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Mrs. CUBIN. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3850) 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, as amended.
The Clerk read as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Independent Telecommunications Consumer Enhancement Act of 2000''.
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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) that has 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 RECONSIDERATION OR WAIVER.--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, 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.
``(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 at any time. The Commission shall not require a carrier making an election under this paragraph with respect to any study area or areas to make the same election for any other study area.
``SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS SERVICES BY TWO PERCENT COMPANIES.
``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.
``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.
``(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 capability; and
``(B) the provision of local 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).
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``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 205 and 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 the securities or assets of another two percent carrier or its affiliate, the Commission shall make any determination required by subsection (d) of this section or section 214 not later than 60 days after the date an application with respect to such merger 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.''.
(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 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 subject to the requirements of this section within this 90 day period, the Commission's enforcement of any rule the reconsideration 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 petition for waiver that is submitted to the Commission on or after the date of enactment of this Act. Pending petitions for reconsideration or petitions for waiver shall be subject to the requirements of this section as if they had been filed on the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from Wyoming (Mrs. CUBIN) and the gentleman from Tennessee (Mr. GORDON) each will control 20 minutes.
The Chair recognizes the gentlewoman from Wyoming (Mrs. CUBIN).
GENERAL LEAVE
Mrs. CUBIN. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and to include extraneous material on H.R. 3850, as amended.
The SPEAKER pro tempore. Is there objection to the request of the gentlewoman from Wyoming?
There was no objection.
Mrs. CUBIN. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I introduced H.R. 3850 to lessen the burdens on small and mid-size telephone companies and to allow them to shift more of their resources to deploying advanced telecommunications services to consumers in all areas of the country.
Small and mid-size companies are truly that. While the more than 1,200 small and mid-size companies serve less than 10 percent of the Nation's lines, they cover a much larger percentage of rural markets and are located in or near most major markets in the country.
Some of these telephone companies are mom and pop operations, typically serving rural areas of the country where most other carriers fear to tread, in high cost places where it is much less profitable than in more populated areas.
In 1996, Congress passed historic legislation in the form of the Telecommunications Act.
Section 706 of the act sent a clear message to the American people and to the Federal Communications Commission that the deployment of new telecommunications services in rural areas around the country must happen quickly and without delay.
Unfortunately, the FCC has not made it any easier for small telephone companies to deploy advanced services in rural areas. In some cases, they have actually made it more difficult. The reason is that the FCC, more often than not, uses a one-size-fits-all model in regulating Incumbent Local Exchange Carriers.
This type of model may be fine for the big companies that have the ability to hire legions of attorneys and staff to interpret and ensure compliance with Federal rules. However, I for one would rather see the small and mid-size companies use their resources to deploy new services and make investment in their telecommunications infrastructure.
Two examples of these burdensome FCC requirements are CAM and ARMIS reports. These reports separately cost about $500,000 to compile and would equate to a small telephone company installing a DSLAM or other facilities to provide high-speed Internet services to customers in rural areas.
Just to give my colleagues an example of how burdensome these reports are, the commission's instructions for filing the reports are over 900 pages long. More often than not, the FCC, according to their own testimony, does not refer to these reports and, in some cases, simply ignores the data filed by the mid-size companies.
Let me be very clear, because this is very important. The bill does nothing to restrict the commission's authority to request this or any other data that it sees fit.
I want to be fair. The FCC should be commended for their efforts to bring some of these reporting requirements down to a reasonable level. They have made advances in their area. In fact, during our hearing on this legislation, the FCC told the Committee on Telecommunications, Trade and Consumer Protection that it may be issuing a notice of proposed rulemaking on the reporting requirements for 2 percent companies sometime this fall.
The problem, though, is that the agency's time frame on issuing these proposed rules has changed like the Wyoming winds. It is time that those obligations are met, and this legislation would solidify what the FCC has already promised to do for a long time.
In addition, I want everyone to know that we have bent over backwards to accommodate many of the initial concerns that some Members had with this legislation and have incorporated a majority of their helpful suggestions. And for their suggestions, I am very grateful because I think that the legislation has been improved.
Some of the changes that were adopted during the Committee on Commerce's consideration of the bill took into account several technical provisions that will continue to allow the FCC to do its job but in a way that still ensures that small and mid-size companies are treated differently than the huge companies.
In closing, Madam Speaker, I want to state for the record what this legislation does and what it does not do. Number one, the bill does not re-open the 1996 act. It does not fully deregulate 2 percent carriers. It does not impact regulations dealing with large local carriers. It would, however, be the first freestanding legislation that would modernize regulations of 2 percent carriers. It would accelerate competition in many small to mid-size markets, accelerate the deployment of new advanced telecommunications services in rural areas, and benefit consumers by allowing 2 percent carriers to redirect their resources to network investment and to new services.
Madam Speaker, this legislation is critical for rural areas across the country where these small telephone companies operate. Without this bill, these 2 percent companies will continue to be burdened with this one-size-fits-all regulatory approach that has kept them from providing rural areas with what they need most, and that is a piece of
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Madam Speaker, I want to thank very sincerely the members of the Committee on Commerce, the staff, and my own staff for their help in moving this bill. I ask my colleagues to support this important piece of legislation.
Madam Speaker, I reserve the balance of my time.
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Mr. GORDON. Madam Speaker, I yield myself such time as I may consume.
I rise today in support of legislation of which I am an original cosponsor, H.R. 3850, the Independent Telecommunications Consumer Enhancement Act. It is this type of legislation that represents what can be accomplished by working with Members on both sides of the aisle to find consensus. Working together with my colleague, the gentlewoman from Wyoming (Mrs. CUBIN), we were able to craft this bipartisan bill which I believe is a practical step that we can take this year to address the growing digital divide in our Nation's rural areas.
H.R. 3850 provides targeted regulatory relief to small and midsized independent telephone companies that serve fewer than 2 percent of the Nation's phone lines. Allowing such companies to devote more resources to deploying high speed data services to their customers, these carriers are uniquely positioned to play a large role in the development of advanced services to consumers in rural and small communities. Unfortunately, they are wasting resources complying with one-size-fits-all regulations originally intended for the larger carriers.
H.R. 3850 would eliminate unnecessary reporting requirements, make it easier for small and midsized companies to introduce new advanced services and give them the flexibility to lower prices in response to competition from larger companies. Finally, it would ensure that FCC take into account the burden on smaller businesses when it implements Federal Rules in the future.
Instead of spending money on complying with useless regulations, this bill will allow companies to devote more of their resources to rolling out new advanced services to rural communities.
H.R. 3850 is a common sense step we can take to close the digital divide in rural areas, and I urge my colleagues to support it.
Madam Speaker, I reserve the balance of my time.
Mrs. CUBIN. Madam Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. DEAL).
Mr. DEAL of Georgia. Madam Speaker, I thank the gentlewoman for yielding me this time.
In the 1996 Telecommunications Act, one of the purposes, and the primary purpose, was to deregulate the issue of telecommunications in this country, but we have not deregulated the regulators. I commend the gentlewoman for bringing this bill because it attempts to take one further step in the direction of dealing with the monopolistic system that we have now said the barriers must be removed from.
As long as regulations are in place with a one-size-fits-all approach, these smaller providers, in this case those with 2 percent or less of the providing capacity in this country, are faced with regulations that really make their operations sometimes prohibitive. I commend the gentlewoman for offering this bill to remove these regulatory restraints because many of these small 2 percent or less of the carrier providers are located in States like hers and in rural areas of a State like mine. They are the ones who need to devote their funding and their resources to an infrastructure development, because without that they cannot be competitive with the bigger competitors in the marketplace.
So I support this legislation, and I again thank the gentlewoman for yielding me this time.
Mr. GORDON. Madam Speaker, I yield 2 minutes to the gentleman from Wisconsin (Mr. BARRETT), a cosponsor of this legislation.
Mr. BARRETT of Wisconsin. Madam Speaker, I am pleased to join my colleagues from the Committee on Commerce in support of the Independent Telecommunications Consumer Enhancement Act.
Along with the gentleman from Tennessee (Mr. GORDON) and the gentleman from Mississippi (Mr. PICKERING), I am an original cosponsor of the bill that was introduced by the gentlewoman from Wyoming (Mrs. CUBIN) last year. This bipartisan bill, which was approved in committee on a voice vote, would relax some of the FCC's one-size-fits-all regulations for our Nation's small and midsized local telephone companies; those with less than 2 percent of the Nation's phone lines.
These companies serve communities across the country and are poised to offer broadband and other advanced services to customers who are often outside the scope of the larger companies. This bill will reduce paperwork for the smaller companies, increase their pricing flexibility, and allow them to bundle services on one bill all without reopening the 1996 Telecommunications Act.
In my State of Wisconsin, 81 of 83 companies providing local phone service are classified as 2 percent companies. By freeing these companies from portions of a regulatory system designed with much larger companies in mind, we will be taking an important first step toward bridging the digital divide by allowing for increasing investment in Internet facilities in rural and suburban areas. I urge all Members to support this common sense legislation.
Mrs. CUBIN. Madam Speaker, I yield myself such time as I may consume and just close by saying that I sincerely appreciate the efforts of the Committee on Commerce staff, both the majority and the minority, and the original cosponsors, the gentleman from Tennessee (Mr. GORDON), the gentleman from Wisconsin (Mr. BARRETT), and the gentleman from Mississippi (Mr. PICKERING) for their work on this bill.
Also, I wish to extend my thanks to the gentleman from Massachusetts (Mr. MARKEY) and his staff, who have been very cooperative and have helped us make changes to the legislation that make it better legislation.
Madam Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. GORDON. Madam Speaker, I yield myself such time as I may consume and will just quickly conclude by saying that I concur with the accolades of the gentlewoman from Wyoming (Mrs. CUBIN), and would also again thank her for her initiative in this area.
Mr. MARKEY. Madam Speaker, I want to start off by thanking Mrs. CUBIN, Mr. GORDON, Chairman TAUZIN, Mr. DINGELL, and Chairman BLILEY for being responsive to many of the concerns that have been raised about the underlying bill.
The bill being offered today contains many helpful clarifications and changes embodied in it that were in response to concerns I have raised about the measure. I believe that in its current form it will clarify the ability of the Commission to protect consumers and safeguard competitive gains in many of its provisions.
I would like to focus my remarks on a couple of areas that I suggest need additional refinement and that I hope can be dealt with prior to sending this bill to the President.
The first has to do with the pricing flexibility and pricing deregulation provision of the bill. The substitute will continue to allow pricing deregulation upon the advent of facilities-based competition in a given service area. The facilities-based competitor however is only required to have at least one--I repeat, one sole customer. Hopefully they will have more but the point is that competition may arrive, but may not be robust or effective in constraining prices.
This concern, I suggest, is heightened in those areas where a company may still be subject to rate-of-return regulation rather than price cap regulation. Regardless of what level of competition triggers pricing flexibility we must be cognizant of the serious repercussions that may result in situations where a carrier remains rate of return regulated.
In other words, consumers in those areas that are not subject to effective competition and receive service from a rate-of-return company run the risk of price increases. There's no guarantee that prices may go up but there is certainly a risk.
The FCC testimony with respect to this legislation highlighted this risk. The FCC testimony the Telecommunications Subcommittee was given is as follows:
[A] grant of pricing flexibility to rate-of-return carriers without the implementation
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This pricing deregulation is not going to affect directly any consumer in my congressional district, but I would suggest to the rural members of the House that they may want to take another look at this pricing deregulation and refine it further because I believe--and the FCC clearly believes--that it runs the risk of allowing unnecessary and unjustified price hikes.
The second issue I want to highlight is the merger review section. This section states that any review involving a so-called 2 percent carrier must be approved or denied by the condition within 60 days. I understand that the companies do not want merger reviews to drag on for years, but I would suggest that 60 days is too short and unrealistic.
While I believe the Commission is itself streamlining its process, if the majority is insistent on having a merger review ``shot clock'' I would suggest giving the Commission a greater period of time. In addition, at our merger review hearing Commissioner Powell made what I thought was a reasonable suggestion. He noted that often companies will amend their initial applications, often late in a review and after public comment. He suggested some flexibility for the FCC to extend the review.
I would suggest, therefore, something that would allow a one-time extension if a majority of the Commission voted to extend the review--of if the filing company itself requested an extension. I think this is a more reasonable way to proceed because in my view 60 days is frankly too short a time and does not sufficiently protect the public interest.
I hope we can continue our dialogue about these issues and others and make additional changes as we proceed on this bill in the future. Thank you.
Mr. GORDON. Madam Speaker, I have no further requests for time, and I yield back the balance of my time.
The SPEAKER pro tempore (Mrs. MORELLA). The question is on the motion offered by the gentlewoman from Wyoming (Mrs. CUBIN) that the House suspend the rules and pass the bill, H.R. 3850, as amended.
The question was taken; and (two-thirds having voted in favor thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
END