HR-3515.

TXT
Article by Kaleb Axon
House bill HR 3515 transcribed by James D Bryant II
This file may be requested from 1:280/77 @fidonet as
"HR-3515.ZIP". The following related files are also available:
HR-3515.ZIP

Text of House bill HR 3515, and an article

concerning its contents.

TX-8387.ZIP

A brief announcement of the decision in Texas

PUC docket 8387, Reginald A. Hirsch, et. al.
vs Southwestern Bell Telephone company, and a
portion of the text of this decision.

3515-LTR.ZIP A sample letter to be sent to your congressmen

concerning HR 3515. Please do not copy this
letter exactly; letter-writing compaigns are
more effective if every letter is different.
---------------------------------------------------------------------H.R. 3515 -- Transcribed by James D. Bryant II on Nov. 24, 1991
I have proofed this twice, it should not contain any
errors or omissions, I can't access my spell checker
right now, there may be a typo or two somewhere..
Please note that this is not the article written by James Bryant. I
wrote my own notice here, because I strongly disagree with his
viewpoint on this bill. His article may be file requested from
1:1/1 @fidonet as "ta91.zip".
The following document is a full transcription of the
Telecommunications Act of 1991.
IF THIS BILL PASSES, IT WILL GIVE THE BELL OPERATING COMPANIES
AND OTHER PHONE SERVICE CARRIERS THE FREEDOM TO CHARGE BBS
OPERATORS WHATEVER RATES THEY SEE FIT.
Please write your congressmen, expressing your opposition to this
bill! Be sure to mention the following points:
1. BBSs are not-for-profit.
2. BBSs are not typically used as heavily as larger, for-profit
information services.
3. BBS operators do not typically charge money for use of the
system.
4. The section of the proposed bill which concerns us is (quote
this exactly):
section 201A(e) of this bill's proposed ammendment to the

Communications Act of 1934

5. In the state of Texas, Southwestern Bell Telephone attempted
to charge business rates to all BBSs, and the Texas Public
Utilities Commission unanimously agreed that this was
unfair. In your letter, refer to Texas PUC docket 8387,
Reginald A. Hirsch, et. al. vs Southwestern Bell Telephone
Company. Partial text of their resolution may be requested
for inclusion in your letter, from 1:280/77 @fidonet as
"TX-8387.ZIP".
Please TELL your Congressman and Senators, and all members of the
involved committees to vote >> NO << on this bill, unless it is
ammended to guarantee residential phone rates to not-for-profit,
free BBSs.
The basic principle of this bill is a good one; it is intended to
prevent the Bell companies from monopolizing the information
services. Please do not say anything in your letter which could
be interpreted as opposition to that basic principle.
-------------------------------------------------------------H.R. 3515

102nd Congress, 1st Session

[Page 01 of 35]

H.R. 3515
To amend the
provision of
diversity of
availability
purposes.

Communications Act of 1934 to encourage competition in the

electronic information services, to foster the continued
information sources and services, to preserve the universal
of basic telecommunications services, and for other

---------------------------------------------------------IN THE HOUSE OF REPRESENTATIVES

October 8, 1991
Mr. Cooper (for himself, Mr. Bliley, Mr. Synar, Mr. Schaefer, and Mr.
Bryant) introduced the following bill, which was referred jointly to the
Committees on Energy and Commerce and the Judiciary.
---------------------------------------------------------A BILL
To amend the
provision of
diversity of
availability
purposes.

Communications Act of 1934 to encourage competition in the

electronic information services, to foster the continued
information sources and services, to preserve the universal
of basic telecommunications services, and for other

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Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE

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This Act may be cited as the "Telecommunications
5 Act of 1991".
H.R. 3515

102nd Congress, 1st Session

[Page 02 of 35]

1 SECTION 2. FINDINGS AND PURPOSES

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(a) Findings--The Congress finds that--

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(1) the national welfare will be enhanced by the

continued development of robust competition in the
provision of electronic information services and telecommunications services;

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(2) the widest possible availability of information and telecommunications services requires an
open telecommunications infrastructure that incorporates market-driven advances in technology and
whose features and functions are available on a nondiscriminatory and unbundled basis;

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(3) the availability of multiple and interconnected complementary telecommunications networks can enhance competition in the provision of
information and telecommunications services;

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(4) the redundancy inherent in a pluralistic

telecommunications infrastructure offers protection
against network failures;

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(5) the cost-effective deployment of advanced

public telecommunicatins networks, subject to appropriate safeguards, can further the long-standing
goals of universal telephone service at affordable
rates;

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(6) the provision of information services by divested operating companies prior to the development of

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an effectively competitive telecommunications infrastructure would likely lead to higher rates for telephone exchange service and jepordize the diversity
of information sources and services; and

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(7) current regulatory policies must be revised

and supplemented to ensure the universal availability
of telephone exchange service at reasonable rates
and fair competition in delivery of telecommunicatications and information services.

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(b) PURPOSES--The purposes of this Act are to--

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(1) ensure the continued availability of affordable telecommunications and information services
that are essential to full participation in the nation's

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economic, political, and social life;

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(2) encourage the continued development of advanced, reliable telecommunications networks;

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(3) ensure that the costs of such networks and

the services provided over them are allocated equitably among users; and

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(4) ensure that the provision of information

services by divested operating companies does not
jepordize the universal availability of telephone exchange service at reasonable rates or undermine
competition in the information services marketplace.

H.R. 3515

102nd Congress, 1st Session

TITLE I -- INFRASTRUCTURE

DEVELOPMENT

[Page 04 of 35]

3 Sec. 101. NETWORK STANDARDS

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Title II of the Communications Act of 1934 is
5 amended by inserting after section 201 the following new
6 section:
7 "Sec. 201A. NETWORK STANDARDS.
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"(a) SERVICE QUALITY --

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"(1) ADOPTION OF STANDARDS.-- A FederalState Joint Board shall be established under section
401(c) not later than 90 days after the enactment
of this subsection to impose and enforce network
quality standards upon the common carriers for the
purpose of ensuring the combined maintenance and
evolution of common carrier facilities and services.
Not later than 180 days after the date of enactment
of this subsection, the Joint Board shall initiate a
rulemaking proceeding to establish standards, to be
enforced by the Commission and the State Commissions as to matters within their respective jurisdictions, for measuring common carrier network quality.

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"(2) REPORTS -- Each common carrier shall

submit to the Joint Board established pursuant to
paragraph (1) a quarterly data report, in a form re-

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102nd Congress, 1st Session

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quired by the Joint Board, reguarding compliance

with the prescribed network quality standards. The
Joint Board may require periodic independant audits
of common carrier compliance with the network
quality standards. The Commission, upon the reccommendation of the Joint Board, shall establish en-

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forcement penalties and procedures, including expedited customer complaint mechanisms, to ensure
common carrier compliance with network quality
standards.

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"(b) INTERCONNECTION --

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"(1) GENERALLY-- Each local exchange carrier

shall provide interconnection, on a reasonable and
nondiscriminatory basis, to common carriers and
other providers of telecommunications services and
information services who request it. An interconnecting party may physically colocate the equipment necessary for interconnection at the premises of a local
exchange carrier, except as provided under paragraph (2).

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"(2) VIRTUAL COLOCATION-- A local exchange

carrier that can demonstrate by clear and convincing
evidence in a particular case that the physical
colocation required under paragraph (1) is not practticable for technical reasons or because of space lim-

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102nd Congress, 1st Session

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itations shall offer an interconnecting party virtual

colocation with it's premises. Virtual colocation shall
be economically and technically comparable to interconnection that is or would be obtained through
physical colocation of the interconnecting party's
equipment at the premises of the local exchange carier. Nothing in this paragraph shall relieve a divested operating company of it's obligations under
section 227(d)(12).

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"(3) EXCEPTION FOR RURAL EXCHANGE CARRIERS.-- Notwithstanding any other provision of this
subsection, a rural exchange carrier shall not be required to provide interconnection to another local exchange carrier.

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"(4) REGUALTIONS-- Within 270 days after the

date of enactment of the Telecommunications Act of
1991, the Commission shall--

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"(A) adopt and make effective rules to enforce the oblications imposed by this subsection;
and

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"(B) initiate a rulemaking to require that

the interconnection offered by a local exchange
carrier pursuant to this subsection shall provide
for the portability of telephone numbers.

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"(c) NETWORK ACCESS--

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102nd Congress, 1st Session

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"(1) REVISIONS TO ORDER-- The Commission

shall further revise the order of the Commission entitled 'Filing and Review of Open Network Archetecture Plans' CC Docket 88-2, Phase I, released December 22, 1988, and subsequently revised, to require that--

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"(A) the plans for compliance with such

order offer unbundled features and functions;

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"(B) such features and functions are made

available on a reasonably uniform basis by all
of the common carriers subject to such order,
and that such features and functions are accessible throughout the service territory of each
such carrier;

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"(C) such plans include a schedule for

timely offering of new features asnd functions;
and

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"(D) common carriers subject to such

order not unreasonably discriminate between affiliated and unaffiliated providers of information services in offering tariffed and nontariffed features, functions, and capabilities.

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"(2) REVIEW OF ORDER AND PLANS-- At least

once every three years, the Commission shall--

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[Page 08 of 35]

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"(A) conduct a proceeding in which interested parties shall have an opportunity to comment on whether the order described in paragraph (1), as further revised, and the plans
filed pursuant to it have opened the networks of
the carriers subject to such order to reasonable
and non-discriminatory access by providers of
telecommunications services and information
services; and

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"(B) not later than 180 days after receiving the reply comments filed in such proceeding, revise such order as it deems necessary or
appropiate and require the common carriers
subject to such order to file new plans consistent with such revisions, which new plans shall
also be subject to public comment and Commission review prior to their becoming effective.

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"(d) PRIVACY-- Personally identifiable customer information obtained or collected by a local exchange carrier
in the course of providing telephone exchange service shall
be used only in connection with the provision of such service, and shall not be made available to any affiliate of such
carrier or any other person except-"(1) as required by law; or

H.R. 3515

102nd Congress, 1st Session

[Page 09 of 35]

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"(2) upon the affirmative request by the customer to which such information relates.

"(e) TARIFFS--

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"(1) GENERALLY-- A local exchange carrier

shall prepare and file tariffs in accordance with this
Act with respect to the interconnection and network
access services required under this section. The costs
that a local exchange carrier incurs in providing
such services shall be borne solely by the users of
the features and functions comprising such services.
The Commission shall review such tariffs to ensure
that--

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"(A) the charges for such services are costbased; and

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"(B) the terms and conditions contained in

such tariffs do not bundle together any separable elements, features, or functions.

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"(2) SUPPORTING INFORMATION-- A local exchange carrier shall submit supporting information
with it's tariffs for interconnection and network access services that is sufficient to enable the Commission and the public to determine the relationship between the proposed charges and the cost of providing such services. The submission of such information shall be pursuant to the rules adopted by the Com-

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102nd Congress, 1st Session

[Page 10 of 35]

mission to ensure that similarly situated carriers

provide such information in an uniform fashion.
"(3) UNIVERSAL SERVICE ELEMENTS-- A local
exchange carrier may include in it's tariffs for interconnection services an element intended to recover
the amount necessary to preclude any substantial increases in the rates for telephone exchange service
that would otherwise result from the offering of
interconnection services. Such element shall be imposed at a uniform rate on any person who purchases such services, and shall also be included at
the same rate in such carrier's charges for services
offered by the carrier in competition with the services offered by interconnecting parties. No later than
270 days after the date of enactment of the Telecommunications Act of 1991, the Commission shall
adopt and make effective rules governing the calculation of such element. Any amounts recovered by
the local exchange carrier through the imposition of
this additional element shall be used to defray the
costs of providing telephone exchange servicce.

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"(f) RESALE-- The resale of telephone exchange
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102nd Congress, 1st Session

[Page 11 of 35]

1 hibited or subject to unreasonable conditions by the Com2 mission, any State, or any local exchange carrier.
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"(g) COORDINATED PLANNING-- The Commission

shall adopt and make effective rules for the conduct of
coordinated network planning by common carriers, subject
to Commission supervision, to ensure (1) the effective and
efficient interconnection and interoperability of common
carrier networks, and (2) that the design of such networks
does not impede access to information services by subscribers to telephone exchange service furnished by a rural
exchange carrier.

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"(h) STUDY-- No later than 270 days after the enactment of the Telecommunications Act of 1991, the Commission shall initiate an inquiry to examine the effects of
competition in the provision of telephone exchange access
and telephone exchange service on the availability and
rates for telephone exchange service furnished by rural exchange carriers.

19 SEC. 102. EXPEDITED REVIEW OF CERTAIN COMPLAINTS

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Section 208 of the Communications Act of 1934 is
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"(c) EXPEDITED REVIEW OF CERTAIN COM24 PLAINTS-- The Commission shall issue a final order with
25 respect to any complaint arising from alleged violations
H.R. 3515

102nd Congress, 1st Session

[Page 12 of 35]

1 of section 201A within 270 days after such complaint is

2 filed".
3 SEC. 103. EXPEDITED LICENSING OF NEW TECHNOLOGIES
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AND SERVICES.

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Section 7 of the Communications Act of 1934 is
6 amended by adding to the end thereof the following new
7 subsection:
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"(c) LICENSING OF NEW TECHNOLOGIES-- Within

twenty-four months after making a determination under
subsection (b) that a technology or service related to the
furnishing of tlelcommunications services or information
services is in the public interest, the Commission shall
adopt and make effective rules for--

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"(1) the provision of such technology or service;

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"(2) the filing of applications for the authorizations necessary to offer such technology or service to
the public, and shall act on any such application
within twenty-four months after it is filed. Any application filed by a carrier under this subsection for
the construcction or extension of a line shall also be
subject to section 214 and to any necessary approval
by the appropriate State commissions".

H.R. 3515
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102nd Congress, 1st Session

[Page 13 of 35]

TITLE II -- PROVISIONS AFFECTING

DIVESTED OPERATING COMPANIES

3 SEC. 201. PROVISION OF INFORMATION SERVICES

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Title II of the Telecommunications Act of 1934 is
5 amended by adding at the end thereof the following new
6 section:
7 "SEC. 227. PROVISION OF INFORMATION SERVICES BY DI8
OPERATING COMPANIES.
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"(a) PROVISION OF SERVICES-- A divested operating
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"(b) ELECTRONIC PUBLISHING-- A divested operating company or an affiliate thereof may not offer electronic publishing services in any State in which such company or affiliate provides telephone exchange service until
the Commission, after notice and opportunity for public
comment and after consultation with the Department of
Justice and the appropriate State commissions, determines that--

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"(1) at least 50 percent of all businesses and

residences within the areas in each State in which
such company or any affiliate thereof provides telephone exchange service have access to transmission
and switching facilities (other than those owned or
controlled by a divested operating company or it's af-

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102nd Congress, 1st Session

[Page 14 of 35]

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filiate) that are comparable in quality, cost, geographic range, and functionality to those offered by
the divested operating company for the delivery of
electronic publishing services;

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"(2) at least 10 percent of all businesses and

residences within the areas in each State in which
such company provides telephone exchange service
subscribe to services delivered over such alternative

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facilities; and
"(3) the divested operating company or affiliate
thereof seeking to provide such electronic publishing
services has demonstrated that there is no substantial possibility that the divested operating company
could use it's position as a local exchange carrier to
(A) impede competition in the provision of electronic
publishing services, or (B) impose additional costs
upon subscribers of telephone exchange service.
"(c) WAIVER-- A divested operating company or an
affiliate thereof may petition the Commission for a waiver
of subsections (b) and (h) to provide a particular electronic publishing service. Such petition shall be granted
if such company or affiliate can demonstrate to the Commission by clear and convincing evidence that (A) such
service would not exist unless offered by such company
or affiliate, and (B) the provision of such service by such

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102nd Congress, 1st Session

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company or affiliate would not impose additional costs

upon subscribers of telephone exchange service. The Commission shall provide notice and opportunity for public
comment with respect to any request for a waiver persuant to this subsection. The provision of any service authorized pursuant to this subsection shall be subject to all of
the other provisions of this Act, including title IV and the
requirements of this subsection.
"(d) SEPARATE SUBSIDIARY--

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"(1) GENERALLY-- Except as provided in subsection (e), a divested operating company or affiliate
thereof may provide information services only
through a subsidiary that is separated from the telephone exchange service operations of the divested
company, in accordance with the requirements of
this subsection and the regualations prescribed by the
Commission to carry out this subsection.

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"(2) MINIMUM NUMBER OF OUTSIDE DIRECTORS-- Any subsidiary required by this subsection
shall have a board of directors not less than 33 percent of whom are not employees, officers, or directors of any divested operating company or any affiliate of such company.

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"(3) TRANSACTION REQUIREMENTS-- Any

transaction between any divested operating company

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102nd Congress, 1st Session

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and any other affiliate of such company (including

the subsidiary required by this subsection)--

"(A) shall not be based upon any pref-

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erence or discrimination arising out of affiliation;

"(B) shall be carried out in the same manner as such company or affiliate conducts such
business with unaffiliated persons;

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"(C) shall be pursuant to contract or tariff

reported to the Commission and made available
for public inspection;

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"(D) shall be fully auditable and reflect all

costs associated with the conduct of such business; and

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"(E) shall not have the effect of permitting

any violation of the requirements of subsection
(f) of this section.

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"(4) SEPERATE OPERATION AND PROPERTY-A subsidiary required by this subsection may not--

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"(A) enter into any joint venture or partnership with the divested operating company;

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"(B) have employees or a financial structure (other than as provided in this section) in
common with the divested operating company;

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"(C) own any property in common with a

divested operating company; or

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"(D) establish any other subsidiary or affiliate except after notice to the Commission in
such form and containing such information as
the Commission may require.

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"(5) SEPARATE COMMERCIAL ACTIVITIES-- A

subsidiary required by this subsection shall carry out
directly it's own marketing, sales, accounting, hiring
and training of personnel, purchasing, and maintenance.

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"(6) BOOKS, RECORDS, AND REPORTS-- Any

subsidiary required by this subsection shall--

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"(A) maintain books, records, and accounts in a manner prescribed by the Commission which shall be seperate from the books,
records, and accounts maintained by the divested operating company and the other affiliates of the divested operating company, and
which shall identify any conduct of business
with such company and any such affiliates; and

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"(B) prepare it's own financial statements

(including balance sheets and the related state-

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ments of operations, stockholders' equity, and

cash flows) that are not consolidated with the

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financial statements of the divested operating

company and any other affiliate of such company; and

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"(C) prepare and file with the Commission,

whether or not such subsidiary is publicly traded, the annual and periodic reports required of
publicly traded companies by the Securities and
Exchange Commission.

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"(7) ADVERTISING-- A subsidiary required by

this subsection may not carry out advertising with
the divested operating company, except that such
subsidiary may carry out institutional advertising
with such company if (A) such advertising does not
specifically relate to any service, and (B) the subsidiary and the divested operating comapany share
any costs of such advertising in proportion to their
revenue.

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"(8) SECURITIES INFORMATION-- A subsidiary

required by this subsection shall submit to the Commission a copy of any statement or prospectus that
such subsidiary is required to file with the Securities
and Exchange Commission.

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"(9) OUTSIDE OWNERSHIP-- A divested operating company or an affiliate thereof may not own
more than 90 percent of any class of outstanding

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capital stock of any affiliated subsidiary required by

this subsection.

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"(10) TRANSMISSION CAPACITY-- A seperate

subsidiary required by this subsection may not own
any transmission facilities, and may obtain the use
of such facilities from an affiliated divested operating company or affiliate thereof only pursuant to
tariffs of general applicability.

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"(11) PRESERVATION OF SEPERATE SUBSIDIARY REQUIREMENTS FOR GRANDFATHERED FUNCTIONS-- Nothing in this subsection shall be construed to relieve a divested operating company or
any affiliate thereof (or any other local exchange
carrier or affiliate thereof) of any seperate subsidiary requirement imposed before October 1, 1991.

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"(12) PROVISION OF SERVICES AND INFORMATION-- A divested operating company may not provide any services or information to a subsidiary re-

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quired by this subsection unless such services or information are made available to others on the same
terms and conditions.

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"(e) EXCEPTION TO SEPERATE SUBSIDIARY RE23 QUIREMENT-- A divested operating company or affiliate
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1 service provided by such company or affiliate on or before

2 October 1, 1991.
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"(f) PREVENTION OF CROSS-SUBSIDIARIES--

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"(1) COST ALLOCATION SYSTEM REQUIRED-Any divested operating company that provides information services, or which has an affiliate that is engaged in the provision of such services, shall establish and administer, in accordance with the requirements of this subsection and the regulations prescribed thereunder, a cost allocation system that, together with the subsidiary requirements of subsection (d), is intended to prohibit any cost of providing such services from being subsidized by revenue from telephone exchange service or telephone exchange access services.

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"(2) COST ASSIGNMENT AND ALLOCATION REGULATIONS--

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"(A) GENERALLY-- The Commission shall

establish regulations to require the just and
reasonable assignment and allocation of all
costs that are in any way incurred by a divested
operating company or any affiliate thereof in
the provision of any information service.

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"(B) JOINT AND COMMON COSTS-- The

regulations adopted pursuant to this paragraph

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shall include a requirement that any costs of

any investment or other expenditure that cannot be allocated based upon direct or indirect
measures of cost causation shall be allocated to
unregulated services--

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"(i) under a formula that ensures that

the rates for telephone exchange service
are no greater than they would have been
in the absence of such investment (taking
into account any decline in the real costs
of providing such service), or
"(ii) based upon the highest forecast

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unregulated usage of the investment over

the life of the investment,

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whichever method results in the lesser allocation

of such costs to telephone exchange service.

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"(3) INSULATION OF RATEPAYERS--

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"(A) ASSETS-- The Commission shall, by

regulation, ensure that the economic risks associated with the provision of information services
by divested operating companies or affiliates
thereof (including any increases in the divested
operating company's cost of capital that occur
as a result of the provision of such services) are
not borne by customers of telephone exchange

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102nd Congress, 1st Session

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service in the event of a business loss or failure.

Investments or other expenditures assigned to
information services shall not be reassigned to
telephone exchange service or telephone exchange access service.

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"(B) DEBT-- Any divested operating company affiliate--

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"(i) which is providing information

services, and
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"(ii) which is required to be or is

structurally seperate from an affiliate engaged in the provision of telephone exchange service,

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shall not obtain credit under any arrangement

that (I) would permit a creditor, upon default,
to have recourse to the assets of the divested
operating company, or (II) would induce a creditor to rely on the tangible or intangible assets
of the divested operating company in extending
credit.

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"(4) TRANSFERS OF ASSETS BETWEEN AFFILIATED COMPANIES-- The Commission shall prescribe
regulations governing the accounting for the transfer
of assets between a divested operating company and
it's affiliates. Such regulations shall protect the inter-

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102nd Congress, 1st Session

[Page 23 of 35]

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ests of ratepayers of telephone exchange service and

require such transfer to be conducted by means of
a transaction that complies with subsection (d)(3).
Such regulations shall require that--

"(A) any transfer of assets from such an

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affiliate to it's affiliated divested operating company be valued at the lesser of net book cost or
fair market value; and

"(B) any transfer of assets fromm a divested

operating company to it's affiliate be valued at
the greater of net book cost or fair market
value.

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H.R. 3515

"(5) ANNUAL AUTIDING REQUIREMENT-"(A) AUDIT APPLICABILITY AND PURPOSE-- Each divested operating company that
engages in, or has an affiliate that engages in,
or has a financial or management interest in an
orginization or entity that provides information
services, shall provide annually to the Commission, and to the State Commission of each State
within which such company provides telephone
exchange service, a report on the results of an
audit by an independant auditor conducted for
the purpose of determining wether the company has-102nd Congress, 1st Session

[Page 24 of 35]

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"(i) established and administered a

cost allocation system as required by paragraph (1) of this subsection, and

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"(ii) complied with the cost assignment and allocation regulations prescribed
under this subsection.

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"(B) CONDUIT OF AUDIT-- Such audit

shall be conducted, at divested operating company expense, in accordance with audit procedures prescribed by the Commission, by regulation, which shall include approval of auditor selection by the Commission and rotation of auditors or other procedures to ensure the independence of such auditor.
"(C) SUBMISSION OF AUDIT RESULTS;
CERTIFICATION-- The divested operating company shall submit the audit to the Commission,
which shall make the audit report available for
public inspection. Such report shall be certified
by the person conducting the audit and by an
appropriate officer of such affiliate and shall
identify with particularity any qualifications or
limitations on such certification and any other
information relevant to the enforcement of the
requirements of this section.
102nd Congress, 1st Session

[Page 25 of 35]

"(D) ACCESS TO DOCUMENTS-- For pur-

poses of conducting and reviewing such audit--

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"(i) the auditor, the Commission, and

a State commission with jurisdiction over
the divested operating company shall have
access to the accounts and records of the
divested operating company and to those
accounts and records of any of it's affiliates
necessary to verify transactions conducted
with the divested operating company; and

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"(ii) the Commission and a State

commission shall have access to the working papers and supporting materials of any
auditor who performs an audit under this
paragraph.

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"(g) RECOVERY OF USE OF INTANGIBLE ASSETS-The Commission and a State commission shall, within
their respective jurisdictions, require a divested operating
company to assess any affiliate providing information
services a charge for the reasonable vvalue of any intangible
assets used in the provision of information services, and
to credit the amount of such charge to the provision of
telephone exchange service.

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"(h) REMOVAL OF BARRIERS TO COMPETITIVE
25 ENTRY-- A divested operating company or affiliate thereH.R. 3515
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102nd Congress, 1st Session

[Page 26 of 35]

of may not provide electronic publishing services, other

than those it provided on or before October 1, 1991, in
any State in which such company or affiliate provides telephone exchange service, unless and untill all entry barriers
to the competitive provision of telecommunications services
imposed by each State or State commission in which such
company or affiliate provides telephone exchange service
have been removed with respect to such company or affiliate.
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"(i) PROVISION OF GATEWAY SERVICES-- Any divested operating company or affiliate thereof that offers
a gateway service shall make such service available concurrently to all it's subscribers at the same rates, terms,
and conditions.

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"(j) ENFORCEMENT-- A person who is injured by a

violation of any of the requirements of this section may,
in lieu of filing a complaint under section 208, commence
in a civil action for injunctive relief and monetary damages
in any Federal judicial district in which the defendant resides or has an agent. A residential customer of telephone
exchange service shall have standing to commence an action under this section, without regard to the amount in
controversy. In any action brought under this section, the
court may award the costs of litigation (including resonable attorneys fees).

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102nd Congress, 1st Session

[Page 27 of 35]

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"(k) ADDITIONAL AUTHORITY-- In addition to any
2 other authority which the Commission may exercise under
3 this Act, the Commission shall take such actions as are
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"(1) to prevent anticompetitive practicces between a divested operating company and any affiliate of the divested operating company;

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"(2) to protect ratepayers of divested operating

companies from subsidizing the provision of information services by such companies or their affiliates;

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"(3) to prevent any divested operating company

or any affiliate thereof fromm imposing any unjust or
unreasonable rates or charges for any common carier services that are provided in connection with the
provision of information services.

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"(m) DEFINITIONS-- As used in this section--

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"(1) AFFILIATE-- The term 'affiliate' means

any organization or entity that, directly or indirectly,
owns or controls, or is owned or controlled by, or is
under common ownership or control with, a divested
operating company. For purposes of this paragraph,
the terms 'own', 'owned', and 'ownership' means a direct or indirect equity interest (or equivalent thereof) of more than 10 percent of an organization or
entity, or the right to more than 10 percent of the

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102nd Congress, 1st Session

[Page 28 of 35]

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gross revenues of an organization or entity under a

revenue sharing or royalty agreement.

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"(3) DIVESTED OPERATING COMPANY-- The

term 'divested operating company'--

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"(A) means any of the following companies: Bell Telephone Company of Nevada, Illinois Bell Telephone Company, Indiana Bell
Telephone Company, Incorporated, Michigan
Bell Telephone Company, New England Telephone and Telegraph Company, New Jersey
Bell Telephone Company, New York Telephone
Company, US West Communications Company,
South Central Bell Telephone Company, Southern Bell Telephone and Telegraph Company,
Southwestern Bell Telephone Company, the
Bell Telephone Company of Pennsylvania, the
Chesapeake and Potomac Telephone Company,
the Chesapeake and Potomac Telephone Company of Maryland, the Chesapeake and Potomac Telephone Company of Virginia, the
Chesapeake and Potomac Telephone Company

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of West Virginia, the Diamond State Telephone

Company, the Ohio Bell Telephone Company,
the Pacific Telephone and Telegraph Company,
and Wisconsin Telephone Company; and

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102nd Congress, 1st Session

[Page 29 of 35]

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"(B) includes any successor or assign of

any such company, but does not include any affiliate of such company.

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"(3) GATEWAY SERVICE-- The term 'gateway

service' means an information service that, at the request of the provider of an electronic publishing
service or other information service, provides a subscriber with access to such electronic publishing
service or other information service, utilizing the following functions: data transmission, address translation, billing information, protocol conversion, and
introductory information content."

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13 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

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"(a) AMENDMENT-- Section 6 of the Communica15 tions Act of 1934 is amended by adding at the end thereof
16 the following new subsection:
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"(d) SEPERATE SUBSIDIARY REQUIREMENTS-- Such

sums as may be necessary are authorized to be appropriated for the implementation and enforcement of the requirements of section 208(c) and 227 of this Act. Such
funds shall be in addition to any appropriations authorized
under subsection (a)."

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"(b) PROVISION OF INFORMATION SERVICES-- A di24 vested operating company or an affiliate thereof may not
25 provide information services until enactment of the
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102nd Congress, 1st Session

[Page 30 of 35]

1 initial appropriation of funds authorized under section

2 6(d) of the Communications Act of 1934, as added by sec3 tion 202(a) of this Act.
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TITLE III -- MISCELLANEOUS PROVISIONS
5 SEC. 301. DEFINITIONS
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Section 3 of the Communicatins Act of 1934 is
7 amended by adding at the end thereof the following new
8 subsections:
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"(hh) 'Electronic publishing service' means the provi10 sion of any information-11
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"(1)(A) that the provider or publisher has (or

has caused to be) authored, originated, gathered,
collected, produced, compiled, edited, categorized, or
indexed; or

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"(B) in which the provider or publisher has a

direct or indirect financial or proprietary interest;
and

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"(2) which is disseminated to an unaffiliated

person through some electronic means.

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"(ii) 'Information services' means the offering of a

capability for generating, acquiring, storing, transforming,
processing, retrieving, utilizing, or making available information that may be conveyed via telecommunications, and
includes electronic publishing, but does not include any
use of any such capability for the management, control,

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102nd Congress, 1st Session

[Page 31 of 35]

1 or operation of a telecommunications service or the man2 agement of a telecommunications service.

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"(jj) 'Local exchange carrier' means a provider of
4 telephone exchange service that is classified by the Com5 mission as a dominant carrier.
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"(kk) 'Rural exchange carrier' means menas a local ex7 change carrier serving a total of 50,000 or fewer access
8 lines.
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"(ll) 'Telecommunications' means the transmission,

between or among points specified by the customer, of information of the customer's choosing, without change in
the form or content of the information as sent and received, by means of an electromagnetic transmission medium, including all instrumentalities, facilities, apparatus,
and services (including the collection, storage, forwarding,
switching, and delivery of such information) essential to
such transmission.

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"(mm) 'Telecommunications service' means the pub19 lic or private offering for hire of telecommunications facili20 ties."
22 SEC. 302. JURISDICTION
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Section 2 of the Communications Act of 1934 is
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102nd Congress, 1st Session

[Page 32 of 35]

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(1) in subsection (b), by striking out "223 or

224" and inserting "223, 224, 225, and 227"; and

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(2) by adding at the end the thereof the following

new subsection:

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"(c)(1) Notwithstanding subsection (b), a State may

not regulate the rates, terms, or conditions for the offering
of information service, except as provided in this sub-

section and title IV.

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"(2) A State may impose regulations upon a local exchange carrier with respect to the intrastate provision of
information services by such carrier or an affiliate thereof
if--

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"(A) such regulations are necessary and appropriate to seperate the provision of such services from
the provision of telephone exchange services by such
carrier or affiliate;

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"(B) such regulations are intended to protect

the privacy rights of customers of telephone exchange services;

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"(C) such regulations do not affect the rates,

terms, or conditions for the provision of such informations services or the types of such services offered
by such carrier or affiliate; and

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"(D) such regulations are not inconsistent with

the purposes of this Act or impede signifigantly the

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enforcement of this Act or any regulation or order

prescribed by the Commission pursuant to the
Act."

4 SEC. 303. TELEPHONE EXCHANGE SERVICE IN RURAL

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AREAS
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Nothing in the amendments made by this Act shall
7 be construed to limit the authority of the States to take
8 actions, consistant with the findings and purposes of that
9 Act, to ensure thae availability of telephone exchange serv10 ice at resonable rates in areas served by rural exchange
11 carriers (as such term is defined in section 3(kk) of the
12 Communications Act of 1934).
13 SEC. 304. APPLICABILITY OF OTHER PROVISIONS OF COM14
MUNICATIONS ACT
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Nothing in the amendments made by this Act shall

be construed to relieve a divested operating company or
affiliate thereof (as such terms are defined in section
227(m) of the Communications Act of 1934) of any of
the obligations, limitations, or responsibilities imposed by
any other provision of the Communications Act of 1934,
as amended.

22 SEC. 305. APPLICABILITY OF ANTITRUST LAWS

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(a) APPLICABILITY OF THE MODIFICATION OF FINAL
24 JUDGEMENT-- A divested operating company shall remain
25 fully suubject to the Modification of Final Judgement in all

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[Page 34 of 35]

1 respects except as expressly provided in the amendments

2 made by this Act.
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(b) NO ANTITRUST IMMUNITY-- Nothing in the

amendments made by this Act shall be construed to create
any immunity to any civil or criminal action under any
Federal or State antitrust law, or to alter or restrict in
any manner the applicability of any Federal or State antitrust law to the actions of a divested operating company
or affiliate thereof (as such terms are defined in section
10 227(m) of the Communications Act of 1934).
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(c) DEFINITIONS-- For purposes of this section--

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(1) FEDERAL ANTITRUST LAWS-- The term

'Federal antitrust laws' means --

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(A) the acts as cited in section 1 of the Clayton Act (15 USC 12),

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(B) section 5 of the Federal Trade Commission Act (15 USC 45); and

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(C) any law enacted after the datr of enactment of this Act by the Congress which prohibits, or makes available to the United States
or to any person in any court of the United
States any civil remedy with respect to, any rerestraint upon, or monopolization of, interstate or
foreign trade or commerce.

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[END]

102nd Congress, 1st Session

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(2) MODIFICATION OF FINAL JUDGMENT -- The

term 'Modification of final judgment' means the
order entered August 24, 1982, in United States -vsWestern Electric Co., Civil Action No. 82-0192
(United States District Court, District of Columbia)