[House Report 107-20]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-20
======================================================================
INDEPENDENT TELECOMMUNICATIONS CONSUMER ENHANCEMENT ACT OF 2001
_______
March 13, 2001.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 496]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 496) to amend the Communications Act of 1934 to
promote deployment of advanced services and foster the
development of competition for the benefit of consumers in all
regions of the Nation by relieving unnecessary burdens on the
Nation's two percent local exchange telecommunications
carriers, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 5
Background and Need for Legislation.............................. 5
Hearings......................................................... 6
Committee Consideration.......................................... 6
Committee Votes.................................................. 6
Statement of General Performance Goals and Objectives............ 6
New Budget Authority, Entitlement Authority, and Tax Expenditures 6
Committee Cost Estimate.......................................... 6
Congressional Budget Office Estimate............................. 7
Federal Mandates Statement....................................... 8
Advisory Committee Statement..................................... 8
Constitutional Authority Statement............................... 8
Applicability to Legislative Branch.............................. 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 10
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Independent Telecommunications
Consumer Enhancement Act of 2001''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds the following:
(1) The Telecommunications Act of 1996 was enacted to foster
the rapid deployment of advanced telecommunications and
information technologies and services to all Americans by
promoting competition and reducing regulation in
telecommunications markets nationwide.
(2) The Telecommunications Act of 1996 specifically
recognized the unique abilities and circumstances of local
exchange carriers with fewer than two percent of the Nation's
subscriber lines installed in the aggregate nationwide.
(3) Given the markets two percent carriers typically serve,
such carriers are uniquely positioned to accelerate the
deployment of advanced services and competitive initiatives for
the benefit of consumers in less densely populated regions of
the Nation.
(4) Existing regulations are typically tailored to the
circumstances of larger carriers and therefore often impose
disproportionate burdens on two percent carriers, impeding such
carriers' deployment of advanced telecommunications services
and competitive initiatives to consumers in less densely
populated regions of the Nation.
(5) Reducing regulatory burdens on two percent carriers will
enable such carriers to devote additional resources to the
deployment of advanced services and to competitive initiatives
to benefit consumers in less densely populated regions of the
Nation.
(6) Reducing regulatory burdens on two percent carriers will
increase such carriers' ability to respond to marketplace
conditions, allowing them to accelerate deployment of advanced
services and competitive initiatives to benefit consumers in
less densely populated regions of the Nation.
(b) Purposes.--The purposes of this Act are--
(1) to accelerate the deployment of advanced services and the
development of competition in the telecommunications industry
for the benefit of consumers in all regions of the Nation,
consistent with the Telecommunications Act of 1996, by reducing
regulatory burdens on local exchange carriers with fewer than
two percent of the Nation's subscriber lines installed in the
aggregate nationwide;
(2) to improve such carriers' flexibility to undertake such
initiatives; and
(3) to allow such carriers to redirect resources from paying
the costs of such regulatory burdens to increasing investment
in such initiatives.
SEC. 3. DEFINITION.
Section 3 of the Communications Act of 1934 (47 U.S.C. 153) is
amended--
(1) by redesignating paragraphs (51) and (52) as paragraphs
(52) and (53), respectively; and
(2) by inserting after paragraph (50) the following:
``(51) Two percent carrier.--The term `two percent carrier'
means an incumbent local exchange carrier within the meaning of
section 251(h) whose access lines, when aggregated with the
access lines of any local exchange carrier that such incumbent
local exchange carrier directly or indirectly controls, is
controlled by, or is under common control with, are fewer than
two percent of the Nation's subscriber lines installed in the
aggregate nationwide.''.
SEC. 4. REGULATORY RELIEF FOR TWO PERCENT CARRIERS.
Title II of the Communications Act of 1934 is amended by adding at
the end thereof a new part IV as follows:
``PART IV--PROVISIONS CONCERNING TWO PERCENT CARRIERS
``SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR TWO PERCENT CARRIERS.
``(a) Commission To Take Into Account Differences.--In adopting rules
that apply to incumbent local exchange carriers (within the meaning of
section 251(h)), the Commission shall separately evaluate the burden
that any proposed regulatory, compliance, or reporting requirements
would have on two percent carriers.
``(b) Effect of Commission's Failure To Take Into Account
Differences.--If the Commission adopts a rule that applies to incumbent
local exchange carriers and fails to separately evaluate the burden
that any proposed regulatory, compliance, or reporting requirement
would have on two percent carriers, the Commission shall not enforce
the rule against two percent carriers unless and until the Commission
performs such separate evaluation.
``(c) Additional Review Not Required.--Nothing in this section shall
be construed to require the Commission to conduct a separate evaluation
under subsection (a) if the rules adopted do not apply to two percent
carriers, or such carriers are exempted from such rules.
``(d) Savings Clause.--Nothing in this section shall be construed to
prohibit any size-based differentiation among carriers mandated by this
Act, chapter 6 of title 5, United States Code, the Commission's rules,
or any other provision of law.
``(e) Effective Date.--The provisions of this section shall apply
with respect to any rule adopted on or after the date of enactment of
this section.
``SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.
``(a) Limitation.--The Commission shall not require a two percent
carrier--
``(1) to file cost allocation manuals or to have such manuals
audited or attested, but a two percent carrier that qualifies
as a class A carrier shall annually certify to the Commission
that the two percent carrier's cost allocation complies with
the rules of the Commission; or
``(2) to file Automated Reporting and Management Information
Systems (ARMIS) reports.
``(b) Preservation of Authority.--Except as provided in subsection
(a), nothing in this Act limits the authority of the Commission to
obtain access to information under sections 211, 213, 215, 218, and 220
with respect to two percent carriers.
``SEC. 283. INTEGRATED OPERATION OF TWO PERCENT CARRIERS.
``The Commission shall not require any two percent carrier to
establish or maintain a separate affiliate to provide any common
carrier or noncommon carrier services, including local and
interexchange services, commercial mobile radio services, advanced
services (within the meaning of section 706 of the Telecommunications
Act of 1996), paging, Internet, information services or other enhanced
services, or other services. The Commission shall not require any two
percent carrier and its affiliates to maintain separate officers,
directors, or other personnel, network facilities, buildings, research
and development departments, books of account, financing, marketing,
provisioning, or other operations.
``SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE CAP REGULATION.
``(a) NECA Pool.--The participation or withdrawal from participation
by a two percent carrier of one or more study areas in the common line
tariff administered and filed by the National Exchange Carrier
Association or any successor tariff or administrator shall not obligate
such carrier to participate or withdraw from participation in such
tariff for any other study area. The Commission may require a two
percent carrier to give 60 days notice of its intent to participate or
withdraw from participation in such common line tariff with respect to
a study area. Except as permitted by section 310(f)(3), a two percent
carrier's election under this subsection shall be binding for one year
from the date of the election.
``(b) Price Cap Regulation.--A two percent carrier may elect to be
regulated by the Commission under price cap rate regulation, or elect
to withdraw from such regulation, for one or more of its study areas.
The Commission shall not require a carrier making an election under
this subsection with respect to any study area or areas to make the
same election for any other study area. Except as permitted by section
310(f)(3), a two percent carrier's election under this subsection shall
be binding for one year from the date of the election.
``SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS SERVICES BY TWO
PERCENT COMPANIES.
``(a) One-Day Notice of Deployment.--The Commission shall permit two
percent carriers to introduce new interstate telecommunications
services by filing a tariff on one day's notice showing the charges,
classifications, regulations, and practices therefor, without obtaining
a waiver, or make any other showing before the Commission in advance of
the tariff filing. The Commission shall not have authority to approve
or disapprove the rate structure for such services shown in such
tariff.
``(b) Definition.--For purposes of subsection (a), the term `new
interstate telecommunications service' means a class or subclass of
service not previously offered by the two percent carrier that enlarges
the range of service options available to ratepayers of such carrier.
``SEC. 286. ENTRY OF COMPETING CARRIER.
``(a) Pricing Flexibility.--Notwithstanding any other provision of
this Act, any two percent carrier shall be permitted to deaverage its
interstate switched or special access rates, file tariffs on one day's
notice, and file contract-based tariffs for interstate switched or
special access services immediately upon certifying to the Commission
that a telecommunications carrier unaffiliated with such carrier is
engaged in facilities-based entry within such carrier's service area. A
two percent carrier subject to rate-of-return regulation with respect
to an interstate switched or special access service, for which pricing
flexibility has been exercised pursuant to this subsection, shall
compute its interstate rate of return based on the nondiscounted rate
for such service.
``(b) Pricing Deregulation.--Notwithstanding any other provision of
this Act, upon receipt by the Commission of a certification by a two
percent carrier that a local exchange carrier that is not a two percent
carrier is engaged in facilities-based entry within the two percent
carrier's service area, the Commission shall regulate such two percent
carrier as non-dominant, and therefore shall not require the tariffing
of the interstate service offerings of such two percent carrier.
``(c) Participation in Exchange Carrier Association Tariff.--A two
percent carrier that meets the requirements of subsection (a) or (b) of
this section with respect to one or more study areas shall be permitted
to participate in the common line tariff administered and filed by the
National Exchange Carrier Association or any successor tariff or
administrator, by electing to include one or more of its study areas in
such tariff.
``(d) Definitions.--For purposes of this section:
``(1) Facilities-based entry.--The term `facilities-based
entry' means, within the service area of a two percent
carrier--
``(A) the provision or procurement of local telephone
exchange switching or its equivalent; and
``(B) the provision of telephone exchange service to
at least one unaffiliated customer.
``(2) Contract-based tariff.--The term `contract-based
tariff' shall mean a tariff based on a service contract entered
into between a two percent carrier and one or more customers of
such carrier. Such tariff shall include--
``(A) the term of the contract, including any renewal
options;
``(B) a brief description of each of the services
provided under the contract;
``(C) minimum volume commitments for each service, if
any;
``(D) the contract price for each service or services
at the volume levels committed to by the customer or
customers;
``(E) a brief description of any volume discounts
built into the contract rate structure; and
``(F) a general description of any other
classifications, practices, and regulations affecting
the contract rate.
``(3) Service area.--The term `service area' has the same
meaning as in section 214(e)(5).
``SEC. 287. SAVINGS PROVISIONS.
``(a) Commission Authority.--Nothing in this part shall be construed
to restrict the authority of the Commission under sections 201 through
208.
``(b) Rural Telephone Company Rights.--Nothing in this part shall be
construed to diminish the rights of rural telephone companies otherwise
accorded by this Act, or the rules, policies, procedures, guidelines,
and standards of the Commission as of the date of enactment of this
section.''.
SEC. 5. LIMITATION ON MERGER REVIEW.
(a) Amendment.--Section 310 of the Communications Act of 1934 (47
U.S.C. 310) is amended by adding at the end the following:
``(f) Deadline for Making Public Interest Determination.--
``(1) Time limit.--In connection with any merger between two
percent carriers, or the acquisition, directly or indirectly,
by a two percent carrier or its affiliate of securities or
assets of another two percent carrier or its affiliate, if the
merged or acquiring carrier remains a two percent carrier after
the merger or acquisition, the Commission shall make any
determinations required by this section and section 214, and
shall rule on any petition for waiver of the Commission's rules
or other request related to such determinations, not later than
60 days after the date an application with respect to such
merger or acquisition is submitted to the Commission.
``(2) Approval absent action.--If the Commission does not
approve or deny an application as described in paragraph (1) by
the end of the period specified, the application shall be
deemed approved on the day after the end of such period. Any
such application deemed approved under this subsection shall be
deemed approved without conditions.
``(3) Election permitted.--The Commission shall permit a two
percent carrier to make an election pursuant to section 284
with respect to any local exchange facilities acquired as a
result of a merger or acquisition that is subject to the review
deadline established in paragraph (1) of this subsection.''.
(b) Effective Date.--The provisions of this section shall apply with
respect to any application that is submitted to the Commission on or
after the date of enactment of this Act. Applications pending with the
Commission on the date of enactment of this Act shall be subject to the
requirements of this section as if they had been filed with the
Commission on the date of enactment of this Act.
SEC. 6. TIME LIMITS FOR ACTION ON PETITIONS FOR RECONSIDERATION OR
WAIVER.
(a) Amendment.--Section 405 of the Communications Act of 1934 (47
U.S.C. 405) is amended by adding to the end the following:
``(c) Expedited Action Required.--
``(1) Time limit.--Within 90 days after receiving from a two
percent carrier a petition for reconsideration or other review
filed under this section or a petition for waiver of a rule,
policy, or other Commission requirement, the Commission shall
issue an order granting or denying such petition. If the
Commission fails to act on a petition for waiver subject to the
requirements of this section within this 90-day period, the
relief sought in such petition shall be deemed granted. If the
Commission fails to act on a petition for reconsideration or
other review subject to the requirements of this section within
such 90-day period, the Commission's enforcement of any rule
the reconsideration or other review of which was specifically
sought by the petitioning party shall be stayed with respect to
that party until the Commission issues an order granting or
denying such petition.
``(2) Finality of action.--Any order issued under paragraph
(1), or any grant of a petition for waiver that is deemed to
occur as a result of the Commission's failure to act under
paragraph (1), shall be a final order and may be appealed.''.
(b) Effective Date.--The provisions of this section shall apply with
respect to any petition for reconsideration or other review or petition
for waiver that is submitted to the Commission on or after the date of
enactment of this Act. Petitions for reconsideration or petitions for
waiver pending with the Commission on the date of enactment of this Act
shall be subject to the requirements of this section as if they had
been filed on the date of enactment of this Act.
Purpose and Summary
The purpose of H.R. 496, the Independent Telecommunications
Consumer Enhancement Act of 2001, is to reduce the regulatory
burden imposed upon two percent telecommunications carriers so
that they may more effectively respond to competition in rural
and less-densely populated areas.
Background and Need for Legislation
In February 1998, the Independent Telephone and
Telecommunications Alliance (ITTA), a group of 14 mid-size
incumbent local exchange carriers (ILECs) that each have less
than two percent of the nation's installed subscriber lines,
petitioned the Federal Communications Commission (FCC) to
forbear from a number of regulations. In May 1999, the FCC
released six orders which denied the vast majority of ITTA's
requests, but granted limited relief on some grounds. As a
result, two percent carriers argue that the regulatory burdens
imposed by the FCC prevent them from being fully competitive in
a competitive environment. H.R. 496 would legislatively remedy
some of the items denied by the FCC and would, additionally,
relieve other regulatory burdens imposed on two percent
carriers.
Committee Hearings
The Committee has held no hearings on H.R. 496. During the
106th Congress, however, the Subcommittee on
Telecommunications, Trade, and Consumer Protection held a
hearing on July 20, 2000 on H.R. 3850, legislation that was
comparable to H.R. 496. The Subcommittee received testimony
from: Carol E. Mattey, Deputy Chief, Common Carrier Bureau,
Federal Communications Commission; Larry F. Darby, Darby
Associates, Communications Consultants; John Sumpter, Vice
President of Regulatory Affairs, Pac-West Telecomm, Inc., on
behalf of Association for Local Telecommunications Services;
Jack Mueller, Cincinnati Telephone Company/BroadWing; and David
Cole, Senior Vice President of Operations Support, CenturyTel,
Inc.
Committee Consideration
On February 28, 2001, the Full Committee met in open markup
session and ordered H.R. 496 reported to the House, with an
amendment in the nature of a substitute offered by
Representative Cubin, by a voice vote, a quorum being present.
Committee Votes
Clause 3(b) of Rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 496 reported. A motion by Mr. Tauzin to order H.R. 496
reported to the House, with amendment, was agreed to by a voice
vote.
Statement of General Performance Goals and Objectives
H.R. 496 will reduce the regulatory burden imposed upon two
percent telecommunications carriers so that they may more
effectively respond to competition in rural and less-densely
populated areas.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of Rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
496, the Independent Telecommunications Consumer Enhancement
Act, would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 12, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 496, the
Independent Telecommunications Consumer Enhancement Act of
2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ken Johnson.
Sincerely,
Steven Lieberman
(For Dan L. Crippen, Director).
Enclosure.
H.R. 496--Independent Telecommunications Consumer Enhancement Act of
2001
H.R. 496 would exempt small telecommunications carriers
from certain rules and reporting requirements administered by
the Federal Communications Commission (FCC). The bill also
would require the FCC to grant or deny merger petitions from
these companies within 60 days, and all reconsideration and
waiver petitions within 90 days.
CBO estimates that H.R. 496 would have no significant
impact on the federal budget. However, the bill could affect
direct spending, so pay-as-you-go procedures would apply. H.R.
496 contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act and would impose no
costs on state, local, or tribal governments.
Based on information from the FCC, CBO estimates that
implementing H.R. 496 would cost the agency about $3 million in
the first year after enactment and $2 million a year
thereafter. The commission would need more staff to investigate
the costs incurred by small telecommunications carriers, which
the bill would exempt from certain reporting requirements. The
FCC also would have to hire additional personnel to review
merger, reconsideration, and waiver petitions in order to meet
the bill's deadlines for acting on such petitions. Under
current law, enforcement and regulatory costs that the agency
incurs are offset by fees charged to the industries that the
FCC regulates. Therefore, CBO expects that the net costs of
implementing these provisions would be negligible.
H.R. 496 would affect application fees the FCC collects to
offset costs associated with tariff filings and other
applications from the telecommunications industry. Those
licensing fees are recorded in the budget as offsetting
receipts. Based on information from the FCC, CBO expects that,
under H.R. 496, small telecommunications carriers might file
slightly fewer tariffs. However, CBO estimates that the effect
on application fees would not be significant.
The CBO staff contact for this estimate is Ken Johnson.
This estimate was approved by Robert A. Sunshine, Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 establishes the short title of the bill, the
``Independent Telecommunications Consumer Enhancement Act of
2001.''
Section 2. Findings and purpose
Section 2 makes certain Congressional findings and
describes the purposes of the bill.
Section 3. Definition
Section 3 defines the term ``two percent carrier'' as an
incumbent local exchange carrier within the meaning of section
251(h) whose access lines, when aggregated with the access
lines of any local exchange carrier that such incumbent local
exchange carrier directly or indirectly controls, is controlled
by, or is under common control with, are fewer than two percent
of the Nation's subscriber lines installed in the aggregate
nationwide.
Section 4. Regulatory relief for two percent carriers
Section 4 of the bill adds a new section 281 to the
Communications Act of 1934 (47 U.S.C. Sec. 151 et seq.) that
requires the FCC to separately evaluate the burden that any
proposed regulation would have on two percent carriers. If the
FCC fails to separately evaluate such regulations, the
Commission is not permitted to enforce the rule against two
percent carriers. If the proposed regulation does not apply to
two percent carriers, a separate evaluation is not required.
This section applies to any rule adopted on or after the date
of enactment of the bill.
New section 282 of the Communications Act exempts two
percent carriers from filing and auditing or attesting cost
allocation manuals and annual Automated Reporting and
Management Information Systems reports. Two percent carriers
that qualify as Class A carriers must annually certify that
they are complying with cost allocation rules. Except for the
provisions contained in section 282, nothing in this bill is
meant to limit the authority of the FCC to request or obtain
access to information currently allowed under the
Communications Act. The elimination of CAM and ARMIS burdens
would not affect other Commission reporting requirements such
as Form 492 and Form 499.
New section 283 of the Communications Act prevents the FCC
from requiring a two percent carrier to establish a separate
affiliate to provide any common carrier or noncommon carrier
service, including local and interexchange services, commercial
mobile radio service, advanced services (within the meaning of
section 706 of the Communications Act), paging, Internet,
information services or other enhanced services. Although
Section 283 prevents the Commission from requiring two percent
carriers to maintain separate books of account, this provision
does not relieve two percent carriers of their obligation to
comply with existing cost allocation requirements.
New section 284 of the Communications Act eliminates the
``all or nothing rules'' relating to the National Exchange
Carrier Assocation (NECA) common line tariff pool and price cap
regulations. This section allows two percent carriers to
participate in NECA's common line tariff in one or more study
areas, and elect to be regulated as a price cap carrier for one
or more study areas. However, a two percent carrier is not
required to participate in NECA's common line tariff in every
one of its study areas, nor is the carrier required to elect
price cap regulation in every one of its study areas. After a
two percent carrier has elected to participate or withdraw from
the NECA common line tariff for a particular study area, or to
be regulated as a price cap carrier for a particular study
area, the choice may not be changed for at least one year
unless a change in ownership occurs.
New section 285 of the Communications Act allows two
percent carriers to introduce new interstate services by filing
a tariff with one day's notice, without obtaining a waiver, and
prevents the FCC from approving or disapproving the rate
structure. The term ``new interstate telecommunications
service'' means a class or subclass of service not previously
offered that enlarges the carrier's range of service options.
New section 286 of the Communications Act allows a two
percent carrier to deaverage its interstate switched or special
access rates, file a tariff with one day's notice, or file
contract-based tariffs for interstate switched or special
access services upon certifying that the carrier faces
competition from a facilities-based carrier. However, a two
percent carrier subject to rate of return regulation may not
compute its interstate rate of return based on a discounted
rate offered for an interstate service. Upon certifying that a
two percent carrier faces competition from a facilities-based
competitor that is not a two percent carrier, the FCC must
regulate a two percent carrier as non-dominant, and, therefore,
shall not require the tariffing of interstate service
offerings. A two percent carrier that qualifies for pricing
flexibility or non-dominant treatment in any study area shall
not be required to exercise such regulatory relief for that
study area. A two percent carrier may not include access lines
for which pricing flexibility or non-dominant treatment has
been exercised in the common line tariff administered and filed
by the National Exchange Carrier Association or any successor
tariff or administrator. The term ``Facilities-based entry'' is
defined as the provision or procurement of local telephone
exchange switching or its equivalent and the provision of
telephone exchange service to at least one unaffiliated
customer.
New section 287 of the Communications Act includes a
savings provision providing that nothing in this section is to
be construed to restrict the authority of the FCC under
sections 201 through 208 of the Communications Act or to
diminish the rights of rural telephone companies under the
Communications Act or any related rules, policies, procedures,
guidelines, and standards of the FCC.
Section 5. Limitation on merger review
Section 5 amends section 310 of the Communications Act (47
U.S.C. Sec. 310) by adding a deadline for making a public
interest determination on the application or any associated
waiver or request. This provision was intended to apply in
instances where a merger between two percent carriers, or the
acquisition of a two percent carrier or the assets or
securities of another carrier by a two percent carrier, results
in a two percent carrier. The FCC, in making a determination
under section 214 and 310 of the Communications Act, must make
a determination not later than 60 days after the date an
application is filed with the FCC. If the FCC fails to approve
or deny the application within 60 days, the merger application
is deemed approved without conditions. This section is
effective with respect to any application submitted to the FCC
on or after the date of enactment. Merger applications pending
at the FCC on the date of enactment shall be subject to this
section as if they had been filed with the FCC on the date of
enactment.
Section 6. Time limits for action on petitions for reconsideration or
waiver
Section 6 amends section 405 of the Communications Act (47
U.S.C. Sec. 405) by requiring the FCC to act on waiver and
reconsideration petitions filed by two percent carriers within
90 days of filing. If no action is taken on a waiver petition
within 90 days, the petition is deemed granted. If no action is
taken on a petition for reconsideration within 90 days, the
Commission's enforcement of any rule the reconsideration of
which was specifically sought shall be stayed with respect to
that party until the Commission issues an order granting or
denying the petition. This section applies to other reviews
conducted by the Commission that involve two-percent carriers.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
COMMUNICATIONS ACT OF 1934
* * * * * * *
TITLE I--GENERAL PROVISIONS
* * * * * * *
SEC. 3. DEFINITIONS.
For the purposes of this Act, unless the context otherwise
requires--
(1) * * *
* * * * * * *
(51) Two percent carrier.--The term ``two percent
carrier'' means an incumbent local exchange carrier
within the meaning of section 251(h) whose access
lines, when aggregated with the access lines of any
local exchange carrier that such incumbent local
exchange carrier directly or indirectly controls, is
controlled by, or is under common control with, are
fewer than two percent of the Nation's subscriber lines
installed in the aggregate nationwide.
[(51)] (52) United states.--The term ``United
States'' means the several States and Territories, the
District of Columbia, and the possessions of the United
States, but does not include the Canal Zone.
[(52)] (53) Wire communication.--The term ``wire
communication'' or ``communication by wire'' means the
transmission of writing, signs, signals, pictures, and
sounds of all kinds by aid of wire, cable, or other
like connection between the points of origin and
reception of such transmission, including all
instrumentalities, facilities, apparatus, and services
(among other things, the receipt, forwarding, and
delivery of communications) incidental to such
transmission.
* * * * * * *
TITLE II--COMMON CARRIERS
* * * * * * *
PART IV--PROVISIONS CONCERNING TWO PERCENT CARRIERS
SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR TWO PERCENT CARRIERS.
(a) Commission To Take Into Account Differences.--In adopting
rules that apply to incumbent local exchange carriers (within
the meaning of section 251(h)), the Commission shall separately
evaluate the burden that any proposed regulatory, compliance,
or reporting requirements would have on two percent carriers.
(b) Effect of Commission's Failure To Take Into Account
Differences.--If the Commission adopts a rule that applies to
incumbent local exchange carriers and fails to separately
evaluate the burden that any proposed regulatory, compliance,
or reporting requirement would have on two percent carriers,
the Commission shall not enforce the rule against two percent
carriers unless and until the Commission performs such separate
evaluation.
(c) Additional Review Not Required.--Nothing in this section
shall be construed to require the Commission to conduct a
separate evaluation under subsection (a) if the rules adopted
do not apply to two percent carriers, or such carriers are
exempted from such rules.
(d) Savings Clause.--Nothing in this section shall be
construed to prohibit any size-based differentiation among
carriers mandated by this Act, chapter 6 of title 5, United
States Code, the Commission's rules, or any other provision of
law.
(e) Effective Date.--The provisions of this section shall
apply with respect to any rule adopted on or after the date of
enactment of this section.
SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.
(a) Limitation.--The Commission shall not require a two
percent carrier--
(1) to file cost allocation manuals or to have such
manuals audited or attested, but a two percent carrier
that qualifies as a class A carrier shall annually
certify to the Commission that the two percent
carrier's cost allocation complies with the rules of
the Commission; or
(2) to file Automated Reporting and Management
Information Systems (ARMIS) reports.
(b) Preservation of Authority.--Except as provided in
subsection (a), nothing in this Act limits the authority of the
Commission to obtain access to information under sections 211,
213, 215, 218, and 220 with respect to two percent carriers.
SEC. 283. INTEGRATED OPERATION OF TWO PERCENT CARRIERS.
The Commission shall not require any two percent carrier to
establish or maintain a separate affiliate to provide any
common carrier or noncommon carrier services, including local
and interexchange services, commercial mobile radio services,
advanced services (within the meaning of section 706 of the
Telecommunications Act of 1996), paging, Internet, information
services or other enhanced services, or other services. The
Commission shall not require any two percent carrier and its
affiliates to maintain separate officers, directors, or other
personnel, network facilities, buildings, research and
development departments, books of account, financing,
marketing, provisioning, or other operations.
SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE CAP REGULATION.
(a) NECA Pool.--The participation or withdrawal from
participation by a two percent carrier of one or more study
areas in the common line tariff administered and filed by the
National Exchange Carrier Association or any successor tariff
or administrator shall not obligate such carrier to participate
or withdraw from participation in such tariff for any other
study area. The Commission may require a two percent carrier to
give 60 days notice of its intent to participate or withdraw
from participation in such common line tariff with respect to a
study area. Except as permitted by section 310(f)(3), a two
percent carrier's election under this subsection shall be
binding for one year from the date of the election.
(b) Price Cap Regulation.--A two percent carrier may elect to
be regulated by the Commission under price cap rate regulation,
or elect to withdraw from such regulation, for one or more of
its study areas. The Commission shall not require a carrier
making an election under this subsection with respect to any
study area or areas to make the same election for any other
study area. Except as permitted by section 310(f)(3), a two
percent carrier's election under this subsection shall be
binding for one year from the date of the election.
SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS SERVICES BY TWO PERCENT
COMPANIES.
(a) One-Day Notice of Deployment.--The Commission shall
permit two percent carriers to introduce new interstate
telecommunications services by filing a tariff on one day's
notice showing the charges, classifications, regulations, and
practices therefor, without obtaining a waiver, or make any
other showing before the Commission in advance of the tariff
filing. The Commission shall not have authority to approve or
disapprove the rate structure for such services shown in such
tariff.
(b) Definition.--For purposes of subsection (a), the term
``new interstate telecommunications service'' means a class or
subclass of service not previously offered by the two percent
carrier that enlarges the range of service options available to
ratepayers of such carrier.
SEC. 286. ENTRY OF COMPETING CARRIER.
(a) Pricing Flexibility.--Notwithstanding any other provision
of this Act, any two percent carrier shall be permitted to
deaverage its interstate switched or special access rates, file
tariffs on one day's notice, and file contract-based tariffs
for interstate switched or special access services immediately
upon certifying to the Commission that a telecommunications
carrier unaffiliated with such carrier is engaged in
facilities-based entry within such carrier's service area. A
two percent carrier subject to rate-of-return regulation with
respect to an interstate switched or special access service,
for which pricing flexibility has been exercised pursuant to
this subsection, shall compute its interstate rate of return
based on the nondiscounted rate for such service.
(b) Pricing Deregulation.--Notwithstanding any other
provision of this Act, upon receipt by the Commission of a
certification by a two percent carrier that a local exchange
carrier that is not a two percent carrier is engaged in
facilities-based entry within the two percent carrier's service
area, the Commission shall regulate such two percent carrier as
non-dominant, and therefore shall not require the tariffing of
the interstate service offerings of such two percent carrier.
(c) Participation in Exchange Carrier Association Tariff.--A
two percent carrier that meets the requirements of subsection
(a) or (b) of this section with respect to one or more study
areas shall be permitted to participate in the common line
tariff administered and filed by the National Exchange Carrier
Association or any successor tariff or administrator, by
electing to include one or more of its study areas in such
tariff.
(d) Definitions.--For purposes of this section:
(1) Facilities-based entry.--The term ``facilities-
based entry'' means, within the service area of a two
percent carrier--
(A) the provision or procurement of local
telephone exchange switching or its equivalent;
and
(B) the provision of telephone exchange
service to at least one unaffiliated customer.
(2) Contract-based tariff.--The term ``contract-based
tariff'' shall mean a tariff based on a service
contract entered into between a two percent carrier and
one or more customers of such carrier. Such tariff
shall include--
(A) the term of the contract, including any
renewal options;
(B) a brief description of each of the
services provided under the contract;
(C) minimum volume commitments for each
service, if any;
(D) the contract price for each service or
services at the volume levels committed to by
the customer or customers;
(E) a brief description of any volume
discounts built into the contract rate
structure; and
(F) a general description of any other
classifications, practices, and regulations
affecting the contract rate.
(3) Service area.--The term ``service area'' has the
same meaning as in section 214(e)(5).
SEC. 287. SAVINGS PROVISIONS.
(a) Commission Authority.--Nothing in this part shall be
construed to restrict the authority of the Commission under
sections 201 through 208.
(b) Rural Telephone Company Rights.--Nothing in this part
shall be construed to diminish the rights of rural telephone
companies otherwise accorded by this Act, or the rules,
policies, procedures, guidelines, and standards of the
Commission as of the date of enactment of this section.
TITLE III--PROVISIONS RELATING TO RADIO
PART I--GENERAL PROVISIONS
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SEC. 310. LIMITATION ON HOLDING AND TRANSFER OF LICENSES.
(a) * * *
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(f) Deadline for Making Public Interest Determination.--
(1) Time limit.--In connection with any merger
between two percent carriers, or the acquisition,
directly or indirectly, by a two percent carrier or its
affiliate of securities or assets of another two
percent carrier or its affiliate, if the merged or
acquiring carrier remains a two percent carrier after
the merger or acquisition, the Commission shall make
any determinations required by this section and section
214, and shall rule on any petition for waiver of the
Commission's rules or other request related to such
determinations, not later than 60 days after the date
an application with respect to such merger or
acquisition is submitted to the Commission.
(2) Approval absent action.--If the Commission does
not approve or deny an application as described in
paragraph (1) by the end of the period specified, the
application shall be deemed approved on the day after
the end of such period. Any such application deemed
approved under this subsection shall be deemed approved
without conditions.
(3) Election permitted.--The Commission shall permit
a two percent carrier to make an election pursuant to
section 284 with respect to any local exchange
facilities acquired as a result of a merger or
acquisition that is subject to the review deadline
established in paragraph (1) of this subsection.
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TITLE IV--PROCEDURAL AND ADMINISTRATIVE PROVISIONS
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SEC. 405. RECONSIDERATIONS.
(a) * * *
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(c) Expedited Action Required.--
(1) Time limit.--Within 90 days after receiving from
a two percent carrier a petition for reconsideration or
other review filed under this section or a petition for
waiver of a rule, policy, or other Commission
requirement, the Commission shall issue an order
granting or denying such petition. If the Commission
fails to act on a petition for waiver subject to the
requirements of this section within this 90-day period,
the relief sought in such petition shall be deemed
granted. If the Commission fails to act on a petition
for reconsideration or other review subject to the
requirements of this section within such 90-day period,
the Commission's enforcement of any rule the
reconsideration or other review of which was
specifically sought by the petitioning party shall be
stayed with respect to that party until the Commission
issues an order granting or denying such petition.
(2) Finality of action.--Any order issued under
paragraph (1), or any grant of a petition for waiver
that is deemed to occur as a result of the Commission's
failure to act under paragraph (1), shall be a final
order and may be appealed.
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