[House Report 109-470]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-470
======================================================================
COMMUNICATIONS OPPORTUNITY, PROMOTION, AND ENHANCEMENT ACT OF 2006
_______
May 17, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Barton of Texas, from the Committee on Energy and Commerce,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 5252]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 5252) to promote the deployment of broadband
networks and services, having considered the same, report
favorably thereon without amendment and recommend that the bill
do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 6
Committee Consideration.......................................... 9
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 20
Statement of General Performance Goals and Objectives............ 20
New Budget Authority, Entitlement Authority, and Tax Expenditures 20
Committee Cost Estimate.......................................... 20
Congressional Budget Office Estimate............................. 20
Federal Mandates Statement....................................... 20
Advisory Committee Statement..................................... 20
Constitutional Authority Statement............................... 20
Applicability to Legislative Branch.............................. 20
Section-by-Section Analysis of the Legislation................... 20
Changes in Existing Law Made by the Bill, as Reported............ 32
Dissenting Views................................................. 53
Purpose and Summary
The purpose of the Communications Opportunity, Promotion,
and Enhancement Act of 2006 is to promote the deployment of
broadband networks and services. The bill does so by: (1)
creating a streamlined, pro-competitive national process under
which companies can enter the cable service market with new,
advanced networks capable of providing broadband video, voice,
and data services; (2) authorizing the Federal Communications
Commission (FCC or the Commission) to enforce its Broadband
Policy Statement and the principles incorporated therein on a
case-by-case basis so that consumers continue to have access to
lawful content, applications, and services of their choosing
that are available over the public Internet; (3) facilitating
and requiring the provision of 911 and enhanced 911 (E911)
services to consumers by Voice Over Internet Protocol (VOIP)
providers; (4) ensuring that municipalities have the option to
provide telecommunications, information, and cable services to
their communities; (5) ensuring consumers have the option to
purchase broadband services on a stand-alone basis; and (6)
facilitating the development of multi-function, multi-platform
wireless devices capable of offering a range of converging
broadband services.
Background and Need for Legislation
Currently, a cable operator generally must obtain a local
franchise from a local franchising authority (LFA) before it
can offer cable service in a local community. See 47 U.S.C.
Sec. 541(b)(1). There are thousands of such LFAs, and each one
can impose disparate restrictions on a cable operator. When
localities first began franchising cable operators, there was
typically only one cable operator in each local community. In
fact, some communities granted exclusive cable franchises.
Moreover, no companies were yet providing other types of
multichannel video programming distribution (MVPD) services
such as direct broadcast satellite (DBS) service. In that
context, it made sense for municipalities to impose rate and
service regulations on their lone cable operators.
Since then, however, DBS service has developed. Two
companies, Echostar and DirecTV, now offer DBS service
nationally, offering multichannel video service in competition
with each other and with cable companies. According to a recent
FCC report, DBS providers have captured almost 28 percent of
the MVPD market. See In re Annual Assessment of the Status of
Competition in the Market for the Delivery of Video
Programming, MB Docket No. 05-255, Twelfth Annual Report, 21
FCC Rcd 2503, para.72 (2006) (Video Competition Report).
Moreover, Congress now prohibits LFAs from granting exclusive
cable franchises, see 47 U.S.C. Sec. 541(a)(1), which enables
cable ``overbuilders'' to enter each local market in
competition with the incumbent cable providers. In 1996,
Congress also lifted a statutory prohibition against the
provision by local telephone companies of video programming
directly to subscribers within the phone companies' telephone
service areas, and created ``open video system'' (OVS)
provisions to facilitate phone companies' entry into the video
business. See Telecommunications Act of 1996, P.L. 104-104, 110
Stat. 124 (repealing 47 U.S.C. Sec. 533(b) and creating 47
U.S.C. Sec. Sec. 571, 573.)
Against this backdrop, there is less need for local
regulation of cable services, which was predicated in part on
the presence of only a single provider. Unfortunately, there is
evidence that cumbersome local regulations are hindering
competition. Indeed, according to the FCC, overbuilders have
only 1.5 percent of the MVPD market. See Video Competition
Report, at para.14. In a proceeding the FCC launched in
November 2005 to examine the barriers to competitive entry that
the local cable franchising regime creates, non-incumbent cable
operators listed local regulations as one of the reasons they
have been unable to penetrate the market. See In re
Implementation of Section 621(a)(1) of the Cable Communications
Policy Act of 1984 as amended by the Cable Television Consumer
Protection and Competition Act of 1992, MB Docket No. 05-311,
Notice of Proposed Rulemaking, 20 FCC Rcd 18581 (2005). In
particular, they have pointed to ``buildout'' requirements,
which force them to serve entire communities regardless of the
economic or business case for such deployment. According to
these providers, such requirements are a large reason why they
have difficulty attracting investment capital and why they are
reluctant to enter new markets. Similarly, Congress' attempts
to facilitate phone company entry into the video business
through the OVS provisions have been frustrated by local
regulation. Despite Congress' goal of creating a streamlined,
national process for OVS entry, a court challenge brought by
the municipalities resulted in the application of local
franchising requirements to OVS providers. See City of Dallas
v. FCC, 165 F.3d 341 (5th Cir. 1999).
A number of entities, including telephone companies, are
once again seeking to offer competitive cable services. The
requirement to negotiate thousands of agreements with LFAs, and
the obligations the LFAs impose, are delaying such entry,
however, as well as the consumer benefits that such entry would
provide.
Cable service is interstate in nature, as the United States
Supreme Court recognized as far back as 1968 in its
Southwestern Cable decision, 392 U.S. 157 (1968). A significant
amount of video programming carried on cable systems is
produced by national networks and distributed across state
lines to a national audience. The same facilities that carry
cable services are also carrying increasing amounts of
Internet-protocol-based broadband video, voice, and data
services that cross state, as well as national, borders. A
patchwork of disparate municipal regulations can hinder the
deployment of advanced broadband networks that will bring
increasingly advanced and competitive services to consumers.
Such a patchwork can delay the rollout of cable services as
cable operators have to maneuver through thousands of local
negotiations and sets of rules.
This bill seeks to address this concern and strike the
right balance between national standards and local oversight.
Thus, the bill creates an alternative, national cable franchise
process that companies may opt into in lieu of the local
franchising process.
Recognizing the role of localities, however, the bill: (1)
preserves municipalities' existing authority to collect a
franchise fee of up to 5 percent of gross revenues from cable
service; (2) preserves the municipalities' authority to manage
their local rights-of-way, so long as such management is
reasonable, competitively neutral, and nondiscriminatory; (3)
continues to require carriage of public, educational, and
governmental (PEG) channels, and allows municipalities to
require holders of a national franchise to increase the number
of PEG channels over time; (4) preserves institutional networks
(iNets) used for governmental and other public safety purposes;
(5) allows municipalities to collect, in addition to the 5
percent franchise fee, another one percent of gross revenues
from cable services to support PEG channels and institutional
networks; (6) requires the FCC to establish national consumer
protection and customer service standards that the
municipalities may enforce; and (7) creates a strong
antidiscrimination provision that prohibits holders of a
national franchise from discriminating in the provision of
cable service to a group of consumers based on the income of
that group.
By creating an alternative, streamlined national franchise
process with a market-based approach, while recognizing the
appropriate role of localities, the bill will reduce barriers
to video entry by both large and small providers. The result
will be increased competition, lower prices, enhanced service
quality, and the deployment of new and innovative broadband
video, voice, and data services over advanced, facilities-based
networks. The deployment of new, advanced networks will
stimulate the economy and increase employment in the United
States, and the increased competition will provide consumers
with more disposable income.
Title II of the COPE Act provides the FCC with explicit
authority to enforce its Broadband Policy Statement, adopted by
the FCC on August 5, 2005. See In re Appropriate Framework for
Broadband Access to the Internet over Wireline Facilities, and
other Matters, CC Docket No. 02-33, Policy Statement, 20 FCC
Rcd 14986 (2005) (Broadband Policy Statement or policy
statement). The Broadband Policy Statement was adopted on the
same day that the FCC conformed its classification of broadband
Internet access services offered by wireline facilities-based
providers consistent with the U.S. Supreme Court's decision in
the Brand X case. See National Cable & Telecommunications Ass'n
v. Brand X Internet Services, 125 S. Ct. 2688 (2005) (Brand X).
In Brand X, the Supreme Court held that the FCC's conclusion
that cable-modem service is an information service under the
Communications Act rather than a telecommunications service is
a lawful construction of the Act.
By classifying both high-speed cable-modem services and
broadband Internet access services offered by wireline
facilities-based providers as information services, the
Commission clarified that such services are beyond the scope of
the common carriage regulations of Title II of the
Communications Act, which requires carriers to have charges,
practices, classifications, and regulations that are ``just and
reasonable.'' 47 U.S.C. Sec. 201(b). Common carriers are also
prohibited from making ``any unjust or unreasonable
discrimination in charges, practices, classifications,
regulations, facilities, or service'' or from providing ``any
undue or unreasonable preference or advantage or any particular
person.'' 47 U.S.C. Sec. 202(a).
In determining the appropriate regulatory framework for
cable modem service, the Commission determined that:
we believe ``broadband services should exist in a
minimal regulatory environment that promotes investment
and innovation in a competitive market.'' In this
regard, we seek to remove regulatory uncertainty that
in itself may discourage investment and innovation. And
we consider how best to limit unnecessary and unduly
burdensome regulatory costs.
In re Inquiry Concerning High-Speed Access to the Internet Over
Cable and Other Facilities, GN Docket No. 00-185, Declaratory
Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd 4798,
para.5 (2002). It is critical that broadband services ``exist
in a minimal regulatory environment that promotes investment
and innovation in a competitive market.'' Id It is also
critical that broadband providers not be subject to common
carriage and non-discrimination regulations such as those
incorporated in Title II of the Communications Act.
Concepts such as ``just and reasonable'' charges and
practices and non-discriminatory treatment may be necessary
where competition does not exist. But where competition does
exist, such as the broadband service market, principles such as
common carriage and non-discrimination are not appropriate
because the competitive market will ensure that providers of
such service will act in the best interest of consumers. In
addition, prescriptive, anticipatory FCC rules imposing common
carriage and non-discrimination requirements on a nascent
market such as Internet access would chill investment and
innovation in this sector and deprive consumers of the benefits
of innovation in the network management necessary to transmit
voice, video, and data over broadband networks.
The broadband market is competitive, and competition and
consumer choice are only going to increase as long as new
technologies can develop in a minimal regulatory environment
that does not involve common carriage or non-discrimination
requirements. Both the FCC and the courts have found the
broadband market to be competitive. See United States Telecom
Ass'n v. FCC, 359 F.3d 554, 585 (D.C. Cir. 2004) (upholding
Commission's decision not to require the unbundling of hybrid
loops, fiber-to-the home facilities, and line sharing because
of ``the persistence of substantial competition in
broadband''); United States Telecom Ass'n v. FCC, 290 F.3d 415,
428 (D.C. Cir. 2002) (noting Commission findings of ``robust
competition * * * in the broadband market''); See In re Annual
Assessment of the Status of Competition in the Market for the
Delivery of Video Programming, MB Docket No. 05-255, Twelfth
Annual Report, 21 FCC Rcd 2503, para.237 (2006) (noting that
``[t]he advent of IPTV is a response by both incumbent
operators and new entrants to the growth of competition in the
provision of broadband services''). Today, cable operators and
telephone companies compete head-to-head in many markets for
broadband subscribers. As of June of 2005, 76% of households
served by incumbent telephone companies had broadband
connectivity available. 91% of households served by cable-
television services had broadband connectivity.
According to the FCC, 74.6% of zip codes had three or more
broadband providers. 88.7% of zip codes had two or more
broadband providers. While the FCC's zip code-based data may
not be an exact demonstration that every household within that
zip code has broadband connectivity, such data is
representative of the fact that broadband service, as well as
broadband competition, is increasingly available throughout the
United States. Even where there are only two providers,
broadband prices have been decreasing and broadband speeds have
been increasing. Competition in the broadband market is
confirmed by the fact that providers are increasing capacity
and lowering prices. For example, AT&T recently announced that
it would offer broadband service at a download speed of up to 6
megabits per second for as low as $27.99 per month during the
first year and $39.99 after that. Such a service is 100 times
faster than the 56 kilobit-per-second speed of dial-up Internet
service, which retailed until recently at approximately $25 per
month.
In addition, dozens of municipalities are providing,
building, or considering contracts to provide broadband
services through wireless and fiber networks. Cities that are
constructing or evaluating contracts to construct municipal
broadband networks include Los Angeles, Chicago, Houston,
Philadelphia, San Francisco, and Seattle. Suffolk County, New
York is planning to provide free wireless access to the
Internet to its 1.5 million residents. The COPE Act will speed
the development of municipal broadband networks by prohibiting
state laws that ban such networks. This will increase the
competitive pressures on existing broadband providers to manage
their networks in a manner that continues consumers' unfettered
access to lawful content, applications, and services available
over the public Internet.
Commercial mobile service providers are also ramping up the
speeds of their broadband networks, especially Sprint/Nextel,
which plans to offer speeds of 2-3 megabits per second for its
wireless broadband service by 2008. In addition, the auction of
90 MHz of spectrum this year as a result of the Commercial
Spectrum Enhancement Act of 2004 and of 60 MHz of spectrum from
the 700 MHz television band in 2008 will greatly increase the
number of wireless broadband providers. The 700 MHz band is
ideally suited for broadband wireless applications.
Faced with this competitive market, the Committee does not
expect broadband providers to manage their networks in a manner
detrimental to consumers. There is no reason to believe that
consumers will be deprived of unfettered access to lawful
Internet content, applications, and service, or be unable to
attach devices of their choosing to their Internet connections
in order to access such content, applications and services. The
Committee is only aware of one instance in which a broadband
provider, Madison River Communications, has acted in a manner
harmful to consumers by blocking the communications ports of
Vonage, a provider of VOIP services.
The Commission and Madison River entered into a consent
decree that terminated the blocking of Vonage's ports, which
was premised upon the FCC's authority under section 201(b). See
In re Madison River Communications, LLC, File No. EB-05-IH-
0110, Order, 20 FCC Rcd 4295 (Chief, Enf. Bur. 2005). While the
FCC, in the wake of the Brand X case, classified wireline
Internet access services as information services not subject to
Section 201(b) of the Communications Act, Title II of the COPE
Act will now give the FCC explicit authority to ensure that the
FCC can remedy situations in which conduct such as port
blocking occurs.
Hearings
During the first session of the 109th Congress, the
Subcommittee on Telecommunications and the Internet held four
oversight hearings on how Internet protocol-enabled services
are changing the face of communications.
The Subcommittee held the first of those oversight hearings
on February 9, 2005. The hearing was entitled, ``How Internet
Protocol-Enabled Services are Changing the Face of
Communications: A View from Technology Companies.'' The
Subcommittee received testimony from: Mr. Ed J. Zander,
Chairman and Chief Executive Officer, Motorola, Inc.; Mr. Andy
Mattes, President and Chief Executive Officer, Siemens
Communications, Inc.; Dr. Michael Quigley, Chief Executive
Officer, Alcatel, USA; Dr. Irwin Mark Jacobs, Chairman and
Chief Executive Officer, Qualcomm, Inc.; and Ms. Patricia
Russo, Chairman and Chief Executive Officer, Lucent, Inc.
The Subcommittee held the second hearing on March 16, 2005.
The hearing was entitled, ``How Internet Protocol-Enabled
Services are Changing the Face of Communications: A Look at the
Voice Marketplace.'' The Subcommittee received testimony from:
Mr. Paul Erickson, Chairman, SunRocket; Mr. Carl Grivner, Chief
Executive Officer, XO Communications; Mr. John Melcher,
Executive Director, Greater Harris County 911 Emergency
Network; Ms. Karen Puckett, President and Chief Operating
Officer, CenturyTel, Inc.; Mr. Thomas M. Rutledge, Chief
Operating Officer, Cablevision Systems Corporation; and Mr.
Mark Shlanta, Chief Executive Officer, South Dakota Network
Communications.
The Subcommittee held the third hearing on April 20, 2005.
The hearing was entitled, ``How Internet Protocol-Enabled
Services are Changing the Face of Communications: A Look at
Video and Data Services.'' The Subcommittee received testimony
from: Ms. Lea Ann Champion, Senior Executive Vice President, IP
Operations and Services, SBC Services, Inc.; Mr. David L.
Cohen, Executive Vice President, Comcast Corporation; Mr. Greg
Schmidt, Vice President of New Development and General Counsel,
LIN Television Corporation; Mr. Paul Mitchell, Senior Director
and General Manager, Microsoft TV Division, Microsoft
Corporation; Mr. Robert E. Ingalls, Jr., President, Retail
Markets Group, Verizon Communications; Mr. James M. Gleason,
President, New Wave Communications; and Mr. Jack Perry,
President and Chief Executive Officer, Decisionmark Corp.
The Subcommittee held the fourth hearing on April 27, 2005.
The hearing was entitled, ``How Internet Protocol-Enabled
Services Are Changing the Face of Communications: A View from
Government Officials.'' The Subcommittee received testimony
from: The Honorable Lewis K. Billings, Mayor, Provo City, Utah;
The Honorable Kenneth Fellman, Mayor, Arvada, Colorado, on
behalf of the National Association of Telecommunications
Officers and Advisors; Ms. Diane Munns, Commissioner, Iowa
State Utilities Board, on behalf of the National Association of
Regulatory Utility Commissioners; Mr. Charles M. Davidson,
Commissioner, Florida Public Service Commission; Mr. John
Perkins, Iowa Consumer Advocate, President, National
Association of State Utility Consumer Advocates; Mr. David C.
Quam, Director, Federal Relations, National Governors
Association; and Ms. Karen P. Strauss, KPS Consulting, on
behalf of the Alliance for Public Technology.
During the first session, the Subcommittee also held one
legislative hearing on November 9, 2005, on a staff discussion
draft of legislation to create a statutory framework for
Internet protocol and broadband services. The Subcommittee
received testimony from: Mr. James D. Ellis, Senior Executive
Vice President and General Counsel, SBC Communications; Mr. Tim
Krause, Chief Marketing Officer and Senior Vice President
Government Relations, Alcatel North America; Mr. Paul Mitchell,
Senior Director and General Manager, Microsoft TV Division,
Microsoft Corporation; The Honorable Marilyn Praisner, Member,
Montgomery County Council, Montgomery County, Maryland, on
behalf of the National Association of Telecommunications
Officers and Advisors; Mr. Christopher Putala, Executive Vice
President, Public Policy, EarthLink, Inc.; Mr. Wayne M.
Rehberger, Chief Operating Officer, XO Communications, Inc.;
Mr. Edward A. Salas, Staff Vice President, Network Planning,
Verizon Wireless; Mr. Michael S. Willner, President and Chief
Executive Officer, Insight Communications; Mr. K. James Yager,
Chief Executive Officer, Barrington Broadcasting Company, LLC,
on behalf of the National Association of Broadcasters; Dr.
Frank G. Bowe, Ph.D., LL.D., Professor, School of Education and
Allied Human Services, Hofstra University; Mr. Tony Clark,
President, North Dakota Public Service Commission, on behalf of
the National Association of Regulatory Utility Commissioners;
Mr. Harry ``Hap'' Haasch, Executive Director, Community Access
Center, on behalf of the Alliance for Community Media; Mr. Gene
Kimmelman, Senior Director of Public Policy, Consumers Union;
Mr. Delbert Wilson, General Manager, Industry Telephone
Company; and Mr. Joel Wiginton, Vice President and Senior
Counsel, Sony Electronics.
During the second session of the 109th Congress, the
Subcommittee held one legislative hearing on March 30, 2006, on
a Committee Print entitled, ``The Communications Opportunity,
Promotion, and Enhancement Act of 2006.'' The Subcommittee
received testimony from: The Honorable Kenneth Fellman, Esq.,
Mayor, Arvada, Colorado, on behalf of the National Association
of Telecommunications Officers and Advisors, the National
League of Cities, the National Conference of Mayors, and the
National Association of Counties; Mr. Walter McCormick,
President and Chief Executive Officer, United States Telecom
Association; Mr. Kyle E. McSlarrow, President and Chief
Executive Officer, National Cable & Telecommunications
Association; Mr. Timothy J. Regan, Senior Vice President,
Global Government Affairs, Corning Incorporated; Mr. Paul
Misener, Vice President, Global Public Policy, Amazon.com; Mr.
David J. Keefe, Chief Executive Officer, Atlantic Broadband, on
behalf of the American Cable Association; Mr. Jerry Fritz,
Senior Vice President and General Counsel, Allbritton
Communications, on behalf of the National Association of
Broadcasters; Mr. Jeffrey Citron, Chairman and Chief
Strategist, Vonage; Ms. Julia Johnson, Chairman, Video Access
Alliance; Mr. Anthony Thomas Riddle, Executive Director,
Alliance for Community Media; Ms. Lillian Rodriguez-Lopez,
President, Hispanic Federation; Ms. Jeannine Kenney, Senior
Policy Analyst, Consumers Union; Mr. Randolph J. May, Senior
Fellow and Director of Communications Policy Studies, the
Progress & Freedom Foundation; and Mr. James Makawa, Co-Founder
and Chief Executive Officer, The Africa Channel.
Committee Consideration
On Tuesday, April 4, 2006, and Wednesday, April 5, 2006,
the Subcommittee on Telecommunications and the Internet met in
open markup session and approved the Committee Print entitled
the Communications Opportunity, Promotion, and Enhancement Act
of 2006 for Full Committee consideration, amended, by a record
vote of 27 yeas and 4 nays, a quorum being present.
On Tuesday, April 25, 2006, and Wednesday, April 26, 2006,
the Full Committee met in open markup session and ordered a
Committee Print entitled the Communications Opportunity,
Promotion, and Enhancement Act of 2006 favorably reported to
the House, amended, by a record vote of 42 yeas and 12 nays, a
quorum being present. A request by Mr. Barton to allow a report
to be filed on a bill to be introduced by Mr. Barton, and that
the actions of the Committee be deemed as actions on that bill,
was agreed to by unanimous consent.
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. The
following are the recorded votes taken on amendments offered to
the measure, including the names of those Members voting for
and against. A motion by Mr. Barton to order the Committee
Print reported to the House, amended, was agreed to by a record
vote of 42 yeas and 12 nays.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held legislative and
oversight hearings and made findings that are reflected in this
report.
Statement of General Performance Goals and Objectives
The goal of H.R. 5252 is to promote the deployment of
broadband networks and services.
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.
5252, the Communications Opportunity, Promotion, and
Enhancement Act of 2006, would result in no new or increased
budget authority, entitlement authority, or tax expenditures or
revenues.
Committee Cost Estimate, Congressional Budget Office Estimate, and
Federal Mandates Statement
The Congressional Budget Office estimate required pursuant
to clause 3(c)(3) of rule XIII of the Rules of the House of
Representatives section 402 of the Congressional Budget Act of
1974, and the estimate of Federal mandates required pursuant to
section 423 of the Unfunded Mandates Reform Act were requested
from the Congressional Budget Office, but were not prepared as
of the date of filing of this report. The Congressional Budget
Office estimate and accompanying materials will be contained in
a supplemental report.
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; table of contents
Section 1 establishes the short title of the bill as the
``Communications Opportunity, Promotion, and Enhancement Act of
2006.''
Section 101. National cable franchising
Section 101(a) of the bill amends the Communications Act of
1934 (the Communications Act) by adding new Section 630, which
creates a national cable franchising regime.
``Sec. 630. National Cable Franchising.''
New Section 630(a) allows an eligible person or group to
elect a national franchise in lieu of a local franchise,
statewide franchise, or OVS authorization to provide cable
service. The bill leaves intact the option for the person or
group to operate under such local and statewide franchises or
an OVS certification. A person or group with such authority to
provide video services may continue to do so, or may elect a
national franchise to provide cable service in a franchise area
consistent with the provision of new Section 630. If such a
person or group elects a national franchise, a local
franchising authority may not require the person or group to
obtain any other authority in order to provide cable service in
that franchise area.
New Section 630(a)(1) allows a person or group to elect a
national franchise in lieu of a local franchise, statewide
franchise, or OVS certification if it meets the criteria
spelled out in new Section 630(d). New Section 630(a)(2)
requires a person or group seeking a national franchise to file
a certification with the FCC identifying the local franchise
areas it plans to serve, and to file subsequent certifications
as it adds additional franchise areas. New Section 630(a)(3)
provides that the certifications must contain basic contact
information about the person or group and its local agent in
each franchise area, a declaration that it is eligible for a
national franchise, an identification of the franchise areas it
is seeking to serve, a declaration that it will send a copy of
the certifications to each local franchising authority where it
plans to provide cable service, a declaration that it will
comply with local rights-of-way requirements in accordance with
new Section 630(f), and a declaration that it will abide by
national consumer protection and customer service standards
that may be enforced by the FCC and the local franchising
authority in accordance with new Section 630(g).
New Section (a)(3)(F) requires the person or group filing
the certification to identify the franchise areas in which it
intends to offer cable service. This will be particularly
important for application of the franchise eligibility
provisions of new Section 630(d) and the antidiscrimination
provisions of new Section 630(h). According to the FCC, 99
percent of U.S. television households are currently passed by
the facilities of an existing cable provider. Video Competition
Report, at para.30. This means that 99 percent of TV households
are already in an existing franchise area as defined by a local
franchising authority. To serve one of these households, a
national franchisee must identify as one if its franchise areas
in its certification one of the existing locally-defined
franchise areas that contains the household. If the household
falls within more than one existing franchise area, such as
where the franchise areas of an incumbent cable operator and an
overbuilder overlap, the national franchisee may select any of
the existing franchise areas that contains the household.
In the rare case in which a household does not fall within
an existing franchise area, to serve that household, the
national franchisee must have identified as one of its
franchise areas a contiguous geographic area that covers the
entirety of a city, county, township, or other unit of general
local government where that household is situated. The phrase
``unit of general local government'' is defined in new Section
630(p). The Committee intends that the national franchisee may
select as large or as small a unit of general local government
as it wishes so long as it covers the entire geographic area
within that unit of general local government, and so long as
that geographic area is within the jurisdiction of only one
local franchising authority. If part of the contiguous
geographic area falls within an existing franchise area,
however, the national franchisee must exclude from its
designation of the franchise area the area already within the
existing franchise area. Also, if the contiguous geographic
area is within the jurisdiction of different franchising
authorities, the national franchise holder must specify each
area as a separate franchise area.
The prospective franchise holder may identify as many
franchise areas as it wishes in a single certification, and may
add additional franchise areas in subsequent certifications.
New Section 630(a)(4) requires the person or group to send
a copy of its certification to each local franchising authority
where it plans to provide cable service under a national
franchise. New Section 630(a)(4) also preserves the option of a
person or group to negotiate a local or statewide franchise, or
operate under the OVS provisions, consistent with current law.
New Section 630(a)(5) requires holders of a national
franchise to keep their certifications up-to-date and accurate.
New Section 630(a)(6) requires the FCC to keep copies of all
current certifications publicly available in electronic form,
such as on its web site.
New Section 630(b) governs the effectiveness and duration
of a national franchise. Under new Section 630(b)(1), national
franchises take effect 30 days after filing of a completed
certification. Under new Section 630(b)(2), franchises last for
10 years, and renew automatically. A franchise authority may
require in the last year of the 10-year franchise that the
cable operator participate in a public hearing on the cable
operator's performance in the franchise area.
New Sections 630(b)(2)(D)-(F) provide the grounds and
process by which the Commission may revoke and reinstate a
national franchise in a local franchise area. In particular,
new Section 630(b)(2)(D) allows the FCC to revoke a national
franchise for a franchise area for: (1) willful or repeated
violation of Federal or state law or FCC regulations related to
the provision of cable service in the local franchise area; (2)
knowingly making false statements or material omissions in any
FCC filing related to the provision of cable service in the
local franchise area; (3) willful or repeated violation of the
rights-of-way management laws or regulations of any franchising
authority related to the provision of cable service in the
franchise area; or (4) willful or repeated violation in the
local franchise area of the antidiscrimination provisions of
new Section 630(h).
Under new Section 630(b)(2)(G), a franchise authority may
file a petition with the FCC to terminate the national
franchise of a cable operator that was already providing cable
service but obtained a national franchise under new Section
630(d)(2) if such national franchisee becomes the only cable
operator in the franchise area.
New Section 630(c) specifies the obligations of a national
franchise. Under new Section 630(c)(1), a local franchising
authority may assess upon a national franchisee a franchise fee
of up to 5 percent of gross revenues from cable service, the
same amount it may assess under current law governing local
franchises. The franchise fee is to be collected in the same
fashion, and paid directly to the local franchising authority,
not to the Commission. New Section 630(c)(2) requires a
national franchisee to make a payment of one percent of gross
revenues from cable service for support of PEG channels and
iNets, as well as abide by other PEG and iNet obligations in
accordance with new Section 630(e). New Section 630(c)(3)
requires the national franchisee to comply with local rights-
of-way requirements pursuant to new Section 630(f). New Section
630(c)(4) requires a national franchisee to comply with
national consumer protection and customer service requirements
promulgated under existing section 632(b) of the Communications
Act and new Section 630(g). New Section 630(c)(5) requires the
national franchisee to comply with the child pornography
provisions of new Section 630(i).
New Section 630(d) describes who is eligible for a national
franchise. Under new Section 630(d)(1), a person or group,
including an OVS operator, not currently providing cable
service in a franchise area may obtain a national franchise to
provide cable service in that franchise area. Under new Section
630(d)(2), a person or group, including an OVS operator,
already providing cable service in a franchise area on the date
of enactment may obtain a national franchise if another person
or group is providing cable service in the franchise area under
a local franchise, a statewide franchise, the OVS provisions of
section 653, or new Section 630.
New Section 630(e) describes requirements regarding the
provision of public, educational, and governmental (PEG)
channels, as well as institutional networks (iNets) used for
local governmental purposes.
New Section 630(f) preserves the authority of a local
franchising authority to impose reasonable, competitively
neutral, and nondiscriminatory fees and regulations for the
management of its public rights-of-way with respect to the
provision of cable services by a nationally franchised cable
operator.
New Section 630(g) contains the consumer protection and
customer service provisions that apply to a holder of a
national franchise.
New Section 630(h) contains the antidiscrimination
provisions that apply to a national franchisee. In particular,
new Section 630(h)(1) prohibits a cable operator with a
national franchise that provides cable service in a franchise
area, as such term is defined and identified in new Section
630(a)(3)(F), from denying access to its cable service to any
group of potential residential cable service subscribers in
such franchise area because of the income of that group. A
national franchisee is in violation of the provision if it is
offering service to parts of a franchise area identified in its
certification, but not to another part of that franchise area
because of the income of a group in that other area.
Under new Section 630(h)(2)(A), an LFA may file an
antidiscrimination complaint with the FCC if the LFA has
reasonable cause to believe that a holder of a national
franchise is violating the antidiscrimination provision. Under
new Section 630(h)(2)(B), the LFA must first provide the
national franchisee with notice of the allegations and at least
30 days to respond so that the LFA and the national franchisee
can try to resolve the dispute. During that period, the LFA may
require the national franchisee to provide a written response
explaining why the national franchisee does not believe it has
violated the antidiscrimination provisions. Under new Section
630(h)(2)(C), the national franchisee must submit a report to
the FCC twice a year describing where the national franchisee
is offering cable service within its franchise areas and its
progress in extending cable service to other parts of those
franchise areas.
New Section 630(h)(2)(D) requires the FCC to notify a
national franchisee once a complaint has been filed. Under new
Section 630(h)(2)(E), the FCC may require a national franchisee
to disclose to the FCC information and documents that the FCC
deems necessary in its investigation to determine whether there
has been a violation. The FCC must maintain the confidentiality
of such information or documents. Under new Section
630(h)(2)(F), the FCC must resolve a complaint under this
subsection not more than 60 days after receipt.
Under new Section 630(h)(2)(G), the FCC must ensure that
the national franchisee extends service to the relevant group
within a reasonable period of time if the FCC determines that a
violation of new subsection (h) has occurred. In addition, new
Section 630(h)(2)(H) provides that the FCC shall enforce new
subsection (h) under Titles IV and V of the Communications Act,
and may assess a forfeiture penalty of up to $500,000 per day
of the violation. Any such forfeiture is to be paid to the
relevant LFA. Moreover, under new Section 630(b)(2)(D)(iv), the
FCC may revoke a national franchisee's authority to provide
cable service in a franchise area for willful or repeated
violation of new subsection (h).
New Section 630(i) requires the FCC to promulgate certain
regulations pertaining to the distribution of child
pornography.
New Section 630(j) clarifies that the leased access
provisions in current law regarding the carriage of qualified
minority and educational programming shall apply to holders of
a national cable franchise.
New Section 630(k) clarifies that existing restrictions on
cable operator provision of two other multichannel video
programming distribution (MVPD) services--multichannel
multipoint distribution service (MMDS) and satellite master
antenna television (SMATV) service--do not apply to holders of
national franchises. New Section 630(k) also clarifies that
certain existing provisions of the Communications Act allowing
local franchising authorities to regulate the provision of
cable services do not apply to holders of national franchises.
The Committee intends that all the other existing provisions of
the Communications Act that apply to cable operators shall
apply in a comparable manner to holders of national franchises
in accordance with new Section 630.
New Section 630(l) clarifies that nothing in the bill
prohibits a state or local government from accessing the
emergency alert system of a cable operator with a national
franchise.
New Section 630(m) lays out auditing provisions intended to
ensure that holders of a national franchise comply with their
obligations to pay the franchise fees required by new Section
630(c)(1) of the bill, as well as the PEG and iNet support
payments required by new Section 630(e)(2).
New Section 630(n) prohibits a vertically integrated cable
programming vendor from denying a holder of a national
franchise access to programming solely because the national
franchisee uses a shared head-end. Some providers of cable
service, particularly rural phone companies, share headends to
reduce their costs of providing service. New Section 630(n) is
designed to prevent a vertically-integrated cable programmer
from using the fact that a holder of a national franchise
shares a headend as a pretext for denying program access to
that national franchise holder in order to restrict competition
with the vertically-integrated programmer's cable distribution
business. The provision is not intended to prevent the
programmer from imposing in a carriage agreement requirements
designed to guard against unauthorized receipt or use of
programming, to enforce program blackout obligations, to
deliver regional feeds, or to require joint and several
liability.
New Section 630(o) defines ``gross revenues'' for purposes
of calculating the franchise fee under new Section 630(c)(1)
and the PEG and iNet support payment under new Section
630(e)(2).
New Section 630(p) creates additional definitions
applicable to new Section 630. New Section 630(p)(1) defines
``cable operator'' for purposes of new Section 630 to make
clear that all holders of a national franchise under this
section shall be treated as cable operators for the purposes of
the rights and obligations of new Section 630. New Section
630(p)(2) defines ``franchise fee.'' The intent of the
Committee in the definition of the term ``franchise fee'' under
section 630(p)(2) is to preserve the rights of states to engage
in all manner of taxation and the Committee does not intend to
interfere with a state sovereign's ability to levy taxes of any
kind. New Section 630(p)(3) defines ``Internet access
service.'' New Section 630(p)(4) defines ``unit of general
local government.''
Section 101(b) of the bill requires the FCC to implement
the provisions of the bill within 120 days after enactment.
Section 102. Definitions
Section 102 of the bill amends certain cable definitions in
the Communications Act. The definitions in current law are
already technology neutral, and the mere fact that programming
is delivered using Internet-Protocol technology does not mean
that the programming is not ``video programming'' or ``other
programming,'' that it is not provided over a ``cable system,''
that its provision is not the provision of ``cable service,''
or that its provider is not a ``cable operator,'' if the
definitions of those terms are otherwise met. Nonetheless, the
bill adds additional clarifying language in an effort to
minimize litigation and to address arguments that the mere use
of Internet-Protocol technology for the transmission of
programming somehow removes the programming, the service, the
facilities, or the provider from the ambit of the definitions.
The Committee emphasizes that none of the changes to the cable
definitions made by Section 102 are intended to affect the
application of any of the definitions, including Section
602(7)(B) of the Communications Act (47 U.S.C. Sec. 522(7)(B)),
which exempts from the ``cable system'' definition facilities
that serve subscribers without using public rights-of-way.
Section 103. Monitoring and reporting
Section 103 of the bill requires the FCC to issue an annual
report regarding the deployment of cable services.
Section 201. Enforcement of Broadband Policy Statement
Section 201 creates a new Section 715 of the Communications
Act which provides the Commission with the authority to enforce
the Commission's Broadband Policy Statement and the principles
incorporated therein.
``Sec. 715. Enforcement of Broadband Policy Statement.''
New Section 715 provides the Commission with the authority
to enforce the Commission's Broadband Policy Statement and the
principles incorporated therein. In the policy statement, the
Commission provided ``guidance and insight into its approach to
the Internet and broadband that is consistent with'' Congress'
directives to the Commission ``to preserve the vibrant and
competitive free market that presently exists for the
Internet,'' ``to promote the continued development of the
Internet,'' and to ``encourage[e] the deployment on a
reasonable and timely basis of advanced telecommunications
capability to all Americans.'' Broadband Policy Statement, at
para.3 (quoting 47 U.S.C. Sec. Sec. 230(b)(2), 230(b)(1), 157
nt (incorporating section 706 of the Telecommunications Act of
1996, Pub. Law No. 104-104, 110 Stat. 56 (1996))).
In the policy statement, the FCC adopted the following
principles:
To encourage broadband deployment and preserve and
promote the open and interconnected nature of the public
Internet, consumers are entitled to access the lawful Internet
content of their choice.
To encourage broadband deployment and preserve and
promote the open and interconnected nature of the public
Internet, consumers are entitled to run applications and use
services of their choice, subject to the needs of law
enforcement.
To encourage broadband deployment and preserve and
promote the open and interconnected nature of the public
Internet, consumers are entitled to connect their choice of
legal devices that do not harm the network.
To encourage broadband deployment and preserve and
promote the open and interconnected nature of the public
Internet, consumers are entitled to competition among network
providers, application and service providers, and content
providers.
The FCC adopted these principles ``subject to reasonable
network management.'' Broadband Policy Statement, at n.15.
While the Commission did not adopt rules in the policy
statement, SBC agreed to abide by the principles for two years
as a condition of its acquisition of AT&T, and Verizon agreed
to abide by the principles for two years as a condition of its
acquisition of MCI. Thus, the principles apply today to the
network management of two of the largest broadband providers in
the United States.
New Section 715(b)(1) provides that the Commission's
Broadband Policy Statement shall be enforced by the Commission
under Titles IV and V of the Communications Act. New Section
715(b)(2) gives the FCC the ability to impose a forfeiture
penalty of up to $500,000 per violation of the Broadband Policy
Statement.
New Section 715(b)(3) provides that the Commission has
exclusive authority to adjudicate any complaint alleging a
violation of the policy statement and the principles
incorporated therein. Thus, a complaint alleging a violation of
the policy statement could not be adjudicated by a State Public
Utility Commission. The language set forth in section 715(b)(3)
in no way adversely affects the ability of any Federal court to
exercise its jurisdiction. It also does not affect the
applicability or enforceability of the antitrust laws. The FCC
is required to complete an adjudicatory proceeding under this
section no later than 90 days after receipt of a complaint. If
the FCC determines that a violation of the policy statement and
the principles incorporated therein has occurred, the
Commission has the authority to require the entity subject to
the complaint to comply with the Broadband Policy Statement and
the principles incorporated therein.
New Section 715(b)(4) provides that, while the Commission
has the authority to adopt procedures for the adjudication of
complaints alleging a violation of the Broadband Policy
Statement or the principles incorporated therein, the
Commission does not have the authority to adopt or implement
rules or regulations regarding enforcement of the policy
statement and principles. It is appropriate to provide the FCC
with explicit authority to adjudicate complaints regarding the
Commission's Broadband Policy Statement and principles, but not
to permit the FCC to promulgate anticipatory, prescriptive
rules governing network management by broadband service
providers. The broadband market is still a nascent market with
rapidly-evolving technology. The FCC could not possibly
anticipate how the market will evolve. As a result,
anticipatory rules would freeze investment and innovation in
broadband networks.
Given the rapid evolution of Internet technology and
services and the absence of actual and widely-occurring
problems, it is appropriate to limit the FCC's enforcement
authority with respect to the broadband principles to an
adjudicatory process. The FCC is very familiar with
implementing policy through an adjudicatory process rather than
rulemaking, and has done so effectively in a number of areas.
There is ample precedent for the Commission to address any
concerns about network management by broadband operators
through case-by-case adjudication rather than through
rulemaking.
In the indecency context, the FCC has emphasized the
importance of case-by-case determinations. In its 2001
Indecency Policy Statement, for example, the FCC explained that
``[i]n determining whether material is patently offensive, the
full context in which the material appeared is critically
important.'' In re Industry Guidance On the Commission's Case
Law Interpreting 18 U.S.C. Sec. 1464 and Enforcement Policies
Regarding Broadcast Indecency, File No. EB-00-IH-0089, 16 FCC
Rcd 7999, para.9 (2001). The FCC observed that it was
``difficult to catalog comprehensively all of the possible
contextual factors that might exacerbate or mitigate the patent
offensiveness of particular material.'' Id. Nonetheless, the
FCC believed that a review of adjudications could provide a set
of factors that would help to define offensiveness: the
Commission found that each case ``presents its own particular
mix of [factors],'' and that a comparison of cases helps to
show ``the weight these considerations have carried in specific
factual contexts.'' Id. at para 10.
The benefits of a case-by-case review by the FCC rather
than a rulemaking are not limited to the indecency context.
With respect to pole attachments, the FCC has rejected a
request to adopt ``more specific rules regarding pole
attachment in rights-of-way and wireless pole attachments.'' In
re Implementation of Section 703(e) of the Telecommunications
Act of 1996, CS Docket No. 97-98, Consolidated Partial Order on
Reconsideration, 16 FCC Rcd 12103, at para. 43 (2001). The FCC
explained that it was not ``persuaded that our current rules
are not satisfactory to provide all parties a process by which
they may seek appropriate remedies when negotiations for
attachments fail.'' Id. at para. 45. Furthermore, the FCC
stated that it was ``prudent to gain experience through case by
case adjudication to determine whether additional guiding
principles or presumptions are necessary or appropriate, and
this will be accomplished through our existing complaint
procedures.'' Id.
In a proceeding involving radio-frequency emissions, the
Commission determined that ``[w]e also conclude that the other
issues raised in the RF Procedures Notice are best addressed
through case-by-case adjudication, and we therefore terminate
our consideration of these issues in the rulemaking context. In
light of developments since the RF Procedures Notice was
released, we now believe that binding rules globally resolving
these issues are neither necessary nor appropriate.'' In re
Procedures for Reviewing Requests for Relief from State and
Local Regulations Pursuant to Section 332(C)(7)(B)(V) of the
Communications Act of 1934, WT Docket No. 97-192, Report and
Order, 15 FCC Rcd 22821, para.2 (2000).
In another radio-frequency emissions proceeding, the
Commission asserted that ``[w]e will not adopt a specific
`impractability' standard as proposed in the Further Notice as
we cannot predict at this time the full range of practical
considerations that may be interposed. Instead, the Commission
will resolve these matters on a case-by-case basis.'' In re
Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's
Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz
Bands Affecting: Private Operational-Fixed Microwave Service,
Multipoint Distribution Service, Multichannel Multipoint
Distribution Service, Instructional Television Fixed Service,
and Cable Television Relay Service, Gen. Docket No. 90-54,
Second Report and Order, 6 FCC Rcd 6792, para.23 (1991).
In addition, in a proceeding regarding video dialtone (an
earlier attempt to use telephone networks to provide video
services), the FCC found that ``[w]e have repeatedly declined
to set fixed standards regarding the size and duration of video
dialtone proposals to determine whether they constitute trials
or commercial offerings, and we do so again here. We continue
to believe that a `case-by-case review of video dialtone
proposals better serves the public interest and will allow
video dialtone to develop according to market forces.''' In re
Application of The Southern England Telephone Company For
Authority pursuant to Section 214 of the Communications Act of
1934, as amended, to construct, operate, own, and maintain
facilities to test a new technology for use in providing video
dialtone service in specific areas in Connecticut, File No. W-
P-C-6858, Order and Authorization, 9 FCC Rcd 7715, para.12
(1994).
To the extent that the Commission should be explicitly
granted any authority to resolve complaints involving network
management by broadband operators, a case-by-case adjudicatory
process is even more appropriate with respect to broadband
services than with the communications issues referenced above.
The nascent broadband market is characterized by rapidly-
changing technology. With such a fluid market, the Commission
could not possibly create regulations that reflect the market
dynamics in the future. Broadband operators would be forced to
plan any potential service or technological upgrades around
regulations frozen in time. Such rules would halt broadband
investment across the United States and across technological
platforms.
In particular, imposing non-discrimination requirements, as
the Markey Amendment offered and rejected during both the
subcommittee and full committee markups of the COPE Act would
have done, could further exacerbate the problems created by the
existence of anticipatory rules by prohibiting broadband
operators from creating innovative new services and
capabilities to distinguish themselves from other operators. As
the FCC found when it decided to remove all vestiges of common
carrier and non-discrimination regulations that required
wireline broadband providers to share their facilities with
unaffiliated Internet Service Providers, ``the record shows
that the existing regulations constrain technological advances
and deter broadband infrastructure investment by creating
disincentives to the deployment of facilities capable of
providing innovative broadband Internet access services * * *
fast-paced technological changes and new consumer demands are
causing a rapid evolution in the marketplace for these
services. Wireline broadband carriers are constrained in their
ability to respond to these changes in an efficient, effective,
or timely manner as a result of the limitations imposed by
these regulations.'' In re Appropriate Framework for Broadband
Access to the Internet over Wireline Facilities, CC Docket No.
02-33, Report and Order & Notice of Proposed Rulemaking, 20 FCC
Rcd 14853, para.19 (2005). In addition, the Markey Amendment
would impose non-discrimination requirements on services such
as cable-modem services and Internet backbone services that
have never been subject to such requirements.
New Section 715(c) requires the Commission to complete a
study within 180 days of enactment regarding whether the
objectives of the policy statement and the principles
incorporated therein are being achieved. This study should
inform the Committee regarding whether any violations of the
policy statement and principles are occurring. The Committee
expects that consumers will continue to have access to lawful
Internet content, applications, and services of their choice
and will be able to attach devices to access such content
consistent with the policy statement. If the Commission's study
demonstrates otherwise, further Committee action will be
necessary.
Section 301. Emergency services; interconnection
Section 301 creates two new sections to the Communications
Act of 1934. New Section 716 requires VOIP providers to offer
911 and E911 services to consumers, and new Section 717 permits
VOIP service providers to assert the rights, duties, and
obligations of telecommunications carriers for the purpose of
interconnecting with telecommunications carriers.
``Sec. 716. Emergency Services.''
New Section 716 requires VOIP providers to offer 911 and
E911 services to consumers where technologically and
operationally feasible. Until the FCC's regulations
implementing new Section 716 are promulgated, the FCC's
existing regulations that apply to VOIP service providers,
other than the regulations as they apply to new customers,
remain in effect. New Section 716(b) ensures that VOIP
providers are granted access to the infrastructure and
databases necessary for them to provide E911 services to
consumers where such access is technologically and
operationally feasible. A VOIP service provider may obtain
access to such infrastructure pursuant to new Section 717 as
described below. Consistent with new Section 716(e), the
Committee expects for such access to be provided without
unreasonable delay to enable VOIP service providers to comply
with the requirements and deadlines imposed by this section.
New Section 716(c) provides that a VOIP service provider is
required to make 911 service available to new customers within
a reasonable period of time. For all new customers not within
the geographic areas where a VOIP service provider can
immediately provide 911 service to the geographically-
appropriate Public Safety Answering Point (PSAP), a VOIP
service provider, or its third-party vendor, shall have no more
than 30 days from the date the VOIP provider has acquired a
customer to order connectivity to the selective router. In such
areas, the VOIP service provider must provide 911 service, or
E911 service where the PSAP is capable of receiving and
processing such information.
For all new customers not within the geographic areas where
the VOIP service provider can immediately provide 911 service
to the geographically-appropriate PSAP, a VOIP service provider
is required to provide 911 service either through an
arrangement mutually agreed to by the VOIP service provider and
the PSAP or through an emergency response center with national
call routing capabilities. Either of these options must ensure
that 911 service is provided 24 hours per day from the date the
VOIP service provider acquires a customer until the provider
can provide 911 service to the geographically-appropriate PSAP.
Before providing service to a new customer not within a
geographic area where the VOIP service provider can immediately
provide 911 service to the geographically-appropriate PSAP,
such provider must provide such customer with clear notice that
911 service will only be available as described above. A VOIP
service provider may not acquire a new customer within a
geographic area served by a selective router if, within 180
days of first acquiring a new customer in such area, the
provider does not provide 911 service, or E911 service where
the PSAP is capable of receiving and processing such
information, for all existing customers served by the selective
router.
New Section 716(e) provides that, in determining whether
(1) the provision of 911 and E911 service by VOIP service
providers and (2) access to the infrastructure and databases
necessary for VOIP service providers to provide E911 service
are technically and operationally feasible, the Commission
shall take into consideration available industry technological
and operational standards.
New Section 716(h) requires the FCC to establish an
emergency routing number administrator within 30 days. New
Section 716(i) requires a report on the migration to a national
IP-enabled emergency network.
``Sec. 717. Rights and Obligations of VOIP Service
Providers.''
New Section 717(a) of the Communications Act that permits
VOIP service providers to assert the rights, duties, and
obligations of telecommunications carriers for the purpose of
interconnecting with telecommunications carriers. Facilities-
based VOIP service providers are granted the same rights,
duties, and obligations as a requesting telecommunications
carrier under sections 251 and 252 of the Communications Act.
The term `facilities-based VOIP service provider' means an
entity that provides VOIP service over a physical facility that
terminates at the end user's location and which such entity or
an affiliate owns or over which such entity or affiliate has
exclusive use (including through access to unbundled network
elements). An entity or affiliate shall be considered a
facilities-based VOIP service provider only in those geographic
areas where such physical facilities are located.
Other VOIP service providers are granted the same rights,
duties, and obligations as a requesting telecommunications
carrier under sections 251(b), 251(e), and 252. New Section
717(a)(3) clarifies that a telecommunications carrier may use
interconnection, services, and network elements obtained
pursuant to sections 251 and 252 from an incumbent local
exchange carrier (as such term is defined in section 251(h)) to
exchange VOIP service traffic with such incumbent local
exchange carrier regardless of the provider originating such
VOIP service traffic, including an affiliate of such
telecommunications carrier.
Under new Section 717(b), a VOIP service provider and a
manufacturer of equipment for such services have the same
rights, duties, and obligations with respect to access by
persons with disabilities as a requesting telecommunications
carrier and a telecommunications equipment manufacturer,
respectively, under sections 225, 255, and 710 of the
Communications Act if such service, or the equipment used for
such service, is marketed as a substitute for
telecommunications service, telecommunications equipment,
customer premises equipment, or telecommunications relay
services. This provision is intended to ensure that VOIP
service is accessible to the disabled to the same extent that
traditional telephone service is accessible to the disabled.
The Committee does not intend, however, to suggest that VOIP
services are ``telecommunications services,'' which are
generally subject to Title II of the Communications Act, or
that VOIP service providers must provide disability access
using the same technologies used by telecommunications
carriers.
Under new Section 717(c), a VOIP service provider is
required to provide clear and conspicuous notice to a customer,
prior to the installation or number activation of VOIP service,
that the customer should notify his or her emergency response
system provider after installation of the VOIP service and
arrange for a test of such system, and that a battery backup is
required for the customer premises equipment installed in
connection with the VOIP service in order for the signaling of
such system to function in the event of a power outage.
Section 401. Government authority to provide services
Section 401 prohibits states from prohibiting or having the
effect of prohibiting public providers such as local government
from providing telecommunications, information, or cable
services. States and localities may not grant any preference or
advantage to a public provider of such services that a state or
locality owns, controls, or with which it is otherwise
affiliated. Public providers of such communications services
must abide by the same laws and regulations as commercial
providers of such services. Not later than one year after the
date of enactment, the Commission must submit a report on the
status of the provision of telecommunications services,
information services, and cable services by public providers of
such services.
Section 501. Stand-alone broadband service
Section 501 creates a new Section 718 of the Communications
Act that prohibits a broadband service provider from requiring
a subscriber, as a condition on the purchase of any broadband
service, to purchase cable service, telecommunications service,
or VOIP service offered by the provider.
``Sec. 718. Stand-alone Broadband Services.''
New Section 718 of the Communications Act prohibits a
broadband service provider from requiring a subscriber, as a
condition on the purchase of any broadband service, to purchase
cable service, telecommunications service, or VOIP service
offered by the provider. However, nothing in new Section 718
requires a broadband service provider to offer a stand-alone
version of broadband service at the same price at which it
offers such service bundled with other services.
Section 502. Study of interference potential of broadband over power
line systems
Section 502 requires the Commission to complete a study on
the interference potential of broadband over power line
systems.
Section 601. Development of seamless mobility
Section 601 requires the Commission to further the
development of seamless mobility, which is defined as the
ability of a communications device to select between and
utilize multiple Internet protocol-enabled technology
platforms, facilities, and networks in a real-time manner to
provide a unified service. Within 120 days of enactment, the
Commission must implement a process for streamlined review and
authorization of multi-mode devices that permit communication
across multiple Internet protocol-enabled broadband platforms,
facilities, and networks.
The Commission is required to undertake an inquiry to
identify barriers to the achievement of seamless mobility.
Within 180 days after the date of enactment of this Act, the
Commission is required to report to the Congress on its
findings and its recommendations for steps to eliminate such
barriers.
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 VI--CABLE COMMUNICATIONS
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 602. DEFINITIONS.
For purposes of this title--
(1) * * *
* * * * * * *
(4) the terms ``cable channel'' or ``channel'' means
a portion of the electromagnetic frequency spectrum
which is used in a cable system and which is capable of
delivering a television channel (as television channel
is defined by the Commission by regulation), or its
equivalent as determined by the Commission;
(5) the term ``cable operator'' means any person or
group of persons (A) who provides cable service over a
cable system (regardless of whether such person or
group provides such service separately or combined with
a telecommunications service or information service)
and directly or through one or more affiliates owns a
significant interest in such cable system, or (B) who
otherwise controls or is responsible for, through any
arrangement, the management and operation of such a
cable system;
[(6) the term ``cable service'' means--
[(A) the one-way transmission to subscribers
of (i) video programming, or (ii) other
programming service, and
[(B) subscriber interaction, if any, which is
required for the selection or use of such video
programming or other programming service;]
(6) the term ``cable service'' means--
(A)(i) the one-way transmission to
subscribers of (I) video programming, or (II)
other programming service; and
(ii) subscriber interaction, if any, which is
required for the selection or use of such video
programming or other programming service; or
(B) the transmission to subscribers of video
programming or other programming service
provided through wireline facilities located at
least in part in the public rights-of-way,
without regard to delivery technology,
including Internet protocol technology, except
to the extent that such video programming or
other programming service is provided as part
of--
(i) a commercial mobile service (as
such term is defined in section
332(d)); or
(ii) an Internet access service (as
such term is defined in section
630(p)).
* * * * * * *
PART III--FRANCHISING AND REGULATION
* * * * * * *
SEC. 630. NATIONAL CABLE FRANCHISING.
(a) National Franchises.--
(1) Election.--A person or group that is eligible
under subsection (d) may elect to obtain a national
franchise under this section as authority to provide
cable service in a franchise area in lieu of any other
authority under Federal, State, or local law to provide
cable service in such franchise area. A person or group
may not provide cable service under the authority of
this section in a franchise area unless such person or
group has a franchise under this section that is
effective with respect to such franchise area. A
franchising authority may not require any person or
group that has a national franchise under this section
in effect with respect to a franchise area to obtain a
franchise under section 621 or any other law to provide
cable service in such franchise area.
(2) Certification.--To obtain a national franchise
under this section as authority to provide cable
service in a franchise area, a person or group shall--
(A) file with the Commission a certification
for a national franchise containing the
information required by paragraph (3) with
respect to such franchise area, if such person
or group has not previously obtained a national
franchise; or
(B) file with the Commission a subsequent
certification for additional franchise areas
containing the information required by
paragraph (3) with respect to such additional
franchise areas, if such person or group has
previously obtained a national franchise.
(3) Contents of certification.--Such certification
shall be in such form as the Commission shall require
by regulation and shall contain--
(A) the name under which such person or group
is offering or intends to offer cable service;
(B) the names and business addresses of the
directors and principal executive officers, or
the persons performing similar functions, of
such person or group;
(C) the location of such person or group's
principal business office;
(D) the name, business address, electronic
mail address, and telephone and fax number of
such person or group's local agent;
(E) a declaration by such person or group
that such person or group is eligible under
subsection (d) to obtain a national franchise
under this section;
(F) an identification of each franchise area
in which such person or group intends to offer
cable service pursuant to such certification,
which franchise area shall be--
(i) the entirety of a franchise area
in which a cable operator is, on the
date of the filing of such
certification, authorized to provide
cable service under section 621 or any
other law (including this section); or
(ii) a contiguous geographic area
that covers the entirety of the
jurisdiction of a unit of general local
government, except that--
(I) if the geographic area
within the jurisdiction of such
unit of general local
government contains a franchise
area in which a cable operator
is, on such date, authorized to
provide cable service under
section 621 or any other law,
the contiguous geographic area
identified in the certification
under this clause as a
franchise area shall not
include the area contained in
the franchise area of such
cable operator; and
(II) if such contiguous
geographic area includes areas
that are, respectively, within
the jurisdiction of different
franchising authorities, the
certification shall specify
each such area as a separate
franchise area;
(G) a declaration that such person or group
transmitted, or will transmit on the day of
filing such declaration, a copy of such
certification to the franchising authority for
each franchise area for which such person or
group is filing a certification to offer cable
service under this section;
(H) a declaration by the person or group that
the person or group will comply with the
rights-of-way requirements of the franchising
authority under subsection (f); and
(I) a declaration by the person or group
that--
(i) the person or group will comply
with all Commission consumer protection
and customer service rules under
section 632(b) and subsection (g) of
this section; and
(ii) the person or group agrees that
such standards may be enforced by the
Commission or by the franchising
authority in accordance with subsection
(g) of this section.
(4) Local notification; preservation of opportunity
to negotiate.--
(A) Copy to franchising authority.--On the
day of filing any certification under paragraph
(2)(A) or (B) for a franchise area, the person
or group shall transmit a copy of such
certification to the franchising authority for
such area.
(B) Negotiated franchise agreements
permitted.--Nothing in this section shall
prevent a person or group from negotiating a
franchise agreement or any other authority to
provide cable service in a franchise area under
section 621 or any other law. Upon entry into
any such negotiated franchise agreement, such
negotiated franchise agreement shall apply in
lieu of any national franchise held by that
person or group under this section for such
franchise area.
(5) Updating of certifications.--A person or group
that files a certification under this section shall
update any information contained in such certification
that is no longer accurate and correct.
(6) Public availability of certifications.--The
Commission shall provide for the public availability on
the Commission's Internet website or other electronic
facility of all current certifications filed under this
section.
(b) Effectiveness; Duration.--
(1) Effectiveness.--A national franchise under this
section shall be effective with respect to any
franchise area 30 days after the date of the filing of
a completed certification under subsection (a)(2)(A) or
(B) that applies to such franchise area.
(2) Duration.--
(A) In general.--A franchise under this
section that applies to a franchise area shall
be effective for that franchise area for a term
of 10 years.
(B) Renewal.--A franchise under this section
for a franchise area shall be renewed
automatically upon expiration of the 10-year
period described in subparagraph (A).
(C) Public hearing.--At the request of a
franchising authority in a franchise area, a
cable operator authorized under this section to
provide cable service in such franchise area
shall, within the last year of the 10-year
period applicable under subparagraph (A) to the
cable operator's franchise for such franchise
area, participate in a public hearing on the
cable operator's performance in the franchise
area, including the cable operator's compliance
with the requirements of this title. The
hearing shall afford the public the opportunity
to participate for the purpose of identifying
cable-related community needs and interests and
assessing the operator's performance. The cable
operator shall provide notice to its
subscribers of the hearing at least 30 days
prior to the hearing.
(D) Revocation.--A franchise under this
section for a franchise area may be revoked by
the Commission--
(i) for willful or repeated violation
of any Federal or State law, or any
Commission regulation, relating to the
provision of cable service in such
franchise area;
(ii) for false statements or material
omissions knowingly made in any filing
with the Commission relating to the
provision of cable service in such
franchise area;
(iii) for willful or repeated
violation of the rights-of-way
management laws or regulations of any
franchising authority in such franchise
area relating to the provision of cable
service in such franchise area; or
(iv) for willful or repeated
violation of the antidiscrimination
requirement of subsection (h) with
respect to such franchise area.
(E) Notice.--The Commission shall send a
notice of such revocation to each franchising
authority with jurisdiction over the franchise
areas for which the cable operator's franchise
was revoked.
(F) Reinstatement.--After a revocation under
subparagraph (D) of a franchise for a franchise
area of any person or group, the Commission may
refuse to accept for filing a new certification
for authority of such person or group to
provide cable service under this section in
such franchise area until the Commission
determines that the basis of such revocation
has been remedied.
(G) Return to local franchising if cable
competition ceases.--
(i) If only one cable operator is
providing cable service in a franchise
area, and that cable operator obtained
a national franchise for such franchise
area under subsection (d)(2), the
franchising authority for such
franchise area may file a petition with
the Commission requesting that the
Commission terminate such national
franchise for such franchise area.
(ii) The Commission shall provide
public notice and opportunity to
comment on such petition. If it finds
that the requirements of clause (i) are
satisfied, the Commission shall issue
an order granting such petition. Such
order shall take effect one year from
the date of such grant, if no other
cable operator offers cable service in
such area during that one year. If
another cable operator does offer cable
service in such franchise area during
that one year, the Commission shall
rescind such order and dismiss such
petition.
(iii) A cable operator whose national
franchise is terminated for such
franchise area under this subparagraph
may obtain new authority to provide
cable service in such franchise area
under this section, section 621, or any
other law, if and when eligible.
(c) Requirements of National Franchise.--A national franchise
shall contain the following requirements:
(1) Franchise fee.--A cable operator authorized under
this section to provide cable service in a franchise
area shall pay to the franchising authority in such
franchise area a franchise fee of up to 5 percent (as
determined by the franchising authority) of such cable
operator's gross revenues from the provision of cable
service under this section in such franchise area. Such
payment shall be assessed and collected in a manner
consistent with section 622 and the definition of gross
revenues in this section.
(2) PEG/I-net requirements.--A cable operator
authorized under this section to provide cable service
in a franchise area shall comply with the requirements
of subsection (e).
(3) Rights-of-way.--A cable operator authorized under
this section to provide cable service in a franchise
area shall comply with the rights-of-way requirements
of the franchising authority under subsection (f).
(4) Consumer protection and customer service
standards.--A cable operator authorized under this
section to provide cable service in a franchise area
shall comply with the consumer protection and customer
service standards established by the Commission under
section 632(b).
(5) Child pornography.--A cable operator authorized
under this section to provide cable service in a
franchise area shall comply with the regulations on
child pornography promulgated pursuant to subsection
(i).
(d) Eligibility for National Franchises.--The following
persons or groups are eligible to obtain a national franchise
under this section:
(1) Commencement of service after enactment.--A
person or group that is not providing cable service in
a franchise area on the date of enactment of this
section under section 621 or any other law may obtain a
national franchise under this section to provide cable
service in such franchise area.
(2) Existing providers of cable service.--A person or
group that is providing cable service in a franchise
area on the date of enactment of this section under
section 621 or any other law may obtain a franchise
under this section to provide cable service in such
franchise area if, on the date that the national
franchise becomes effective, another person or group is
providing cable service under this section, section
621, or any other law in such franchise area.
(e) Public, Educational, and Governmental Use.--
(1) In general.--Subject to paragraph (3), a cable
operator with a national franchise for a franchise area
under this section shall provide channel capacity for
public, educational, and governmental use that is not
less than the channel capacity required of the cable
operator with the most subscribers in such franchise
area on the effective date of such national franchise.
If there is no other cable operator in such franchise
area on the effective date of such national franchise,
or there is no other cable operator in such franchise
area on such date that is required to provide channel
capacity for public, educational, and governmental use,
the cable operator shall provide the amount of channel
capacity for such use as determined by Commission rule.
(2) Peg and i-net financial support.--A cable
operator with a national franchise under this section
for a franchise area shall pay an amount equal to 1
percent of the cable operator's gross revenues (as such
term is defined in this section) in the franchise area
to the franchising authority for the support of public,
educational, and governmental use and institutional
networks (as such term is defined in section 611(f)).
Such payment shall be assessed and collected in a
manner consistent with section 622, including the
authority of the cable operator to designate that
portion of a subscriber's bill attributable to such
payment. A cable operator that provided cable service
in a franchise area on the date of enactment of this
section and that obtains a national franchise under
this section shall continue to provide any
institutional network that it was required to provide
in such franchise area under section 621 or any other
law. Notwithstanding section 621(b)(3)(D), a
franchising authority may not require a cable operator
franchised under this section to construct a new
institutional network.
(3) Adjustment.--Every 10 years after the
commencement of a franchise under this section for a
franchise area, a franchising authority may require a
cable operator authorized under such franchise to
increase the channel capacity designated for public,
educational, or governmental use, and the channel
capacity designated for such use on any institutional
networks required under paragraph (2). Such increase
shall not exceed the higher of--
(A) one channel; or
(B) 10 percent of the public, educational, or
governmental channel capacity required of that
operator prior to the increase.
(4) Transmission and production of programming.--
(A) A cable operator franchised under this
section shall ensure that all subscribers
receive any public, educational, or
governmental programming carried by the cable
operator within the subscriber's franchise
area.
(B) The production of any programming
provided under this subsection shall be the
responsibility of the franchising authority.
(C) A cable operator franchised under this
section shall be responsible for the
transmission from the signal origination point
(or points) of the programming, or from the
point of interconnection with another cable
operator under subparagraph (D), to the cable
operator's subscribers, of any public,
educational, or governmental programming
produced by or for the franchising authority
and carried by the cable operator pursuant to
this section.
(D) Unless two cable operators otherwise
agree to the terms for interconnection and cost
sharing, such cable operators shall comply with
regulations prescribed by the Commission
providing for--
(i) the interconnection between two
cable operators in a franchise area for
transmission of public, educational, or
governmental programming, without
material deterioration in signal
quality or functionality; and
(ii) the reasonable allocation of the
costs of such interconnection between
such cable operators.
(E) A cable operator shall display the
program information for public, educational, or
governmental programming carried under this
subsection in any print or electronic program
guide in the same manner in which it displays
program information for other video programming
in the franchise area. The cable operator shall
not omit such public, educational, or
governmental programming from any navigational
device, guide, or menu containing other video
programming that is available to subscribers in
the franchise area.
(f) Rights-of-Way.--
(1) Authority to use.--Any franchise under this
section for a franchise area shall be construed to
authorize the construction of a cable system over
public rights-of-way, and through easements, which is
within the area to be served by the cable system and
which have been dedicated for compatible uses, except
that in using such easements the cable operator shall
ensure that--
(A) the safety, functioning, and appearance
of the property and the convenience and the
safety of other persons not be adversely
affected by the installation or construction of
facilities necessary for a cable system;
(B) the cost of the installation,
construction, operation, or removal of such
facilities be borne by the cable operator or
subscriber, or a combination of both; and
(C) the owner of the property be justly
compensated by the cable operator for any
damages caused by the installation,
construction, operation, or removal of such
facilities by the cable operator.
(2) Management of public rights-of-way.--Nothing in
this Act affects the authority of a State or local
government (including a franchising authority) over a
person or group in their capacity as a cable operator
with a franchise under this section to manage, on a
reasonable, competitively neutral, and non-
discriminatory basis, the public rights-of-way, and
easements that have been dedicated for compatible uses.
A State or local government (including a franchising
authority) may, on a reasonable, competitively neutral,
and non-discriminatory basis--
(A) impose charges for such management; and
(B) require compliance with such management,
such charges, and paragraphs (1)(A), (B), and
(C).
(g) Consumer Protection and Customer Service.--
(1) National standards.--Notwithstanding section
632(d), no State or local law (including any
regulation) shall impose on a cable operator franchised
under this section any consumer protection or customer
service requirements other than consumer protection or
customer service requirements of general applicability.
(2) Proceeding.--Within 120 days after the date of
enactment of this section, the Commission shall issue a
report and order that updates for cable operators
franchised under this section the national consumer
protection and customer service rules under section
632(b), taking into consideration the national nature
of a franchise under this section and the role of State
and local governments in enforcing, but not creating,
consumer protection and customer service standards for
cable operators franchised under this section.
(3) Requirements of new rules.--
(A) Such rules shall, in addition to the
requirements of section 632(b), address, with
specificity, no less than the following
consumer protection and customer service
issues:
(i) Billing, billing disputes, and
discontinuation of service, including
when and how any late fees may be
assessed (but not the amount of such
fees).
(ii) Loss of service or service
quality.
(iii) Changes in channel lineups or
other cable services and features.
(iv) Availability of parental control
options.
(B) Such rules shall require forfeiture
penalties or customer rebates, or both, as
determined by the Commission, that may be
imposed for violations of such Commission rules
in a franchise area, and shall provide for
increased forfeiture penalties or customer
rebates, or both, for repeated violations of
the standards in such rules.
(C) The Commission's rules shall also
establish procedures by which any forfeiture
penalty assessed by the Commission under this
subsection shall be paid by the cable operator
directly to the franchising authority.
(D) The Commission shall report to the
Congress no less than once a year--
(i) on complaints filed, and
penalties imposed, under this
subsection; and
(ii) on any new consumer protection
or customer service issues arising
under this subsection.
(E) The Commission's rules established under
this subsection shall be revised as needed.
(4) Complaints.--Any person may file a complaint with
respect to a violation of the regulations prescribed
under section 632(b) in a franchise area by a cable
operator franchised under this section--
(A) with the franchising authority in such
area; or
(B) with the Commission.
(5) Local franchising orders requiring compliance.--
In a proceeding commenced with a franchising authority
on such a complaint, a franchising authority may issue
an order requiring compliance with any of such
regulations prescribed by the Commission, but a
franchising authority may not create any new standard
or regulation, or expand upon or modify the
Commission's standards or regulations.
(6) Access to records.--In such a proceeding, the
franchising authority may issue an order requiring the
filing of any contract, agreement, or arrangement
between the subscriber and the provider, or any other
data, documents, or records, directly related to the
alleged violation.
(7) Commission remedies; appeals.--Unless appealed to
the Commission, an order of a franchising authority
under this subsection shall be enforced by the
Commission. Any such appeal shall be resolved by the
Commission within 30 days after receipt of the appeal
by the Commission.
(8) Cost of franchising authority orders.--A
franchising authority may charge a provider of cable
service under this section a nominal fee to cover the
costs of issuing such orders.
(h) Antidiscrimination.--
(1) Prohibition.--A cable operator with a national
franchise under this section to provide cable service
in a franchise area shall not deny access to its cable
service to any group of potential residential cable
service subscribers in such franchise area because of
the income of that group.
(2) Enforcement.--
(A) Complaint.--If a franchising authority in
a franchise area has reasonable cause to
believe that a cable operator is in violation
of this subsection with respect to such
franchise area, the franchising authority may,
after complying with subparagraph (B), file a
complaint with the Commission alleging such
violation.
(B) Notice by franchising authority.--Before
filing a complaint with the Commission under
subparagraph (A), a franchising authority--
(i) shall give notice of each alleged
violation to the cable operator;
(ii) shall provide a period of not
less than 30 days for the cable
operator to respond to such
allegations; and
(iii) during such period, may require
the cable operator to submit a written
response stating the reasons why the
operator has not violated this
subsection.
(C) Biannual report.--A cable operator with a
national franchise under this section for a
franchise area, not later than 180 days after
the effective date of such national franchise,
and biannually thereafter, shall submit a
report to the Commission and the franchising
authority in the franchise area--
(i) identifying the geographic areas
in the franchise area where the cable
operator offers cable service; and
(ii) describing the cable operator's
progress in extending cable service to
other areas in the franchise area.
(D) Notice by commission.--Upon receipt of a
complaint under this paragraph alleging a
violation of this subsection by a cable
operator, the Commission shall give notice of
the complaint to the cable operator.
(E) Investigation.--In investigating a
complaint under this paragraph, the Commission
may require a cable operator to disclose to the
Commission such information and documents as
the Commission deems necessary to determine
whether the cable operator is in compliance
with this subsection. The Commission shall
maintain the confidentiality of any information
or document collected under this subparagraph.
(F) Deadline for resolution of complaints.--
Not more than 60 days after the Commission
receives a complaint under this paragraph, the
Commission shall issue a determination with
respect to each violation alleged in the
complaint.
(G) Determination.--If the Commission
determines (in response to a complaint under
this paragraph or on its own initiative) that a
cable operator with a franchise under this
section to provide cable service in a franchise
area has denied access to its cable service to
a group of potential residential cable service
subscribers in such franchise area because of
the income of that group, the Commission shall
ensure that the cable operator extends access
to that group within a reasonable period of
time.
(H) Remedies.--
(i) In general.--This subsection
shall be enforced by the Commission
under titles IV and V.
(ii) Maximum forfeiture penalty.--For
purposes of section 503, the maximum
forfeiture penalty applicable to a
violation of this subsection shall be
$500,000 for each day of the violation.
(iii) Payment of penalties to
franchising authority.--The Commission
shall order any cable operator subject
to a forfeiture penalty under this
subsection to pay the penalty directly
to the franchising authority involved.
(i) Child Pornography.--Not later than 180 days after the
date of enactment of this section, the Commission shall
promulgate regulations to require a cable operator with a
national franchise under this section to prevent the
distribution of child pornography (as such term is defined in
section 254(h)(7)(F)) over its network.
(j) Leased Access.--The provisions of section 612(i)
regarding the carriage of programming from a qualified minority
programming source or from any qualified educational
programming source shall apply to a cable operator franchised
under this section to provide cable service in a franchise
area.
(k) Applicability of Other Provisions.--The following
sections shall not apply in a franchise area to a person or
group franchised under this section in such franchise area, or
confer any authority to regulate or impose obligations on such
person or group: Sections 611(a), 611(b), 611(c), 613(a), 617,
621 (other than subsections (b)(3)(A), (b)(3)(B), (b)(3)(C),
and (c)), 624(b), 624(c), 624(h), 625, 626, 627, and 632(a).
(l) Emergency Alerts.--Nothing in this Act shall be construed
to prohibit a State or local government from accessing the
emergency alert system of a cable operator with a franchise
under this section in the area served by the State or local
government to transmit local or regional emergency alerts.
(m) Reporting, Records, and Audits.--
(1) Reporting.--A cable operator with a franchise
under this section to provide cable service in a
franchise area shall make such periodic reports to the
Commission and the franchising authority for such
franchise area as the Commission may require to verify
compliance with the fee obligations of subsections
(c)(1) and (e)(2).
(2) Availability of books and records.--Upon request
under paragraph (3) by a franchising authority for a
franchise area, and upon request by the Commission, a
cable operator with a national franchise for such
franchise area shall make available its books and
records to periodic audit by such franchising authority
or the Commission, respectively.
(3) Franchising authority audit procedure.--A
franchising authority may, upon reasonable written
request, but no more than once in any 12-month period,
review the business records of such cable operator to
the extent reasonably necessary to ensure payment of
the fees required by subsections (c)(1) and (e)(2).
Such review may include the methodology used by such
cable operator to assign portions of the revenue from
cable service that may be bundled or functionally
integrated with other services, capabilities, or
applications. Such review shall be conducted in
accordance with procedures established by the
Commission.
(4) Cost recovery.--
(A) To the extent that the review under
paragraph (3) identifies an underpayment of an
amount meeting the minimum percentage specified
in subparagraph (B) of the fee required under
subsections (c)(1) and (e)(2) for the period of
review, the cable operator shall reimburse the
franchising authority the reasonable costs of
any such review conducted by an independent
third party, as determined by the Commission,
with respect to such fee. The costs of any
contingency fee arrangement between the
franchising authority and the independent
reviewer shall not be subject to reimbursement.
(B) The Commission shall determine by rule
the minimum percentage underpayment that
requires cost reimbursement under subparagraph
(A).
(5) Limitation.--Any fee that is not reviewed by a
franchising authority within 3 years after it is paid
or remitted shall not be subject to later review by the
franchising authority under this subsection and shall
be deemed accepted in full payment by the franchising
authority.
(n) Access to Programming for Shared Facilities.--
(1) Prohibition.--A cable programming vendor in which
a cable operator has an attributable interest shall not
deny a cable operator with a national franchise under
this section access to video programming solely because
such cable operator uses a headend for its cable system
that is also used, under a shared ownership or leasing
agreement, as the headend for another cable system.
(2) Definition.--The term ``cable programming
vendor'' means a person engaged in the production,
creation, or wholesale distribution for sale of video
programming which is primarily intended for the direct
receipt by cable operators for their retransmission to
cable subscribers.
(o) Gross Revenues.--As used in this section:
(1) In general.--Subject to paragraphs (2) and (3),
the term ``gross revenues'' means all consideration of
any kind or nature, including cash, credits, property,
and in-kind contributions (services or goods) received
by the cable operator from the provision of cable
service within the franchise area.
(2) Included items.--Subject to paragraph (3), the
term ``gross revenues'' shall include the following:
(A) all charges and fees paid by subscribers
for the provision of cable service, including
fees attributable to cable service when sold
individually or as part of a package or bundle,
or functionally integrated, with services other
than cable service;
(B) any franchise fee imposed on the cable
operator that is passed on to subscribers;
(C) compensation received by the cable
operator for promotion or exhibition of any
products or services over the cable service,
such as on ``home shopping'' or similar
programming;
(D) revenue received by the cable operator as
compensation for carriage of video programming
or other programming service on that operator's
cable service;
(E) all revenue derived from the cable
operator's cable service pursuant to
compensation arrangements for advertising; and
(F) any advertising commissions paid to an
affiliated third party for cable services
advertising.
(3) Excluded items.--The term ``gross revenues''
shall not include the following:
(A) any revenue not actually received, even
if billed, such as bad debt net of any
recoveries of bad debt;
(B) refunds, rebates, credits, or discounts
to subscribers or a municipality to the extent
not already offset by subparagraph (A) and to
the extent such refund, rebate, credit, or
discount is attributable to the cable service;
(C) subject to paragraph (4), any revenues
received by the cable operator or its
affiliates from the provision of services or
capabilities other than cable service,
including telecommunications services, Internet
access services, and services, capabilities,
and applications that may be sold as part of a
package or bundle, or functionally integrated,
with cable service;
(D) any revenues received by the cable
operator or its affiliates for the provision of
directory or Internet advertising, including
yellow pages, white pages, banner
advertisement, and electronic publishing;
(E) any amounts attributable to the provision
of cable service to customers at no charge,
including the provision of such service to
public institutions without charge;
(F) any tax, fee, or assessment of general
applicability imposed on the customer or the
transaction by a Federal, State, or local
government or any other governmental entity,
collected by the provider, and required to be
remitted to the taxing entity, including sales
and use taxes and utility user taxes;
(G) any forgone revenue from the provision of
cable service at no charge to any person,
except that any forgone revenue exchanged for
trades, barters, services, or other items of
value shall be included in gross revenue;
(H) sales of capital assets or surplus
equipment;
(I) reimbursement by programmers of marketing
costs actually incurred by the cable operator
for the introduction of new programming; and
(J) the sale of cable services for resale to
the extent the purchaser certifies in writing
that it will resell the service and pay a
franchise fee with respect thereto.
(4) Functionally integrated services.--In the case of
a cable service that is bundled or integrated
functionally with other services, capabilities, or
applications, the portion of the cable operator's
revenue attributable to such other services,
capabilities, or applications shall be included in
gross revenue unless the cable operator can reasonably
identify the division or exclusion of such revenue from
its books and records that are kept in the regular
course of business.
(5) Affiliate revenue.--Revenue of an affiliate shall
be included in the calculation of gross revenues to the
extent the treatment of such revenue as revenue of the
affiliate has the effect (whether intentional or
unintentional) of evading the payment of franchise fees
which would otherwise be paid for cable service.
(6) Affect on other law.--Nothing in this section is
intended to limit a franchising authority's rights
pursuant to section 622(h).
(p) Additional Definitions.--For purposes of this section:
(1) Cable operator.--The term ``cable operator'' has
the meaning provided in section 602(5) except that such
term also includes a person or group with a national
franchise under this section.
(2) Franchise fee.--
(A) The term ``franchise fee'' includes any
fee or assessment of any kind imposed by a
franchising authority or other governmental
entity on a person or group providing cable
service in a franchise area under this section,
or on a subscriber of such person or group, or
both, solely because of their status as such.
(B) The term ``franchise fee'' does not
include--
(i) any tax, fee, or assessment of
general applicability (including any
such tax, fee, or assessment imposed on
both utilities and a person or group
providing cable service in a franchise
area under this section (or the
services of such person or group) but
not including a fee or assessment which
is unduly discriminatory against such
person or group or the subscribers of
such person or group);
(ii) any fee assessed under
subsection (e)(2) for support of
public, educational, and governmental
use and institutional networks (as such
term is defined in section 611(f));
(iii) requirements or charges under
subsection (f)(2) for the management of
public rights-of-way, including
payments for bonds, security funds,
letters of credit, insurance,
indemnification, penalties, or
liquidated damages; or
(iv) any fee imposed under title 17,
United States Code.
(3) Internet access service.--The term ``Internet
access service'' means a service that enables users to
access content, information, electronic mail, or other
services offered over the Internet.
(4) Unit of general local government.--The term
``unit of general local government'' means--
(A) a county, township, city, or political
subdivision of a county, township, or city;
(B) the District of Columbia; or
(C) the recognized governing body of an
Indian tribe or Alaskan Native village that
carries out substantial governmental duties and
powers.
* * * * * * *
TITLE VII--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 715. ENFORCEMENT OF BROADBAND POLICY STATEMENT.
(a) Authority.--The Commission shall have the authority to
enforce the Commission's broadband policy statement and the
principles incorporated therein.
(b) Enforcement.--
(1) In general.--This section shall be enforced by
the Commission under titles IV and V. A violation of
the Commission's broadband policy statement or the
principles incorporated therein shall be treated as a
violation of this Act.
(2) Maximum forfeiture penalty.--For purposes of
section 503, the maximum forfeiture penalty applicable
to a violation described in paragraph (1) of this
subsection shall be $500,000 for each violation.
(3) Adjudicatory authority.--The Commission shall
have exclusive authority to adjudicate any complaint
alleging a violation of the broadband policy statement
and the principles incorporated therein. The Commission
shall complete an adjudicatory proceeding under this
subsection not later than 90 days after receipt of the
complaint. If, upon completion of an adjudicatory
proceeding pursuant to this section, the Commission
determines that such a violation has occurred, the
Commission shall have authority to adopt an order to
require the entity subject to the complaint to comply
with the broadband policy statement and the principles
incorporated therein. Such authority shall be in
addition to the authority specified in paragraph (1) to
enforce this section under titles IV and V. In
addition, the Commission shall have authority to adopt
procedures for the adjudication of complaints alleging
a violation of the broadband policy statement or
principles incorporated therein.
(4) Limitation.--Notwithstanding paragraph (1), the
Commission's authority to enforce the broadband policy
statement and the principles incorporated therein does
not include authorization for the Commission to adopt
or implement rules or regulations regarding enforcement
of the broadband policy statement and the principles
incorporated therein, with the sole exception of the
authority to adopt procedures for the adjudication of
complaints, as provided in paragraph (3).
(c) Study.--Within 180 days after the date of enactment of
this section, the Commission shall conduct, and submit to the
House Committee on Energy and Commerce and the Senate Committee
on Commerce, Science, and Transportation, a study regarding
whether the objectives of the broadband policy statement and
the principles incorporated therein are being achieved.
(d) Definition.--For purposes of this section, the term
``Commission's broadband policy statement'' means the policy
statement adopted on August 5, 2005, and issued on September
23, 2005, In the Matters of Appropriate Framework for Broadband
Access to the Internet over Wireline Facilities, and other
Matters (FCC 05-151; CC Docket No. 02-33; CC Docket No. 01-337;
CC Docket Nos. 95-20, 98-10; GN Docket No. 00-185; CS Docket
No. 02-52).
SEC. 716. EMERGENCY SERVICES.
(a) 911 and E-911 Services.--
(1) In general.--Each VOIP service provider has a
duty to ensure that 911 and E-911 services are provided
to subscribers of VOIP services.
(2) Use of existing regulations.--A VOIP service
provider that complies with the Commission's
regulations requiring providers of VOIP service to
supply 911 and E911 capabilities to their customers
(Report and Order in WC Docket Nos. 04-36 and 05-196)
and that are in effect on the date of enactment of this
section shall be considered to be in compliance with
the requirements of this section, other than subsection
(c), until such regulations are modified or superseded
by subsequent regulations.
(b) Non-Discriminatory Access to Capabilities.--
(1) Access.--Each incumbent local exchange carrier
(as such term is defined in section 251(h)) or
government entity with ownership or control of the
necessary E-911 infrastructure shall provide any
requesting VOIP service provider with nondiscriminatory
access to such infrastructure. Such carrier or entity
shall provide access to the infrastructure at just and
reasonable, nondiscriminatory rates, terms, and
conditions. Such access shall be consistent with
industry standards established by the National
Emergency Number Association or other applicable
industry standards organizations.
(2) Enforcement.--The Commission or a State
commission may enforce the requirements of this
subsection and the Commission's regulations thereunder.
A VOIP service provider may obtain access to such
infrastructure pursuant to section 717 by asserting the
rights described in such section.
(c) New Customers.--A VOIP service provider shall make 911
service available to new customers within a reasonable time in
accordance with the following requirements:
(1) Connection to selective router.--For all new
customers not within the geographic areas where a VOIP
service provider can immediately provide 911 service to
the geographically appropriate PSAP, a VOIP service
provider, or its third party vendor, shall have no more
than 30 days from the date the VOIP provider has
acquired a customer to order service providing
connectivity to the selective router so that 911
service, or E911 service where the PSAP is capable of
receiving and processing such information, can be
provided through the selective router.
(2) Interim service.--For all new customers not
within the geographic areas where the VOIP service
provider can immediately provide 911 service to the
geographically appropriate PSAP, a VOIP service
provider shall provide 911 service through--
(A) an arrangement mutually agreed to by the
VOIP service provider and the PSAP or PSAP
governing authority; or
(B) an emergency response center with
national call routing capabilities.
Such service shall be provided 24 hours a day from the date a
VOIP service provider has acquired a customer until the VOIP
service provider can provide 911 service to the geographically
appropriate PSAP.
(3) Notice.--Before providing service to any new
customer not within the geographic areas where the VOIP
service provider can immediately provide 911 service to
the geographically appropriate PSAP, a VOIP service
provider shall provide such customer with clear notice
that 911 service will be available only as described in
paragraph (2).
(4) Restriction on acquisition of new customers.--A
VOIP service provider may not acquire new customers
within a geographic area served by a selective router
if, within 180 days of first acquiring a new customer
in the area served by the selective router, the VOIP
service provider does not provide 911 service, or E911
service where the PSAP is capable of receiving and
processing such information, to the geographically
appropriate PSAP for all existing customers served by
the selective router.
(5) Enforcement: no first warnings.--Paragraph (5) of
section 503(b) shall not apply to the assessment of
forfeiture penalties for violations of this subsection
or the regulations thereunder.
(d) State Authority.--Nothing in this Act or any Commission
regulation or order shall prevent the imposition on or
collection from a VOIP service provider, of any fee or charge
specifically designated or presented as dedicated by a State,
political subdivision thereof, or Indian tribe on an equitable,
and non-discriminatory basis for the support of 911 and E-911
services if no portion of the revenue derived from such fee or
charge is obligated or expended for any purpose other than
support of 911 and E-911 services or enhancements of such
services.
(e) Feasibility.--In establishing requirements or obligations
under subsections (a) and (b), the Commission shall ensure that
such standards impose requirements or obligations on VOIP
service providers and entities with ownership or control of
necessary E-911 infrastructure that the Commission determines
are technologically and operationally feasible. In determining
the requirements and obligations that are technologically and
operationally feasible, the Commission shall take into
consideration available industry technological and operational
standards.
(f) Progress Reports.--To the extent that the Commission
concludes that it is not technologically or operationally
feasible for VOIP service providers to comply with E-911
requirements or obligations, then the Commission shall submit
reports to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Commerce, Science, and
Transportation of the Senate on the progress in attaining and
deploying E-911 service. Such reports shall be submitted
semiannually until the Commission concludes that it is
technologically and operationally feasible for all VOIP service
providers to comply with E-911 requirements and obligations.
Such reports may include any recommendations the Commission
considers appropriate to encourage the migration of emergency
services to TCP/IP protocol or other advanced services.
(g) Access to Information.--The Commission shall have the
authority to compile a list of PSAP contact information,
testing procedures, and classes and types of services supported
by PSAPs, or other information concerning the necessary E-911
infrastructure, for the purpose of assisting providers in
complying with the requirements of this section.
(h) Emergency Routing Number Administrator.--Within 30 days
after the date of enactment of this section, the Federal
Communications Commission shall establish an emergency routing
number administrator to enable VOIP service providers to
acquire non-dialable pseudo-automatic number identification
numbers for 9-1-1 routing purposes on a national scale. The
Commission may adopt such rules and practices as are necessary
to guide such administrator in the fair and expeditious
assignment of these numbers.
(i) Emergency Response Systems.--
(1) Notice prior to installation or number activation
of voip service.--Prior to installation or number
activation of VOIP service for a customer, a VOIP
service provider shall provide clear and conspicuous
notice to the customer that--
(A) such customer should arrange with his or
her emergency response system provider, if any,
to test such system after installation;
(B) such customer should notify his or her
emergency response system provider after VOIP
service is installed; and
(C) a battery backup is required for customer
premises equipment installed in connection with
the VOIP service in order for the signaling of
such system to function in the event of a power
outage.
(2) Definition.--In this subsection:
(A) The term ``emergency response system''
means an alarm or security system, or personal
security or medical monitoring system, that is
connected to an emergency response center by
means of a telecommunications carrier or VOIP
service provider.
(B) The term ``emergency response center''
means an entity that monitors transmissions
from an emergency response system.
(j) Migration to Ip-Enabled Emergency Network.--
(1) National report.--No more than 18 months after
the date of the enactment of this section, the National
911 Implementation and Coordination Office shall
develop a report to Congress on migrating to a national
IP-enabled emergency network capable of receiving and
responding to all citizen activated emergency
communications.
(2) Contents of report.--The report required by
paragraph (1) shall--
(A) outline the potential benefits of such a
migration;
(B) identify barriers that must be overcome
and funding mechanisms to address those
barriers;
(C) include a proposed timetable, an outline
of costs and potential savings;
(D) provide recommendations on specific
legislative language,
(E) provide recommendations on any
legislative changes, including updating
definitions, to facilitate a national IP-
enabled emergency network; and
(F) assess, collect, and analyze the
experiences of the PSAPs and related public
safety authorities who are conducting trial
deployments of IP-enabled emergency networks as
of the date of enactment of this section.
(3) Consultation.--In developing the report required
by paragraph (1), the Office shall consult with
representatives of the public safety community,
technology and telecommunications providers, and others
it deems appropriate.
(k) Implementation.--
(1) Deadline.--The Commission shall prescribe
regulations to implement this section within 120 days
after the date of enactment of this section.
(2) Limitation.--Nothing in this section shall be
construed to permit the Commission to issue regulations
that require or impose a specific technology or
technological standard.
(l) Definitions.--For purposes of this section:
(1) Voip service.--The term ``VOIP service'' means a
service that--
(A) provides real-time 2-way voice
communications transmitted through customer
premises equipment using TCP/IP protocol, or a
successor protocol (including when the voice
communication is converted to or from TCP/IP
protocol by the VOIP service provider and
transmitted to the subscriber without use of
circuit switching), for a fee;
(B) is offered to the public, or such classes
of users as to be effectively available to the
public (whether part of a bundle of services or
separately); and
(C) has the capability so that the service
can originate traffic to, and terminate traffic
from, the public switched telephone network.
(2) Voip service provider.--The term ``VOIP service
provider'' means any person who provides or offers to
provide a VOIP service.
(3) Necessary e-911 infrastructure.--The term
``necessary E-911 infrastructure'' means the selective
routers, selective router databases, automatic location
information databases, master street address guides,
trunk lines between selective routers and PSAPs, trunk
lines between automatic location information databases
and PSAPs, and other 911 and E-911 equipment,
facilities, databases, interfaces, and related
capabilities specified by the Commission.
(4) Non-dialable pseudo-automatic number
identification number.--The term ``non-dialable pseudo-
automatic number identification number'' means a
number, consisting of the same number of digits as
numbers used for automatic number identification, that
is not a North American Numbering Plan telephone
directory number and that may be used in place of an
automatic number identification number to convey
special meaning. The special meaning assigned to the
non-dialable pseudo-automatic number identification
number is determined by nationally standard agreements,
or by individual agreements, as necessary, between the
system originating the call, intermediate systems
handling and routing the call, and the destination
system.
SEC. 717. RIGHTS AND OBLIGATIONS OF VOIP SERVICE PROVIDERS.
(a) In General.--
(1) Facilities-based voip service providers.--A
facilities-based VOIP service provider shall have the
same rights, duties, and obligations as a requesting
telecommunications carrier under sections 251 and 252,
if the provider elects to assert such rights.
(2) Voip service providers.--A VOIP service provider
that is not a facilities-based VOIP service provider
shall have only the same rights, duties, and
obligations as a requesting telecommunications carrier
under sections 251(b), 251(e), and 252, if the provider
elects to assert such rights.
(3) Clarifying treatment of voip service.--A
telecommunications carrier may use interconnection,
services, and network elements obtained pursuant to
sections 251 and 252 from an incumbent local exchange
carrier (as such term is defined in section 251(h)) to
exchange VOIP service traffic with such incumbent local
exchange carrier regardless of the provider originating
such VOIP service traffic, including an affiliate of
such telecommunications carrier.
(b) Disabled Access.--A VOIP service provider or a
manufacturer of VOIP service equipment shall have the same
rights, duties, and obligations as a telecommunications carrier
or telecommunications equipment manufacturer, respectively,
under sections 225, 255, and 710 of the Act. Within 1 year
after the date of enactment of this Act, the Commission, in
consultation with the Architectural and Transportation Barriers
Compliance Board, shall prescribe such regulations as are
necessary to implement this section. In implementing this
subsection, the Commission shall consider whether a VOIP
service provider or manufacturer of VOIP service equipment
primarily markets such service or equipment as a substitute for
telecommunications service, telecommunications equipment,
customer premises equipment, or telecommunications relay
services.
(c) Definitions.--For purposes of this section:
(1) Facilities-based voip service provider.--The term
``facilities-based VOIP service provider'' means an
entity that provides VOIP service over a physical
facility that terminates at the end user's location and
which such entity or an affiliate owns or over which
such entity or affiliate has exclusive use. An entity
or affiliate shall be considered a facilities-based
VOIP service provider only in those geographic areas
where such terminating physical facilities are located.
(2) Voip service provider; voip service.--The terms
``VOIP service provider'' and ``VOIP service'' have the
meanings given such terms by section 716(j).
SEC. 718. STAND-ALONE BROADBAND SERVICE.
(a) Prohibition.--A broadband service provider shall not
require a subscriber, as a condition on the purchase of any
broadband service the provider offers, to purchase any cable
service, telecommunications service, or VOIP service offered by
the provider.
(b) Definitions.--In this section:
(1) The term ``broadband service'' means a two-way
transmission service that connects to the Internet and
transmits information at an average rate of at least
200 kilobits per second in at least one direction.
(2) The term ``broadband service provider'' means a
person or entity that controls, operates, or resells
and controls any facility used to provide broadband
service to the public, by whatever technology and
whether provided for a fee, in exchange for an explicit
benefit, or for free.
(3) The term ``VOIP service'' has the meaning given
such term by section 716(j).
DISSENTING VIEWS OF REPRESENTATIVES JOHN D. DINGELL, HENRY A. WAXMAN,
EDWARD J. MARKEY, ANNA G. ESHOO, LOIS CAPPS, MICHAEL F. DOYLE, JAN
SCHAKOWSKY, HILDA L. SOLIS, AND TAMMY BALDWIN
We oppose H.R. 5252, the ``Communications Opportunity,
Promotion, and Enhancement Act of 2006'', (COPE Act) as
reported. While some consumers may see more cable and broadband
competition from this bill, far too many will be worse off
after the bill than they are today. This reality cannot be
ignored, so we cannot support the legislation.
The COPE Act represents a dramatic departure from historic
communications policy goals of universal service, localism, and
diversity. It abandons universal service in a way that will
result in higher cable rates for certain customers, shoddy
service quality, or outright withdrawal of cable service. It
undermines localism in the delivery of cable service and
resolution of disputes. It overturns a decade of forward-
thinking policies fostering broadband networks and a hands-off
treatment of the Internet by blessing the broadband designs of
network operators at the expense of innovators, entrepreneurs,
and individual citizens.
In short, this bill is bad for consumers, bad for
communities, and bad for citizens of the Internet. We offered
amendments that would have addressed several shortcomings, yet
those amendments were defeated, mostly along party lines.
Without curing the bill's many infirmities, we remain concerned
that this bill does consumers and Internet users more harm than
good.
The Bill Overturns Longstanding Cable Universal Service Requirements
Supporters of the bill tout its potential to accelerate
competition to cable, a worthy goal. But the competition they
envision will not extend to all consumers in all parts of town.
New wireline competitors to cable may very well result in lower
prices and better services for residents of the areas facing
head-to-head competition, but everyone else may be worse off.
As explained below, people living in areas bypassed by the
competition could see higher prices, diminished quality of
service, and deteriorating facilities, and be foreclosed from
the innovative features and services yet to come.
The bill grants new cable operators access to a community's
public rights-of-way without any obligation to serve the entire
community. All national franchisees, including new entrants and
incumbent cable operators, will be able to select the most
lucrative households to serve while ignoring others. This is a
reversal of decades of Congressional policies designed to
ensure universal service to communications services. If there
is value in the universal availability of cable service, then
this value will be lost.
Currently, cable operators must offer their services
throughout entire franchise areas. Commonly referred to as a
``buildout'' requirement, this universal service principle is a
recognition that as part and parcel of using the public rights-
of-way, cable operators must extend service to all the public.
The Communications Act specifies that a local franchising
authority must allow a reasonable period of time for a cable
operator to become capable of providing cable service to all
households in the franchise area. The COPE Act eliminates this
requirement--not just for new entrants, but for incumbent cable
operators once a new entrant has offered service anywhere in
the franchise area.
Several consequences flow from eliminating a buildout
requirement on incumbent operators and allowing new entrants to
cherry pick their customers. At a hearing on the bill in the
Subcommittee on Telecommunications and the Internet, a cable
industry representative testified that the industry could not
pledge (1) they would not withdraw service in certain areas,
(2) they would not target service upgrades only to competitive
neighborhoods, or (3) they would not increase rates in some
areas to subsidize lower rates in competitive areas.
First, some consumers could actually lose cable service
altogether. Once cable companies switch to a national
franchise, they can choose not to continue serving all of the
households they currently are required to serve. Without a
buildout requirement, those abandoned customers have little
recourse to complain about the withdrawal of their service. For
those who believe that cable operators with facilities already
in the ground are unlikely to withdraw service, can we be
confident that is the case in areas like the Ninth Ward of New
Orleans following a hurricane or other areas where disaster
strikes? There may be other areas where, in order to focus on
competing in other areas, the incumbent operator may choose to
stop serving outlying parts of the franchise area, or sell off
systems to a smaller operator with more limited means of
obtaining programming. If this bill were to pass in its current
form, those residents may lose their only provider of cable
service. That would represent a radical departure from this
Committee's commitment to universal service.
Second, even if service is not withdrawn, the bill lets
operators avoid maintaining or upgrading facilities in certain
neighborhoods, which could result in differing levels of
service depending on the demographics of a neighborhood. Some
parts of town may receive high-quality, cutting edge services
as families across town see their service and facilities
deteriorate. Although the incumbent's cable system has already
been built, the system will require upgrades, maintenance, and
expansion, particularly where population growth occurs.
Removing the universal service requirement may mean that it is
no longer profitable for an incumbent cable operator to incur
the costs of upgrading service in the areas not facing
competition, as it deploys more resources into competitive
areas. The lack of equitable upgrades of cable facilities has
sparked consumer backlash in the past, and will likely do so
again.
Third, many consumers could face higher cable rates as a
result of this legislation. When a national franchisee enters
only part of an incumbent cable operator's franchise area, the
incumbent may respond by lowering prices in that area. To
offset this reduction, the cable operator may decide to charge
a higher price in the parts of the franchise area where there
is no new entry. In that case, the very consumers that do not
share in the cable competition will see their cable rates
increase. We should give careful consideration to any measure
that promises to lower cable rates for some, but increases
cable rates for others.
As reported, the bill will create the digital equivalent of
gated communities in our cities, towns, and countryside. To
correct this injustice, Democrats unsuccessfully sought to
amend the bill with a carefully constructed, market-based,
buildout amendment. The amendment was based on the simple
premise in communications policy that in return for public
rights-of-way privileges in a community, all of the public
should benefit. Maintaining a buildout obligation would prevent
cable operators from engaging in discriminatory behavior and go
a long way toward ensuring that all consumers are able to
choose from competing cable operators.
The amendment would have required a phased-in buildout
approach within a franchise area. The buildout requirement was
market-based, applying only if a provider's business plan is
successful. It was also incremental, requiring buildout over
time. Finally, it was flexible, allowing operators to meet
obligations in rural and high cost areas using any comparable
alternative technology, such as wireless.
The Democratic buildout amendment would benefit consumers
by:
(1) Guarding against economic discrimination through the
maintenance of universal service principles and prevention of
permanent cherry picking by new entrants.
(2) Creating market-based incremental service requirements
for national franchisees in exchange for their use of the
public rights-of-way in a manner which would not overburden new
entrants in their initial deployment of service and would
account for small startup providers.
(3) Creating a level playing field for new entrants by
complementing the incumbent cable operator's current
requirement to serve the entire franchise area.
(4) Closing the digital divide by ensuring that all
consumers benefit from the use of the public rights-of-way and
eventually gain access to competitive service providers.
(5) Protecting consumers from operators failing to upgrade
or equitably serve portions of the franchise area given that
the new competitor will eventually extend comparable service to
those areas.
(6) Mitigating against operators charging selective higher
prices to different parts of a franchise area in view of the
fact that competition will eventually extend throughout the
franchise area.
A buildout requirement is not a mere vestige of a bygone
monopoly era. Like other franchise requirements, a buildout
obligation is part of the pact with the public over the use of
public rights-of-way. It is grounded in the use of the public's
property, and not in the provision of a monopoly service. In
fact, current law prevents localities from granting exclusive
cable franchises. Even the Federal Government, when it turns
over the public's property rights through spectrum licenses,
has traditionally imposed buildout and other requirements on
private companies that gain the right to use government
property for their own commercial interests. For example, in
wireless service, the Federal Government imposed construction
and buildout requirements to foster ubiquitous deployment of
service, particularly to rural areas.
Universal service requirements, which are not unique to the
cable industry, are grounded in equitable considerations,
economic development, and even economic efficiencies in
networked industries. Even though the amendment would have
imposed a buildout requirement on new entrants five years after
their entry into the marketplace, in the end all potential
customers in the franchise area would have had the ability to
share in the competitive cable service. This Committee has long
sought to ensure universal availability of cutting edge
communications infrastructure and services throughout the
nation. We are not prepared to jettison that principle.
The Bill Imposes a Weak Redlining Protection
As a general matter, reliance upon an after-the-fact
redlining complaint process where the onus is on aggrieved
households to prove outright economic discrimination is a less-
than-satisfactory replacement for a principle of fairness that
has served our country well for decades. But if the COPE Act is
going to abandon the requirement in current law for cable
operators to offer service throughout an entire franchise area,
then the bill needs a strong anti-discrimination provision to
assure that services are made available equitably across all
our communities. Unfortunately, as drafted, the bill contains a
provision that purports to prevent discrimination, but it is
weak and may prove ineffective. Several Democratic amendments
that sought to strengthen the anti-redlining protections were
defeated, largely along party lines.
The failure to provide a communications service, or the
offering of inferior service, to a certain neighborhood or
community through redlining undercuts economic development and
could imperil the ability of those communities to participate
in the information age.
Numerous parties, in letters and testimony before the
Committee, supported strengthening the anti-discrimination
provision. According to a joint filing in the Federal
Communications Commission's (FCC) local franchising proceeding
by 34 organizations,\1\ a credible anti-redlining regulatory
program should perform the following functions: (1) specify
what constitutes discrimination (e.g., discrimination based on
race, household wealth, age and condition of the physical
plant, genders of heads of households, rental or home ownership
status, local crime rates, supposed creditworthiness, or the
cost of obtaining and maintaining insurance in a particular
area); (2) define specifically, and in terms understandable to
lay people, what constitutes redlining and what services are
covered by this definition (e.g., promotional campaigns,
responsiveness to service and repair calls, and locations of
neighborhood sales and bill-paying offices); (3) apply an
impact standard rather than an intent standard; (4) specify who
decides when redlining has occurred; (5) specify the evidence
needed to compel a hearing or trial to determine whether
redlining has occurred in a specific community; (6) broadly
afford standing to complain and explain how parties may
demonstrate standing; (7) provide meaningful, prompt and
enforceable remedies and relief; (8) prohibit mandatory
arbitration and provide individuals with other fora in which to
adjudicate complaints alleging redlining in the provision of
communications services; (9) establish an accessible venue for
appellate review; (10) provide for the applicability of the
Civil Rights Attorneys Fees Act of 1976 or other provisions to
encourage the private bar to assume the risks attendant to
bringing these cases; (11) afford a new entrant a means of
obtaining pre-clearance of its buildout plans, with such pre-
clearance establishing a rebuttable presumption that the
company will not redline; and (12) perhaps allow a new entrant
(and the incumbent) to choose among regulatory options, such
that the fulfillment of the chosen option would be sufficient
to allow for buildout to commence without delay while the
granular details of anti-redlining reporting are being
finalized.
---------------------------------------------------------------------------
\1\Minority Media and Telecommunications Council; Advancement
Project; American Federation of Television and Radio Artists (AFTRA);
American Indians in Film and Television; Asian American Justice Center;
Asian Law Caucus; Black College Communication Association; Center for
Asian American Media; Fairness and Accuracy in Reporting; Hispanic
Americans for Fairness in Media; Labor Council for Latin American
Advancement; Lawyers' Committee for Civil Rights; League of United
Latin American Citizens; Minority Business Enterprise Legal Defense and
Education Fund; National Association for Multi-Ethnicity in
Communications; National Association of Black Journalists; National
Association of Black Owned Broadcasters; National Association of Black
Telecommunications Professionals; National Association of Hispanic
Journalists; National Association of Hispanics in Information
Technology and Telecommunications; National Association of Latino
Independent Producers; National Bar Association; National Coalition of
Hispanic Organizations; National Council of Churches; National Indian
Telecommunications Institute; National Institute for Latino Policy;
National Puerto Rican Coalition; Native American Public
Telecommunications; Office of Communication of the United Church of
Christ; Puerto Rican Legal Defense and Education Fund; Rainbow/PUSH
Coalition; The Links; Women's Institute for Freedom of the Press.
---------------------------------------------------------------------------
When compared against these criteria, the bill's anti-
redlining provision does not measure up. The bill prohibits
denial of access to cable service on the basis of income within
a franchise area and imposes heavy fines for proven violations.
Yet, in practice, the provision does little to assure that
discrimination will not take place. Among some of its most
glaring deficiencies: First, the provision prohibits only
income-based denials of service, potentially leaving unanswered
discrimination on the basis of race, color, religion, national
origin, sex and other factors. Second, it only addresses denial
of access, which, depending on how it will be interpreted,
potentially leaves companies able to provide inferior service,
unequal upgrades, and less timely repairs. Third, it requires
the FCC, with little experience in civil rights issues, not
localities, to handle all complaints, and then requires
confidential treatment of the investigative materials. Fourth,
it appears to require proof of discriminatory intent, rather
than the impact standard of traditional civil rights laws.
Fifth, even if a violation is proven, it offers no assurance of
how quickly the affected consumers will be served beyond an
unspecified ``reasonable'' time.
Several Democratic amendments sought to strengthen the
protections against redlining and were defeated. An amendment
offered by Rep. Solis would have expanded the prohibited bases
of discrimination beyond income to address denial of access on
the basis of race, color, religion, national origin, or sex. An
amendment offered by Rep. Waxman would have added to the scope
of prohibited discrimination by addressing the offering of
inferior access, not just denial of access. Consistent with
traditional civil rights enforcement, that amendment also would
have clarified that the prohibition extends to the offering of
service in a manner that has the purpose or effect of
discriminating against a group on the basis of income. An
amendment offered by Rep. Baldwin would have given the local
franchising authorities with knowledge of the affected
geographic areas the responsibility to determine first whether
income-based discrimination had occurred, with an appeal to the
FCC. These amendments would have gone a long way toward
strengthening the bill's anti-discrimination provision so that
it could achieve its intended purposes and adequately protect
the public. Without them, there is little assurance of
equitable deployment of cable service from national
franchisees.
The Bill Shifts Too Much Local Control to the FCC
The COPE Act undermines the ability of local governments to
protect consumers, enforce local matters, and effectively
manage the public rights-of-way.
The bill could be read to make the FCC the final arbiter of
local rights-of-way disputes. While purporting to preserve
municipal authority over rights-of-way matters, the bill
overreaches and imposes a new ``reasonableness'' requirement
over municipal regulation that, depending on how it will be
interpreted, could leave communities having to defend the
exercise of their municipal rights-of-way authority at the FCC
in Washington, DC.
We believe strongly that incidents occurring in local
rights-of-way are public safety concerns better addressed
locally and immediately. The FCC, with no expertise concerning
local streets, sidewalks, public safety, or traffic patterns,
should not be regulating and second-guessing all local rights-
of-way practices and disputes without regard to whether those
practices concern run-of-the-mill daily disputes or rise to the
level of constituting an overall barrier to entry.
Even beyond rights-of-way issues, the bill shifts too much
responsibility to the FCC to handle the flood of cable
complaints and requests for resolution of local disputes that
may result. Although the bill enables local franchising
authorities to enforce the consumer protection requirements and
customer service standards, it does not specifically allow the
franchising authorities to resolve other types of local
disputes that may arise. For example, disputes over the
carriage, quality, or interconnection of public, educational,
and governmental access channels would seemingly have to be
resolved in Washington at the FCC rather than locally.
An amendment offered by Rep. Dingell addressed several
local governance matters, and was defeated on a largely party-
line vote. First, the amendment would have preserved the status
quo concerning the enforcement of municipal rights-of-way
disputes by clarifying that the bill was not intended to grant
authority to the FCC over enforcement of local rights-of-way
matters. Second, the amendment would have required a national
franchisee to certify that it will comply with municipal
rights-of-way requirements as part of its national franchise
certification. Third, the amendment sought to reduce
anticipated ambiguity in the ``gross revenues'' definition and
preserve the ability for cities to recover franchise fees on
revenue from integrated features, functions and capabilities of
video programming. Fourth, recognizing that disputes between a
locality and a cable operator over the amount of franchise and
other fees may be inevitable, the amendment would have
established a dispute resolution process for monetary disputes
that would have encouraged parties to meet and settle their
differences before filing a complaint at the FCC. Fifth, the
amendment required the FCC, within the time frame outlined in
the bill, to consult with and draw upon the expertise of
franchising authorities when it establishes the rules and
policies necessary to implement the national franchise.
An amendment by Rep. Doyle would have strengthened the
overall enforcement of the national franchise by allowing local
resolution of complaints in conjunction with the FCC. It would
have clarified that, although the requirements of the national
franchise would be established federally, the local franchising
authorities would be given authority to enforce compliance with
all Federal standards. Consumers, public access channel
administrators, or anyone else with a complaint regarding the
requirements of the national franchise would have been able to
go before their local franchising authority for initial
resolution of complaints, which would then be appealable to the
FCC. The amendment was defeated, largely on a party-line vote.
The Bill Fails To Preserve the Free, Open and Innovative Internet
BACKGROUND
The Internet was born out of taxpayer-funded projects
starting in the 1960's. The pioneering use of ``packet-
switching,'' as opposed to traditional circuit-switching, also
underscored a key founding feature of the nascent Internet,
namely, that of open architecture networking. As an open
architecture network, packets could traverse various
independent networks from various providers to reach their
destinations. In short, this meant that the Internet itself was
not ``owned'' by anyone.
In 1991, the U.S. Government decided to take this Federal
network and permit its commercialization. The astounding growth
of the Internet since that time is a tribute to the fact that
its open architecture permitted individuals to innovate,
invest, exchange ideas, and traffic on a nondiscriminatory
basis. This, in turn, fostered yet greater expansion of the
Internet.
From 1991 to August of 2005, the Internet's
nondiscriminatory nature was also protected from being
compromised by historic communications laws that required such
nondiscriminatory treatment by telecommunications carriers. In
other words, no commercial telecommunications carrier could
engage in discriminatory conduct regarding Internet traffic and
Internet access because it was prohibited by law. The
Telecommunications Act of 1996, by removing barriers to greater
competition, induced the rapid introduction of broadband
service across the country, with a concomitant growth in
Internet access and activity.
These broadband networks have become the lifeblood of our
digital economy. They also hold the promise of promoting
further innovation in and creation of new markets and
technologies, applications and services, jobs, and furthering
the widespread dissemination of educational, civic, and
cultural information across communities and societies. The
worldwide leadership that the U.S. provides in high technology
is directly related to the government-driven policies over
decades which have ensured that telecommunications networks are
open to all lawful uses and all users. The Internet, which is
accessible every day to more and more Americans on such
broadband networks, was also founded upon an open architecture
protocol and as a result it has provided low barriers to entry
for that unleashed, explosive growth of web-based content,
applications, and services.
In August of 2005, however, the Federal Communications
Commission re-classified broadband access to the Internet in a
way that removed such legal protections. It did not take long
for the telecommunications carriers to respond to that
decision. Just a few months later, the Chairman of then-SBC
Communications made the following statement in a November 7
Business Week interview: ``Now what they [Google, Yahoo, MSN]
would like to do is use my pipes free, but I ain't going to let
them do that because we have spent this capital and we have to
have a return on it. So there's going to have to be some
mechanism for these people who use these pipes to pay for the
portion they're using. * * *''
In a December 1, 2005, Washington Post article, a BellSouth
executive indicated that his company wanted to strike deals to
give certain Web sites priority treatment in reaching computer
users. The article noted this would ``significantly change how
the Internet operates'' and that the BellSouth executive said
``his company should be allowed to charge a rival voice-over-
Internet firm so that its service can operate with the same
quality as BellSouth's offering.'' Meaning, that if the rival
firm did not pay, or was not permitted to pay for competitive
reasons, its service presumably would not ``operate with the
same quality'' as BellSouth's own product.
Finally, on January 6, 2006, the CEO of Verizon, in an
address to the Consumer Electronics Show, also indicated that
Verizon would now be the corporate arbiter of how traffic would
be treated when he said the following: ``We have to make sure
[content providers] don't sit on our network and chew up our
capacity.''
The corrosion of historic policies of nondiscrimination by
the imposition of artificial bottlenecks by broadband network
owners endangers economic growth, innovation, job creation, and
First Amendment freedom of expression on such networks.
Broadband network owners should not be able to determine who
can and who cannot offer services over broadband networks or
over the Internet. The detrimental effect to the digital
economy would be quite severe if such conduct were permitted
and became widespread. The COPE Act permits such conduct and as
a result, puts the Internet in jeopardy.
FLAWED PROVISIONS IN THE COPE ACT
In response to this threat to the open, nondiscriminatory
nature of the Internet, the COPE Act, as reported, contains in
Title II a purported ``network neutrality'' provision. This
provision permits the FCC to enforce its so-called ``broadband
policy statement.'' That policy statement, however, is a
broadly-worded, imprecise statement of ``feel-good'' rhetoric
intended to guide future agency decision-making but not, as the
FCC Chairman indicated, to result in any enforceable
protections or specific behavior requirements. It was not
adopted subject to the thoroughness of the Administrative
Procedures Act's (APA) notice-and-comment process. It was not
adopted with any notion of enforcement attached to it. In
essence, the COPE Act requires the FCC to enforce something
that is of highly dubious enforceability.
For instance, the policy statement does not define
broadband service. It does not indicate whether it covers
wireless services, asynchronous satellite-delivered broadband
services, or narrow bandwidth services. In addition, as an
example of the vague nature of the FCC's statement, the ``4th
principle'' reads as follows: ``Consumers are entitled to
competition among network providers, application and service
providers, and content providers.'' How does the FCC enforce
that? How can an entity be justly found in violation of that?
Competition across all markets is a noble aspiration, but can
the lack of it legitimately lead to FCC fines? Simply directing
the FCC to enforce this statement may prove unworkable.
Compounding this error, the COPE Act explicitly bars the
FCC from actually turning its policy statement into more
effective rules. We do not recall other legislation approved by
this Committee that proposed to statutorily tie the hands of
the expert agency in order to prevent it from doing its job
consistent with its historic practice and the APA.
These are some of the ways in which the COPE Act is wholly
deficient in substantively protecting the Internet. The
principle of non-discrimination is not encompassed explicitly
in the FCC's policy statement and the bill contains no
directive on it. The COPE Act fails to address in any way the
stated aims of the telephone industry to begin instituting a
broadband tax on web-based businesses. It contains no provision
addressing the discriminatory prioritization of data through
networks. It effectively condones this practice as well as the
discriminatory charging, or withholding, of ``quality of
service'' functionality and management by broadband network
owners.
THE NETWORK NEUTRALITY AMENDMENT
In the Subcommittee and Committee markups, a network
neutrality amendment was offered by Representatives Markey,
Boucher, Eshoo, and Inslee, to remedy these many deficiencies
in the COPE Act's approach to network neutrality. The amendment
stated clear, substantive, and explicit statutory protections
for consumers and Internet-based entities. It articulated
clear, reasonable exceptions to address network security,
emergency communications, parental controls, and other
consumer-protection measures. And it contained an expedited
enforcement provision to ensure speedy resolution of
complaints.
At its heart, the amendment preserved the Internet as we
today know it. It told broadband behemoths to keep their hands
off the Net. And without its inclusion, the COPE Act blesses
the broadband designs of a small handful of large corporations
over the aspirations of thousands of smaller companies,
entrepreneurs, innovators, and individual citizens. The network
neutrality amendment must be added to this bill.
Conclusion
We support the goal of having a national cable franchise
structure in an effort to spur cable competition and bring
consumers the promise of choosing among competing providers for
video, voice, and data. But the COPE Act as reported will not
fulfill that promise. It risks harming many consumers by
removing protections that they have today. Why should some
consumers lose their current cable service, be forced to pay
higher prices, or receive worse service so that other consumers
can receive more cable choice? This result is unwise and
contrary to decades of telecommunications policies designed to
ensure that everyone has access to cutting-edge communications
service. Consumers and Internet users will also be harmed by
the injection of private taxation onto the Internet, and the
allowance of discriminatory treatment and interference by
network operators. The free, open, and innovative Internet has
flourished under network neutrality legal protections until
last year. We are not prepared to turn over control of the free
flow of the Internet to the whims of cable and telephone
companies without stronger and better protections to ensure the
continued innovation, entrepreneurialism, and freedom that has
marked the most powerful communications tool we have ever seen.
John D. Dingell.
Henry A. Waxman.
Edward J. Markey.
Anna G. Eshoo.
Lois Capps.
Michael F. Doyle.
Jan Schakowsky.
Hilda L. Solis.
Tammy Baldwin.