[Note: this bill did not pass, and was not even reported out of committee, but may be revised and reproposed soon.] Telecommunications Infrastructure Act of 1993 (S. 1086) Introduced by Senators Danforth and Inouye on June 9, 1993 First hearing scheduled: July 14, 9:30 AM A Summary by the Electronic Frontier Foundation The Senate Communications Subcommittee is now in the process of considering legislation that would eliminate the legal monopoly that local telephone companies have on local phone service, allow any communications provider to offer local phone service, and allow local telephone companies to compete fully in the cable television market. The legislation's goal is to promote increased investment in the nation's telecommunications infrastructure. The bill proposes many significant policy changes, chief among which is a very rapid move toward deregulating the local telephone company's monopoly on local telephone service. The policies proposes are laid out in broad concepts, leaving the Federal Communications Commission to wrestle with the actual implementation of the policies. LOCAL EXCHANGE COMPETITION One year after the bill is enacted, any company would be allowed to offer local telephone service. Potential new entrants who would be allowed in the local exchange market under this bill include cable television companies, wireless service providers, and even Bell companies outside their current local exchange monopoly areas. Any State laws which would preserve the current telephone company monopoly or limit the entry of competitors are pre-empted by the bill. TELECOMMUNICATIONS CARRIER OBLIGATIONS Any company that offers telecommunications service or is interconnected with the local exchange carrier's network, has several obligations under this bill. The definition of telecommunications service is somewhat vague, but certainly includes voice telephone service, interactive data services used to carry information services, and possible one-way video services such as are currently provided by cable television companies. Carriers' obligations include: 1. Interconnection All carriers that either provide telecommunications service or are interconnected with a carrier that does provide telecommunications service, must allow other carriers to interconnect with their network for the purpose of providing telecommunications or information services to users of either network. Network operators must provide interconnection under nondiscriminatory terms, on an unbundled basis. Operators must also supply all necessary technical information to enable others to interconnect and interoperate from one network to another. 2. Universal Service All providers of telecommunications service must contribute to the "preservation and advancement of universal service." States, in cooperation with the FCC, are responsible to make regulations that establishes the mechanism for supporting universal service in the newly competitive telephone market. The bill does provide, however, that any universal service support should be given directly to "individuals and entities that cannot afford the cost" of telecommunications service. Subsidy for user's communications equipment is also allowed. 3. Number Portability The FCC will establish regulations the provide for "portable" numbers from all carriers as soon as possible. Thus, a customer could switch telecommunications providers without having to change telephone numbers. The administration of the numbering system would be removed from Bellcore and placed with an "impartial entity." INFRASTRUCTURE FOR RURAL AREAS AND NON-COMPETITIVE MARKETS The bill recognizes that in a competitive market environment, rural and "noncompetitive markets" may not enjoy the level of investment necessary for providing advanced telecommunications services. The minimum level of service desired in the bill is that which would "provide subscribers with sufficient network capacity to access to information services that provide a combination of voice, data, image, and video; and are available at nondiscriminatory rates that are based on the reasonably identifiable costs of providing such services." It is not clear that such services would be interactive. State regulators given the primary responsibility to ensure that carriers have an incentive to provide high-quality services to all areas. If this approach fails, the FCC is empowered to take action to have necessary service delivered to these areas. NETWORK STANDARDS AND PLANNING All segment of the communications industry are encouraged to work together to set voluntary standards for interconnection and interoperability. If the FCC determines that standards development is not succeeding or proceeding too slowly, it may set incentives or deadlines for work to be completed. The FCC may also impose mandatory standards if the voluntary process fails. The FCC and the States are required to ensure that advanced telecommunications services are designed to be accessible to people with disabilities. TELEPHONE COMPANY ENTRY INTO CABLE TELEVISION MARKET The current ban preventing local telephone companies from entering the cable television market is lifted, in part. Local phone companies will be allowed, under the bill, to provide cable television service within their serving area provided that the service is provided by a separate subsidiary and that the phone company not break any laws regarding improper cross-subsidization between phone service and cable services. By the same token, cable companies that provide telecommunications service must do so through separate subsidiaries and obey laws regarding cross-subsidization. Phone companies are still not allowed to purchase more than 5 percent interest in any cable system that provides services within the phone companies service region. CHANGES IN LONG DISTANCE RESTRICTIONS The restrictions on local phone companies against providing long distance (InterLATA) telecommunications service are lifted, in part, by the bill, to enable local phone companies to function more easily in the cable television and cellular phone markets. Bell companies would be allowed to operate wireline and satellite links for the purposes of distributing cable television signals over long distances. Some relaxation of the InterLATA restriction is also allowed to enable Bell companies to carry cellular phone calls from one region to another, and to hand-off calls from one cellular system to another. INFORMATION SERVICES SAFEGUARDS Bell companies that provide information services must do so through a separate subsidiary in order to prevent cross-subsidies that would be unfair to consumers of basic phone service and to information service competitors. The separate subsidiary must maintain separate books and records, only engage in arms-length transactions with the Bell company, and follow other regulations that the FCC issues regarding accounting, Tariffing, and business practices. PRIVACY OF CUSTOMER TRANSACTION INFORMATION Telecommunications carriers are prohibited from disclosing information about individual customers unless there is an affirmative, written request to do so by that customer. Carriers must, however, make any information (Customer Proprietary Network Information) which is disclosed available equally to their affiliates and all competitors who request the information. Customer Proprietary Network Information includes quantity, type, and technical characteristics of telecommunications service used by a customer, as well as information contained in bills received by the customer. [A complete copy of S.1086 is available by anonymous ftp on ftp.eff.org] [Please direct any questions to eff@eff.org.]