[This is a *draft* of the Clinton Administration's propsed new regulatory scheme for interactive broadband networks. 1994. It was intended as an amendment to S.1822, the Senate's telecom reform bill, but was rejected (as was the entire bill eventually.)] TITLE VII SEC. 701. SHORT TITLE. This Title may be cited as the "[ ] Act of 1994." SEC. 702. FINDINGS. The Congress finds that -- (1) Communications service providers are emerging that offer broadband, interactive, switched, digital services to persons in a wide range of places, including but not limited to homes, offices, classrooms, libraries, hospitals, and health care facilities. These offerings will include a variety of voice, high-speed data, and video services provided on an integrated basis over advanced network facilities. (2) Such providers face the potential of being regulated under two different parts of the Communications Act of 1934 -- Title II (Common Carriers) and Title VI (Cable Communications). These providers could also be subject to regulation at the state level for the intrastate components of their offerings, and at the local level for cable television and possibly other services. (3) The current regulatory environment will be needlessly overlapping, complex, and potentially conflicting for entities seeking to provide broadband, interactive, switched, digital services. (4) Technological and market changes are increasingly blurring the formerly established lines between traditional voice telephony, data communications, and cable television services, and these changes could erase such lines entirely in the future. (5) The goals of competitive fairness and efficient regulation requires that the Federal Communications Commission regulate similarly-situated entities in a similar fashion. (6) The existing regulatory scheme created by the Communications Act of 1934 may be ill-suited to services offered as a result of rapidly changing technology, as regulatory policies predicated on outdated distinctions can harm consumers by impeding competition and discouraging private sector investment in network and service offerings that are desired by the public. (7) A more streamlined, adaptable regulatory regime would provide greater incentives for private sector firms to provide broadband, interactive, switched, digital services, thereby promoting competition in the delivery of communications services and the widespread availability of high quality, advanced services offered to the public at reasonable prices. (8) A new, more flexible regulatory scheme can allow for rapid technological and marketplace changes, while also establishing mechanisms to ensure that important universal service, consumer protection, and efficiency goals continue to be met. SEC. 703. STATEMENT OF PURPOSES. The purposes of this Title are -- (1) To enact a flexible, adaptable regulatory regime that encourages the widespread provision of broadband, interactive, switched, digital services to a wide range of persons and places, including but not limited to homes, businesses, classrooms, libraries, hospitals and clinics; (2) To encourage the development of broadband, interactive, switched, digital services, while ensuring that current services relied upon by the public, including basic telephone and cable television services, continue to be provided at reasonable prices and at high levels of quality. (3) To remove unnecessary and artificial barriers to participation by the private sector in communications markets, while ensuring that consumers remain protected from any anticompetitive activities, and that communications networks that serve the public are interconnected and interoperable. (4) To encourage private investment, promote and protect competition, and encourage flexible, responsive government action with regard to communications networks. (5) To harmonize regulatory provisions under the Communications Act of 1934, in order to provide a more unified, streamlined approach to regulation of broadband, interactive, switched, digital services, thereby avoiding the imposition of conflicting or duplicative regulatory burdens on communications service providers. (6) To provide the Federal Communications Commission flexibility in the regulation of such communications services, so that regulation can keep pace with the rapid technological and marketplace changes that pervade the telecommunications and information industries, while preserving and advancing traditional universal service goals, and ensuring just and reasonable terms and conditions for competitors and consumers alike. (7) To ensure that the Federal Communications Commission has the statutory authority to treat similarly situated firms similarly, rather than regulating firms according to the technology they use to transport information. (8) To ensure provision, on a non-discriminatory basis, of open access to communications networks for information providers and consumers. (9) To facilitate the realization of the goal that private sector activities result in the connection of all classrooms, libraries, hospitals, and clinics in the United States to the information infrastructure. (10) To promote an open information marketplace, with services offered at reasonable prices, based on consumer demand, with expanded access to the information infrastructure. (11) To promote and develop a society where information is easily available to all people, including disadvantaged, disabled, low-income, and rural users, as well as educational, medical, and small business entities, among others. (12) To advance substantial governmental and First Amendment interests in promoting a diversity of views provided through multiple outlets, by enabling individuals and organizations alike to publish and otherwise make information available in electronic form, including the development of local community networks. (13) To provide the Federal Communications Commission with flexibility to tailor its regulations so that it can prevent abuses of market power that could harm consumers or impede competition, while ensuring that government regulation promotes new entry, innovation in technologies and services, efficient investment in infrastructure development, and full and fair competition in the offering of telecommunications services to the public. SEC. 704. NEW TITLE ADDED TO THE COMMUNICATIONS ACT. The Communications Act of 1934 (47 U.S.C. 701 et seq.) is amended by adding a new Title VII, entitled "[ ]" with the following sections: "SEC. 701. DEFINITIONS. For purposes of this Title, the following terms are defined: "(a) "Title VII firm" means a person that is subject to Federal Communications Commission jurisdiction under this Title. "(b) "Title VII broadband services" means broadband, interactive, switched, digital transmission services offered by Title VII firms to end users. "(c) "Other Title VII services" means communication services offered by a Title VII firm, other than Title VII broadband services, that: (1) use the same facilities as Title VII broadband services, and (2) would be subject either to common carrier regulation under Title II, or regulation under Title VI, if offered by non-Title VII firms. "(d) "Title VII services" means Title VII broadband services and other Title VII services. "SEC. 702. ELIGIBILITY TO ELECT TITLE VII REGULATION. "(a) Any person that offers broadband, interactive, switched, digital services may elect to apply to the Commission for such services to be regulated under this Title. "(b) To be eligible to become a Title VII firm in a particular state, the applicant must offer Title VII broadband services to at least 20 percent of its subscribers in that state. The Commission may waive the threshold subscriber percentage in specific cases, or modify it by rule of general applicability, it if finds doing so would advance the goals of this Title. "(c) A Title VII applicant must certify to the Commission that it meets the condition in subsection (b) and provide such documentation and other information as the Commission may require. Its election to become a Title VII firm will become effective 180 days following such certification and provision of such documentation and information, for each state for which the condition is met, unless the Commission, after notice and comment, disallows the application prior to that time. " SEC. 703. COMMISSION AUTHORITY. "(a) The Commission shall apply the regulatory regime established under this Title to all Title VII services, but only in those states for which a person offering the services is a Title VII firm. "(b) Services subject to Commission authority under this Title, including both Title VII broadband services and other Title VII services, shall not be subject to either the provisions of Title II or Title VI. "(c) The Commission shall, by rule, establish procedures and standards necessary to implement this Title. "(d) The Commission shall treat a Title VII firm as a carrier, or common carrier, with respect to any Title VII services it offers, for the purposes of applying Sections 310(b), 396(h)(1), 406, 407, 408(g), 410(b), 410(c), 412, 413, 415, 503(a), 503(b), 806, and 810 of this Act. [to add savings clause somewhere re any FCC Title II or other authority stemming from changes to AT&T Consent Decree, as below: ["(e) Nothing in this Title shall be construed as altering the Commission's regulation of the activities of the Bell Operating Companies under Title II that pertain to regulation of [long distance], manufacturing, electronic publishing, and alarm monitoring services.] " SEC. 704. STREAMLINED REGULATORY APPROACH FOR TITLE VII SERVICES. "(a) Title VII firms shall provide open access to their networks so that anyone, including end users and information service providers, can use Title VII services to transmit information, including voice, data, and video programming, on a non-discriminatory basis. The Commission may establish rules, as needed to ensure that Title VII firms comply with this provision. "(b) The Commission shall adopt rules, in consultation with the states, to establish universal service obligations applicable to Title VII firms. Such obligations may include contributions, either financial or in-kind, to the preservation and advancement of universal service consistent with universal service obligations imposed under other Titles of this Act, whether or not the Title VII firms are subject to the rate regulation provisions of this Title. "(c) The Commission shall seek to promote the interconnection and interoperability of networks providing Title VII services. To further this goal, the Commission is authorized to take actions that facilitate industry standards-setting processes, including the promulgation of procedures and timetables for the adoption of industry standards. The Commission shall have the authority to establish interconnection and interoperability standards or requirements by rule if it finds that the industry standards- setting process is not functioning to accomplish this goal within a reasonable period of time, or that promulgating such standards or requirements is necessary to advance the goals of this Title. "(d) The Commission shall adopt rules as are necessary and feasible to ensure that Title VII services are accessible and usable by individuals with disabilities, including individuals with functional limitations of hearing, vision, movement, manipulation, speech and interpretation, and are available to all educational institutions in the nation. "(e) The Commission shall regulate the rates for Title VII services only if it finds that a Title VII firm has market power with respect to such services. The Commission shall conduct proceedings to establish guidelines or standards for defining "market power" for the offering of Title VII services. The Commission is also authorized to adopt transitional rules, as needed, for the application of such rate regulation before it has made a determination regarding a Title VII firm's market power. However, the Commission shall impose such transitional rate regulation only on Title VII firms that, at the time of their application for Title VII status, are regulated by the Commission under Title II as a common carrier with market power, or under Title VI as a cable operator that is not subject to effective competition. "(f) For any Title VII services subject to rate regulation, the Commission has the authority to impose requirements to provide public notice regarding such rates, through tariffing or some other appropriate means, and to establish, by rule, procedures and standards to ensure that rates are just and reasonable. "(g) With respect to the offering of Title VII services, the Commission shall promulgate rules, as necessary, to address the concerns reflected in Sections 223 through 229 of Title II. "(h) The Commission may adopt such regulations as necessary to ensure that the delivery of video programming directly to subscribers via Title VII services is consistent with the principles and objectives of sections 325(b), 611, 614, 615, and 632 of this Act. Providers of video programming directly to subscribers via Title VII services shall be subject to the payment of fees imposed by a local franchising authority, in lieu of the fees required of a cable operator under section 622. The rate at which such fees are imposed shall not exceed the rate at which franchise fees are imposed on any cable operator transmitting video programming in the same service area. "(i) The Commission may also impose additional requirements by rule, or issue such orders, as necessary, to carry out the purposes of this Title. "(j) The Commission shall establish procedures for resolving expeditiously any complaints filed by any entity against a Title VII firm and alleging a violation of the terms of Title VII, or a Commission order issued pursuant to its Title VII authority. " SEC. 705. STATE AUTHORITY TO REGULATE TITLE VII SERVICES. "(a) Notwithstanding any other provision of this Act, no state or local government may regulate entry into the market for the provision of any Title VII services. "(b) State governments may regulate rates for any Title VII services only pursuant to the authority provided under this Title. "(c) No state or local government may regulate rates for any Title VII service if the Commission finds, or has found, that the Title VII firm lacks market power in the provision of such service. "(d) States may regulate rates for intrastate services, subject to the following conditions: "(1) For those intrastate Title VII broadband services for which the Commission finding in subsection (c) has not been made, a state may regulate the rates for such services pursuant to models or standards established by the Commission for rate regulation. The Commission shall, after notice and comment, establish such models or standards in consultation with the states. A Title VII firm subject to state regulation under this subsection, or any other interested party, may petition the Commission for review of the state's compliance with the Commission's models or standards for rate regulation. If the Commission declines to review the state's action, it may do so in an order without stating its reasons, and such order is not subject to appeal in the U.S. courts. If the Commission accepts the petition for review, it must provide the state, the Title VII firm, and other interested parties an opportunity to comment. Following its review of such comments, the Commission shall issue an order, including findings on whether the state has so complied, an explanation of the Commission's reasons, and directions for such relief as its finds necessary, and such order shall be subject to appeal in the U.S. courts. "(2) For those intrastate other Title VII services for which the Commission finding in subsection (c) has not been made, states may regulate the rates for such services; provided that the Commission may preempt such state regulation, but only to the extent necessary to avoid direct conflict between state regulatory actions and the policies implemented under this Title. "(e) The Commission is granted the authority to preempt other state or local regulations concerning other terms or conditions of a Title VII firm's offering, but only to the extent such regulation is found to conflict with the policies and provisions established under this Title. " SEC. 706. REMEDIES. "The Commission may award damages to any person claiming to be damaged by a Title VII firm for a violation of, or failure to comply with, any provision of this Title or any Commission order issued pursuant to this Title. SEC. 705. CONFORMING AMENDMENT. (a) Section VII of the Communications Act of 1934, which is labeled "Miscellaneous Provisions" and includes Sections 701 through 713, is changed to Title VIII and the Sections renumbered to be Sections 801 through 813. (b) Section 2(b) of the Communications Act is amended to read "Except as provided in sections 223 through 227, inclusive, and subject to the provisions of section 301, title VI, and Section 705 . . ."