Paragraph (3), as noted previously, provides that the Commission's video dialtone regulations, adopted in CC Docket No. 87-266, are repealed on the date of enactment and shall not apply to the operation of an open video system. Repeal of the Commission's video dialtone regulations is not intended to alter the status of any video dialtone service offered before the regulations required by this section become effective. Section 303 - Preemption of Franchising Authority Regulation of Telecommunications Services Senate bill Subsection 201(b) of the Senate bill establishes the principles applicable to the provision of telecommunications by a cable operator. Paragraph (1) of this subsection adds a new paragraph 3(A) to section 62 l(b) of the Communications Act, which sets forth the jurisdiction of and limi- tations on franchising authorities over cable operators engaged in the provision of telecommunications services. Specifically, a cable operator or affiliate engaged in the provision of telecommunications services is not required to obtain a franchise under title VI of the Communications Act, nor do the provisions of title VI apply to a cable operator or affiliate to the extent they are engaged in the provision of telecommunications services. Franchising authorities are prohibited from ordering a cable operator or affiliate to discontinue the provision of telecommunications service, requiring cable operators to obtain a franchise to provide telecommunications services, or requiring a cable operator to provide telecommunications services or facilities as a condition of initial grant of franchise, franchise renewal, or transfer of a franchise. However, the Senate intends that telecommunications services provided by a cable company shall be subject to the authority of a local government to manage its public rights of way in a non-discriminatory and competitively neutral manner and to charge fair and reasonable fees for its use. These changes do not affect existing Federal or State authority with respect to telecommunications services. House amendment Section 106 of the House amendment creates a new section 621(b)(3)(A) of the Communications Act that provides that, to the extent a cable operator is engaged in providing a telecommunications service other than cable service, it shall not be required to obtain a franchise, and the provisions of title VI of the Communications Act shall not apply. Subparagraph (B) provides that a franchising authority may not impose any requirement that has the effect of prohibiting or limiting the provision of telecommunications service by a cable operator. Subparagraph (C) provides that a franchising authority may not terminate an operator's offering of a telecommunications service or cable service because of the failure of the operator to obtain a franchise for the provision of telecommunications services. Subparagraph (D) establishes that franchising authorities may not require a cable operator to provide any telecommunications service or facilities, other than intergovernmental services, as a condition of the initial grant of a franchise or renewal. Subsection (b) amends section 622(b) of the Communications Act by inserting the phrase "to provide cable services." This amendment makes clear that the franchise fee provision is not intended to reach revenues that a cable operator derives for providing new telecommunications services over its system, but only the operators cable-related revenues. Conference agreement The conference agreement adopts the House provision with some minor, technical modifications. The conferees intend that, to the extent permissible under State and local law, telecommunications services, including those provided by a cable company, shall be subject to the authority of a local government to, in a nondiscriminatory and competitively neutral way, manage its public rights-of-way and charge fair and reasonable fees. Section 304 - Competitive Availability of Navigation Devices Senate bill No provision. House amendment Section 203 of the House amendment directs the Commission to adopt regulations to assure the competitive availability to consumers of converter boxes, interactive communications devices, and other customer premises equipment from manufacturers, retailers, and other vendors not affiliated with a telecommunications operator. Section 203 does not prohibit telecommunications system operators from also offering navigation devices and other customer premise equipment to customers provided that the system operators' charges for navigation devices and equipment are separately stated, and are not subsidized by the charges for the network service. Section 203 specifically recognizes that cable and other telecommunications system operators have a valid interest, which the Commission should continue to protect, in system or signal security and in preventing theft of service and, therefore, the Commission may not prescribe regulations which would jeopardize signal security or impede the legal rights of a provision to preempt theft of service. Section 203 directs the Commission to waive a regulation for a limited time where the telecommunications system operator has shown that the waiver is necessary to the introduction of a new telecommunications subscription service. Section 203(f) sunsets the regulations adopted pursuant to this section when the Commission determines that the market for customer premises equipment, including navigation devises, has become competitive. Conference agreement The conference agreement adopts the House provision with modifications as a new section 629 of the Communications Act. The scope of the regulations are narrowed to include only equipment used to access services provided by multichannel video programming distributors. In prescribing regulations to ensure the commercial availability of such equipment to consumers, the Commission is directed to consult with private standard-setting organizations, such as IEEE, DAVIC (Digital Audio Video Council), MPEG, ANSI and other appropriate bodies. The conferees intend that the Commission avoid actions which could have the effect of freezing or chilling the development of new technologies and services. One purpose of this section is to help ensure that consumers are not forced to purchase or lease a specific, proprietary converter box, interactive device or other equipment from the cable system or network operator. Thus, in implementing this section, the Commission should take cognizance of the current state of the marketplace and consider the results of private standards setting activities. The conference agreement also directs the Commission to act on waiver requests within 90 days. The agreement sunsets the regulations when the Commission determines the following: the market for the multichannel video programming distributors is competitive; the market for equipment used in conjunction with the services is competitive; and elimination of the regulations are in the public interest and would promote competition. The agreement makes clear that nothing in this section expands or limits current Commission authority. Section 305 - Video Programming Accessibility Senate bill Section 308 of the Senate bill adds a new section 262 to the Communications Act in part to require the Commission to ensure that video programming is accessible through closed captions and that video programming providers or owners maximize the accessibility of video programming previously published or exhibited through the provision of closed captions. New section 262(f) further provides the Commission with authority to exempt various program and providers of video programs from this requirement. In addition, a provider of video programming or program owner may petition the Commission for an exemption from the requirements of this subsection. Section 262(f) also requires the Commission to undertake a study of the current extent of closed captioning of video programming and of previously published video programming; providers of video programming; the cost and market for closed captioning; strategies to improve competition and innovation in the provision of closed captioning; and such other matters as the Commission considers relevant. New section 262(g) requires the Commission to prescribe regulations to implement all provisions of this new section, not later than eighteen (18) months after the date of enactment of this Act. As noted above, such regulations shall be consistent with the standards developed by the Board in accordance with section 262(e) of this new section. New section 262(h) authorizes the Commission to enforce this new section. The Commission shall resolve, by final order, a complaint alleging a violation of this section within 180 days after the date such complaint is filed. Subsection (b) of section 308 requires that the Commission undertake within 6 months of enactment of this Act a study of the feasibility of requiring the use of video descriptions on video programming in order to ensure the accessibility of video programming to individuals with visual impairments. House amendment Section 204 of the House amendment is designed to ensure that video services are accessible to hearing impaired and visually impaired individuals. Subsection (a) requires the Commission to complete an inquiry within 180 days of enactment of this section to ascertain the level at which video programming is closed captioned. In its inquiry, the Commission should examine the level of closed captioning for live and prerecorded programming, the extent to which existing or previously published programming is closed captioned, the type and size of the provider or owner providing the closed captioning, the size of the markets served, the relative audience shares achieved, and any other relevant factors. The Commission also should examine the quality of closed captioning and the style and standards which are appropriate for the particular type of programming. Finally, the Commission should examine the costs of closed captioning to programs and program providers. Subsection (b) provides that, consistent with the results of its inquiry, the Commission is instructed to establish an appropriate schedule of deadlines and technical requirements regarding closed captioning of programming. Accordingly, the Commission shall establish reasonable timetables and exceptions for implementing this section. Such schedules should not be economically burdensome on program providers, distributors or the owners of such programs. Section 204(d) allows the Commission to exempt specific programs, or classes of programs, or entire services from captioning requirements. Any exemption should be granted using the information collected during the inquiry, and should be based on a finding that the provision of closed captioning would be economically burdensome to the provider or owner of such programs. The term "provider" contained throughout section 204(d) refers to the specific television station, cable operator, cable network or other service that provides programming to the public. When considering such exemptions, the Commission should focus on the individual outlet and not on the financial conditions of that outlet's corporate parent, nor on the resources of other business units within the parent's corporate structure. When considering exemptions under paragraph (d)(1), the Commission shall consider several factors, including but not limited to: (1) the nature and cost of providing closed captions; (2) the impact on the operations of the program provider, distributor, or owner; (3) the financial resources of the program provider, distributor, or owner and the financial impact of the program; (4) the cost of the captioning, considering the relative size of the market served or the audience share; (5) the cost of the captioning, considering whether the program is locally or regionally produced and distributed; (6) the non-profit status of the provider; and (7) the existence of alternative means of providing access to the hearing impaired, such as signing. Paragraph (d)(2) recognizes that closed captioning should not be required where it would be inconsistent with programming contracts between program owners, distributors, or providers, already in effect as of the date of enactment of this section, or inconsistent in effect as of the date of enactment of this section, or inconsistent with copyright law. In addition, cable operators and common carriers establishing video platforms may not refuse to carry programming or services which are required to be carried under the carriage provisions of title VI of the Communications Act or pursuant to retransmission consent obligations due to closed captioning requirements. Paragraph (d)(3) authorizes the Commission to grant additional exemptions, on a case-by- case basis, where providing closed captions would constitute an undue burden. In making such determinations, the Commission shall balance the need for closed captioned programming against the potential for hindering the production and distribution of programming. Subsection (f) directs the Commission to initiate an inquiry within six months of the date of enactment, regarding the use of video descriptions on video programming in order to ensure the accessibility of video programming to persons with visual impairments. The Commission shall report to Congress on its findings. The report shall assess appropriate methods for phasing video descriptions into the marketplace, technical and quality standards for video descriptions, a definition of programming for which video descriptions would apply, and other technical and legal issues. Following the completion of this inquiry the Commission may adopt regulations it deems necessary to promote the accessibility of video programming to persons with visual impairments. It is the goal of the House to ensure that all Americans ultimately have access to video services and programs, particularly as video programming becomes an increasingly important part of the home, school and workplace. Subparagraph (h) makes clear that the Commission has exclusive jurisdiction over complaints arising under this section. Conference agreement The conference agreement adopts the House provision with modifications which are incorporated as new section 713 of the Communications Act. The agreement deletes the House provision referencing a Commission rulemaking with respect to video description. The remedies available under the Communications Act, including the provisions of sections 207 and 208, are available to enforce compliance with the provisions of section 713. TITLE IV - REGULATORY REFORM Section 401 - Regulatory Forbearance Senate bill Section 303 of the Senate bill adds a new section 260 of the Communications Act, under which the Commission must forbear from regulation of a carrier or a service if it determines that enforcement is not necessary to ensure that charges are just and reasonable and not unjustly or unreasonably discriminatory or to protect consumers, and that forbearance is consistent with the public interest. In making the determination to forbear, the Commission shall consider whether forbearance would promote competition. This section allows a carrier to petition the Commission to request that the Commission exercise the authority granted by this section, and such petition shall be deemed granted if the Commission does not deny the petition within 90 days (unless extended for an additional 60 day period). The Commission may grant the petition in whole or in part, and must justify its decision in writing. House amendment Section 103 of the House amendment adds new section 230 to the Communications Act. Section 230 requires that the Commission forbear from applying regulation from part I or part II of title II (except for sections 201, 202, 208, 243, and 248) to a common carrier or service unless it determines that enforcement is necessary to ensure that charges are reasonable and not unjustly or unreasonably discriminatory or to protect consumers, or that forbearance is inconsistent with the public interest. In making the determination to forbear, the Commission shall consider whether forbearance would promote competition. Section 230(c) allows joint marketing of mobile services in connection with telephone exchange service, exchange access, intra- and interLATA telecommunication service and information services. Conference agreement The conferees agree to create a new section 10 in title I of the Communications Act. New subsection (a) of section 10 requires the Commission to forbear from applying any provision of the Communications Act or from applying any of its regulations to a telecommunications carrier or telecommunications service, if the Commission determines that enforcement is not necessary to: o ensure that charges, practices, classifications or regulations for such carrier or service are just and reasonable, and not unjustly or unreasonably discriminatory; o protect consumers; and o protect the public interest. In making its public interest determinations, the Commission under new subsection (b) of section 10 shall consider whether or not forbearance will promote competition. New subsection (c) permits carriers to petition for forbearance and these petitions shall be deemed granted if the Commission does not deny such petition within one year of the Commission's receipt of the petition. The Commission may only extend this one year time period for 90 days. The Commission can also approve or deny the petition in whole or in part. New subsection (d) provides that the Commission may not forbear from applying the requirements of new sections 251(c) or 271 until the Commission determines that those requirements have been fully implemented. New subsection (e) provides that a State may not continue to apply or enforce any provision of the Communications Act that the Commission has determined to forbear from applying under new subsection (a). This new subsection is not intended to limit or preempt State enforcement of State statutes or regulations. Section 402 - Biennial Review of Regulations; Regulatory Relief Senate bill Section 302 of the Senate bill adds a new section 259 of the Communications Act, under which every two years the Commission and a Federal-State Joint Board must review all regulations issued under the Communications Act or any State legislation to determine whether they are still necessary in the public interest as a result of meaningful competition. The Commission is required to repeal any of its regulations found to be no longer necessary. House amendment No provision. Conference agreement The conferees agree to create a new section 11 in title I of the Communications Act. New subsection (a) of section 11 requires the Commission, beginning in 1998 and in every even numbered year thereafter, to review all of its regulations that apply to the operations and activities of providers of telecommunications services and determine whether any of these regulations are no longer in the public interest because competition between providers renders the regulation no longer meaningful. New subsection (b) of section 11 requires the Commission to eliminate the regulations that it determines are no longer in the public interest. New subsection (b) of section 402 of the conference agreement addresses regulatory relief that streamlines the procedures for revision by local exchange carriers of charges, classifications and practices under section 204 of the Communications Act. New subsection (b) of section 402 also eliminates the section 214 approval requirement for extension of lines and permits carriers to file ARMIS reports annually. New subsection (c) of section 402 of the conference agreement requires the Commission in classifying carriers according to 47 CFR 32.11, and in establishing reporting requirements pursuant to 47 CFR part 43 and 47 CFR 64.903, to adjust revenue requirements to account for inflation as of the date the Commission's Report and Order on Docket No. CC 91-141 was released, and annually thereafter. Section 403 - Elimination of Unnecessary Commission Regulations and Functions Senate bill Section 302(b) of the Senate bill is intended to eliminate unnecessary Commission regulations and functions. Subsection (b)(1) repeals the current requirement that the Commission set depreciation rates for common carriers, thus allowing the Commission flexibility to assess whether doing so would serve the public interest. Subsection (b)(2) authorizes the Commission to hire outside, independent licensed CPA's to audit telecommunications carriers and vests those outsiders with the same authority as Commission staff auditors. Subsection (b)(3) streamlines the Federal-State coordination process by allowing states and the Commission to select the least formal method appropriate in resolving specific regulatory issues. Subsection (b)(4) allows for inspection of ship radio stations by private entities and provides the Commission with authority to waive the current mandatory annual inspection while providing greater flexibility in scheduling ship inspections. Subsection (b)(5) would give the Commission flexibility in determining whether broadcast construction permits are required where the likelihood of interference is minimal or does not exist. Subsection (b)(6) allows automatic cancellation of a broadcaster's license if the station does not transmit for 12 consecutive months. Subsection (b)(7) provides Commission staff with authority to process routine comparative ITFS applications. Subsection (b)(8) permits the Commission to delegate, subject to established Commission standards, testing and certification of telecommunications devices and home electronics equipment to private laboratories. Subsection (b)(9) eliminates the requirement that a public hearing be held for a station to make routine changes in frequency, hours of operation, and authorized power. Subsection (b)(10) also eliminates the individual licensing requirement currently imposed on domestic ships and aircraft, citizens band radio and personal radio services, if the Commission determines it is in the public interest. Subsection (b)(11) expedites the licensing of fixed microwave service by eliminating the requirement that 30 days public notice be given prior to granting these licenses. Subsection (b)12) also ends redundant Commission jurisdiction over ship radios owned by other government agencies. Subsection (b)(13) broadens the number of individuals authorized to administer amateur radio examinations and reduces the amount of paperwork that must be kept. Subsection (b)(14) authorizes the Commission to streamline and reduce its renewal procedures for non-broadcast radio license renewal applicants such as cellular licensees. House amendment The House has no comparable provisions, except for the provision delegating equipment testing authority. Conference agreement The conference agreement adopts the Senate provisions, except for subsection (b)(3), with modifications. Specifically, subsections (b)(4), (b)(7), (b)(10) and (b)(11) of the Senate bill have been modified to incorporate provisions as passed in the House budget reconciliation legislation (House Report 104-280). The conference agreement also amends section 310(b) of the Communications Act to remove the restrictions on corporations having foreign officers or directors. TITLE V - OBSCENITY AND VIOLENCE SUBTITLE A - OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF TELECOMMUNICATIONS FACILITIES Section 502 - Obscene or Harassing Use of Telecommunications Facilities under the Communications Act of 1934 Senate bill Section 401 of the Senate bill updates section 223(a) of the Communications Act by using the term "telecommunications service" as a replacement for or in addition to "telephone" references in the present law. The term "communication" is added to current law references to "conversation." An intent requirement is added to section 223(a)(1)(A) that liability is incurred for "obscene, lewd, lascivious, filthy, or indecent" communications with the intent to "annoy, abuse, threaten, or harass another person." Current law "Dial-a-Porn" provisions (sections 223(b)&(c)) are untouched by the Senate bill. A new section 223(d) is added to prohibit the use of a telecommunications device to make or make available an obscene communication. A new section 223(e) is added to prohibit the use of a telecommunications device to make or make available an indecent communications to minors. New defenses are provided to assure that the mere provision of access to an interactive computer service does not create liability. The access providers provision is not available to one who provides access to a system with which they conspire or own or control. Employers are provided a defense for actions by employees unless the employee's conduct is within the scope of employment and is known, authorized, or ratified by the employer. A good faith defense is provided for "reasonable, effective, and appropriate" measures to restrict access to prohibited communications. The word "effective" is given its common meaning and does not require an absolute 100 percent restriction of access to be judged "effective." Nothing in the defenses to section 223 are intended to narrow or effect the application of the existing dial-a-porn law or other Federal criminal law or to provide a defense for the person who created and sent a prohibited communication. The use of the good faith defenses which are otherwise legal shall not expose an individual to liability and the States may not impose obligations for commercial activities which are inconsistent with the treatment of activities or actions described in this section. House amendment No provision. Conference agreement. The conference agreement adopts the Senate provisions with modifications. New subsection 223(d)(1) applies to content providers who send prohibited material to a specific person or persons under 18 years of age. Its "display" prohibition applies to content providers who post indecent material for online display without taking precautions that shield that material from minors. New section 223(d)(1) codifies the definition of indecency from FCC v. Pacifica Foundation, 438 U.S. 726 (1978). Defenses to violations of the new sections assure that attention is focused on bad actors and not those who lack knowledge of a violation or whose actions are equivalent to those of common carriers. The conferees intend that the term indecency (and the rendition of the definition of that term in new section 502) has the same meaning as established in FCC v. Pacifica Foundation, 438 U.S. 726 (1978), and Sable Communications of California, Inc. v. FCC, 492 U.S. 115 (1989). These cases clearly establish the principle that the federal government has a compelling interest in shielding minors from indecency. Moreover, these cases firmly establish the principle that the indecency standard is fully consistent with the Constitution and specifically limited in its reach so that the term is not unconstitutionally vague. See also Action for Children's Television v. FCC, 58 F. 3d 654, 662-63 (en banc) (D.C. Cir. 1995), cert. denied, 64 U.S.L.W. 3465 (1996); Alliance For Community Media v. FCC, 56 F. 3d 105, 1124-25 (D.C. Cir. 1995) cert. granted sub. nom., Denver Area Education Telecommunications Consortium v. FCC, 116 S.CT. 471 (1995); Dial Information Services Corp. of New York v. Thornburgh, 938 F.2d 1535, 1540-41 (2d Cir. 1991) cert. denied sub. nom., Dial Information Services Corp. of New York v. Barr, 502 U.S. 1072 (1992); Action for Children's Television v. FCC, 932 F. 2d 1504, 1508 (D.C. Cir. 1991). The precise contours of the definition of indecency have varied slightly depending on the communications medium to which it has been applied. The essence of the phrase -- patently offensive descriptions of sexual and excretory activities -- has remained constant, however. At the time of this writing, the Supreme Court will consider at least one constitutional challenge to federal indecency statutes. Importantly, the question whether indecency is overly broad or unconstitutionally vague is not seriously at issue in that challenge. See Alliance for Community Media, supra, (whether State action exists as to private decisions by cable operators). There is little doubt that indecency can be applied to computer-mediated communications consistent with constitutional strictures, insofar as it has already been applied without rejection in other media contexts, including telephone, cable, and broadcast radio. The conferees considered, but rejected, the so-called "harmful to minors" standard. See Ginsberg v. New York, 390 U.S. 629, 641-43 (1968). The proponents of the "harmful to minors" standard contended that that standard contains an exemption for material with "serious literary, artistic, political, and scientific value," and therefore was the better of the two alternative standards. ("Harmful to minors" laws use the "variable obscenity" test and prohibit the sale, and sometimes the display, of certain sexually explicit material to minors.) This assertion misapprehends the indecency standard itself, and disregards the Supreme Court's various rulings on this issue. See Pacifica, 438 U.S. at 743, n. 18, and its progeny. The gravamen of the indecency concept is "patent offensiveness." Such a determination cannot be made without a consideration of the context of the description or depiction at issue. It is the understanding of the conferees that, as applied, the patent offensiveness inquiry involves two distinct elements: the intention to be patently offensive, and a patently offensive result. In the Matter of Sagittarius Broadcasting Corp. et al, 7 FCC Rcd. 6873, 6875 (1992); In the Matter of Audio Enterprises, Inc., 3 FCC Rcd. 930, 932 (1987). Material with serious redeeming value is quite obviously intended to edify and educate, not to offend. Therefore, it will be imperative to consider the context and the nature of the material in question when determining its "patent offensiveness." In view of the solid constitutional pedigree of the indecency standard (see Pacifica), 438 U.S. at 743 (describing indecency as low value and marginally protected by the First Amendment)), use of the indecency standard poses no significant risk to the free-wheeling and vibrant nature of discourse or to serious, literary, and artistic works that currently can be found on the Internet, and which is expected to continue and grow. As the Supreme Court itself noted when upholding the constitutionality of indecency prohibitions, prohibiting indecency merely focuses speakers to re-cast their message into less offensive terms, but does not prohibit or disfavor the essential meaning of the communication. Pacifica, 438 U.S. at 743, n. 18. Likewise, requiring that access restrictions be imposed to protect minors from exposure to indecent material does not prohibit or disfavor the essential meaning of the indecent communication, it merely puts it in its appropriate place: away from children. Violators of this section shall be fined under title 18, U.S. Code, or imprisoned not more than two years, or both. Each intentional act of posting indecent content for display shall be considered a separate violation of this subsection, rather than each occasion upon which indecent material is accessed or downloaded from an interactive computer service or posted without the content provider's knowledge on such a service. New subsection 223(d)(2) sets forth the standard of liability for facilities providers who intentionally permit their facilities to be used for an activity prohibited by new subsection 223(d)(1). New subsection 223(e) includes statutory defenses for violations of new sections 223(a) and (d) that supplement other defenses available at law, such as common law defenses. New subsections 223(e)(1), (e)(2) and (e)(3) set forth the "access provider" defense. The defense protects entities from liability for providing access or connection to or from a facility, network or system not under their control. The defense covers provision of related capabilities incidental to providing access, such as server and software functions, that do not involve the creation of content. The defense does not apply to entities that conspire with entities actively involved in the creation of content prohibited by this section, or who advertise that they offer access to prohibited content. Nor does it apply to provision of access or connection to a facility, system or network that engages in violations of this section and that is owned or controlled by the access provider. In the absence of these conditions, commercial and non-profit Internet operators who provide access to the Internet and other interactive computer services shall not be liable for indecent material accessed by means of their services. This provision is designed to target the criminal penalties of new sections 223(a) and (d) at content providers who violate this section and persons who conspire with such content providers, rather than entities that simply offer general access to the Internet and other online content. The conferees intend that this defense be construed broadly to avoid impairing the growth of online communications through a regime of vicarious liability. New subsection 223(e)(4) provides a defense to employers whose employees or agents make unauthorized use of office communications systems. This defense is intended to limit vicarious or imputed liability of employers for actions of their employees or agents. To be outside the defense, the prohibited action must be within the scope of the employee's or agent's employment. In addition, the employer must either have knowledge of the prohibited action and affirmatively act to authorize or ratify it, or recklessly disregard the action. Both conditions must be met in order for employers to be held liable for the actions of an employee or agent. The good faith defenses set forth in new subsection 223(e)(5) are provided for "reasonable, effective, and appropriate" measures to restrict access to prohibited communications. The word "effective" is given its common meaning and does not require an absolute 100% restriction of access to be judged effective. The managers acknowledge that content selection standards, and other technologies that enable restriction of minors from prohibited communication, which are currently under development, might qualify as reasonable, effective, and appropriate access restriction devices if they are effective at protecting minors from exposure to indecent material via the Internet. New subsection 223(e)(6) permits the Commission to describe its view of what constitute "reasonable, effective and appropriate" measures and provides that use of such measures shall be admissible as evidence that the defendant qualifies for the good faith defense. This new subsection grants no further authority to the Commission over interactive computer services and should be narrowly construed. New subsection 223(f)(1) supplements, without in any way limiting, the "Good Samaritan" liability protections of new section 230. New subsection 223(f)(2) preempts inconsistent State and local regulation of activities and actions described in new subsections 223(a)(2) and (d). This provision is intended to establish a uniform national standard of content regulation for a national, and indeed a global, medium, in which content is transmitted instantaneously in point-to-point and point-to-multipoint communications. As originally passed by the Senate, this subsection excluded non-commercial content providers. The conferees have expanded this section to provide for consistent national and State and local content regulation of both commercial and non-commercial providers. The conferees recognize and wish to protect the important work of nonprofit libraries and higher educational institutions in providing the public with both access to electronic communications networks like the Internet, and valuable content which they are uniquely well-positioned to provide. Accordingly, nonprofit libraries and educational institutions, like commercial entities, are assured by this provision that they will not be subjected to liability at the State or local level in a manner inconsistent with the treatment of their activities or actions under this legislation. The conferees also recognize the critical importance of access software in making the Internet and other interactive computer services accessible to Americans who are not computer experts. Accordingly, provision of "access software" is included within the access provider defense. As defined in new subsection 223(h)(3), the term includes software that enables a user to do any of an enumerated list of functions that are set forth in technical language. It includes client and server software, such as proxy server software that downloads and caches popular web pages to reduce the load of traffic on the Internet and to permit faster retrieval. The definition distinguishes between software that actually creates or includes prohibited content and software that allows the user to access content provided by others. Section 503 - Obscene Programming on Cable Television Senate bill Section 403 of the Senate bill amends section 639 of the Communications Act to increase the maximum fine for transmitting obscene programming on cable television from $10,000 to $100,000. House amendment No provision. Conference agreement The conference agreement adopts the Senate provision with modifications. $10,000 is struck from the current law and "under title 18, United States Code" is inserted. Section 504 - Scrambling of Cable Channels for Nonsubscribers Senate bill Section 407 of the Senate bill adds a new section 640 to the Communications Act requiring cable television operators to fully scramble or otherwise block upon subscriber request and at no charge to the subscriber, the audio and video portions of programming not specifically subscribed to by a household and unsuitable for children in the judgment of the subscriber. House amendment No provision. Conference agreement. The conference agreement adopts the Senate provision with modifications as a new section 640 of the Communications Act. The "unsuitable for children" standard is dropped. Programming not subscribed to by a household shall be blocked on request without charge. Section 505 - Scrambling of Sexually Explicit Adult Video Service Programming Senate bill Section 408 of the Senate bill requires that cable operators offering sexually explicit adult programming or other programming that is indecent on any channel of its service primarily dedicated to sexually-oriented programming fully scramble or block the video and audio portions of such channel or channels so that one not a subscriber does not receive it. House amendment No provision. Conference agreement The conference agreement adopts the Senate with modifications as a new section 641 of the Communications Act. Section 506 - Cable Operator Refusal to Carry Certain Programs Senate bill Section 408 of the Senate bill amends title VI of the Communications Act to allow cable operators to refuse to transmit any public access or leased access program or portion of a program which contains obscenity, indecency, or nudity. House amendment No provision. Conference agreement The conference agreement adopts the Senate provision. Section 507 - Protection of Minors and Clarification of Current Laws Regarding Communication of Obscene Materials Through the Use of Computers. Senate bill No provision. House amendment Section 403(a)(2) of the House amendment made conforming and clarifying amendments to sections 1462, 1467, and 1469 of title 18, United States Code. Those statutes currently prohibit the interstate transportation of obscenity for the purpose of sale or distribution, whether commercial or non-commercial in nature. These statutes outlaw the importation of obscenity, by whatever means. These provisions were intended to simply clarify sections 1462, 1465, and 1467 of title 18, United States Code. Conference agreement The Senate recedes to the House with modifications. Section 507 simply clarifies that the current obscenity statutes, in fact, do prohibit using a computer to import and receive an importation of, and transport to sell or distribute, "obscene" material. The amendments made by this section are clarifying and shall not be interpreted to limit or repeal any prohibition contained in sections 1462 or 1465 of title 18, United States Code, before such amendment, under the rule established in United States v. Alpers, 338 U.S. 680 (1950). Section 508 - Coercion and Enticement of Minors Senate bill Several provisions of the Senate bill protect children from harassing, indecent or obscene communications. House amendment Several provisions of the House amendment protect children from obscene or indecent communications. Conference agreement Section 508 would amend section 2422 of title 18 to prohibit the use of a facility of interstate commerce which includes telecommunications devices and other forms of communication for the purpose of luring, enticing, or coercing a minor into prostitution or a sexual crime for which a person could be held criminally liable, or attempt to do so. On July 24, 1995, the Senate Judiciary Committee held a hearing on online indecency, obscenity, and child endangerment. The record of this hearing supports the need for Congress to take effective action to protect children and families from online harm. Section 509 - Online Family Empowerment Senate bill No provision House amendment Section 104 of the House amendment protects from civil liability those providers and users of interactive computer services for actions to restrict or to enable restriction of access to objectionable online material. Conference agreement The conference agreement adopts the House provision with minor modifications as a new section 230 of the Communications Act. This section provides "Good Samaritan" protections from civil liability for providers or users of an interactive computer service for actions to restrict or to enable restriction of access to objectionable online material. One of the specific purposes of this section is to overrule Stratton-Oakmont v. Prodigy and any other similar decisions which have treated such providers and users as publishers or speakers of content that is not their own because they have restricted access to objectionable material. The conferees believe that such decisions create serious obstacles to the important federal policy of empowering parents to determine the content of communications their children receive through interactive computer services. These protections apply to all interactive computer services, as defined in new subsection 230(e)(2), including non-subscriber systems such as those operated by many businesses for employee use. They also apply to all access software providers, as defined in new section 230(e)(5), including providers of proxy server software. The conferees do not intend, however, that these protections from civil liability apply to so-called "cancelbotting," in which recipients of a message respond by deleting the message from the computer systems of others without the consent of the originator or without having the right to do so. SUBTITLE B - VIOLENCE Section 551 - Parental Choice in Television Programming Senate bill Sections 501-505 of Senate bill gives the industry one year to voluntarily develop a ratings system for TV programs. If the industry fails to do so, a Federal TV Ratings Commission would set the ratings. The Commission would be appointed by the President, subject to confirmation by the Senate and would establish rules for rating the level of violence and other objectionable content in programs. The Board would also establish rules for TV broadcasters and cable systems to transmit the ratings to viewers. The Commission would be authorized funds necessary to carry out its duties. The Senate bill requires TV manufacturers to equip all 13 inch or greater TV sets with circuitry to block rated shows. House amendment Section 305 of the House amendment gives the cable and broadcast industries one year to develop voluntary ratings for video programming containing violence, sex and other indecent materials and to agree voluntarily to broadcast signals containing such ratings. If the industry fails to come up with an acceptable plan, the Commission must develop guidelines for rating programs based on recommendations from an advisory committee that is fairly balanced politically. If a program is rated, the broadcasters must transmit the signal of the rating. The House amendment requires TV manufacturers to equip 13 inch or greater sets with circuitry that will enable the set to block out all programs with a common rating. Conference agreement The conference agreement adopts the House provisions with modifications. In subsection (a), Congress makes findings concerning the adverse impact of violent and indecent video programming on children, the compelling interest of the government in addressing this problem, and the promise of technological tools that allow parents to protect their children by blocking harmful programming on their television sets. In subsection (b), Congress provides the Commission the authority to set up an advisory committee to recommend a system for rating video programming that contains sexual, violent or other indecent material about which parents should be informed before it is displayed to children. It also provides the Commission with authority to prescribe rules requiring a distributor to transmit a rating if the distributor has decided to rate a video program. However, in subsection (e), Congress delays the Commission's exercise of this authority to no sooner than one year after the date of enactment, and only if it determines that distributors of video programming have not established an acceptable voluntary system for rating programming nor agreed voluntarily to broadcast signals that contain ratings of such programming. In subsection (b)(1), the Commission is authorized to prescribe guidelines and recommended procedures for a rating system based on the recommendations from the advisory committee. Nothing in this language is intended to preclude publishing the rating in print advertisements or on the air, but under this subsection the distributor must include the electronic transmission of the rating as an additional method of empowering parents to block programming carrying the rating. The rules prescribed for transmitting a rating are requirements. In contrast, the guidelines and recommended procedures for a rating system are not rules and do not include requirements. They are intended to provide industry with a carefully considered and practical system for rating programs if industry does not develop such a system itself. However, nothing in subsection (b)(1) authorizes, and the conferees do not intend that, the Commission require the adoption of the recommended rating system nor that any particular program be rated. In subsection (b)(2), Congress directs the Commission to ensure that the advisory committee is composed of representatives from the private sector and be fairly balanced in terms of political affiliation, the points of view represented, and the functions to be performed by the committee. It also direct the Commission to provide to the committee such staff and resources as may be necessary and require the committee to submit a final report no later than one year after the appointment of its members. In new subsections (c) and (d), the conferees have removed language from the House amendment concerning the importation of televisions, and clarified that the requirements of these subsections apply to all televisions above a certain size shipped in interstate commerce (regardless of where they were manufactured) or televisions manufactured in the United States. Such sets are required by these two subsections to include a feature designed to enable viewers to block display of programs carrying a common rating in compliance with rules prescribed by the Commission. Under subsection (c)(4), the Commission is authorized to amend these rules as appropriate to allow set manufacturers to comply with this subsection using alternative technology that meets certain standards of cost, effectiveness and ease of use. Under subsection (e)(1), the effective date for subsection (b) (regarding the appointment of an advisory committee to recommend a rating system and the rules for transmitting a rating) is no less than one year after the date of enactment. The actual effective date has also been made contingent on a determination by the Commission that distributors of video programming have not, by such date, established a voluntary system for rating video programming and such programming is acceptable to the Commission and have also agreed to include ratings in the transmission of signals to television sets for blocking. Under subsection (e)(2), the effective date for subsection (c) (regarding the rules for the manufacture of television sets capable of blocking) is no less than two years after the date of enactment. The conferees intend that the actual effective date be specified by the Commission after consultation with the television manufacturing industry. Section 552 - Technology Fund Senate bill No provision. House amendment Section 304 of the House amendment encourages broadcast, cable, satellite, syndication, and other video programming distributors to establish a technology fund to encourage TV and electronics equipment manufacturers to facilitate the development of blocking technology that would empower parents to block TV programming they deem inappropriate for their children. Conference agreement The conference agreement adopts the House provision with modifications to encourage the availability of blocking technology to low income families. SUBTITLE C - JUDICIAL REVIEW Section 561 - Expedited Review Conference agreement The conference agreement adds new language to provide for expedited judicial review of the indecency, obscenity and violence provisions of this title. In any civil action in which a party makes a facial challenge to these provisions, the challenge shall be heard by a three-judge district court convened under 28 U.S.C. 2284. Any decision of the three-judge district court holding a provision unconstitutional shall be directly appealable to the Supreme Court as a matter of right. However, the direct right of appeal provided in subsection (b) in this limited circumstance does not limit any appeal rights applicable to other circumstances under general statutes. The conferees emphasize that these provisions are limited in several ways. They apply only in civil actions. If a party makes a facial challenge in a criminal context, that party would not be able to use the procedures provided in this section. These provisions apply only to facial challenges. These provisions do not apply to actions in which the party only challenges the provision as applied to the particular party involved. However, the three-judge district court could hear both a facial challenge and an "as applied" challenge if they were combined in the same action, and facial validity had not yet been determined. Thus, the conferees intend that these provisions should be invoked in only the limited number of cases necessary to determine the facial validity of these provisions. If that facial validity is upheld by the courts, these provisions may not be used in every "as applied" challenge brought thereafter. TITLE VI - EFFECT ON OTHER LAWS Section 601 - Applicability of Consent Decrees and Other Law Senate bill Section 7(a) of the Senate bill provides that except for the supersession of the Modification of Final Judgment, nothing in the Communications Act shall be construed to modify, impair, or supersede the applicability of any antitrust law. Section 7(b) provides that the Communications Act shall supersede the Modification of Final Judgment to the extent that it is inconsistent with the Communications Act. Section 7(c) of the bill transfers jurisdiction of any parts of the Modification of Final Judgment which are not superseded to the Commission. Section 7(d) supersedes the GTE consent decree. Section 201(c) of the Senate bill provides that except as provided in section 202, nothing in the Communications Act shall be construed to modify, impair, or supersede any State or local tax law. Section 226 of the Senate bill provides that notwithstanding any other provision of law or any judicial order, no person shall be subject to the provisions of the Modification of Final Judgment solely by reason of having acquired CMS or private mobile service assets or operations previously owned by a BOC or an affiliate of a BOC. House amendment Section 401(a) of the House amendment provides that certain specified sections of the Modification of Final Judgment are superseded. Section 401(b) provides that nothing in the Communications Act or the amendments made by the conference agreement shall be construed to modify, impair, or supersede any of the antitrust laws. Section 401(c)(1) provides that parts II and III of title II of the Communications Act shall not be construed to modify, impair, or supersede Federal, State, or local law unless expressly so provided in such part. Section 401(c)(2) provides that notwithstanding section 401(c)(1), nothing in the Communications Act or the amendments made by the conference agreement shall be construed to modify, impair, or supersede any State or local tax law except as provided in sections 243(e) and 622 of the Communications Act and section 402 of this Act. Section 401(d) of the House amendment provides that the GTE consent decree is superseded. Section 401(e) provides that no person shall be considered an affiliate, successor, or an assign of a BOC under section III of the Modification of Final Judgment by reason of having acquired wireless exchange assets or operations previously owned by a BOC or an affiliate of a BOC. Section 401(f) defines the term "antitrust laws" as used in section 401. Section 401(g) provides that for the purposes of this section, the terms "Modification of Final Judgment" and "Bell Operating Company" have the same meanings provided such terms in section 3 of the Communications Act. Conference agreement The conference agreement adopts a new approach to the supersession of the Modification of Final Judgment (now called the AT&T Consent Decree in the conference agreement) and the GTE consent decree, and it adds language superseding the AT&T-McCaw Consent Decree ("McCaw Consent Decree"). The conferees sought to avoid any possibility that the language in the conference agreement might be interpreted as impinging on the judicial power. Congress may not by legislation retroactively overturn a final judgment. Plaut v. Spendthrift Farm, Inc., 115 S.Ct. 1447 (1995). On the other hand, Congress may by legislation modify or eliminate the prospective effect of a continuing injunction. Robertson v. Seattle Audubon Society, 503 U.S. 429 (1992); Plaut, 115 S.Ct. 1447; Pennsylvania v. Wheeling & Belmont Bridge Co., 59 U.S. 421 (1856). The conferees believe that the AT&T Consent Decree, the GTE Consent Decree, and the McCaw Consent Decree are continuing injunctions rather than final judgments. The Committee has chosen to use the term "AT&T Consent Decree" rather than "Modification of Final Judgment" to emphasize that point. To avoid any possible constitutional problem, the conferees adopted the following new approach. Rather than "superseding" all or part of these continuing injunctions, the conference agreement simply provides that all conduct or activities that are currently subject to these consent decrees shall, on and after the date of enactment, become subject to the requirements and obligations of the Communications Act and shall no longer be subject to the restrictions and obligations of the respective consent decrees. The conferees intend that the court shall retain jurisdiction over the three consent decrees for the limited purpose of dealing with any conduct or activity occurring before the date of enactment. Nothing in the language eliminating the prospective effect of the three consent decrees should be construed as eliminating the jurisdiction of the Court to deal with pre-enactment conduct or activities under the consent decrees. At the time of the divestiture of AT&T under the AT&T Consent Decree, AT&T and the BOCs entered into a number of long-term contracts that dealt with pensions, contingent liabilities, and the like. These contracts are not incorporated by reference in the AT&T Consent Decree, and nothing in the language eliminating the prospective effect of the AT&T Consent Decree should be construed as affecting these contracts. By eliminating the prospective effect of the GTE Consent Decree, this language removes entirely the GTE Consent Decree's prohibition on GTE's and the GTE Operating Companies' entry into the interexchange market. No provision in the Communications Act should be construed as creating or continuing in any way the GTE Consent Decree's prohibition on GTE or its operating companies' entry into the interexchange market. Language explicitly overturning the McCaw Consent Decree was not included in either bill. However, the new approach to the AT&T and GTE Consent Decrees, as well as intervening events, justify the overturning of the McCaw Consent Decree in the conference agreement. The McCaw Consent Decree includes three major elements: (1) equal access and interconnection requirements for AT&T's cellular business, (2) restrictions on AT&T's manufacturing business, and (3) a separate subsidiary requirement for AT&T's cellular business. Both bills contained language that would have overturned the equal access and interconnection requirements for all cellular businesses, and that language is included in the conference agreement. Since the passage of the original bills in both the House and Senate, AT&T has announced that it will spin off its manufacturing business, and so the manufacturing aspects of the decree will soon become moot. Finally, a recent decision of the Sixth Circuit, Cincinnati Bell Tel. Co. v. FCC, 69 F.3d 752 (6th Cir. 1995), may lead to the removal of the separate subsidiary requirement for other cellular businesses. Accordingly, there is little reason to keep the McCaw Consent Decree in place. The McCaw Consent Decree presents a slightly different problem than the other two consent decrees because it has not yet been formally entered by the court. The parties agreed to the McCaw Consent Decree and filed it with the court on July 15, 1994. AT&T entered into a stipulation to abide by the proposed consent decree until the court completed its review under the Tunney Act. That review is still continuing. Nonetheless, the conferees believe that the same basic principles of law set forth above relating to modifying the prospective effect of injunctions apply to the McCaw Consent Decree, which is defined to include the stipulation. The new approach adopted in the Committee required that several new provisions be added to the conference agreement. Two of these provisions are described below. Two other provisions, relating to equal access and nondiscrimination for interexchange carriers and existing activities under consent decree waivers, are also related to this change and they are described in the appropriate sections of this Joint Statement. Both the Senate bill and the House amendment specifically provided that a company would not be considered a successor to a BOC or otherwise subject to restrictions imposed on BOCs solely because the company acquired (by spinoff, transfer, or any other manner) wireless exchange assets or operations from a BOC. The language of these provisions provided this protection under the AT&T Consent Decree. Because of the new approach to the AT&T Consent Decree, the language in the bills no longer worked to provide the protection that was intended. For that reason, those specific provisions in both bills are omitted from the conference agreement. In lieu of those provisions, the conference agreement modifies the definition of BOC so that successors or assigns of the listed BOCs fall within the definition only if they provide wireline telephone exchange service. This change of definition is intended to provide the same protection that the provisions in the two bills provided -- that a successor to a BOC's wireless assets shall not be treated as a BOC simply because of the acquisition of those assets. The conference agreement adopts the House antitrust savings clause with modifications. The antitrust savings clause provides that except as provided in paragraphs two and three, nothing in this Act or the amendments made by the conference agreement shall be construed to modify, impair, or supersede the applicability of any of the antitrust laws. The clause was modified to include the repeal of section 221(a) of the Communications Act (47 U.S.C. 221(a)). Congress enacted section 221(a) in the days when local telephone service was viewed as a natural monopoly. Its purpose was to allow competing local telephone companies to merge without facing antitrust scrutiny. Thus, the statute provides that when any two telephone companies merge, the Commission should determine whether the merger will be "of advantage to the persons to whom service is to be rendered and in the public interest." If so, the Commission can render the transaction immune from "any Act or Acts of Congress making the proposed transaction unlawful." In a world of regulated monopolies, this idea made sense. However, section 221(a) could inadvertently undercut several of the provisions of the Telecommunications Act of 1996. The problem arises for at least two reasons. First, the critical term "telephone company" is not defined. In the old world of regulated monopolies, a definition probably was not necessary. However, in the new world of competition, many companies will be able to argue plausibly that they are telephone companies. Second, section 221(a) allows the Commission to confer immunity from any Act of Congress (including the Telecommunications Act of 1996) after performing a public interest review. Section 221(a) could be used to avoid the cable-telco buyout provisions of the Telecommunications Act of 1996. Any cable company that owned any telephone assets could become a telephone company and be bought out by a BOC by applying for immunity under this section. In addition, if immunity were conferred under section 221(a), it would allow mergers between telecommunications giants to go forward without any antitrust or securities review. In the old world, the statute was usually used to confer immunity on mergers between non-competing Bell operating subsidiaries or mergers between Bells and small independents within their territories. Neither of these situations involved competitive considerations. However, in the future, the conferees anticipate that cable companies will be providing local telephone service and the BOCs will be providing cable service. Mergers between these kinds of companies should not be allowed to go through without a thorough antitrust review under the normal Hart-Scott-Rodino process. The new language contains a conforming change to clarify that these mergers will now be subject to Hart-Scott-Rodino review. By returning review of mergers in a competitive industry to the DOJ, this repeal would be consistent with one of the underlying themes of the bill -- to get both agencies back to their proper roles and to end government by consent decree. The Commission should be carrying out the policies of the Communications Act, and the DOJ should be carrying out the policies of the antitrust laws. The repeal would not affect the Commission's ability to conduct any review of a merger for Communications Act purposes, e.g. transfer of licenses. Rather, it would simply end the Commission's ability to confer antitrust immunity. The conference agreement adopts the House provision stating that the bill does not have any effect on any other Federal, State, or local law unless the bill expressly so provides. This provision prevents affected parties from asserting that the bill impliedly preempts other laws. The conference agreement adopts the House version of the State tax savings clause with a modification to clarify that fees for open video systems are excluded from the savings clause. Section 602 - Preemption of Local Taxation with Respect to Direct-to-Home Services Senate bill No provision. House amendment Section 402 of the House amendment preempts local taxation on the provision of direct-to-home (DTH) satellite services. This section exempts DTH satellite service providers and their sales and distribution agents and representatives from collecting and remitting local taxes on satellite-delivered programming services. Section 402 does not preempt local taxes on the sale of the equipment needed to receive these services. Conference agreement The conference agreement adopts the House provisions with modifications. This section exempts DTH satellite service providers from collecting and remitting local taxes and fees on DTH satellite services. DTH satellite service is programming delivered via satellite directly to subscribers equipped with satellite receivers at their premises; it does not require the use of public rights-of-way or the physical facilities or services of a community. The conferees adopt the House language, but narrow the language to ensure that the exemption is only provided for the actual sale of the programming delivered by the direct-to-home satellite service. The conference agreement amends the House provisions to clarify that the exemption applies to taxes "on" direct-to-home satellite service rather than "with respect to the provision of" such service. The conference agreement deletes the language specifying that the sale of equipment was not within the exemption. The conference agreement amends the definition of "direct-to-home satellite service" so that it includes only programming transmitted or broadcast by satellite. The intent of these amendments is to clarify that the exemption applies only to the programming provided by the direct-to-home satellite service. To give two illustrative examples, the exemption does not apply to the sale of equipment; that language was deleted only because it could have created a negative implication that the exemption was broader than intended. In addition, the exemption does not apply to real estate taxes that are otherwise applicable when the provider owns or leases real estate in a jurisdiction. Also, States are free to tax the sale of the service and they may rebate some or all of those monies to localities if they so desire. TITLE VII - MISCELLANEOUS PROVISIONS Section 701 - Prevention of Unfair Billing Practices for Information or Services Provided Over Toll-Free Telephone Calls Senate bill Section 406 of the Senate bill amends section 228(c) of the Communications Act to add protection against the use of toll free telephone numbers to connect an individual to a "pay-per-call" service. Published reports have indicated that toll free numbers have been used to defeat the blocking of "pay-per-call" numbers by connecting a caller to a "pay-per-call" service after a toll free connection has been made. Households, businesses and other institutions have been billed for "pay-per-call" charges even though "pay-per-call" blocking techniques were used. This provision is intended to stop that practice. Section 703 of the Senate bill also amends section 228(c) of the Communications Act to clarify that subscribers who call an 800 number or other toll-free numbers shall not be charged for the calls unless the calling party agrees to be charged under a written subscription agreement or other appropriate means. Section 703(a) enumerates findings made by Congress concerning the prevention of unfair billing practices for information or services provided over toll-free telephone calls. House amendment Section 110 protects unsuspecting callers from being charged for 800 calls that they expect to be toll-free -- thereby preserving the toll-free status and integrity of the 800 number exchange and $8 billion industry -- by requiring strict cost disclosure requirements to ensure that consumers clearly know when there is a charge for a call, how much the charge will be, and how they will be billed. Pursuant to the provisions of this section, information providers must obtain legal, informed consent from a caller through either a written pre-authorized contract between the information providers and the caller, or through the use of an instructive preamble at the start of all non-free 800 calls. Both of these options ensure that consumers know there is a charge for the information service and that they are giving their consent to be charged. Conference agreement The conference agreement adopts the Senate provisions with modifications. The conferees agreed to close a loophole in current law, which permits information providers to evade the restrictions of section 228 by filing tariffs for the provision of information services. Many information providers have taken advantage of this exemption by filing tariffs -- especially for 1-500, 1-700 and 10XXX numbers -- and charging customers high prices for the services. This exemption has proven to be a problem because consumers have none of the protections that were enacted as part of the Telephone Disclosure and Dispute Resolution Act (P.L. 102-556). Section 701(b) of the conference agreement closes that loophole. Section 702 - Privacy of Customer Information Senate bill Section 102 of the Senate bill amends the Communications Act to add a new section 252 to impose separate affiliate and other safeguards on certain activities of the BOCs. Subsection (g) of new section 252 establishes rules to ensure that the BOCs protect the confidentiality of proprietary information they receive and to prohibit the sharing of such information in aggregate form with any subsidiary or affiliate unless that information is available to all other persons on the same terms and conditions. In general, a BOC may not share with anyone customer-specific proprietary information without the consent of the person to whom it relates. Exceptions to this general rule permit disclosure in response to a court order or to initiate, render, bill and collect for telecommunications services. For purposes of this subsection the term "customer proprietary information" does not include subscriber list information. Subsection 301(c) of the Senate bill defines the term "subscriber list information" and requires local exchange carriers to provide subscriber list information on a timely and unbundled basis and at nondiscriminatory and reasonable rates, terms and conditions to anyone upon request for the purpose of publishing directories in any format. Subsection 301(d) provides that telecommunications carriers have a duty to protect the confidentiality of proprietary information of other common carriers and customers, including resellers. A telecommunications carrier that receives such from another carrier may not use such information for its own marketing efforts. House amendment Section 105 of the House amendment adds a new section 222 to the Communications Act. Section 222 establishes privacy protections for customer proprietary network information (CPNI). Section 222(a) imposes on carriers a statutory duty to provide subscriber list information on a timely basis, under nondiscriminatory and reasonable rates, terms and conditions, to any publisher of directories upon request. Section 222(b)(1)(B) prohibits the use of CPNI "in the identifications or solicitation of potential customers for any service other than the service from which such information is derived." With respect to section 222(b)(2), the House recognizes that carriers are likely to incur some costs in complying with the customer-requested disclosures contemplated by this section. This section does not preclude a carrier from being reimbursed by the customers or third parties for the costs associated with making such disclosures. In addition, the disclosures described in this section include only the information provided to the carrier by the customer. A carrier is not required to disclose any of its work product based on such information. In section 222(b)(3), the term "aggregate information" should not be construed as a mechanism whereby carriers are forced to disclose sensitive information to their competitors. Indeed, the key component of "aggregate information" is that such information would have to be able to be disclosed only to those persons who have the approval of the customer. Thus, the House intends that the use of "aggregate information" would be rather limited or restricted. Section 222(c) states that this section shall not prevent the use of CPNI to combat toll fraud or to bill and collect for services requested by the customers. Section 222(d) allows the Commission to exempt from its requirements of subsection (b) carriers with fewer than 500,000 access lines, if the Commission determines either that such an exemption is in the public interest or that compliance would impose an undue burden. Section 222(e) defines terms used in this section. Section 104(b) directs the Commission to review the impact of converging communications technologies on customer privacy. This section requires the Commission to commence a proceeding within one year after the date of enactment to examine the impact of converging technologies and globalization of communications networks has on the privacy rights of consumers and possible remedies to protect them. This section also directs changes in the Commission's regulations to ensure that customer privacy rights are considered in the introduction of new telecommunications service and directs the Commission to correct any defects in its privacy regulations that are identified pursuant to this section. The Commission is also directed to make any recommendations to Congress for any legislative changes required to correct such defects within 18 months after the date of enactment of this Act. This section defines three fundamental principles to protect all consumers. These principles are: (1) the right of consumers to know the specific information that is being collected about them; (2) the right of consumers to have proper notice that such information is being used for other purposes; and (3) the right of consumers to stop the reuse or sale of that information. Conference agreement The conference agreement adopts the Senate provisions with modifications. Section 702 of the conference agreement amends title II of the Communications Act by adding a new section 222. In general, the new section 222 strives to balance both competitive and consumer privacy interests with respect to CPNI. New subsection 222(a) stipulates that it is the duty of every telecommunications carrier to protect the confidentiality of proprietary information of and relating to other carriers, equipment manufacturers and customers, including carriers reselling telecommunications services provided by a telecommunications carrier. New subsection 222(b) provides that a telecommunications carrier that receives or obtains proprietary information from another carrier for purposes of providing any telecommunications service shall use such information only for such purpose and shall not use such information for its own marketing efforts. In new subsection 222(c) use of CPNI by telecommunications carriers is limited, except as provided by law or with the approval of the customer. New subsection (c) specifies that telecommunications carriers shall only use, disclose, or permit access to individually identifiable CPNI in its provision of the telecommunications service for which such information is derived or in its provision of services necessary to or used in the provision of such telecommunications service, including directory services. The conferees also agreed upon a provision that will require disclosure of CPNI by a telecommunications carrier upon affirmative written request by the customer, to any person designated by the customer. The conference agreement also asserts carriers' rights in new subsection 222(d) to use CPNI to initiate, render, bill, and collect for telecommunications service. New subsection (d) also allows use of CPNI to protect the rights or property of the carrier. The conferees intend new subsection 222(d)(2) to allow carriers to use CPNI in limited fashion for credit evaluation to protect themselves from fraudulent operators who subscribe to telecommunications services, run up large bills, and then change carriers without payment. New subsection 222(e) stipulates that subscriber list information shall be made available by telecommunications carriers that provide telephone exchange service on a timely and unbundled basis to any person upon request for the purpose of publishing directories in any format. The subscriber list information provision guarantees independent publishers access to subscriber list information at reasonable and nondiscriminatory rates, terms and conditions from any provider of local telephone service. New subsection 222(f) contains definitions of CPNI, aggregate information and subscriber list information. Section 703 - Pole Attachments Senate bill Section 204 of the Senate bill amends section 224 of the Communications Act. Section 204 requires that poles, ducts, conduits and rights-of-way controlled by utilities are made available to cable television systems at the rates, terms and conditions that are just and reasonable regardless of whether the cable system is providing cable television services or telecommunications services. Section 204 further requires the Commission to prescribe additional regulations to establish rates for attachments by telecommunications carriers. Such rates will take effect five years from date of enactment and be phased in over a five year period. House amendment Section 105 of the House amendment is intended to remedy the inequity of charges for pole attachments among providers of telecommunications services. First, it expands the scope of the coverage of section 224 of the Communications Act. Under current law, section 224(a)(4) currently defines "pole attachment" to mean any attachment by a cable television system to a pole, conduit, or right of way owned or controlled by a utility. This section expands the definition of "pole attachment" to include attachments by all providers of telecommunications services. Second, it amends section 224 to direct the Commission, no later than one year after the date of enactment of the Communications Act of 1995, to prescribe regulations for ensuring that utilities charge just and reasonable and nondiscriminatory rates for pole attachments to all providers of telecommunications services, including such attachments used by cable television systems to provide telecommunications services. The new provision directs the Commission to regulate pole attachment rates based on a "fully allocated cost" formula. In prescribing pole attachment rates, the Commission shall: (1) recognize that the entire pole, duct, conduit, or right-of-way other than the usable space is of equal benefit to all entities attaching to the pole and therefore apportion the cost of the space other than the usable space equally among all such attachments; (2) recognize that the usable space is of proportional benefit to all entities attaching to the pole, duct, conduit, or right-of-way and therefore apportion the cost of the usable space according to the percentage of usable space required for each entity; and (3) allow for reasonable terms and conditions relating to health, safety, and the provision of reliable utility service. This new provision further provides that, to the extent that a company seeks pole attachment for a wire used solely to provide cable television services (as defined by section 602(6) of the Communications Act), that cable company will continue to pay the rate authorized under current law (as set forth in subparagraph (d)(1) of the 1978 Act). If, however, a cable television system also provides telecommunications services, then that company shall instead pay the pole attachment rate prescribed by the Commission pursuant to the fully allocated cost formula. Finally, the new provision requires that whenever the owner of a conduit or right-of-way intends to modify or to alter such conduit or right-of-way, the owner shall provide written notification of such action to any entity that has obtained an attachment so that such entity may have a reasonable opportunity to add to or modify its existing attachment. Any entity that adds to or modifies its existing attachment after receiving such notification shall bear a proportionate share of the costs incurred by the owner in making such conduit or right-of-way accessible. Conference agreement The conference agreement adopts the Senate provision with modifications. The conference agreement amends section 224 of the Communications Act by adding new subsection (e)(1) to allow parties to negotiate the rates, terms, and conditions for attaching to poles, ducts, conduits, and rights-of-way owned or controlled by utilities. New subsection 224(e)(2) establishes a new rate formula charged to telecommunications carriers for the non-useable space of each pole. Such rate shall be based upon the number of attaching entities. The conferees also agree to three additional provisions from the House amendment. First, subsection (g) requires utilities that engage in the provision of telecommunications services or cable services to impute to its costs of providing such service an equal amount to the pole attachment rate for which such company would be liable under section 224. Second, new subsection 224(h) requires utilities to provide written notification to attaching entities of any plans to modify or alter its poles, ducts, conduit, or rights-of-way. New subsection 224(h) also requires any attaching entity that takes advantage of such opportunity to modify its own attachments shall bear a proportionate share of the costs of such alterations. Third, new subsection 224(i) prevents a utility from imposing the cost of rearrangements to other attaching entities if done solely for the benefit of the utility. Section 704 - Facilities Siting; Radio Frequency Emission Standards Senate bill No provision. House amendment Section 108 of the House amendment required the Commission to issue regulations within 180 days of enactment for siting of CMS. A negotiated rulemaking committee comprised of State and local governments, public safety agencies and the affected industries were to have attempted to develop a uniform policy to propose to the Commission for the siting of wireless tower sites. The House amendment also required the Commission to complete its pending Radio Frequency (RF) emission exposure standards within 180 days of enactment. The siting of facilities could not be denied on the basis of RF emission levels for facilities that were in compliance with the Commission standard. The House amendment also required that to the greatest extent possible the Federal government make available the use of Federal property, rights-of-way, easements and any other physical instruments in the siting of wireless telecommunications facilities. Conference agreement The conference agreement creates a new section 704 which prevents Commission preemption of local and State land use decisions and preserves the authority of State and local governments over zoning and land use matters except in the limited circumstances set forth in the conference agreement. The conference agreement also provides a mechanism for judicial relief from zoning decisions that fail to comply with the provisions of this section. It is the intent of the conferees that other than under section 332(c)(7)(B)(iv) of the Communications Act of 1934 as amended by this Act and section 704 of the Telecommunications Act of 1996 the courts shall have exclusive jurisdiction over all other disputes arising under this section. Any pending Commission rulemaking concerning the preemption of local zoning authority over the placement, construction or modification of CMS facilities should be terminated. When utilizing the term "functionally equivalent services" the conferees are referring only to personal wireless services as defined in this section that directly compete against one another. The intent of the conferees is to ensure that a State or local government does not in making a decision regarding the placement, construction and modification of facilities of personal wireless services described in this section unreasonably favor one competitor over another. The conferees also intend that the phrase "unreasonably discriminate among providers of functionally equivalent services" will provide localities with the flexibility to treat facilities that create different visual, aesthetic, or safety concerns differently to the extent permitted under generally applicable zoning requirements even if those facilities provide functionally equivalent services. For example, the conferees do not intend that if a State or local government grants a permit in a commercial district, it must also grant a permit for a competitor's 50-foot tower in a residential district. Actions taken by State or local governments shall not prohibit or have the effect of prohibiting the placement, construction or modification of personal wireless services. It is the intent of this section that bans or policies that have the effect of banning personal wireless services or facilities not be allowed and that decisions be made on a case-by-case basis. Under subsection (c)(7)(B)(ii), decisions are to be rendered in a reasonable period of time, taking into account the nature and scope of each request. If a request for placement of a personal wireless service facility involves a zoning variance or a public hearing or comment process, the time period for rendering a decision will be the usual period under such circumstances. It is not the intent of this provision to give preferential treatment to the personal wireless service industry in the processing of requests, or to subject their requests to any but the generally applicable time frames for zoning decision. The phrase "substantial evidence contained in a written record" is the traditional standard used for judicial review of agency actions. The conferees intend section 332(c)(7)(B)(iv) to prevent a State or local government or its instrumentalities from basing the regulation of the placement, construction or modification of CMS facilities directly or indirectly on the environmental effects of radio frequency emissions if those facilities comply with the Commission's regulations adopted pursuant to section 704(b) concerning such emissions. The limitations on the role and powers of the Commission under this subparagraph relate to local land use regulations and are not intended to limit or affect the Commission's general authority over radio telecommunications, including the authority to regulate the construction, modification and operation of radio facilities. The conferees intend that the court to which a party appeals a decision under section 332(c)(7)(B)(v) may be the Federal district court in which the facilities are located or a State court of competent jurisdiction, at the option of the party making the appeal, and that the courts act expeditiously in deciding such cases. The term "final action" of that new subparagraph means final administrative action at the State or local government level so that a party can commence action under the subparagraph rather than waiting for the exhaustion of any independent State court remedy otherwise required. With respect to the availability of Federal property for the use of wireless telecommunications infrastructure sites under section 704(c), the conferees generally adopt the House provisions, but substitute the President or his designee for the Commission. It should be noted that the provisions relating to telecommunications facilities are not limited to commercial mobile radio licensees, but also will include other Commission licensed wireless common carriers such as point to point microwave in the extremely high frequency portion of the electromagnetic spectrum which rely on line of sight for transmitting communication services. Section 705 - Mobile Service Direct Access to Long Distance Carriers Senate bill Subsection (b) of section 221 of the Senate bill, as passes, states that notwithstanding the MFJ or any other consent decree, no CMS provider will be required by court order or otherwise to provide long distance equal access. The Commission may only order equal access if a CMS provider is subject to the interconnection obligations of section 251 and if the Commission finds that such a requirement is in the public interest. CMS providers shall ensure that its subscribers can obtain unblocked access to the interexchange carrier of their choice through the use of interexchange carrier identification codes, except that the unblocking requirement shall not apply to mobile satellite services unless the Commission finds it is in the public interest. House amendment Under section 109 of the House amendment, the Commission shall require providers of two-way switched voice CMS to allow their subscribers to access the telephone toll services provider of their choice through the use of carrier identification codes. The Commission rules will supersede the equal access, balloting and presubscription requirements imposed by the MFJ and the AT&T-McCaw consent decree. The Commission may exempt carriers or classes of carriers from the requirements of this section if it is consistent with the public interest, convenience, and necessity, and the provision of mobile services by satellite is specifically exempt from this section. Conference agreement The conference agreement adopts the House provision with modifications as a new paragraph (8) of section 332 of the Communications Act. Specifically, no CMS provider is required to provide equal access to common carriers providing telephone toll services. However, the Commission may impose rules to require unblocked access through the use of mechanisms such as carrier identification codes or toll-free numbers, if it determines that customers are being denied access to the telephone toll service provider of their choice, and such denial is contrary to the public interest, convenience, and necessity. The requirements for unblocked access to providers of telephone toll service shall not apply to mobile satellite services unless the Commission finds it to be in the public interest. Section 706 - Advanced Telecommunications Incentives Senate bill Section 304 of the Senate bill ensures that advanced telecommunications capability is promptly deployed by requiring the Commission to initiate and complete regular inquiries to determine whether advanced telecommunications capability, particularly to schools and classrooms, is being deployed in a "reasonable and timely fashion." Such determinations shall include an assessment by the Commission of the availability, at reasonable cost, of equipment needed to deliver advanced broadband capability. If the Commission makes a negative determination, it is required to take immediate action to accelerate deployment. Measures to be used include: price cap regulation, regulatory forbearance, and other methods that remove barriers and provide the proper incentives for infrastructure investment. The Commission may preempt State commissions if they fail to act to ensure reasonable and timely access. House amendment No provision. Conference agreement The conference agreement adopts the Senate provision with a modification. Section 707 - Telecommunications Development Fund Senate bill No provision. House amendment Section 112 creates the Telecommunications Development Fund (TDF). The TDF is an organization to provide funds for small businesses involved in telecommunications applications. The TDF is formulated to serve as a quasi-governmental entity that will provide low interest loans as well as financial guarantees. The capital for the Fund will be derived from the deposit of up-front payments for spectrum auctions into an interest bearing account. Businesses with gross assets of less that $50 million will be eligible to receive loans, based upon an assessment of their loan application. The fund will be administered as a not-for-profit organization, and funds will be disbursed on a race and gender neutral basis. The board of directors will consist of seven members: four from the private sector, and one from three Federal agencies (the Commission, Department of Treasury, and the Small Business Administration). The fund will provide for reinvestment, create jobs, and promote technological innovation in the telecommunications industry. A unique aspect of the Fund is that it will promote public/private sector partnerships to enhance fund assets, and promote technology development and transfer. Conference agreement The conference agreement adopts the House provision as a new section 714 of the Communications Act. Section 708 - National Education Technology Funding Corporation Senate bill Title VI of the Senate bill adds the National Education Technology Funding Corporation Act of 1995. The provisions of this title authorize a corporation, established in the District of Columbia as a private, nonprofit corporation which is not an agency or independent establishment of the Federal Government, to receive financial assistance from Federal departments and agencies. The Corporation will receive such assistance to leverage resources and stimulate private investment in education technology infrastructure, to encourage States to create and upgrade interactive high capacity networks for elementary schools, secondary schools and public libraries, to provide loans, grants and other forms of assistance to State education technology agencies, and other educational purposes. The Corporation's financial statements shall be audited annually, and the Corporation shall publish an annual report to the President and the Congress. House amendment No provision. Conference agreement The conference agreement adopts the Senate provision. Section 709 - Report on the Use of Advanced Telecommunications Services for Medical Purposes Senate bill No provision. House amendment The House amendment directs the Assistant Secretary of Commerce for Communications and Information, in consultation with the Secretary of Health and Human Services, to submit a report on telemedicine grant programs conducted by the government. Conference agreement The conference agreement adopts the House provision. Section 710 - Authorization of Appropriations Senate bill No provision. House amendment This section authorizes appropriations for the Commission of such sums as may be necessary to carry out this Act, and provides that additional amounts appropriated to carry out this Act shall be construed to be changes in the amounts appropriated for the performance of the activities described in section 9(a) of the Communications Act. Conference agreement The conference agreement adopts the House provision with a technical modification to section 309(j)(8)(B) of the Communications Act.
Radio, Television, and Press Contact Information
Copyright © 2005 Vortex Technology. All Rights Reserved.