S 652 ES
104th CONGRESS
1st Session
AN ACT

To provide for a pro-competitive, de-regulatory national policy
framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services
to all Americans by opening all telecommunications markets to
competition, and for other purposes. Be it enacted by the Senate and
House of Representatives of the United States of America in Congress
assembled, SECTION 1. SHORT TITLE. This Act may be cited as the
`Telecommunications Competition and Deregulation Act of 1995'. SEC. 2.
TABLE OF CONTENTS. The table of contents for this Act is as follows:
Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Purpose. Sec.
4. Goals. Sec. 5. Findings. Sec. 6. Amendment of Communications Act of
1934. Sec. 7. Effect on other law. Sec. 8. Definitions. TITLE
I--TRANSITION TO COMPETITION Sec. 101. Interconnection requirements.
Sec. 102. Separate affiliate and safeguard requirements. Sec. 103.
Universal service. Sec. 104. Essential telecommunications carriers.
Sec. 105. Foreign investment and ownership reform. Sec. 106.
Infrastructure sharing. Sec. 107. Coordination for telecommunications
network-level interoperability. TITLE II--REMOVAL OF RESTRICTIONS TO
COMPETITION SUBTITLE A--REMOVAL OF RESTRICTIONS. Sec. 201. Removal of
entry barriers. Sec. 202. Elimination of cable and telephone company 
cross-ownership restriction. Sec. 203. Cable Act reform. Sec. 204.
Pole attachments. Sec. 205. Entry by utility companies. Sec. 206.
Broadcast reform. SUBTITLE B--TERMINATION OF MODIFICATION OF FINAL
JUDGMENT. Sec. 221. Removal of long distance restrictions. Sec. 222.
Removal of manufacturing restrictions. Sec. 223. Existing activities.
Sec. 224. Enforcement. Sec. 225. Alarm monitoring services. Sec. 226.
Nonapplicability of Modification of Final Judgment. TITLE III--AN END
TO REGULATION Sec. 301. Transition to competitive pricing. Sec. 302.
Biennial review of regulations; elimination of  unnecessary
regulations and functions. Sec. 303. Regulatory forbearance. Sec. 304.
Advanced telecommunications incentives. Sec. 305. Regulatory parity.
Sec. 306. Automated ship distress and safety systems. Sec. 307.
Telecommunications numbering administration. Sec. 308. Access by
persons with disabilities. Sec. 309. Rural markets. Sec. 310.
Telecommunications services for health care providers  for rural
areas, educational providers, and libraries. Sec. 311. Provision of
payphone service and telemessaging service. Sec. 312. Direct Broadcast
Satellite. TITLE IV--OBSCENE, HARASSING, AND WRONGFUL UTILIZATION OF
TELECOMMUNICATIONS FACILITIES Sec. 401. Short title. Sec. 402. Obscene
or harassing use of telecommunications facilities under the
Communications Act of 1934. Sec. 403. Obscene programming on cable
television. Sec. 404. Broadcasting obscene language on radio. Sec.
405. Separability. Sec. 406. Additional prohibition on billing for
toll-free  telephone calls. Sec. 407. Scrambling of cable channels for
nonsubscribers. Sec. 408. Scrambling of sexually explicit adult video
service programming. Sec. 409. Cable operator refusal to carry certain
programs. Sec. 410. Restrictions on access by children to obscene and 
indecent material on electronic information networks open to  the
public. TITLE V--PARENTAL CHOICE IN TELEVISION Sec. 501. Short title.
Sec. 502. Findings. Sec. 503. Rating code for violence and other
objectionable content on television. Sec. 504. Requirement for
manufacture of televisions that block programs. Sec. 505. Shipping or
importing of televisions that block programs. TITLE VI--NATIONAL
EDUCATION TECHNOLOGY FUNDING CORPORATION Sec. 601. Short title. Sec.
602. Findings; purpose. Sec. 603. Definitions. Sec. 604. Assistance
for educational technology purposes. Sec. 605. Audits. Sec. 606.
Annual report; testimony to the Congress. TITLE VII--MISCELLANEOUS
PROVISIONS Sec. 701. Spectrum auctions. Sec. 702. Renewed efforts to
regulate violent programming. Sec. 703. Prevention of unfair billing
practices for information or services provided over toll-free
telephone calls. Sec. 704. Disclosure of certain records for
investigations of telemarketing fraud. Sec. 705. Telecommuting public
information program. Sec. 706. Authority to acquire cable systems.
SEC. 3. PURPOSE. It is the purpose of this Act to increase competition
in all telecommunications markets and provide for an orderly
transition from regulated markets to competitive and deregulated
telecommunications markets consistent with the public interest,
convenience, and necessity. SEC. 4. GOALS. This Act is intended to
establish a national policy framework designed to accelerate rapidly
the private sector deployment of advanced telecommunications and
information technologies and services to all Americans by opening all
telecommunications  markets to competition, and to meet the following
goals: (1) To promote and encourage advanced telecommunications
networks, capable of enabling users to originate and receive
affordable, high-quality voice, data, image, graphic, and video
telecommunications services. (2) To improve international
competitiveness markedly. (3) To spur economic growth, create jobs,
and increase productivity. (4) To deliver a better quality of life
through the preservation and advancement of universal service to allow
the more efficient delivery of educational, health care, and other
social services. SEC. 5. FINDINGS. The Congress makes the following
findings: (1) Competition, not regulation, is the best way to spur
innovation and the development of new services.  A competitive market
place is the most efficient way to lower prices and increase value for
consumers. In furthering the principle of open and full competition in
all telecommunications markets, however, it must be recognized that
some markets are more open than others. (2) Local telephone service is
predominantly a monopoly service.  Although business customers in
metropolitan areas may have alternative providers for exchange access
service, consumers do not have a choice of local telephone service.  
Some States have begun to open local telephone markets to competition.
 A national policy framework is needed to accelerate the process. (3)
Because of their monopoly status, local telephone companies and the
Bell operating companies have been prevented from competing in certain
markets.  It is time to eliminate these restrictions.  Nonetheless,
transition rules designed to open monopoly markets to competition must
be in place before certain restrictions are lifted. (4) Transition
rules must be truly transitional, not protectionism for certain
industry segments or artificial impediments to increased competition
in all markets.  Where possible, transition rules should create
investment incentives through increased competition.  Regulatory
safeguards should be adopted only where competitive conditions would
not prevent anticompetitive behavior. (5) More competitive American
telecommunications markets will promote United States technological
advances, domestic job and investment opportunities, national
competitiveness, sustained economic development, and improved quality
of American life  more effectively than regulation. (6) Congress
should establish clear statutory guidelines, standards, and time
frames to facilitate more effective communications competition and, by
so doing, will reduce business and customer uncertainty, lessen
regulatory processes, court appeals, and litigation, and thus
encourage the business community to focus more on competing in the
domestic and international communications marketplace. (7) Where
competitive markets are demonstrably inadequate to safeguard important
public policy goals, such as the continued universal availability of
telecommunications services at reasonable and affordable prices,
particularly in rural  America, Congress should establish workable
regulatory procedures to advance those goals, provided that in any
proceeding undertaken to ensure universal availability, regulators
shall seek to choose the most procompetitive and least burdensome
alternative. (8) Competitive communications markets, safeguarded by
effective Federal and State antitrust enforcement, and strong economic
growth in the United States which such markets will foster are the
most effective means of assuring that all segments of the American
public command access to advanced telecommunications technologies. (9)
Achieving full and fair competition requires strict  parity of
marketplace opportunities and responsibilities on the part of
incumbent telecommunications service providers as well as new entrants
into the telecommunications marketplace, provided that any
responsibilities placed on providers should  be the minimum required
to advance a clearly defined public policy goal. (10) Congress should
not cede its constitutional responsibility regarding interstate and
foreign commerce in communications to the Judiciary through the
establishment of procedures which will encourage or necessitate
judicial interpretation or intervention into the communications
marketplace. (11) Ensuring that all Americans, regardless of where
they  may work, live, or visit, ultimately have comparable access to
the full benefits of competitive communications markets  requires
Federal and State authorities to work together affirmatively to
minimize and remove unnecessary institutional and regulatory barriers
to new entry and competition. (12) Effectively competitive
communications markets will ensure customers the widest possible
choice of services and equipment, tailored to individual desires and
needs, and at prices they are willing to pay. (13) Investment in and
deployment of existing and future advanced, multipurpose technologies
will best be fostered by minimizing government limitations on the
commercial use of  those technologies. (14) The efficient development
of competitive United States communications markets will be furthered
by policies which aim at ensuring reciprocal opening of international
investment opportunities. SEC. 6.  AMENDMENT OF COMMUNICATIONS ACT OF
1934. Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the
Communications Act of 1934 (47 U.S.C. 151 et seq.). SEC. 7. EFFECT ON
OTHER LAW. (a) Antitrust Laws: Except as provided in subsections (b)
and  (c), nothing in this Act shall be construed to modify, impair, or
supersede the applicability of any antitrust law. (b) Modification of
Final Judgment: This Act shall supersede the Modification of Final
Judgment to the extent that it is  inconsistent with this Act. (c)
Transfer of MFJ: After the date of enactment of this Act, the
Commission shall administer any provision of the Modification of Final
Judgment not overridden or superseded by this Act. The District Court
for the District of Columbia shall have no further jurisdiction over
any provision of the Modification of Final Judgment administered by
the Commission under this Act or the Communications Act of 1934. The
Commission may, consistent with  this Act (and the amendments made by
this Act), modify any  provision of the Modification of Final Judgment
that it administers. (d) GTE Consent Decree: This Act shall supersede
the provisions  of the Final Judgment entered in United States v. GTE
Corp., No. 83-1298 (D.C. D.C.), and such Final Judgment shall not be
enforced after the effective date of this Act. SEC. 8. DEFINITIONS.
(a) Terms Used In This Act: As used in this Act-- (1) Commission: The
term `Commission' means the Federal Communications Commission. (2)
Modification of final judgment: The term `Modification of Final
Judgment' means the decree entered on August 24, 1982, in United
States v. Western Electric Civil Action No. 82-0192 (United States
District Court, District of Columbia), and includes any judgment or
order with respect to such action entered on or after August 24, 1982,
and before the date of enactment of this Act. (3) GTE consent decree:
The term `GTE Consent Decree' means the order entered on December 21,
1984, as restated January 11, 1985, in United States v. GTE
Corporation, Civil Action No. 83-1298 (United States District Court,
District of Columbia), and includes any judgment or order with respect
to such action entered on or after January 11, 1985, and before the
date of enactment of this Act. (4) Integrated telecommunications
service provider: The term `integrated telecommunications service
provider' means any 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, signalling, or control devices. (b) Terms Used
in the Communications Act of 1934: Section 3 (47 U.S.C. 153) is
amended by adding at the end thereof the following: `(gg)
`Modification of Final Judgment' means the decree entered  on August
24, 1982, in United States v. Western Electric Civil Action No.
82-0192 (United States District Court, District of Columbia), and
includes any judgment or order with respect to such action entered on
or after August 24, 1982, and before the date of enactment of the
Telecommunications Competition and Deregulation  Act of 1995. `(hh)
`Bell operating company' means any company listed in appendix A of the
Modification of Final Judgment to the extent such company provides
telephone exchange service or exchange access service, and includes
any successor or assign of any such company, but does not include any
affiliate of such company. `(ii) `Affiliate' means a person that
(directly or indirectly) owns or controls, is owned or controlled by,
or is under common ownership or control with, another person. For
purposes of this paragraph, the term `own' means to own an equity
interest (or the equivalent thereof) of more than 10 percent. `(jj)
`Telecommunications Act of 1995' means the Telecommunications
Competition and Deregulation Act of 1995. `(kk) `Local exchange
carrier' means a provider of telephone exchange service or exchange
access service. `(ll) `Telecommunications' means 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.
`(mm) `Telecommunications service' means the offering of
telecommunications for a fee directly to the public, or to such
classes of users as to be effectively available directly to the
public, regardless of the facilities used to transmit the
telecommunications service. `(nn) `Telecommunications carrier' means
any provider of telecommunications services, except that such term
does not include hotels, motels, hospitals, and other aggregators of
telecommunications services (as defined in section 226).  A
telecommunications carrier shall only be treated as a common  carrier
under this Act to the extent that it is engaged in  providing
telecommunications services for voice, data, image, graphics, or video
that it does not own, control, or select, except that the Commission
shall continue to determine whether the provision of fixed and mobile
satellite service shall be treated as common carriage. `(oo)
`Telecommunications number portability' means the ability  of users of
telecommunications services to retain, at the same location, existing
telecommunications numbers without impairment of quality, reliability,
or convenience when switching from one telecommunications carrier to
another. `(pp) `Information service' means the offering of services
that-- `(1) employ computer processing applications that act on the
format, content, code, protocol, or similar aspects of the
subscriber's transmitted information; `(2) provide the subscriber
additional, different, or restructured information; or `(3) involve
subscriber interaction with stored information. `(qq) `Cable service'
means cable service as defined in section 602. `(rr) `Rural telephone
company' means a telecommunications  carrier operating entity to the
extent that such entity provides telephone exchange service, including
access service subject to  part 69 of the Commission's rules (47
C.F.R. 69.1 et seq.), to-- `(1) any service area that does not include
either-- `(A) any incorporated place of 10,000 inhabitants or  more,
or any part thereof, based on the most recent population statistics of
the Bureau of the Census; or `(B) any territory, incorporated or
unincorporated, included in an urbanized area, as defined by the
Bureau of the Census as of January 1, 1995; or `(2) fewer than 100,000
access lines within a State. `(ss) `Service area' means a geographic
area established by the Commission and the States for the purpose of
determining universal service obligations and support mechanisms.  In
the case of an area served by a rural telephone company, `service
area' means such company's `study area' unless and until the
Commission and the States, after taking into account recommendations
of a  Federal-State Joint Board instituted under section 410(c), 
establish a different definition of service area for such company.
`(tt) `LATA' means a local access and transport area as defined  in
United States v. Western Electric Co., 569 F. Supp. 990 (U. S.
District Court, District of Columbia) and subsequent judicial  orders
relating thereto, except that, with respect to commercial mobile
services, the term `LATA' means the geographic areas defined or used
by the Commission  in issuing licenses for such services: Provided
however, That in the case of a Bell operating company cellular
affiliate, such geographic area shall be no smaller than the LATA area
for such affiliate on the date of enactment of the Telecommunications
Act of 1995.'. TITLE I--TRANSITION TO COMPETITION SEC. 101.
INTERCONNECTION REQUIREMENTS. (a) Required Interconnection: Title II
(47 U.S.C. 201 et seq.) is amended by inserting after section 228 the
following: `PART II--COMPETITION IN TELECOMMUNICATIONS `SEC. 251.
INTERCONNECTION. `(a) Duty to Provide Interconnection:  `(1) In
general: A local exchange carrier, or class of local exchange
carriers, determined by the Commission to have market power in
providing telephone exchange service or exchange  access service has a
duty under this Act, upon request-- `(A) to enter into good faith
negotiations with any telecommunications carrier requesting
interconnection between the facilities and equipment of the requesting
telecommunications carrier and the carrier, or class of carriers, of
which the request was made for the purpose of permitting the
telecommunications carrier to provide telephone exchange or exchange
access service; and `(B) to provide such interconnection, at rates
that are reasonable and nondiscriminatory, according to the terms of
the agreement and in accordance with the requirements of this section.
`(2) Initiation: A local exchange carrier, or class of carriers,
described in paragraph (1) shall commence good faith negotiations to
conclude an agreement, whether through negotiation under subsection
(c) or arbitration or intervention under subsection (d), within 15
days after receiving a request from any telecommunications carrier
seeking to provide  telephone exchange or exchange access service.
Nothing in this Act shall prohibit multilateral negotiations between
or among a local exchange carrier or class of carriers and a
telecommunications carrier or class of carriers seeking
interconnection under subsection (c) or subsection (d). At the request
of any of the parties to a negotiation, a State may participate in the
negotiation of any portion of an agreement under subsection (c). `(3)
Market power: For the purpose of determining whether a carrier has
market power under paragraph (1), the relevant market shall include
all providers of telephone exchange or exchange access services in a
local area, regardless of the technology used by any such provider.
`(b) Minimum Standards: An interconnection agreement entered into
under this section shall, if requested by a telecommunications carrier
requesting interconnection, provide for-- `(1) nondiscriminatory
access on an unbundled basis to the network functions and services of
the local exchange carrier's telecommunications network (including
switching software, to  the extent defined in implementing regulations
by the Commission); `(2) nondiscriminatory access on an unbundled
basis to any of the local exchange carrier's telecommunications
facilities and information, including databases and signaling,
necessary to  the transmission and routing of any telephone exchange
service or exchange access service and the interoperability of both
carriers' networks; `(3) interconnection to the local exchange
carrier's telecommunications facilities and services at any
technically feasible point within the carrier's network; `(4)
interconnection that is at least equal in type, quality, and price (on
a per unit basis or otherwise) to that provided  by the local exchange
carrier to itself or to any subsidiary, affiliate, or any other party
to which the  carrier provides interconnection; `(5) nondiscriminatory
access to the poles, ducts, conduits, and rights-of-way owned or
controlled by the local exchange carrier at just and reasonable rates;
`(6) the local exchange carrier to take whatever action under its
control is necessary, as soon as is technically feasible,  to provide
telecommunications number portability and local dialing parity in a
manner that-- `(A) permits consumers to be able to dial the same
number of digits when using any telecommunications carrier providing
telephone exchange service or exchange access service in the market
served by the local exchange carrier; `(B) permits all such carriers
to have nondiscriminatory access to telephone numbers, operator
services, directory assistance, and directory listing with no
unreasonable dialing delays; and `(C) provides for a reasonable
allocation of costs among the parties to the agreement; `(7)
telecommunications services and network functions of the local
exchange carrier to be available to the  telecommunications carrier on
an unbundled basis without any unreasonable conditions on the resale
or sharing of those services or functions, including the origination,
transport,  and termination of such telecommunications services, other
than reasonable conditions required by a State; and for purposes of
this paragraph, it is not an unreasonable condition for a State to
limit the resale-- `(A) of services included in the definition of
universal service to a telecommunications carrier who resells that
service to a category of customers different from the category of
customers being offered that universal service by such carrier if the
State orders a carrier to provide  the same service to different
categories of customers at different prices necessary to promote
universal service; or `(B) of subsidized  universal service in a
manner that allows companies to charge another carrier rates which
reflect the actual cost of providing those services to that carrier,
exclusive of any universal service support  received for providing
such services in accordance with section 214(d)(5); `(8) reciprocal
compensation arrangements for the origination and termination of
telecommunications; `(9) reasonable public notice of changes in the
information necessary for the transmission and routing of services
using that local exchange carrier's facilities or networks, as well 
as of any other changes that would affect the interoperability of
those facilities and networks; and `(10) a schedule of itemized
charges and conditions for each service, facility, or function
provided under the agreement. `(c) Agreements Arrived at Through
Negotiation: Upon receiving a request for interconnection, a local
exchange carrier may meet its interconnection obligations under this
section by negotiating and entering into a binding agreement with the
telecommunications carrier seeking interconnection without regard to
the standards set forth in subsection (b). The agreement shall include
a schedule of itemized charges for each service, facility, or function
included  in the agreement. The agreement, including any
interconnection agreement negotiated before the date of enactment of
the Telecommunications Act of 1995, shall be submitted to the State
under subsection (e). `(d) Agreements Arrived at Through Arbitration
or Intervention:  `(1) In general: Any party negotiating an
interconnection agreement under this section may, at any point in the
negotiation, ask a State to participate in the negotiation and to
arbitrate any differences arising in the course of the negotiation. 
The refusal of any other party to the negotiation to participate
further in the negotiations, to cooperate with the  State in carrying
out its function as a arbitrator, or to continue to negotiate in good
faith in the presence, or with  the assistance, of the State shall be
considered a failure to negotiate in good faith. `(2) Intervention: If
any issues remain open in a negotiation commenced under this section
more than 135 days after the date upon which the local exchange
carrier received the request for such negotiation, then the carrier or
any other party to the negotiation may petition a State to intervene
in the negotiations for purposes of resolving any such remaining open
issues. Any such request must be made during the 25-day period that
begins 135 days after the carrier receives the request for such
negotiation and ends 160 days after that date. `(3) Duty of
petitioner:  `(A) A party that petitions a State under paragraph (2)
shall, at the same time as it submits the petition, provide the State
all relevant documentation concerning the negotiations necessary to
understand-- `(i) the unresolved issues; `(ii) the position of each of
the parties with  respect to those issues; and `(iii) any other issue
discussed and resolved by the parties. `(B) A party petitioning a
State under paragraph (2)  shall provide a copy of the petition and
any documentation to the other party not later than the day on which
the  State receives the petition. `(4) Opportunity to respond: A party
to a negotiation under this section with respect to which the other
party has petitioned a State under paragraph (2) may respond to the
other party's petition and provide such additional information as it
wishes within 25 days after the State receives the petition. `(5)
Action by state:  `(A) A State proceeding to consider a petition under
this subsection shall be conducted in accordance with the rules
promulgated by the Commission under subsection (i). The State shall
limit its consideration of any petition under paragraph (2) (and any
response thereto) to the issues set forth in the petition and in the
response, if any, filed under paragraph (4). `(B) The State may
require the petitioning party and the responding party to provide such
information as may be necessary for the State to reach a decision on
the unresolved issues. If either party refuses or fails unreasonably
to respond on a timely basis to any reasonable request from the State,
then the State may proceed on the basis of the best information
available to it from whatever source derived. `(C) The State shall
resolve each issue set forth in the petition and the response, if any,
by imposing appropriate conditions upon the parties to the agreement,
and shall conduct the review of the agreement (including the issues
resolved by the State) not later than 10 months after the date on
which the local exchange carrier received the request for
interconnection under this section. `(D) In resolving any open issues
and imposing conditions upon the parties to the agreement, a State
shall ensure  that the requirements of this section are met by the
solution imposed by the State and are consistent with the Commission's
rules defining minimum standards. `(6) Charges: If the amount charged
by a local exchange carrier, or class of local exchange carriers, for
an unbundled element of the interconnection provided under subsection
(b) is determined by arbitration or intervention under this 
subsection, then the charge-- `(A) shall be `(i) based on the cost
(determined without reference to a rate-of-return or other rate-based
proceeding) of providing the unbundled element, `(ii)
nondiscriminatory, and `(iii) individually priced to the smallest
element that is technically feasible and economically  reasonable to
provide; and `(B) may include a reasonable profit. `(e) Approval by
State: Any interconnection agreement under this section shall be
submitted for approval to the State. A State to which an agreement is
submitted shall approve or reject the agreement, with written findings
as to any deficiencies.  The State may only reject-- `(1) an agreement
under subsection (c) if it finds that the agreement discriminates
against a telecommunications carrier  not a party to the agreement;
and `(2) an agreement under subsection (d) if it finds that-- `(B) the
agreement does not meet the standards set forth in subsection (b), or
`(B) the implementation of the agreement is not in the public
interest. If the State does not act to approve or reject the agreement
within 90 days after receiving the agreement, or 30 days in the case
of an agreement negotiated under subsection (c), the agreement shall
be deemed approved.  No State court shall have jurisdiction to review
the action of a State in approving or rejecting an agreement under
this section. `(f) Filing Required: A State shall make a copy of each
a greement  approved under subsection (e) available for public
inspection and copying within 10 days after the agreement is approved.
The State may charge a reasonable and nondiscriminatory fee to the
parties to the agreement to cover the costs of approving and filing
such agreement. `(g) Availability to Other Telecommunications
Carriers: A local exchange carrier shall make available any service,
facility, or function provided under an interconnection agreement to
which it is a party to any other telecommunications carrier that
requests such interconnection upon the same terms and conditions as
those  provided in the agreement. `(h) Collocation: A State may
require telecommunications carriers to provide for actual collocation
of equipment necessary for interconnection at the premises of the
carrier at reasonable charges, if the State finds actual collocation
to be in the public interest. `(i) Implementation:  `(1) Rules and
standards: The Commission shall promulgate rules to implement the
requirements of this section within 6 months after the date of
enactment of the Telecommunications  Act of 1995.  In establishing the
standards for determining  what facilities and information are
necessary for purposes of subsection (b)(2), the Commission shall
consider, at a minimum, whether-- `(A) access to such facilities and
information that are proprietary in nature is necessary; and `(B) the
failure to provide access to such facilities and information would
impair the ability of the telecommunications carrier seeking
interconnection to provide the services that it seeks to offer. `(2)
Commission to act if state will not act: If a State, through action or
inaction, fails to carry out its responsibility under this section in
accordance with the rules prescribed by the Commission under paragraph
(1) in any proceeding or other matter under this section, then the
Commission shall issue an order preempting the State's jurisdiction of
that proceeding or matter within 90 days after being notified (or
taking notice) of such failure, and shall assume the responsibility of
the State under this section with respect to the proceeding or matter
and act for the State. `(3) Waivers and modifications for rural
carriers: The Commission or a State shall, upon petition or on its own
initiative, waive or modify the requirements of subsection (b) for a
rural telephone company or companies, and may waive or modify the
requirements of subsection (b) for local exchange carriers with fewer
than 2 percent of the Nation's subscriber lines installed in the
aggregate nationwide, to the extent that the Commission or a State
determines that 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 Commission or a State shall act
upon any petition filed under this paragraph within 180 days of 
receiving such petition. Pending such action, the Commission or a
State may suspend enforcement of the requirement or requirements to
which the petition applies with respect to the petitioning carrier or
carriers. `(j) State Requirements: Nothing in this section precludes a
 State from imposing requirements on a telecommunications carrier  for
intrastate services that are necessary to further competition  in the
provision of telephone exchange service or exchange access service, as
long as the State's requirements are not inconsistent with the
Commission's regulations to implement this section. `(k) Access Charge
Rules: Nothing in this section shall affect 
the Commission's interexchange-to-local exchange access charge  rules
for local exchange carriers or interexchange carriers in effect on the
date of enactment of the Telecommunications Act of 1995. `(l) Review
of Interconnection Standards: Beginning 3 years after the date of
enactment of the Telecommunications Act of 1995 and every 3 years
thereafter, the Commission shall review the standards and requirements
for interconnection established under subsection (b).  The Commission
shall complete each such review within 180  days and may modify or
waive any requirements or standards established under subsection (b)
if it determines that the modification or waiver meets the
requirements of section 260. `(m) Commercial Mobile Service Providers:
The requirements of  this section shall not apply to commercial mobile
services provided by a wireline local exchange carrier unless the
Commission determines under subsection (a)(3) that such carrier has
market power in the provision of commercial mobile service.'. (c)
Technical Amendments:  (1) Title II (47 U.S.C. 201 et seq.) is amended
by inserting before section 201 the following: `PART I--GENERAL
PROVISIONS'. (2) Section 2(b) (47 U.S.C. 152(b)) is amended by
striking `sections 223 through 227, inclusive, and section 332,' and
inserting `section 214(d), sections 223 through 227, part II of title
II, and section 332,'. SEC. 102. SEPARATE AFFILIATE AND SAFEGUARD
REQUIREMENTS. (a) In General: Part II of title II (47 U.S.C. 251 et
seq.), as added by section 101 of this Act, is amended by inserting
after section 251 the following new section: `SEC. 252. SEPARATE
AFFILIATE; SAFEGUARDS. `(a) Separate Affiliate Required For
Competitive Activities:  `(1) In general: A Bell operating company
(including any affiliate) which is a local exchange carrier that is
subject to the requirements of section 251(a) may not provide any
service described in paragraph (2) unless it provides that service
through one or more affiliates that-- `(A) are separate from any
operating company entity that is subject to the requirements of
section 251(a); and `(B) meet the requirements of subsection (b). `(2)
Services for which a separate affiliate is required: The services for
which a separate affiliate is required by  paragraph (1) are: `(A)
Information services, including cable services and alarm monitoring
services, other than any information service a Bell operating company
was authorized to provide before July 24, 1991. `(B) Manufacturing
services. `(C) InterLATA services other than-- `(i) incidental
services, not including information services; `(ii) out-of-region
services; or `(iii) services authorized under an order entered by the
United States District Court for the District of Columbia pursuant to
the Modification of Final Judgment before the date of enactment of the
Telecommunications Act of 1995. `(b) Structural and Transactional
Requirements: The separate affiliate required by this section-- `(1)
shall maintain books, records, and accounts in the  manner prescribed
by the Commission which shall be separate  from the books, records,
and accounts maintained by the Bell operating company of which it is
an affiliate; `(2) shall have separate officers, directors, and
employees from the Bell operating company of which it is an affiliate;
`(3) may not obtain credit under any arrangement that would permit a
creditor, upon default, to have recourse to the assets of the Bell
operating company; and `(4) shall conduct all transactions with the
Bell operating company of which it is an affiliate on an arm's length
basis with any such transactions reduced to writing and available for
public inspection. `(c) Nondiscrimination Safeguards: In its dealings
with its affiliate described in subsection (a) a Bell operating
company-- `(1) may not discriminate between that company or affiliate
and any other entity in the provision or procurement of goods,
services, facilities, and information, or in the establishment of
standards; `(2) may not provide any goods, services, facilities, or
information to such company or affiliate unless the goods, services,
facilities, or information are made available to  other persons on
reasonable and nondiscriminatory terms and conditions, unbundled to
the smallest element that is technically feasible and economically
reasonable to provide,  and at just and reasonable rates that are not
higher on a per-unit basis than those charged for such services to any
affiliate of such company; and `(3) shall account for all transactions
with an affiliate described in subsection (a) in accordance with
generally accepted accounting principles. `(d) Biennial Audit:  `(1)
General requirement: A company required to operate a separate
affiliate under this section shall obtain and pay for  a joint
Federal/State audit every 2 years conducted by an independent auditor
selected by the Commission, and working at the direction of, the
Commission and the State commission of each State in which such
company provides service, to determine whether such company has
complied with this section and the regulations promulgated under this
section, and particularly whether such company has complied with the
separate accounting requirements under subsection (b). `(2) Results
submitted to commission; state commissions: The auditor described in
paragraph (1) shall submit the results of the audit to the Commission
and to the State commission of each State in which the company audited
provides service, which  shall make such results available for public
inspection. Any party may submit comments on the final audit report.
`(3) Access to documents: For purposes of conducting audits and
reviews under this subsection-- `(A) the independent auditor, the
Commission, and the State commission shall have access to the
financial  accounts and records of each company and of its affiliates
necessary to verify transactions conducted with that  company that are
relevant to the specific activities permitted under this section and
that are necessary for the regulation of rates; `(B) the Commission
and the State commission shall have access to the working papers and
supporting materials of  any auditor who performs an audit under this
section; and `(C) the State commission shall implement appropriate
procedures to ensure the protection of any proprietary information
submitted to it under this section. `(e) Joint Marketing:  `(1) A Bell
operating company affiliate required by this section may not market or
sell telephone exchange services provided by the Bell operating
company unless that company permits other entities offering the same
or similar service to market and sell its telephone exchange services.
`(2) A Bell operating company may not market or sell any service
provided by an affiliate required by this section until that company
has been authorized to provide interLATA services under section 255.
`(3) The joint marketing and sale of services permitted under this
subsection shall not be considered to violate the nondiscrimination
provisions of subsection (c). `(f) Additional Requirements for
Provision of InterLATA Services: A Bell operating company-- `(1) shall
fulfill any requests from an unaffiliated entity for exchange access
service within a period no longer than that in which it provides such
exchange access service to itself or to its affiliates; `(2) shall
fulfill any such requests with exchange access service of a quality
that meets or exceeds the quality of exchange access service provided
by the Bell operating company to itself or its affiliate; `(3) shall
provide exchange access service to all carriers at rates that are
just, reasonable, not unreasonably discriminatory, and based on costs;
`(4) shall not provide any facilities, services, or information
concerning its provision of exchange access service to the affiliate
described in subsection (a) unless such facilities, services, or
information are made available to  other providers of interLATA
services in that market on the  same terms and conditions; `(5) shall
charge the affiliate described in subsection (a), and impute to itself
or any intraLATA interexchange affiliate, the same rates for access to
its telephone exchange service and exchange access service that it
charges unaffiliated interexchange carriers for such service; and `(6)
may provide any interLATA or intraLATA facilities or services to its
interLATA affiliate if such services or facilities are made available
to all carriers at the same rates and on the same terms and conditions
so long as the costs are appropriately allocated. `(g) Proprietary
Information:  `(1) In general: In complying with the requirements of
this section, each Bell operating company and any affiliate of such
company has a duty to protect the confidentiality of propriety
information relating to other common carriers, to equipment
manufacturers, and to customers.  A Bell operating company may not
share customer proprietary information in aggregate form with its
affiliates unless such aggregate information is available to other
carriers or persons under the same terms and conditions.  Individually
identifiable customer proprietary information and other proprietary
information may be-- `(A) shared with any affiliated entity required
by this section or with any unaffiliated entity only with the consent
of the person to which such information relates or from which it was
obtained (including other carriers); or `(B) disclosed to appropriate
authorities pursuant to court order. `(2) Exceptions: Paragraph (1)
does not limit the disclosure of individually identifiable customer
proprietary information  by each Bell operating company as necessary--
`(A) to initiate, render, bill, and collect for telephone exchange
service, interexchange service, or telecommunications service
requested by a customer; or `(B) to protect the rights or property of
the carrier, or to protect users of any of those services and other 
carriers from fraudulent, abusive, or unlawful use of, or subscription
to, any such service. `(3) Subscriber list information: For purposes
of this subsection, the term `customer proprietary information' does 
not include subscriber list information. `(h) Commission May Grant
Exceptions: The Commission may grant an exception from compliance with
any requirement of this section upon a showing that the exception is
necessary for the public interest, convenience, and necessity. `(i)
Application to Utility Companies:  `(1) Registered public utility
holding company: A registered company may provide telecommunications
services only through a separate subsidiary company that is not a
public utility company. `(2) Other utility companies: Each State shall
determine whether a holding company subject to its jurisdiction-- `(A)
that is not a registered holding company, and `(B) that provides
telecommunications service, is required to provide that service
through a separate subsidiary company. `(3) Savings provision: Nothing
in this subsection or the Telecommunications Act of 1995 prohibits a
public utility company from engaging in any activity in which it is
legally engaged on the date of enactment of the Telecommunications Act
of 1995; provided it complies with the terms of any applicable
authorizations. `(4) Definitions: For purposes of this subsection, the
terms `public utility company', `associate company', `holding
company', `subsidiary company', `registered holding company', and
`State commission' have the same meaning as they have in section 2 of
the Public Utility Holding Company Act of 1935.'. (b) Implementation:
The Commission shall promulgate any regulations necessary to implement
section 252 of the  Communications Act of 1934 (as added by subsection
(a)) not later than one year after the date of enactment of this Act.
Any separate affiliate established or designated for purposes of
section 252(a) of the Communications Act of 1934 before the
regulations have been issued in final form shall be restructured or
otherwise modified,  if necessary, to meet the requirements of those
regulations. (c) Effective Date: The amendment made by subsection (a)
shall take effect on the date of enactment of this Act. SEC. 103.
UNIVERSAL SERVICE. (a) Findings: The Congress finds that-- (1) the
existing system of universal service has evolved  since 1930 through
an ongoing dialogue between industry,  various Federal-State Joint
Boards, the Commission, and the courts; (2) this system has been
predicated on rates established by the Commission and the States that
require implicit cost shifting by monopoly providers of telephone
exchange service through both local rates and access charges to
interexchange carriers; (3) the advent of competition for the
provision of telephone exchange service has led to industry requests
that the existing system be modified to make support for universal
service explicit and to require that all telecommunications carriers
participate in the modified system on a competitively neutral basis;
and (4) modification of the existing system is necessary to promote
competition in the provision of telecommunications services and to
allow competition and new technologies to  reduce the need for
universal service support mechanisms. (b) Federal-State Joint Board on
Universal Service:  (1) Within one month after the date of enactment
of this Act, the Commission shall institute and refer to a
Federal-State Joint Board under section 410(c) of the Communications
Act of 1934 a proceeding to recommend rules regarding the
implementation of section 253 of that Act, including the definition of
universal service. The Joint Board shall, after notice and public
comment, make its recommendations to the Commission no later than 9
months after the date of enactment  of this Act. (2) The Commission
may periodically, but no less than once every 4 years, institute and
refer to the Joint Board  a proceeding to review the implementation of
section 253 of that Act  and to make new recommendations, as
necessary, with  respect to any modifications or additions that may be
needed.  As part of any such proceeding the Joint Board shall review
the definition of, and adequacy of support for, universal service and
shall evaluate the extent to which universal service has been
protected and advanced. (c) Commission Action: The Commission shall
initiate a single proceeding to implement recommendations from the
initial Joint  Board required by subsection (a) and shall complete
such proceeding within 1 year after the date of enactment of this Act.
Thereafter, the Commission shall complete any proceeding to implement
recommendations from any further Joint Board required under subsection
(b) within one year after receiving such recommendations. (d)
Separations Rules: Nothing in the amendments made by this Act to the
Communications Act of 1934 shall affect the Commission's separations
rules for local exchange carriers or interexchange carriers in effect
on the date of enactment of this Act. (e) Amendment of Communications
Act: Part II of title II (47 U.S.C. 251 et seq.), as added by this
Act, is amended by inserting after section 252 the following new
section: `SEC. 253. UNIVERSAL SERVICE. `(a) Universal Service
Principles: The Joint Board and the Commission shall base policies for
the preservation and advancement of universal service on the following
principles: `(1) Quality services are to be provided at just,
reasonable, and affordable rates. `(2) Access to advanced
telecommunications and information services should be provided in all
regions of the Nation. `(3) Consumers in rural and high cost areas
should have  access to telecommunications and information services, 
including interexchange services, that are reasonably  comparable to
those services provided in urban areas. `(4) Consumers in rural and
high cost areas should have  access to telecommunications and
information services at rates that are reasonably comparable to rates
charged for similar services in urban areas. `(5) Consumers in rural
and high cost areas should have  access to the benefits of advanced
telecommunications and information services for health care,
education, economic development, and other public purposes. `(6) There
should be a coordinated Federal-State universal service system to
preserve and advance universal service using specific and predictable
Federal and State mechanisms administered by an independent,
non-governmental entity or entities. `(7) Elementary and secondary
schools and classrooms should have access to advanced
telecommunications services. `(b) Definition:  `(1) In general:
Universal service is an evolving level of intrastate and interstate
telecommunications services that the Commission, based on
recommendations from the public, Congress, and the Federal-State Joint
Board periodically convened under section 103 of the
Telecommunications Act of 1995, and taking into account advances in
telecommunications and information technologies and services,
determines-- `(A) should be provided at just, reasonable, and
affordable rates to all Americans, including those in rural and high
cost areas and those with disabilities; `(B) are essential in order
for Americans to participate effectively in the economic, academic,
medical, and democratic processes of the Nation; and `(C) are, through
the operation of market choices, subscribed to by a substantial
majority of residential customers. `(2) Different definition for
certain purposes: The  Commission may establish a different definition
of universal service for schools, libraries, and health care providers
for the purposes of section 264. `(c) All Telecommunications Carriers
Must Participate: Every telecommunications carrier engaged in
instrastate, interstate, or foreign communication shall participate,
on an equitable and nondiscriminatory basis, in the specific and
predictable mechanisms established by the Commission and the States to
preserve and  advance universal service. Such participation shall be
in the  manner determined by the Commission and the States to be
reasonably necessary to preserve and advance universal service. Any
other provider of telecommunications may be required to participate in
 the preservation and advancement of universal service, if the  public
interest so requires. `(d) State Authority: A State may adopt
regulations to carry out its responsibilities under this section, or
to provide for additional definitions, mechanisms, and standards to
preserve and advance universal service within that State, to the
extent that  such regulations do not conflict with the Commission's
rules to implement this section. A State may only enforce additional
definitions or standards to the extent that it adopts additional
specific and predictable mechanisms to support such definitions or
standards. `(e) Eligibility for Universal Service Support: To the
extent necessary to provide for specific and predictable mechanisms to
achieve the purposes of this section, the Commission shall modify its
existing rules for the preservation and advancement of  universal
service. Only essential telecommunications carriers designated under
section 214(d) shall be eligible to receive  support for the provision
of universal service. Such support, if any, shall accurately reflect
what is necessary to preserve and advance universal service in
accordance with this section and the other requirements of this Act.
`(f) Universal Service Support: The Commission and the States shall
have as their goal the need to make any support for universal service
explicit, and to target that support to those essential
telecommunications carriers that serve areas for which such support is
necessary. The specific and predictable mechanisms adopted by  the
Commission and the States shall ensure that essential
telecommunications carriers are able to provide universal service  at
just, reasonable, and affordable rates. A carrier that receives
universal service support shall use that support only for the
provision, maintenance, and upgrading of facilities and services  for
which the support is intended. `(g) Interexchange Services: The rates
charged by any provider of interexchange telecommunications service to
customers in rural and high cost areas shall be no higher than those
charged by such provider to its customers in urban areas. `(h) Subsidy
of Competitive Services Prohibited: A telecommunications carrier may
not use services that are not competitive to subsidize competitive
services. The Commission, with respect to interstate services, and the
States, with respect to intrastate services, shall establish any
necessary cost allocation rules, accounting safeguards, and guidelines
to ensure that  services included in the definition of universal
service bear no more than a reasonable share of the joint and common
costs of facilities used to provide those services. `(i) Congressional
Notification Required:  `(1) In general: The Commission may not take
action to  require participation by telecommunications carriers or
other providers of telecommunications under subsection (c), or to
modify its rules to increase support for the preservation and
advancement of universal service, until-- `(A) the Commission submits
to the Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Commerce of the House of Representatives a
report on the participation required, or the increase in support 
proposed, as appropriate; and `(B) a period of 120 days has elapsed
since the date the report required under paragraph (1) was submitted.
`(2) Not applicable to reductions: This subsection shall not apply to
any action taken to reduce costs to carriers or consumers. `(j) Effect
on Commission's Authority: Nothing in this section shall be construed
to expand or limit the authority of the Commission to preserve and
advance universal service under this Act. `(k) Effective Date: This
section takes effect on the date of enactment of the
Telecommunications Act of 1995, except for subsections (c), (d), (e),
(f), and (i) which take effect one year after the date of enactment of
that Act.'. (f) Prohibition on Exclusion of Areas from Service Based
on Rural Location, High Costs, or Income: Part II of title II (47
U.S.C. 201 et seq.) as amended by this Act, is amended by adding after
section 253 the following: `SEC. 253A PROHIBITION ON EXCLUSION OF
AREAS FROM SERVICE BASED ON RURAL LOCATION, HIGH COSTS, OR INCOME.
`(a) The Commission shall prohibit any telecommunications carrier from
excluding from any of such carrier's services any high-cost area, or
any area on the basis of the rural location or the income of the
residents of such area: Provided, That a carrier may exclude an area
in which the carrier can demonstrate that-- `(1) there will be
insufficient consumer demand for the carrier to earn some return over
the long term on the capital invested to provide such service to such
area, and-- `(2) 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 the
service. `(b) The Commission shall provide for public comment on the
adequacy of the carrier's proposed service area on the basis of the
requirements of this section.'. SEC. 104.  ESSENTIAL
TELECOMMUNICATIONS CARRIERS. (a) In General: Section 214(d) (47 U.S.C.
214(d)) is amended-- (1) by inserting `(1) Adequate facilities
required: ' before `The Commission'; and (2) by adding at the end
thereof the following: `(2) Designation of essential carrier:  If one
or more common carriers provide telecommunications service to a
geographic area, and no common carrier will provide universal service
to an unserved community or any portion thereof that requests such
service within such area, then the Commission, with respect to
interstate  services, or a State, with respect to intrastate services,
shall determine which common carrier serving that area is best able to
provide universal service to the requesting unserved community or
portion thereof, and shall designate that common carrier as an
essential telecommunications carrier for that unserved community or
portion thereof. `(3) Essential carrier obligations: A common carrier
may be designated by the Commission, or by a State, as appropriate, as
an essential telecommunications carrier for a specific service area 
and become eligible to receive universal service support under section
253.  A carrier designated as an essential telecommunications carrier
shall-- `(A) provide through its own facilities or through a
combination of its own facilities and resale of services using another
carrier's facilities, universal service and any additional service
(such as 911 service) required by the Commission or the State, to any
community or portion thereof which requests such service; `(B) offer
such services at nondiscriminatory rates established by the
Commission, for interstate services, and the State, for intrastate
services, throughout the service area; and `(C) advertise throughout
the service area the availability  of such services and the rates for
such services using media of general distribution. `(4) Multiple
essential carriers: If the Commission, with respect to interstate
services, or a State, with respect to intrastate services, designates
more than one common carrier as an essential telecommunications
carrier for a specific service area, such  carrier shall meet the
service, rate, and advertising requirements imposed by the Commission
or State on any other essential telecommunications carrier for that
service area. A State shall require that, before designating an
additional essential telecommunications carrier, the State agency
authorized to make the designation shall find that-- `(A) the
designation of an additional essential telecommunications carrier is
in the public interest and that there will not be a significant
adverse impact on users of telecommunications services or on the
provision of universal service; `(B) the designation encourages the
development and  deployment of advanced telecommunications
infrastructure and services in rural areas; and `(C) the designation
protects the public safety and welfare, ensures the continued quality
of telecommunications services,  or safeguards the rights of
consumers. `(5) Resale of universal service: The Commission, for
interstate services, and the States, for intrastate services, shall
establish rules to govern the resale of universal service to allocate
any support received for the provision of such service in a manner
that ensures that the carrier whose facilities are being resold is
adequately compensated for their use, taking into account the  impact
of the resale on that carrier's ability to maintain and deploy its
network as a whole.  The Commission shall also  establish, based on
the recommendations of the Federal-State Joint Board instituted to
implement this section, rules to permit a carrier designated as an
essential telecommunications carrier to relinquish that designation
for a specific service area if another telecommunications carrier is
also designated as an essential telecommunications carrier for that
area.  The rules-- `(A) shall ensure that all customers served by the
relinquishing carrier continue to be served, and shall require
sufficient notice to permit the purchase or construction of adequate
facilities by any remaining essential telecommunications carrier if
such remaining carrier provided universal service through resale of
the facilities of the relinquishing carrier; and `(B) shall establish
criteria for determining when a carrier which intends to utilize
resale to meet the requirements for designation under this subsection
has adequate resources to purchase, construct, or otherwise obtain the
facilities necessary to meet its obligation if the reselling carrier
is no longer able or obligated to resell the service. `(6)
Enforcement: A common carrier designated by the Commission  or a State
as an essential telecommunications carrier that refuses to provide
universal service within a reasonable period to an unserved community
or portion thereof which requests such service shall forfeit to the
United States, in the case of interstate services, or the State, in
the case of intrastate services, a sum  of up to $10,000 for each day
that such carrier refuses to provide such service. In determining a
reasonable period the Commission or the State, as appropriate, shall
consider the nature of any construction required to serve such
requesting unserved community  or portion thereof, as well as the
construction intervals normally attending such construction, and shall
allow adequate time for regulatory approvals and acquisition of
necessary financing. `(7) Interexchange services: The Commission, for
interstate services, or a State, for intrastate services, shall
designate an essential telecommunications carrier for interexchange
services for any unserved community or portion thereof requesting such
s ervices.  Any common carrier designated as an essential
telecommunications carrier for interexchange services under this
paragraph shall provide interexchange services included in  universal
service to any unserved community or portion thereof  which requests
such service.  The service shall be provided at nationwide
geographically averaged rates for interstate interexchange services
and at geographically averaged rates for intrastate interexchange
services, and shall be just and reasonable and not unjustly or
unreasonably discriminatory.  A common carrier designated as an
essential telecommunications carrier for interexchange services under
this paragraph that refuses to provide interexchange service in
accordance with this paragraph to an unserved community or portion
thereof that requests such service within 180 days of such request
shall forfeit to the United States 

a sum of up to $50,000 for each day that such carrier refuses to
provide such service.  The Commission or the State, as appropriate,
may extend the 180-day period for providing interexchange service upon
a showing by the common carrier of good faith efforts to  comply
within such period. `(8) Implementation: The Commission may, by
regulation, establish guidelines by which States may implement the
provisions of this section.'. (b) Conforming Amendment: The heading
for section 214 is amended by inserting a semicolon and `essential
telecommunications  carriers' after `lines'. (c) Transition Rule: A
rural telephone company is eligible to receive universal service
support payments under section 253(e) of the Communications Act of
1934 as if such company were an essential telecommunications carrier 
until such time as the Commission, with respect to interstate
services, or a State, with respect to intrastate services, designates
an essential telecommunications carrier or carriers for the area
served by such company under section 214 of that Act. SEC. 105.
FOREIGN INVESTMENT AND OWNERSHIP REFORM. (a) In General: Section 310
(47 U.S.C. 310) is amended by adding at the end thereof the following
new subsection: `(f) Termination of Foreign Ownership Restrictions: 
`(1) Restriction not to apply where reciprocity found: Subsection (b)
shall not apply to any common carrier license held, or for which
application is made, after the date of enactment of the
Telecommunications Act of 1995 with respect to any alien (or
representative thereof), corporation, or foreign government (or
representative thereof) if the Commission determines that the foreign
country of which such alien is a citizen, in which such corporation is
organized, or in which such foreign government is in control provides
equivalent  market opportunities for common carriers to citizens of
the United States (or their representatives), corporations  organized
in the United States, and the United States   Government (or its
representative): Provided, That the  President does not object within
15 days of such determination. If the President objects to a
determination, the President shall, immediately upon such objection,
submit to Congress a written report (in unclassified form, but with a
classified annex if necessary) that sets forth a detailed explanation
of the findings made and factors considered in objecting to the
determination. The determination of whether market  opportunities are
equivalent shall be made on a market segment specific basis within 180
days after the application is filed. While determining whether such
opportunities are equivalent on that basis, the Commission shall also
conduct an evaluation of opportunities for access to all segments of
the telecommunications market of the applicant. `(2) Snapback for
reciprocity failure: If the Commission determines that any foreign
country with respect to which it  has made a determination under
paragraph (1) ceases to meet the requirements for that determination,
then-- `(A) subsection (b) shall apply with respect to such aliens,
corporations, and government (or their representatives) on the date on
which the Commission publishes notice of its determination under this
paragraph, and `(B) any license held, or application filed, which
could not be held or granted under subsection (b) shall be withdrawn,
or denied, as the case may be, by the Commission under the provisions
of subsection (b).'. (b) Conforming Amendment: Section 332(c)(6) (47
U.S.C. 332(c)(6)) is amended by adding at the end thereof the
following: `This paragraph does not apply to any foreign ownership 
interest or transfer of ownership to which section 310(b) does not
apply because of section 310(f).'. (c) The Application of the
Exon-Florio Law: Nothing in this section (47 U.S.C. 310) shall limit
in any way the application of the Exon-Florio law (50 U.S.C. App.
2170) to any transaction. SEC. 106. INFRASTRUCTURE SHARING. (a)
Regulations Required: The Commission shall prescribe, within one year
after the date of enactment of this Act, regulations that require
local exchange carriers that were subject to Part 69 of the
Commission's rules on or before that date to make available to any
qualifying carrier such public switched network infrastructure,
technology, information, and telecommunications facilities and
functions as may be requested by such qualifying carrier for the
purpose of enabling such qualifying carrier to provide
telecommunications services, or to provide access to information
services, in the service area in which such qualifying carrier has
requested and obtained designation as an essential telecommunications
carrier under section 214(d) and provides universal service by means
of its own facilities. (b) Terms and Conditions of Regulations: The
regulations prescribed by the Commission pursuant to this section
shall-- (1) not require a local exchange carrier to which this 
section applies to take any action that is economically unreasonable
or that is contrary to the public interest; (2) permit, but shall not
require, the joint ownership or operation of public switched network
infrastructure and  services by or among such local exchange carrier
and a qualifying carrier; (3) ensure that such local exchange carrier
will not be treated by the Commission or any State as a common carrier
for hire or as offering common carrier services with respect to any
infrastructure, technology, information, facilities, or functions made
available to a qualifying carrier in accordance with regulations
issued pursuant to this section; (4) ensure that such local exchange
carrier makes such infrastructure, technology, information,
facilities, or functions available to a qualifying carrier on just and
reasonable terms and conditions that permit such qualifying carrier to
fully benefit from the economies of scale and scope of such local
exchange carrier, as determined in accordance  with guidelines
prescribed by the Commission in regulations issued pursuant to this
section; (5) establish conditions that promote cooperation between
local exchange carriers to which this section applies and qualifying
carriers; (6) not require a local exchange carrier to which this 
section applies to engage in any infrastructure sharing agreement for
any services or access which are to be provided  or offered to
consumers by the qualifying carrier in such local exchange carrier's
telephone exchange area; and (7) require that such local exchange
carrier file with the Commission or State for public inspection, any
tariffs, contracts, or other arrangements showing the rates, terms,
and conditions under which such carrier is making available public
switched network infrastructure and functions under this section. (c)
Information Concerning Deployment of New Services and Equipment: A
local exchange carrier to which this section applies that has entered
into an infrastructure sharing agreement under  this section shall
provide to each party to such agreement timely information on the
planned deployment of telecommunications  services and equipment,
including any software or upgrades of software integral to the use or
operation of such  telecommunications equipment. (d) Definitions: For
purposes of this section-- (1) Qualifying carrier: The term
`qualifying carrier' means a telecommunications carrier that-- (A)
lacks economies of scale or scope, as determined in accordance with
regulations prescribed by the Commission pursuant to this section; and
(B) is a common carrier which offers telephone exchange service,
exchange access service, and any other service  that is included in
universal service, to all consumers without preference throughout the
service area for which such carrier has been designated as an
essential telecommunications carrier under section 214(d) of the
Communications Act of 1934. (2) Other terms: Any term used in this
section that is  defined in the Communications Act of 1934 has the
same meaning as it has in that Act. SEC. 107. COORDINATION FOR
TELECOMMUNICATIONS NETWORK-LEVEL INTEROPERABILITY. (a) In General: To
promote nondiscriminatory access to telecommunications networks by the
broadest number of users and vendors of communications products and
services through-- (1) coordinated telecommunications network planning
and  design by common carriers and other providers of
telecommunications services, and (2) interconnection of
telecommunications networks, and of devices with such networks, to
ensure the ability of users and information providers to seamlessly
and transparently transmit and receive information between and across
telecommunications networks, the Commission may participate, in a
manner consistent with its authority and practice prior to the date of
enactment of this Act, in the development by appropriate voluntary
industry standards-setting organizations to promote telecommunications
network-level interoperability. (b) Definition of telecommunications
network-level interoperability: As used in this section, the term
`telecommunications network-level interoperability' means the ability
of 2 or more telecommunications networks to communicate and interact
in concert with each other to exchange information without
degeneration. (c) Commission's Authority Not Limited: Nothing in this
section shall be construed as limiting the existing authority of the
Commission. TITLE II--REMOVAL OF RESTRICTIONS TO COMPETITION SUBTITLE
A--REMOVAL OF RESTRICTIONS SEC. 201. REMOVAL OF ENTRY BARRIERS. (a)
Preemption of State Rules: Part II of title II (47 U.S.C. 251 et
seq.), as added by this Act, is amended by inserting after section 253
the following: `SEC. 254. REMOVAL OF BARRIERS TO ENTRY. `(a) In
General: No State or local statute or regulation, or  other State or
local legal requirement, may prohibit or have the effect of
prohibiting the ability of any entity to provide any interstate or
intrastate telecommunications services. `(b) State Regulatory
Authority: Nothing in this section shall affect the ability of a State
to impose, on a competitively neutral basis and consistent with
section 253, requirements necessary to preserve and advance universal
service, protect the public safety and welfare, ensure the continued
quality of telecommunications services, and safeguard the rights of
consumers. `(c) State and Local Government Authority: Nothing in this 
section affects the authority of a State or local government to manage
the public rights-of-way  or to require fair and reasonable
compensation from telecommunications providers, on a competitively
neutral and nondiscriminatory basis, for use of public  rights-of-way
on a nondiscriminatory basis, if the compensation required is publicly
disclosed by such government. `(d) Preemption: If, after notice and an
opportunity for public comment, the Commission determines that a State
or local government has permitted or imposed any statute, regulation,
or legal requirement that violates subsection (a) or (b), the
Commission shall preempt the enforcement of such statute, regulation,
or legal requirement to the extent necessary to correct such violation
or inconsistency. `(e) Commercial mobile services providers: Nothing
in this  section shall affect the application of section 332(c)(3) to
commercial mobile services providers.'. (b) Provision of
Telecommunications Services by a Cable Operator:  (1) Jurisdiction of
franchising authority: Section 621(b) (47 U.S.C. 541(b)) is amended by
adding at the end thereof the following new paragraph: `(3)(A) To the
extent that a cable operator or affiliate thereof is engaged in the
provision of telecommunications services-- `(i) such cable operator or
affiliate shall not be required to obtain a franchise under this title
for the provision of telecommunications services; and `(ii) the
provisions of this title shall not apply to  such cable operator or
affiliate for the provision of telecommunications services. `(B) A
franchising authority may not order a cable operator  or affiliate
thereof to discontinue the provision of a telecommunications service.
`(C) A franchising authority may not require a cable operator to
provide any telecommunications service or facilities as a condition of
the initial grant of a franchise, franchise renewal, or transfer of a
franchise. `(D) Nothing in this paragraph affects existing Federal or
State authority with respect to telecommunications services.'. (2)
Franchise fees: Section 622(b) (47 U.S.C. 542(b)) is amended by
inserting `to provide cable services' immediately before the period at
the end of the first sentence. (c) State and Local Tax Laws: Except as
provided in section 202, nothing in this Act (or in the Communications
Act of 1934 as  amended by this Act) shall be construed to modify,
impair, or supersede, or authorize the modification, impairment, or
supersession of, any State or local law pertaining to taxation that is
consistent with the requirements of the Constitution of the United
States, this Act, the Communications Act of 1934, or any other
applicable Federal law. (d) Effective Date: The amendments made by
this section take effect on the date of enactment of this Act. SEC.
202. ELIMINATION OF CABLE AND TELEPHONE COMPANY  CROSS-OWNERSHIP
RESTRICTION. (a) In General: Section 613(b) (47 U.S.C. 533(b)) is
amended to read as follows: `(b) Video Programming and Cable Services:
 `(1) Distinction between video platform and cable service: To the
extent that any telecommunications carrier carries video programming
provided by others, or provides video programming that it owns,
controls, or selects directly to subscribers, through a common carrier
video platform, neither the telecommunications carrier nor any video
programming provider making use of such platform shall be deemed to be
a cable operator providing cable service. To the extent that any
telecommunications carrier provides video programming directly to
subscribers through a cable system, the carrier shall be deemed to be
a cable operator providing cable service. `(2) Bell operating company
activities:  `(A) Notwithstanding the provisions of section 252, to 
the extent that a Bell operating company carries video programming
provided by others or provides video  programming that it owns,
controls, or selects over a  common carrier video platform, it need
not use a separate affiliate if-- `(i) the carrier provides
facilities, services, or information to all programmers on the same
terms and conditions as it provides such facilities, services, or
information to its own video programming operations, and `(ii) the
carrier does not use its telecommunications services to subsidize its
provision of video programming. `(B) To the extent that a Bell
operating company provides cable service as a cable operator, it shall
provide such service through an affiliate that meets the requirements
of section 252 (a), (b), and (d) and the Bell operating company's
telephone exchange services and exchange access services shall meet
the requirements of subparagraph  (A)(ii) and section 252(c); except
that, to the extent the Bell operating company provides cable service
utilizing its own telephone exchange facilities, section 252(c) shall
not require the Bell operating company to make video  programming
services capacity available on a non-discriminatory basis to other
video programming  services providers. `(C) Upon a finding by the
Commission that the  requirement of a separate affiliate under the
preceding subparagraph is no longer necessary to protect consumers,
competition, or the public interest, the Commission shall exempt a
Bell operating company from that requirement. `(3) Common carrier
video platform: Nothing in this Act precludes a telecommunications
carrier from carrying video programming provided by others directly to
subscribers over a common carrier video platform. Nothing in this Act
precludes a video programming provider making 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, United States Code. `(4)
Rates; access: Notwithstanding paragraph (2)(A)(i), a provider of
common carrier video platform services shall  provide local broadcast
stations, and to those public, educational, and governmental entities
required by local franchise authorities to be given access to cable
systems operating in the same market as the common carrier video
platform, with access to that platform for the transmission of
television broadcast programming at rates no higher than the
incremental-cost-based rates of providing such access.  Local
broadcast stations shall be entitled to obtain access on the first
tier of programming on the common carrier video platform. If the area
covered by the common carrier video platform includes more than one
franchising area, then the Commission shall determine the number of
channels allocated to public, educational, and governmental entities
that may be eligible for such rates for that platform. `(5)
Competitive neutrality: A provider of video programming may be
required to pay fees in lieu of franchise fees (as defined in section
622(g)(1)) if the fees-- `(A) are competitively neutral; and `(B) are
separately identified in consumer billing. `(6) Acquisitions; joint
ventures; partnerships; joint use of facilities: `(A) Local exchange
carriers: No local exchange carrier  or any affiliate of such carrier
owned by, operated by, controlled by, or under common control with
such carrier  may purchase or otherwise acquire more than a 10 percent
financial interest, or any management interest, in any  cable operator
providing cable service within the local exchange carrier's telephone
service area. `(B) Cable operators: No cable operator or affiliate of
a cable operator that is owned by, operated by, controlled  by, or
under common ownership with such cable operator may purchase or
otherwise acquire, directly or indirectly, more than a 10 percent
financial interest, or any management interest, in any local exchange
carrier providing telephone exchange service within such cable
operator's franchise area. `(C) Joint Venture: A local exchange
carrier and a cable operator whose telephone service area and cable
franchise area, respectively, are in the same market may not enter
into any joint venture or partnership to provide video programming
directly to subscribers or to provide telecommunications services
within such market. `(D) Exception: Notwithstanding subparagraphs (A),
(B), and (C) of this paragraph, a local exchange carrier (with respect
to a cable system located in its telephone service area) and a cable
operator (with respect to the facilities of a local exchange carrier
used to provide telephone exchange service in its cable franchise
area) may obtain a controlling interest in, management interest in, or
enter into a joint venture or partnership with such system or
facilities to the extent that such system or facilities  only serve
incorporated or unincorporated-- `(i) places or territories that have
fewer than  50,000 inhabitants; and `(ii) are outside an urbanized
area, as defined by  the Bureau of the Census. `(E) Waiver: The
Commission may waive the restrictions of subparagraph (A), (B), or (C)
only if the Commission determines that, because of the nature of the
market served by the affected cable system or facilities used to
provide telephone exchange service-- `(i) the incumbent cable operator
or local exchange carrier would be subjected to undue economic
distress  by the enforcement of such provisions, `(ii) the system or
facilities would not be economically viable if such provisions were
enforced, or `(iii) the anticompetitive effects of the proposed
transaction are clearly outweighed in the public interest by the
probable effect of the transaction in meeting the convenience and
needs of the community to  be served. `(F) Joint use: Notwithstanding
subparagraphs (A), (B), and (C), a telecommunications carrier may
obtain within  such carrier's telephone service area, with the
concurrence of the cable operator on the rates, terms, and conditions,
the use of that portion of the transmission facilities of such a cable
system extending from the last multiuser terminal to the premises of
the end user in excess of the capacity that the cable operator uses to
provide its own cable services. A cable operator that provides access
to such portion of its transmission facilities to one
telecommunications carrier shall provide nondiscriminatory access to
such portion of its transmission facilities to  any other
telecommunications carrier requesting such access. `(G) Savings
clause: Nothing in this paragraph affects-- `(i) the authority of a
local franchising authority (in the case of the purchase or
acquisition of a cable operator, or a joint venture to provide cable
service) or a State Commission (in the case of the acquisition  of a
local exchange carrier, or a joint venture to provide telephone
exchange service) to approve or disapprove a purchase, acquisition, or
joint venture, or `(ii) the antitrust laws, as described in section 
7(a) of the Telecommunications Competition and Deregulation Act of
1995.'. (b) No Permit Required for Video Programming Services: Section
 214 (47 U.S.C. 214) is amended by adding at the end thereof the
following: `(e) Special Rule: No certificate is required under this
section for a carrier to construct facilities to provide video
programming services.'. (c) Safeguards: Within one year after the date
of enactment of this Act, the Commission shall prescribe regulations
that-- (1) require a telecommunications carrier that provides video
programming directly to subscribers to ensure that subscribers are
offered the means to obtain access to the signals of local broadcast
television stations identified under section 614 as readily as they
are today; (2) require such a carrier to display clearly and
prominently at the beginning of any program guide or menu of program
offerings the identity of any signal of any television  broadcast
station that is carried by the carrier; (3) require such a carrier to
ensure that viewers are able to access the signal of any television
broadcast station that is carried by that carrier without first having
to view  advertising or promotional material, or a navigational
device, guide, or menu that omits broadcasting services as an
available option; (4) except as required by paragraphs (1) through
(3),  prohibit such carrier and a multichannel video programming
distributor using the facilities of such carrier from discriminating
among video programming providers with respect  to material or
information provided by the carrier to subscribers for the purposes of
selecting programming, or in  the way such material or information is
presented to subscribers; (5) require such carrier and a multichannel
video programming distributor using the facilities of such carrier to
ensure that video programming providers or copyright holders (or both)
are able suitably and uniquely to identify their programming services
to subscribers; (6) if such identification is transmitted as part of
the programming signal, require a telecommunications carrier that
provides video programming directly to subscribers and a multichannel
video programming distributor using the facilities of such carrier to
transmit such identification without change or alteration; (7)
prohibit such carrier from discriminating among video programming
providers with regard to carriage and ensure that the rates, terms,
and conditions for such carriage are just, reasonable, and
nondiscriminatory; (8) extend to such carriers and multichannel video 
programming distributors using the facilities of such carrier the
Commission's regulations concerning network nonduplication (47 C.F.R.
76.92 et seq.) and syndicated exclusivity (47 C.F.R. 76.171 et seq.);
and (9) extend to such carriers and multichannel video  programming
distributors using the facilities of such carrier the protections
afforded to local broadcast signals in section 614(b)(3),
614(b)(4)(A), and 615(g)(1) and (2) of such Act (47 U.S.C. 534(b)(3),
534(b)(4)(A), and 535(g)(1) and (2)). (d) Enforcement: The Commission
shall resolve disputes under subsection (c) and the regulations
prescribed under that  subsection.  Any such dispute shall be resolved
with 180 days after notice of the dispute is submitted to the
Commission.  At that  time, or subsequently in a separate proceeding,
the Commission may award damages sustained in consequence of any
violation of this section to any person denied carriage, or require
carriage, or  both.  Any aggrieved party may also seek any other
remedy available under the law. (e) Effective Dates: The amendment
made by subsection (a) takes effect on the date of enactment of this
Act. The amendment made by subsection (b) takes effect 1 year after
that date. SEC. 203. CABLE ACT REFORM. (a) Change in Definition of
Cable System: Section 602(7) (47 U.S.C. 522(7)) is amended by striking
out `(B) a facility that serves only subscribers in 1 or more multiple
unit dwellings under common ownership, control, or management, unless
such facility or facilities uses any public right-of-way;' and
inserting `(B) a facility that serves subscribers without using any
public right-of-way;'. (b) Rate Deregulation:  




(1) Section 623(c) (47 U.S.C. 543(c)) is amended-- (A) by striking
`subscriber,' and the comma after `authority' in paragraph (1)(B); (B)
by striking paragraph (2) and inserting the following: `(2) Standard
for unreasonable rates: The Commission may only consider a rate for
cable programming services to be unreasonable if it substantially
exceeds the national average rate for comparable cable programming
services provided by  cable systems other than small cable systems,
determined on a per-channel basis as of June 1, 1995, and
redetermined, and adjusted if necessary, every 2 years thereafter.'.
(2) Section 623(l)(1) (47 U.S.C. 543(l)(1)) is amended-- (A) by
striking `or' at the end of subparagraph (B); (B) by striking the
period at the end of subparagraph (C) and inserting a semicolon and
`or'; and (C) by adding at the end the following: `(D) a local
exchange carrier offers video programming services directly to
subscribers, either over a common carrier video platform or as a cable
operator, in the franchise area of an unaffiliated cable operator
which is providing cable service in that franchise area, but only if
the video programming services offered by the carrier in that area are
comparable to the video programming services provided by the
unaffiliated cable operator in that area.'. (c) Greater Deregulation
for Smaller Cable Companies: Section 623 (47 U.S.C. 543) is amended by
adding at the end thereof the following: `(m) Special Rules for Small
Companies:  `(1) In general: Subsection (a), (b), or (c) does not
apply  to a small cable operator with respect to-- `(A) cable
programming services, or `(B) a basic service tier that was the only
service tier subject to regulation as of December 31, 1994, in any
franchise area in which that operator serves 35,000 or fewer
subscribers. `(2) Definition of small cable operator: For purposes of
this subsection, the term `small cable operator' means a cable
operator that, directly or through an affiliate, serves in the
aggregate fewer than 1 percent of all subscribers in the United States
and is not affiliated with any entity or entities whose gross annual
revenues in the aggregate exceed $250,000,000.'. (d) Program Access:
Section 628 (47 U.S.C. 628) is amended by adding at the end the
following: `(j) Common Carriers: Any provision that applies to a cable
operator under this section shall apply to a telecommunications
carrier or its affiliate that provides video programming by any means
directly to subscribers.  Any such provision that applies to 

a satellite cable programming vendor in which a cable operator has an
attributable interest shall apply to any satellite cable programming
vendor in which such common carrier has an attributable interest.'.
(e) Expedited Decision-Making for Market Determinations Under Section
614: (1) In general: Section 614(h)(1)(C)(iv) (47 U.S.C.
614(h)(1)(C)(iv)) is amended to read as follows: `(iv) Within 120 days
after the date on which a request is filed under this subparagraph,
the  Commission shall grant or deny the request.'. (2) Application to
pending requests: The amendment made by paragraph (1) shall apply to--
(A) any request pending under section 614(h)(1)(C) of the
Communications Act of 1934 (47 U.S.C. 614(h)(1)(C)) on the date of
enactment of this Act; and (B) any request filed under that section
after that date. (f) Effective Date: The amendments made by this
section take effect on the date of enactment of this Act. SEC. 204.
POLE ATTACHMENTS. Section 224  (47 U.S.C. 224) is amended-- (1) by
inserting the following after subsection (a)(4): `(5) The term
`telecommunications carrier' shall have the meaning given such term in
subsection 3(nn) of this Act, except that, for purposes of this
section, the term shall not include any person classified by the
Commission as a dominant provider of telecommunications services as of
January 1, 1995.'; (2) by inserting after `conditions' in subsection
(c)(1) a comma and the following: `or access to poles, ducts,
conduits, and rights-of-way as provided in subsection (f),'; (3) by
inserting after subsection (d)(2) the following: `(3) This subsection
shall apply to the rate for any pole attachment used by a cable
television system solely to provide cable service. Until the effective
date of the regulations required under subsection (e), this subsection
shall also apply to the pole attachment rates for cable television
systems (or for any telecommunications carrier that was not a party to
any pole attachment agreement prior to the date of enactment of the
Telecommunications Act of 1995) to provide any telecommunications
service or any other service subject to the jurisdiction of the
Commission.'; and (4) by adding at the end thereof the following:
`(e)(1) The Commission shall, no later than 2 years after the date of
enactment of the Telecommunications Act of 1995, prescribe regulations
in accordance with this subsection to govern the charges for pole
attachments by telecommunications carriers. Such regulations shall
ensure that utilities charge just and reasonable and
non-discriminatory rates for pole attachments. `(2) A utility shall
apportion the cost of providing space on a pole, duct, conduit, or
right-of-way other than the usable space among entities so that such
apportionment equals the sum of-- `(A) two-thirds of the costs of
providing space other  than the usable space that would be allocated
to such  entity under an equal apportionment of such costs among all
attachments, plus `(B) the percentage of usable space required by each
such entity multiplied by the costs of space other than the usable
space; but in no event shall such proportion exceed the amount that
would be allocated to such entity under an equal apportionment of such
costs among all attachments. `(3) A utility shall apportion the cost
of providing usable space among all entities according to the
percentage of usable space required for each entity. Costs shall be
apportioned between the usable space and the space on a pole, duct, 
conduit, or right-of-way other than the usable space on a
proportionate basis. `(4) The regulations required under paragraph (1)
shall  become effective 5 years after the date of enactment of the
Telecommunications Act of 1995. Any increase in the rates for pole
attachments that result from the adoption of the regulations required
by this subsection shall be phased in  equal annual increments over a
period of 5 years beginning on the effective date of such regulations.
`(f)(1) A utility shall provide a cable television system or any
telecommunications carrier with nondiscriminatory access to any pole,
duct, conduit, or right-of-way owned or controlled by it. `(2)
Notwithstanding paragraph (1), a utility providing electric service
may deny a cable television system or telecommunications carrier
access to its poles, ducts, conduits, or rights-of-way, on 

a non-discriminatory basis where there is insufficient capacity and
for reasons of safety, reliability, and generally applicable
engineering purposes. `(g) A utility that engages in the provision of 
telecommunications services shall impute to its costs of providing
such services (and charge any affiliate, subsidiary, or associate
company engaged in the provision of such services) an amount equal to
the pole attachment rate for which such company would be liable under
this section.'. SEC. 205. ENTRY BY UTILITY COMPANIES. (a) In General: 
(1) Authorized activities of utilities: Notwithstanding any other
provision of law to the contrary (including the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79a et seq.)),  an electric, gas,
water, or steam utility, and any subsidiary company, affiliate, or
associate company of such a utility, other than a public utility
company that is an associate  company of a registered holding company,
may engage, directly  or indirectly, in any activity whatsoever,
wherever located, necessary or appropriate to the provision of-- (A)
telecommunications services, (B) information services, (C) other
services or products subject to the  jurisdiction of the Federal
Communications Commission under the Communications Act of 1934 (47
U.S.C. 151 et seq.), or (D) products or services that are related or
incidental  to a product or service described in subparagraph (A),
(B), or (C). (2) Removal of sec jurisdiction: The Securities and
Exchange Commission has no jurisdiction under the Public Utility
Holding Company Act of 1935 (15 U.S.C. 79a et seq.) over a holding
company, or a subsidiary company, affiliate, or associate company of a
holding company, to grant any authorization to enforce any requirement
with respect to, or approve or  otherwise review, any activity
described in paragraph (1), including financing, investing in,
acquiring, or maintaining  any interest in, or entering into affiliate
transactions or contracts, and any authority over audits or access to
books and records. (3) Applicability of Telecommunications Regulation:
Nothing  in this section shall affect the authority of the Federal
Communications Commission under the Communications Act of 1934, or the
authority of State commissions under State laws concerning the
provision of telecommunications services, to regulate the activities
of an associate company engaged in activities described in paragraph
(1). (4) Commission rules: The Commission shall consider and  adopt,
as necessary, rules to protect the customers of a public utility
company that is a subsidiary company of a registered holding company
against potential detriment from the telecommunications activities of
any other subsidiary of such registered holding company. (b)
Prohibition of Cross-Subsidization: Nothing in the Public Utility
Holding Company Act of 1935 shall preclude the Federal Energy
Regulatory Commission or a State commission from exercising its
jurisdiction under otherwise applicable law to determine  whether a
public utility company may recover in rates the costs of any activity
described in subsection (a)(1) which is performed by  an associate
company regardless of whether such costs are incurred through the
direct or indirect purchase of goods and services from such associate
company. (c) Assumption of Liabilities: Any public utility company
that is an associate company of a registered holding company and that
is subject to the jurisdiction of a State commission with respect to
its retail electric or gas rates shall not issue any security for the
purpose of financing the acquisition, ownership, or operation  of an
associate company engaged in activities described in subsection (a)(1)
without the prior approval of the State  commission. Any public
utility company that is an associate company of a registered holding
company and that is subject to the jurisdiction of a State commission
with respect to its retail electric or gas rates shall not assume any
obligation or liability as guarantor, endorser, surety, or otherwise
by the public utility in respect of any security of an associate
company engaged in activities described in subsection (a)(1) without
the prior  approval of the State commission. (d) Pledging or
Mortgaging Utility Assets: Any public utility company that is an
associate company of a registered holding  company and that is subject
to the jurisdiction of a State commission with respect to its retail
electric or gas rates shall not pledge, mortgage, or otherwise use as
collateral any utility assets of the public utility or utility assets
of any subsidiary company thereof for the benefit of an associate
company engaged in activities described in subsection (a)(1) without
the prior  approval of the State commission. (e) Books and Records: An
associate company engaged in activities described in subsection (a)(1)
which is an associate company of a registered holding company shall
maintain books, records, and accounts separate from the registered
holding company which  identify all transactions with the registered
holding company and its other associate companies, and provide access
to books,  records, and accounts to State commissions and the Federal
Energy Regulatory Commission under the same terms of access,
disclosure, and procedures as provided in section 201(g) of the
Federal Power Act. (f) Independent Audit Authority for State
Commissions:  (1) State may order audit: Any State commission with
jurisdiction over a public utility company that-- (A) is an associate
company of a registered holding company, and (B) transacts business,
directly or indirectly, with a subsidiary company, affiliate, or
associate company of that holding company engaged in any activity
described in subsection (a)(1), may order an independent audit to be
performed, no more frequently than on an annual basis, of all matters
deemed relevant by the selected auditor that reasonably relate to
retail rates: Provided, That such matters relate, directly or
indirectly, to transactions or transfers between the public utility
company subject to its jurisdiction and the subsidiary company,
affiliate, or associate company engaged in that activity. (2)
Selection of firm to conduct audit:  (A) If a State commission orders
an audit in accordance with paragraph (1), the public utility company
and the  State commission shall jointly select within 60 days a firm
to perform the audit. The firm selected to perform the  audit shall
possess demonstrated qualifications relating to: (i) competency,
including adequate technical training and professional proficiency in
each discipline necessary to carry out the audit, and (ii)
independence and objectivity, including that the firm be free from
personal or external impairments to independence, and should assume an
independent position with the State commission and auditee, making
certain that the audit is based upon an impartial consideration of all
pertinent facts and responsible opinions. (B) The public utility
company and the company engaged in activities under subsection (a)(1)
shall cooperate fully with all reasonable requests necessary to
perform the audit and the public utility company shall bear all costs
of having the audit performed. (3) Availability of auditor's report:
The auditor's report shall be provided to the State commission within
6 months after the selection of the auditor, and provided to the
public  utility company 60 days thereafter. (g) Required Notices:  (1)
Affiliate contracts: A State commission may order any public utility
company that is an associate company of a registered holding company
and that is subject to the jurisdiction of the State commission to
provide quarterly reports listing any contracts, leases, transfers, or
other transactions with an associate company engaged in activities
described in subsection (a)(1). (2) Acquisition of an interest in
associate companies: Within 10 days after the acquisition by a
registered holding company  of an interest in an associate company
that will engage in activities described in subsection (a)(1), any
public utility company that is an associate company of such company
shall notify each State commission having jurisdiction over the 
retail rates of such public utility company of such  acquisition. In
the notice an officer on behalf of the public utility company shall
attest that, based on then current information, such acquisition and
related financing will not materially impair the ability of such
public utility company to meet its public service responsibility,
including its ability  to raise necessary capital. (h) Definitions:
Any term used in this section that is defined in the Public Utility
Holding Company Act of 1935 (15 U.S.C. 79a et seq.) has the same
meaning as it has in that Act. The terms `telecommunications service'
and `information service' shall have the same meanings as those terms
have in the Communications Act of 1934. (i) Implementation: Not later
than 1 year after the date of enactment of this Act, the Federal
Communications Commission shall promulgate such regulations as may be
necessary to implement this section. (j) Effective Date: This section
takes effect on the date of enactment of this Act. SEC. 206. BROADCAST
REFORM. (a) Spectrum Reform:  (1) Advanced television spectrum
services: If the Commission by rule permits licensees to provide
advanced television services, then-- (A) it shall adopt regulations
that allow such licensees to make use of the advanced television
spectrum for the transmission of ancillary or supplementary services
if the licensees provide without charge to the public at least one
advanced television program service as prescribed by the Commission
that is intended for and available to the  general public on the
advanced television spectrum; and (B) it shall apply similar rules to
use of existing television spectrum. (2) Commission to collect fees:
To the extent that a television broadcast licensee provides ancillary
or supplementary services using existing or advanced television
spectrum-- (A) for which payment of a subscription fee is required  in
order to receive such services, or (B) for which the licensee directly
or indirectly  receives compensation from a third party in return for
transmitting material furnished by such third party, other than
payments to broadcast stations by third parties for transmission of
program material or commercial advertising, the Commission may collect
from each such licensee an annual  fee to the extent the existing or
advanced television spectrum is used for such ancillary or
supplementary services. In determining the amount of such fees, the
Commission shall take into account the portion of the licensee's total
existing or advanced television spectrum which is used for such
services  and the amount of time such services are provided. The
amount  of such fees to be collected for any such service shall not,
in any event, exceed an amount equivalent on an annualized basis  to
the amount paid by providers of a competing service on spectrum
subject to auction under section 309(j) of the Communications Act of
1934 (47 U.S.C. 309(j)). (3) Public interest requirement: Nothing in
this section  shall be construed as relieving a television
broadcasting station from its obligation to serve the public interest,
convenience, and necessity. In the Commission's review of any
application for renewal of a broadcast license for a television
station that provides ancillary or supplementary services, the
television licensee shall establish that all of its program services
on the existing or advanced television spectrum are in the public
interest. Any violation of the Commission rules applicable to
ancillary or supplementary services shall reflect upon the licensee's
qualifications for renewal of its license. (4) Definitions: As used in
this subsection-- (A) The term `advanced television services' means
television services provided using digital or other  advanced
technology to enhance audio quality and video resolution. (B) The term
`existing' means spectrum generally in use for television broadcast
purposes on the date of enactment of this Act. (b) Ownership Reform: 
(1) In general: The Commission shall modify its rules for multiple
ownership set forth in 47 CFR 73.3555 by-- (A) eliminating the
restrictions on the number of television stations owned under
subdivisions (e)(1) (ii)  and (iii); and (B) changing the percentage
set forth in subdivision (e)(2)(ii) from 25 percent to 35 percent. (2)
Radio Ownership: The Commission shall modify its rules  set forth in
47 CFR 73.3555 by eliminating any provisions limiting the number of AM
or FM broadcast stations which may be owned or controlled by one
entity either nationally or in a particular market. The Commission may
refuse to approve the transfer or issuance of an AM or FM broadcast
license to a particular entity if it finds that the entity would
thereby obtain an undue concentration of control or would thereby harm
competition. Nothing in this section shall require or prevent the
Commission from modifying its rules contained in 47 CFR 73.3555(c)
governing the ownership of both a radio and television broadcast
stations in the same market. (3) Local marketing agreement: Nothing in
this Act shall be construed to prohibit the continuation or renewal of
any television local marketing agreement that is in effect on the date
of enactment of this Act and that is in compliance with  the
Commission's regulations. (4) Statutory restrictions: Section 613 (47
U.S.C. 533) is amended by striking subsection (a) and inserting the
following: `(a) The Commission shall review its ownership rules
biennially  as part of its regulatory reform review under section
259.'. (5) Conforming changes: The Commission shall amend its rules to
make any changes necessary to reflect the effect of this section on
its rules. (6) Effective date: The Commission shall make the
modifications required by paragraphs (1) and (2) effective on the date
of enactment of this Act. (c) Term of Licenses: Section 307(c) (47
U.S.C. 307(c)) is  amended by striking the first four sentences and
inserting the following: `No license shall be granted for a term
longer than 10 years.  Upon  application, a renewal of such license
may be granted from time to time for a term of not to exceed 10 years,
if the  Commission finds that the public interest, convenience, and
necessity would be served thereby.'. (d) Broadcast License Renewal
Procedures:  (1) Section 309 (47 U.S.C. 309) is amended by adding at
the end thereof the following: `(k)(1)(A) Notwithstanding subsections
(c) and (d), if the licensee of a broadcast station submits an
application to the Commission for renewal of such license, the
Commission shall grant the application if it finds, after notice and
opportunity for comment, with respect to that station during the
preceding term of its license, that-- `(i) the station has served the
public interest, convenience, and necessity; `(ii) there have been no
serious violations by the licensee  of this Act or the rules and
regulations of the Commission; and `(iii) there have been no other
violations by the licensee of this Act or the rules and regulations of
the Commission which, taken together, would constitute a pattern of
abuse. `(B) If any licensee of a broadcast station fails to meet the
requirements of this subsection, the Commission may deny the
application for renewal in accordance with paragraph (2), or grant
such application on appropriate terms and conditions, including
renewal for a term less than the maximum otherwise permitted. `(2) If
the Commission determines, after notice and opportunity for a hearing,
that a licensee has failed to meet the requirements specified in
paragraph (1)(A) and that no mitigating factors  justify the
imposition of lesser sanctions, the Commission shall-- `(A) issue an
order denying the renewal application filed by such licensee under
section 308; and `(B) only thereafter accept and consider such
applications  for a construction permit as may be filed under section
308 specifying the channel or broadcasting facilities of the former
licensee. `(3) In making the determinations specified in paragraphs
(1) or (2)(A), the Commission shall not consider whether the public
interest, convenience, and necessity might be served by the grant  of
a license to a person other than the renewal applicant.'. (2) Section
309(d) (47 U.S.C. 309(d)) is amended by inserting `(or subsection (k)
in the case of renewal of any broadcast station license)' after `with
subsection (a)' each place it appears. (3) The amendments made by this
subsection apply to applications filed after May 31, 1995. (4) This
section shall operate only if the Commission shall amend its
`Application for renewal of License for AM, FM, TV, Translator or LPTV
Station' (FCC Form 303-S) to require that, for commercial TV
applicants only, the applicant attach as an exhibit to the application
a summary of written comments and suggestions received from the public
and maintained by the licensee in accordance with section 73.1202 of
title 47, Code  of Federal Regulations, that comment on the
applicant's programming, if any, characterized by the commentor as
constituting violent programming. SUBTITLE B--TERMINATION OF
MODIFICATION OF FINAL JUDGMENT SEC. 221. REMOVAL OF LONG DISTANCE
RESTRICTIONS. (a) In General: Part II of title II (47 U.S.C. 251 et
seq.), as added by this Act, is amended by inserting after section 254
the following new section: `SEC. 255. INTEREXCHANGE TELECOMMUNICATIONS
SERVICES. `(a) In General: Notwithstanding any restriction or
obligation imposed before the date of enactment of the
Telecommunications Act of 1995 under section II(D) of the Modification
of Final Judgment, 

a Bell operating company, or any subsidiary or affiliate of a Bell
operating company, that meets the requirements of this section may
provide-- `(1) interLATA telecommunications services originating in
any region in which it is the dominant provider of wireline telephone
exchange service or exchange access service after the Commission
determines that it has fully implemented the competitive checklist
found in subsection (b)(2) in the area in which it seeks to provide
interLATA telecommunications  services, in accordance with the
provisions of subsection (c); `(2) interLATA telecommunications
services originating in any area where that company is not the
dominant provider of  wireline telephone exchange service or exchange
access service in accordance with the provisions of subsection (d);
and `(3) interLATA services that are incidental services in accordance
with the provisions of subsection (e). `(b) Specific InterLATA
Interconnection Requirements:  `(1) In general: A Bell operating
company may provide interLATA services in accordance with this section
only if that company has reached an interconnection agreement under
section 251 and that agreement provides, at a minimum, for
interconnection that meets the competitive checklist requirements of
paragraph (2). `(2) Competitive checklist: Interconnection provided by
a  Bell operating company to other telecommunications carriers under
section 251 shall include: `(A) Nondiscriminatory access on an
unbundled basis to  the network functions and services of the Bell
operating company's telecommunications network that is at least equal
in type, quality, and price to the access the Bell  operating company
affords to itself or any other entity. `(B) The capability to exchange
telecommunications  between customers of the Bell operating company
and the telecommunications carrier seeking interconnection. `(C)
Nondiscriminatory access to the poles, ducts, conduits, and
rights-of-way owned or controlled by the Bell operating company at
just and reasonable rates where it has the legal authority to permit
such access. `(D) Local loop transmission from the central office to
the customer's premises, unbundled from local switching or other
services. `(E) Local transport from the trunk side of a wireline local
exchange carrier switch unbundled from switching or other services.
`(F) Local switching unbundled from transport, local loop
transmission, or other services. `(G) Nondiscriminatory access to--
`(i) 911 and E911 services; `(ii) directory assistance services to
allow the  other carrier's customers to obtain telephone numbers; and
`(iii) operator call completion services. `(H) White pages directory
listings for customers of the other carrier's telephone exchange
service. `(I) Until the date by which neutral telephone number
administration guidelines, plan, or rules are established,
nondiscriminatory access to telephone numbers for  assignment to the
other carrier's telephone exchange  service customers.  After that
date, compliance with such guidelines, plan, or rules. `(J)
Nondiscriminatory access to databases and associated signaling,
including signaling links, signaling service control points, and
signaling service transfer points, necessary for call routing and
completion. `(K) Until the date by which the Commission determines
that final telecommunications number portability is technically
feasible and must be made available,  interim telecommunications
number portability through remote call forwarding, direct inward
dialing trunks, or other comparable arrangements, with as little
impairment of functioning, quality, reliability, and convenience as
possible. After that date, full compliance with final
telecommunications number portability. `(L) Nondiscriminatory access
to whatever services or information may be necessary to allow the
requesting  carrier to implement local dialing parity in a manner that
permits consumers to be able to dial the same number of digits when
using any telecommunications carrier providing telephone exchange
service or exchange access service. `(M) Reciprocal compensation
arrangements on a nondiscriminatory basis for the origination and
termination of telecommunications. `(N) Telecommunications services
and network functions provided on an unbundled basis without any
conditions or restrictions on the resale or sharing of those services
or functions, including both origination and termination of
telecommunications services, other than reasonable conditions required
by the Commission or a State. For purposes of this subparagraph, it is
not an unreasonable condition for the Commission or a State to limit
the resale-- `(i) of services included in the definition of universal
service to a telecommunications carrier who intends to resell that
service to a category of customers different from the category of
customers  being offered that universal service by such carrier if the
Commission or State orders a carrier to provide the same service to
different categories of customers at different prices necessary to
promote universal  service; or `(ii) of subsidized  universal service
in a manner that allows companies to charge another carrier rates
which reflect the actual cost of providing those services to that
carrier, exclusive of any universal service support received for
providing such services in accordance with section 214(d)(5). `(3)
Joint marketing of local and long distance services: Until a Bell
operating company is authorized to provide interLATA services in a
telephone exchange area where that company is the dominant provider of
wireline telephone exchange service or exchange access service, or
until 36 months have passed since the enactment of the
Telecommunications Act of 1995, whichever is earlier, a
telecommunications carrier that serves greater than 5 percent of the
Nation's presubscribed access lines may not jointly market in such
telephone exchange area telephone exchange service purchased from such
company  with interLATA services offered by that telecommunications
carrier. `(4) Commission may not expand competitive checklist: The
Commission may not, by rule or otherwise, limit or extend the terms
used in the competitive checklist. `(c) In-Region Services:  `(1)
Application: Upon the enactment of the  Telecommunications Act of
1995, a Bell operating company or its affiliate may apply to the
Commission for authorization notwithstanding the Modification of Final
Judgment to provide interLATA telecommunications service originating
in any area where such Bell operating company is the dominant provider
of wireline telephone exchange service or exchange access service. The
application shall describe with particularity the nature  and scope of
the activity and of each product market or service market, and each
geographic market for which authorization is sought. `(2)
Determination by commission:  `(A) Determination: Not later than 90
days after  receiving an application under paragraph (1), the 
Commission shall issue a written determination, on the record after a
hearing and opportunity for comment,  granting or denying the
application in whole or in part.  Before making any determination
under this subparagraph,  the Commission shall consult with the
Attorney General regarding the application. In consulting with the 
Commission under this subparagraph, the Attorney General  may apply
any appropriate standard. `(B) Approval: The Commission may only
approve the authorization requested in an application submitted under
paragraph (1) if it finds that-- `(i) the petitioning Bell operating
company has fully implemented the competitive checklist found in
subsection (b)(2); and `(ii) the requested authority will be carried
out in accordance with the requirements of section 252, and if the
Commission determines that the requested authorization is consistent
with the public interest, convenience, and necessity.  If the
Commission does not approve an application under this subparagraph, it
shall state the basis for its denial of the application. `(3)
Publication: Not later than 10 days after issuing a determination
under paragraph (2), the Commission shall publish in the Federal
Register a brief description of the determination. `(4) Judicial
review:  `(A) Commencement of action: Not later than 45 days after a
determination by the Commission is published under paragraph (3), the
Bell operating company or its subsidiary or affiliate that applied to
the Commission under paragraph (1), or any person who would be
threatened with loss or damage as a result of the determination
regarding such company's engaging in the activity described in its
application, may commence an action in any United States Court of
Appeals against the Commission for judicial review of the
determination regarding the application. `(B) Judgment:  `(i) The
Court shall enter a judgment after reviewing the determination in
accordance with section 706 of title 5 of the United State Code. `(ii)
A judgment-- `(I) affirming any part of the determination that
approves granting all or part of the requested authorization, or `(II)
reversing any part of the determination that denies all or part of the
requested authorization, shall describe with particularity the nature
and scope of the activity, and of each product market or service
market, and each geographic market, to which the affirmance or
reversal applies. `(5) Requirements relating to separate affiliate;
safeguards; and intralata toll dialing parity: `(A) Separate
affiliate; safeguards: Other than interLATA services authorized by an
order entered by the United  States District Court for the District of
Columbia pursuant to the Modification of Final Judgment before the
date of enactment of the Telecommunications Act of 1995, a Bell
operating company, or any affiliate of such a company, providing
interLATA services authorized under this subsection may provide such
interLATA services in that market only in accordance with the
requirements of section 252. `(B) Intralata toll dialing parity:  `(i)
A Bell operating company granted authority to provide interLATA
services under this subsection shall provide intraLATA toll dialing
parity throughout that market coincident with its exercise of that
authority. If the Commission finds that such a Bell operating company
has provided interLATA service authorized under this clause before its
implementation of intraLATA toll dialing parity throughout that
market, or fails to maintain intraLATA toll dialing parity throughout
that market, the Commission, except in cases of inadvertent
interruptions or other events beyond the control of the Bell operating
company, shall suspend the authority to provide interLATA service for
that market until the Commission determines that intraLATA toll
dialing  parity is implemented or reinstated. `(ii) Except for
single-LATA States and States which have issued an order by June 1,
1995 requiring a Bell operating company to implement toll dialing
parity, a State may not require a Bell operating company to implement
toll dialing parity in an intraLATA area before a Bell operating
company has been granted authority under this subsection to provide
interLATA services in that area or before three years after the date
of enactment of the Telecommunications Act of  1995, whichever is
earlier.  Nothing in this clause precludes a State from issuing an
order requiring toll dialing parity in an intraLATA area prior to
either  such date so long as such order does not take effect until
after the earlier of either such dates. `(iii) In any State in which
intraLATA toll dialing parity has been implemented prior to the
earlier date specified in clause (ii), no telecommunications carrier
that serves greater than five percent of the Nation's presubscribed
access lines may jointly market interLATA telecommunications services
and intraLATA toll telecommunications services in a telephone exchange
 area in such State until a Bell operating company is authorized under
this subsection to provide interLATA services in such telephone
exchange area or until three years after the date of enactment of the
Telecommunications Act of 1995, whichever is earlier. `(d)
Out-of-Region Services: Effective on the date of enactment  of the
Telecommunications Act of 1995, a Bell operating company or its
affiliate may provide interLATA telecommunications services
originating in any area where such company is not the dominant
provider of wireline telephone exchange service or exchange access
service. `(e) Incidental Services:  `(1) In general: Effective on the
date of enactment of the Telecommunications Act of 1995, a Bell
operating company or its affiliate may provide interLATA services that
are incidental to-- `(A)(i) providing audio programming, video
programming,  or other programming services to subscribers of such
company, `(ii) providing the capability for interaction by such
subscribers to select or respond to such audio programming, video
programming, or other programming services, to order, or control
transmission of the programming, polling or balloting, and ordering
other goods or services, `(iii) providing to distributors audio
programming or video programming that such company owns, controls, or
is licensed by the copyright owner of such programming, or by an
assignee of such owner, to distribute, or `(iv) providing alarm
monitoring services, `(B) providing-- `(i) a telecommunications
service, using the transmission facilities of a cable system that is
an affiliate of such company, between LATAs within a cable system
franchise area in which such company is not, on the date of enactment
of the Telecommunications Act of 1995, a provider of wireline
telephone exchange  service, or `(ii) two-way interactive video
services or Internet services over dedicated facilities to or for
elementary and secondary schools as defined in section 264(d), `(C)
providing a service that permits a customer that is located in one
LATA to retrieve stored information from, or file information for
storage in, information storage facilities of such company that are
located in another LATA area, so long as the customer acts
affir