Subject: Summary of Revisions to House Bills 3636 and 3626 ---------------------------------------------------------- The House Energy and Commerce Committee marked up two major telecommunications bills last week. The Committee approved HR 3636, the National Communications Competition and Information Infrastructure Act of 1993, cosponsored by Reps. Markey (D-Mass.) and Fields (R-Tex.), and HR 3626, the Antitrust Reform Act of 1993, cosponsored by Reps. Brooks (D-Tex.) and Dingell (D-Mich.). The House Judiciary Committee, which also has jurisdiction over HR 3626, approved the bill in a different version. The House Rules Committee will decide which provisions from the two different versions of HR 3626 to allow on the floor. Floor votes on HR 3626 and 3636 may be scheduled as early as late April. Both bills are designed to provide more opportunity for competition in long-distance telephone, cable television, and cellular communication services. HR 3636 would allow cable and telephone companies to compete in each other's lines of business. HR 3626 is a major antitrust reform measure and would allow the regional Bell telephone operating companies, known as Baby Bells or RBOCs, to offer long-distance services. HR 3636 HR 3636 proposes a major restructuring of the Communications Act of 1934 to account for changes in technology, market structure, and people's increasing needs for advanced telecommunications services. HR 3636 includes EFF's Open Platform provisions and supports an open, accessible network with a true diversity of information sources. Open Platform service is designed to give residential subscribers affordable access to voice, data, and video digital telephone service on a switched, end-to-end basis. Open Platform service would provide residential and business customers access to a variety of applications on the information highway, including distance learning, telemedicine, telecommuting, the Internet, and many more. HR 3636 directs the FCC to investigate the policy changes needed to make Open Platform service widely available at reasonable rates. The bill promotes the entry of telephone companies into video cable service and seeks to benefit customers by spurring competition in the cable television industry. Telephone companies that want to provide video programming would be required to provide video services through a "video platform," which would be open to all bona fide requests from other video programming providers. The markup bill substitutes a contract carriage regime for the original bill's common carriage regime by dropping the original bill's requirement that 75% of a telephone company's video platform channels must be reserved for competitors. Instead, the markup bill would require that video platforms have a suitable margin of capacity to meet reasonable growth in demand. To promote local competition in telecommunications services, the bill requires that local telephone companies open their networks to competitors who wish to interconnect with the public switched telephone network. The bill also would establish a Joint Federal-State Board (made up of FCC members and state regulators) to devise a framework for ensuring continued universal service. The Board would be required to define the services encompassed within a telephone company's universal service obligation and to promote access to advanced telecommunications technology. Several amendments were approved during markup of HR 3636 to address a myriad of issues. Some of these amendments are designed to facilitate the deployment of advanced telecommunications services. For example, Rep. Boucher's (D-Va.) amendment would accelerate FCC approval of common carrier facilities' applications to provide video dialtone services under section 214 of the Communications Act. Rep. Swift's (D-Wash.) amendment would require telephone companies to provide at-cost preferential rates to noncommercial and governmental entities for advanced, non-video platform services. Rep. Schaefer's (R-Colo.) amendment would prohibit the imposition of fees on new telecommunications providers that are not imposed on existing service providers. Other amendments address common carrier rate regulation. Rep. Tauzin (D-La.) sponsored an amendment requiring that a common carrier with more than 1.8 million access lines be "subject to alternative or price regulation, and not cost-based rate of return regulation," when it has implemented equal access, openness, and accessibility provisions. Another Tauzin amendment would allow broadcasters to use spectrum for ancillary services and provides that the FCC would collect fees generated from any broadcasts made using advanced services. Rep. Wyden (D-Ore.) sponsored an amendment requiring that telephone rate increases for residential customers who opt out of advanced telecommunications services must be implemented over a period of 5 years if they are more than an inflation adjustment. To address cross-subsidy and franchising requirements, Rep. Synar (D-Okla.) sponsored a ban on cross-subsidies between regulated telephone service and competitive telecommunications, information, and video services. In addition, Rep. Fields' (R-Tex.) amendment would preempt state and local governments' ability to extend their franchising authority over cable television providers to cover any telecommunications services offered by cable television operators. HR 3626 This bill would phase out the limitations placed on the Baby Bells under the modified consent decree that resulted in the antitrust agreement that broke up AT&T in 1982 (the "MFJ" or "Modification of Final Judgment"). The MFJ currently precludes Baby Bells from providing long distance service and manufacturing telephone equipment. Until two years ago, the Bell Companies were precluded from electronic publishing. The bill gives the Attorney General and the FCC the authority to make a public interest determination before a Baby Bell could offer competitive long distance services. The bill requires the Attorney General to make a finding that there is no substantial possibility that the Baby Bell or its affiliates could use monopoly power, for example by preventing access to networks or using profits earned, to impede competition in the market it seeks to enter. HR 3626 also would lift MFJ restrictions and allow Baby Bells to engage in manufacturing telephone equipment, electronic publishing, and burglar alarm services. Two different versions of HR 3626 emerged from the Energy and Commerce Committee, chaired by Rep. Dingell, and the Judiciary Committee, chaired by Rep. Brooks. The two Committee chairs had previously reached a compromise on the conditions under which Baby Bells should be allowed into interstate resale and intrastate service. However, the Judiciary Committee's version would tighten the requirements for Baby Bells to enter intrastate long distance and interstate resale. Rep. Dingell's bill would allow Baby Bells to provide incidental services across the LATA boundaries that currently divide their regions. An amendment sponsored by Rep. Markey would list privacy requirements for common carriers and require the FCC to study the impact of converging technologies on consumer privacy. Rep. Markey also introduced an amendment to expand the definition of electronic publishing. An amendment to both HR 3636 and 3626 would authorize additional FCC appropriations as necessary to carry out the acts and their amendments.