[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5828 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5828
To reform the universal service provisions of the Communications Act of
1934, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2010
Mr. Boucher (for himself and Mr. Terry) introduced the following bill;
which was referred to the Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To reform the universal service provisions of the Communications Act of
1934, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Universal Service Reform Act of
2010''.
SEC. 2. DEFINITIONS.
(a) In General.--Section 3(a) of the Communications Act of 1934 (47
U.S.C. 153(a)) is amended--
(1) by adding the following new paragraphs:
``(53) Communications service provider.--The term
`communications service provider' means any entity that--
``(A) contributes to or receives universal service
support for the most recent calendar quarter ending
before the date of enactment of the Universal Service
Reform Act of 2010;
``(B) uses telephone numbers or Internet protocol
addresses, or their functional equivalents or
successors, to offer a service or a capability--
``(i) that provides or enables real-time 2-
way voice communications; and
``(ii) in which the voice component is the
primary function; or
``(C) offers directly to the public, or to such
classes of users as to be effectively available
directly to the public, a physical transmission
facility, whether circuit-switched, packet-switched, a
leased line, or using radio frequency transmissions
(regardless of the form, protocol, or statutory
classification of the service) that allows an end user
to obtain access from a particular end user location to
a network that permits the end user to engage in
electronic communications (including
telecommunications) with the public.
``(54) High-cost support.--The term `high-cost support'
means high cost loop support, high cost model support, local
switching support, interstate access support, and interstate
common line support, as such forms of support are described in
part 54 of title 47, Code of Federal Regulations, respectively,
as in effect on the date of enactment of the Universal Service
Reform Act of 2010, or any other support or revenue recovery
mechanism established by the Commission as part of the high
cost fund of the universal service fund pursuant to section 254
or the Universal Service Reform Act of 2010.
``(55) High-speed broadband service.--
``(A) Definition.--The term `high-speed broadband
service' means a 2-way network that uses Internet
protocol (and the associated capabilities and
functionalities, services, and applications provided
over an Internet protocol platform or for which an
Internet protocol capability is an integral component)
and services, facilities, equipment, or applications
that enable an end-user to receive communications in
Internet protocol format, regardless of whether the
communications are voice, data, video, or any other
form, at or exceeding the minimum data rate requirement
established by the Commission under section 254(q).
``(B) Internet protocol.--In subparagraph (A), the
term `Internet protocol' means the Transmission Control
Protocol/Internet Protocol or any predecessor or
successor protocols to such protocol.
``(56) Mobile wireless communications service.--The term
`mobile wireless communications service' means a commercial
mobile service (as defined in section 332(d)), except that such
term shall only apply to such service as it relates to 2-way
communications.
``(57) Mobile wireless communications service provider.--
The term `mobile wireless communications service provider'
means a provider of a mobile wireless communications
service.''; and
(2) by reordering paragraphs (1) through (52) of such
section and the additional paragraphs added by paragraph (1) of
this section in alphabetical order based on the headings of
such paragraphs and renumbering such paragraphs as so
reordered.
(b) Rule of Construction.--Terms used in this Act shall have the
meanings set forth in the Communications Act of 1934 (47 U.S.C. 151 et
seq.) unless otherwise specified.
TITLE I--UNIVERSAL SERVICE REFORM
SEC. 101. UNIVERSAL SERVICE REFORM PROCEDURES AND PRINCIPLES.
Subsections (a), (b), and (c) of section 254 of the Communications
Act of 1934 (47 U.S.C. 254) are amended to read as follows:
``(a) Procedures to Reform Universal Service.--
``(1) Federal-state joint board on universal service.--
``(A) Proceeding required.--Within 1 month after
the date of enactment of the Universal Service Reform
Act of 2010, the Commission shall institute and refer
to the Federal-State Joint Board under section 410(c) a
proceeding to recommend changes to any of its
regulations in order to implement section 214(e) and
this section (as amended by the Universal Service
Reform Act of 2010), including the definition of the
services that are supported by Federal universal
service support mechanisms and a specific timetable for
the completion of such recommendations.
``(B) Additional member.--In addition to the
members of the Joint Board required under section
410(c), 1 member of such Joint Board shall be a State-
appointed utility consumer advocate nominated by a
national organization of State utility consumer
advocates.
``(C) Deadline for joint board.--The Joint Board
shall, after notice and opportunity for public comment,
make its recommendations to the Commission within 9
months after the date of enactment of the Universal
Service Reform Act of 2010.
``(2) Commission action.--
``(A) Deadline for commission.--The Commission
shall initiate a proceeding to consider the
recommendations from the Joint Board required by
paragraph (1)(C) and shall complete such proceeding
within 18 months after the date of enactment of the
Universal Service Reform Act of 2010.
``(B) Requirement.--The rules established by such
proceeding shall include a definition of the services
that are supported by Federal universal service support
mechanisms and a specific timetable for implementation.
``(b) Universal Service Principles.--The Joint Board and the
Commission shall base policies for the preservation and advancement of
universal service on the following principles:
``(1) Quality and rates.--Quality services should be
available at just, reasonable, and affordable rates.
``(2) Access to advanced services.--Access to advanced
telecommunications and information services should be provided
in all regions of the Nation.
``(3) Access in rural, insular, or high cost areas.--
Consumers in all regions of the Nation, including low-income
consumers and those in rural, insular, or high cost areas,
should have access to the services the Commission determines to
be universal services in accordance with subsection (c),
including interexchange services and advanced
telecommunications and information services, that are
reasonably comparable to those services provided in urban areas
and that are available at rates that are reasonably comparable
to rates charged for similar services in urban areas.
``(4) Comparable treatment of communications service
providers.--
``(A) Equitable and nondiscriminatory
contributions.--All communications service providers
should make equitable and nondiscriminatory
contributions to the preservation and advancement of
universal service.
``(B) Competitive neutrality.--Federal and State
mechanisms to preserve and advance universal service
should be competitively neutral such that those
mechanisms neither unfairly advantage nor disadvantage
one communications service provider over another and
neither unfairly favor nor disfavor one technology over
another.
``(5) Explicit, specific, and predictable support
mechanisms.--There should be explicit, specific, predictable,
and sufficient Federal and State mechanisms to preserve and
advance universal service.
``(6) Access to advanced telecommunications services for
schools, health care, and libraries.--Elementary and secondary
schools and classrooms, health care providers, and libraries
should have access to advanced telecommunications services as
described in subsection (h).
``(7) Additional principles.--Such other principles as the
Joint Board and the Commission determine are necessary and
appropriate for the protection of the public interest,
convenience, and necessity and are consistent with this Act.
``(c) Definition.--
``(1) In general.--Universal service includes the services
defined on the day before the date of enactment of the
Universal Service Reform Act of 2010 as universal services, as
modified by the Commission as necessary to implement the
provisions of such Act, high-speed broadband service, and an
evolving level of telecommunications and information services
that the Commission shall establish periodically under this
section, taking into account advances in telecommunications and
information technologies and services.
``(2) Alterations and modifications.--The Joint Board shall
consider whether to recommend to the Commission modifications
in the definition of the services that are supported by Federal
universal service support mechanisms not less than once every 5
years.
``(3) Considerations.--The Joint Board in recommending, and
the Commission in establishing, the definition of the services
that are supported by Federal universal service support
mechanisms shall consider the extent to which such services--
``(A) are essential to education, public health, or
public safety;
``(B) have, through the operation of market choices
by customers, been subscribed to by a substantial
majority of residential customers;
``(C) are being deployed in public
telecommunications networks by communications service
providers; and
``(D) are consistent with the public interest,
convenience, and necessity.
``(4) Special services.--In addition to the services
included in the definition of universal service under paragraph
(1), the Commission may designate additional services for such
support mechanisms for schools, libraries, and health care
providers for the purposes of subsection (h).
``(5) High-speed broadband service.--The definition of
universal service shall not be construed to exclude eligible
communications service providers from using universal service
funding for the provision, maintenance, and upgrading of high-
speed broadband service.''.
SEC. 102. UNIVERSAL SERVICE SUPPORT CONTRIBUTIONS.
(a) In General.--Section 254(d) of the Communications Act of 1934
(47 U.S.C. 254(d)) is amended to read as follows:
``(d) Universal Service Support Contributions.--
``(1) Calculating universal service support
contributions.--
``(A) In general.--
``(i) Equitable.--To preserve and advance
universal service in accordance with the
principles in subsection (b), the Commission
shall assess contributions to universal service
support mechanisms from communications service
providers in a manner that is equitable,
competitively neutral, nondiscriminatory, and
ensures that communications service providers
are subject to similar obligations.
``(ii) Methodology.--The Commission may
employ any methodology to assess such
contributions, including a methodology based
on--
``(I) revenues derived from the
provision of intrastate, interstate,
and foreign telecommunications services
and information services by
communications service providers;
``(II) working telephone numbers
used by communications service
providers; or
``(III) any other current or
successor identifier protocols or
connections to the network used by
communications service providers.
``(B) Use of more than one methodology.--If no one
methodology designated under subparagraph (A)(ii)
effectuates the principles described in this Act, the
Commission may employ a combination of any such
methodologies.
``(C) Low volume exception.--The Commission shall
not materially increase the contributions of
communications service providers whose customers
typically make a low volume of calls on a monthly
basis.
``(D) De minimis exception.--The Commission may
exempt a communications service provider from the
requirements of this subsection if the amount of
telecommunications services and information services
provided by such provider are limited to such an extent
that the level of contributions of such provider to the
preservation and advancement of universal service would
be de minimis.
``(E) Group plan exception.--If the Commission uses
a methodology under subparagraph (A)(ii) based in whole
or in part on working telephone numbers, it may provide
a discount for additional numbers provided under a
group or family pricing plan for residential customers
provided in one bill.
``(F) Discretionary authority.--If the Commission
determines that it is in the public interest, any
provider of a telecommunications service or an
information service may be required to contribute to
the preservation and advancement of universal service.
``(2) Reports.--
``(A) In general.--The Commission shall establish
annual reporting requirements for all entities
contributing to universal service support mechanisms or
receiving universal service support.
``(B) Neutral.--The reporting requirements shall
not impose unnecessary burdens and shall be neutral
with respect to technology and provider.
``(C) Review.--The Commission shall periodically
review the reporting requirements to ensure that such
requirements provide adequate information to ensure
that universal service support is being used for the
provision, maintenance, and upgrading of the facilities
for which such support is intended.
``(3) Universal service support contribution limits.--In
repurposing universal service support to ensure that all people
in the United States have access to voice service and high-
speed broadband service, the Commission shall not unreasonably
increase the contribution burden on consumers.''.
(b) Study of Contribution Methodologies.--
(1) In general.--Not later than 270 days after the date of
enactment of this Act, the Federal Communications Commission
shall complete a study, including a cost-benefit analysis, of
using a system based on working telephone numbers or revenues
for calculating contributions by communications service
providers to universal service support mechanisms.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Federal Communications Commission
shall transmit to the Committee on Energy and Commerce of the
House of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate a report on the study
conducted under paragraph (1).
SEC. 103. UNIVERSAL SERVICE SUPPORT DISTRIBUTION.
Section 254(e) of the Communications Act of 1934 (47 U.S.C. 254(e))
is amended to read as follows:
``(e) Distribution and Use of Universal Service Support.--
``(1) In general.--
``(A) Eligibility.--Only a communications service
provider designated as an eligible communications
service provider under section 214(e) shall be eligible
to receive specific Federal universal service support.
``(B) Use restriction.--An eligible communications
service provider that receives such support shall use
that support only for the provision, maintenance, and
upgrading of facilities and facilities-based services
for which the support is intended.
``(C) Explicit and sufficient.--Any such support
shall be explicit and sufficient to achieve the
purposes of this section.
``(2) Use of high-cost support.--The use of high-cost
support for all rural, insular, or high cost areas--
``(A) shall be expanded to include high-speed
broadband service and any other service that is
determined to be a universal service by the Commission
under subsection (c); and
``(B) shall be available to eligible communications
service providers designated under section 214(e), but,
until such time as the Commission implements the new
cost model required by paragraph (3), an eligible
communications service provider that is also an
incumbent local exchange carrier may elect to have the
Commission calculate the amount of high-cost support
payable to such provider pursuant to part 54 of title
47, Code of Federal Regulations, as in effect on the
date of enactment of the Universal Service Reform Act
of 2010.
``(3) Calculating high-cost support for eligible
communications service providers providing service in rural,
insular, or high cost areas.--
``(A) Calculating high-cost support.--
``(i) Development of cost model.--Within 2
years after the date of enactment of the
Universal Service Reform Act of 2010, the
Commission shall develop a new cost model for
the provision of high-cost support to eligible
communications service providers to provide
universal service in rural, insular, and high
cost areas, taking into account the cost to
eligible communications service providers of
providing voice service and high-speed
broadband service.
``(ii) Inclusive.--The new cost model shall
determine the cost of providing voice service
and high-speed broadband service both on the
basis of wire centers and study areas.
``(iii) Data rate requirements.--The
Commission shall require eligible
communications service providers to meet the
minimum data rate requirements established
pursuant to subsection (q) no earlier than 3
years after support is initially disbursed
pursuant to the new cost model.
``(iv) Maximization of access.--In
developing the new cost model, the Commission
shall ensure that the new cost model results in
the maximum number of households that do not
have access to high-speed broadband service as
of the date of enactment of the Universal
Service Reform Act of 2010 obtaining such
access as quickly as possible.
``(v) Rate of return regulation.--In
developing the new cost model, the Commission
shall develop and implement a mechanism that
maintains rate-of-return regulation for the
distribution of high-cost support to an
eligible communications service provider
subject to rate-of-return regulation as of the
date of enactment of the Universal Service
Reform Act of 2010.
``(B) Consideration.--In determining the
appropriate level of high-cost support for eligible
communications service providers, the Commission may
consider the net revenues derived by such providers
from the provision of any services, including
telecommunications service, high-speed broadband
service, and multi-channel video programming service
that are offered in a service area over infrastructures
receiving high-cost support.
``(C) Model for eligible communications service
providers other than rural lecs.--The Commission shall
require all eligible communications service providers
other than rural local exchange carriers to use the
wire center results of the new cost model within 120
days after the Commission completes the revisions
required by subparagraph (A).
``(D) Rural lecs.--
``(i) In general.--Except as provided in
clause (ii), the Commission shall require all
rural local exchange carriers to use the study
area results of the new cost model within 120
days after the Commission completes the
revisions required by subparagraph (A).
``(ii) Exception.--
``(I) Election.--Within 120 days
after the Commission completes the
revisions required by subparagraph (A),
any rural local exchange carrier may
make a one-time permanent election to
have the Commission calculate the
amount of high-cost support payable to
such provider based on the wire center
results of the new cost model instead
of the study area results of the new
cost model.
``(II) Review.--The Commission
shall review and approve the transition
to the wire center results of the new
cost model for any such provider within
120 days after receiving notice of such
election.
``(E) Limitation on high-cost support.--High-cost
support provided to an incumbent local exchange carrier
in accordance with the new cost model shall be in lieu
of any Federal high-cost support mechanisms to which
the carrier was entitled on the day before the date on
which the Commission implements the new cost model
under subparagraph (A)(i).
``(F) Process for reduction of support for ilecs.--
``(i) In general.--
``(I) Requirement.--Within 1 year
after the Commission completes the new
cost model required by subparagraph
(A), the Commission shall develop and
implement a recurring mechanism for
reducing or eliminating the high-cost
support provided to an incumbent local
exchange carrier in the competitive
portions of the incumbent local
exchange carrier's service areas and
shall reduce or eliminate high-cost
support in such areas.
``(II) Investment costs.--When an
incumbent local exchange carrier has
invested to fulfill the requirements of
subparagraphs (A) through (E) of
section 214(e)(1) in the portion of a
service area that is subsequently found
to be competitive, the Commission may,
in recalculating the amount of per-line
high-cost support provided to such
carrier for the non-competitive
portions of such service area, consider
an appropriate amortization schedule
for costs incurred to satisfy the
buildout requirements in the areas that
were previously determined pursuant to
subclause (III) not to be competitive.
``(III) Definition.--For purposes
of this subparagraph, in a service area
(as defined in section 214) in which
the Commission determines that at least
75 percent of the households can
purchase wireline voice service and
wired high-speed broadband service from
an unsupported, facilities-based, non-
incumbent provider, a competitive
portion of a service area shall be that
portion of a service area where
households can purchase wireline voice
service and wired high-speed broadband
service from such provider.
``(ii) Recalculation.--
``(I) In general.--Such mechanism
shall also include a methodology for
recalculating, in a service area in
which the Commission has determined
that there is a competitive portion,
the amount of per-line high-cost
support provided to an eligible
communications service provider for the
non-competitive portions of such
service area to ensure comparable rates
for supported services in both the
competitive and non-competitive
portions of the service area.
``(II) Considerations.--In
developing such methodology, the
Commission may consider the net
revenues derived by such providers from
the provision of any services,
including telecommunications service,
high-speed broadband service, and
multi-channel video programming service
that are offered in a service area over
infrastructures receiving high-cost
support, except that the total amount
of high-cost support the incumbent
local exchange carrier receives for the
entire service area after applying such
methodology shall be no greater than
the total amount of high-cost support
the incumbent local exchange carrier
received with respect to the service
area on the day before such methodology
was applied.
``(iii) Requirements.--The Commission shall
also ensure that each unsupported, facilities-
based non-incumbent provider in the competitive
portion of each service area that such non-
incumbent provider is authorized to serve and
that is determined by the Commission to be
competitive shall--
``(I) provide basic voice service
of standard quality and high-speed
broadband service to any requesting
residential customer in such area and
be able to provide such service upon
request, except that such provider may
impose, subject to rules adopted by the
Commission--
``(aa) reasonable
requirements for
creditworthiness, such as
requiring a security deposit;
and
``(bb) a just and
reasonable line extension
charge to provide service to
any such customer whose
premises are located beyond a
standard distance from the
provider's infrastructure;
``(II) provide residential
customers with the option to subscribe
to basic voice service on a stand-alone
basis without any term commitment nor
any penalty for early termination of
the subscription;
``(III) provide toll limitation (as
defined in section 54.400(d) of title
47, Code of Federal Regulations, as of
the date of enactment of the Universal
Service Reform Act of 2010) if the
provider offers basic voice service
that does not include unlimited local
and domestic interexchange calling for
a flat monthly rate;
``(IV) offer access to
telecommunications relay services in
accordance with Commission
requirements; and
``(V) comply with Commission
requirements regarding--
``(aa) appropriate notice
and approval before
discontinuing service;
``(bb) emergency
preparedness and network
outages; and
``(cc) the provision of 911
and E911 service.
``(iv) Limitation.--A State may not impose
or enforce any carrier-of-last-resort
requirements on any unsupported, facilities-
based non-incumbent provider in a service area
that the Commission has determined is
competitive.
``(G) Tribal lands.--
``(i) In general.--Notwithstanding any
other provision of this paragraph, the
Commission shall not reduce high-cost support
for tribal lands under section 54.400(e) of
title 47, Code of Federal Regulations, unless
the Commission makes an affirmative finding
that such reductions are in the public
interest.
``(ii) Requirements for finding.--In making
a finding under clause (i), the Commission
shall consider whether residents of such tribal
lands have access to the services the
Commission determines to be universal services
in accordance with subsection (c), including
interexchange services and advanced
telecommunications and information services,
that are reasonably comparable to those
services provided in urban areas and that are
available at rates that are reasonably
comparable to rates charged for similar
services in urban areas, consistent with
subsection (b)(3).
``(H) Hold harmless.--
``(i) In general.--The Commission shall
ensure that, for 1 year after the Commission
implements the new cost model under
subparagraph (A)(i), no incumbent local
exchange carrier receives less high-cost
support in a service area than the incumbent
local exchange carrier was receiving in high-
cost support in such area on the day before the
Commission implements such new cost model.
``(ii) Determination.--The Commission shall
determine the difference between the amount an
incumbent local exchange carrier was receiving
in high-cost support on the day before the
Commission implements such new cost model and
the amount that such incumbent local exchange
carrier would receive after the Commission
implements such new cost model and shall,
beginning in the fifth quarter that begins
after the Commission implements such new cost
model, reduce the amount of such difference in
equal increments over a 5-year period such that
the amount of the difference has been reduced
to zero at the end of such period.''.
SEC. 104. ELIGIBLE RECIPIENTS OF UNIVERSAL SERVICE SUPPORT.
(a) Amendment.--Section 214(e) of the Communications Act of 1934
(47 U.S.C. 214(e)) is amended--
(1) in paragraph (1)--
(A) by striking ``Eligible telecommunications
carriers.--A common carrier'' and all that follows
through ``paragraph (2), (3), or (6)'' and inserting
the following: ``Eligible communications service
provider.--A communications service provider designated
as an eligible communications service provider under
paragraph (2), (3), (6), or (8)'';
(B) by striking ``throughout the service area for
which'' and inserting ``throughout the portions of a
service area that the Commission has not determined are
competitive, where the eligible communications service
provider accepts support, and for which'';
(C) in subparagraph (A),
(i) by striking ``services that are'' and
inserting ``services, except for high-speed
broadband service, that are''; and
(ii) by striking ``; and'' and inserting
the following: ``and adhere to the State
carrier-of-last-resort requirements that are
imposed on incumbent local exchange carriers
serving such service area;'';
(D) in subparagraph (B), by striking the period at
the end and inserting the following: ``throughout the
service area and advertise the availability of life-
line and link-up services in a manner reasonably
designed to reach those likely to qualify for those
services;''; and
(E) by adding at the end the following:
``(C) demonstrate the ability to remain functional
in emergency situations;
``(D) comply with applicable State and Federal
consumer protection and service quality standards; and
``(E) notwithstanding subparagraph (A), in an area
where an eligible communications service provider
elects to receive high-cost support and high-speed
broadband service is not otherwise available, meet the
basic requirements for the deployment of high-speed
broadband service and provide high-speed broadband
service either itself or through resale of another
provider's services, including, for purposes of this
subparagraph only, the resale of satellite broadband
service, except that the Commission shall establish a
process in which--
``(i) a determination can be made to waive
the requirements of this subparagraph for 3
years upon a communications service provider's
application covering all or part of such
communications service provider's service area
demonstrating that the deployment and provision
of high-speed broadband service is not
technically feasible or would materially impair
the communications service provider's ability
to continue to provide local exchange service
throughout its service area, except that a
waiver shall be deemed automatically granted
under this clause for a communications service
provider demonstrating that the cost per line
of deploying and providing high-speed broadband
service to unserved high cost portions of its
service area is at least 3 times the national
average cost per line of providing high-speed
broadband service or demonstrating that there
is insufficient satellite capacity to meet the
requirements to provide high-speed broadband
service, subject to the renewal provisions set
forth in clause (ii);
``(ii) the communications service provider
may seek renewal of such waiver every 3 years
for as long as the deployment and provision of
high-speed broadband service is not technically
feasible or would materially impair the
communications service provider's ability to
continue to provide local exchange service
throughout its service area or the cost per
line of deploying and providing high-speed
broadband service to unserved high cost
portions of its service area remains at least 3
times the national average cost per line of
providing high-speed broadband service or there
continues to be insufficient satellite capacity
to meet the requirements to provide high-speed
broadband service; and
``(iii) any application of a communications
service provider for a waiver pursuant to
clause (i) on which the Commission has not
taken final action within 60 days after the
date of submission to the Commission shall be
deemed granted.'';
(2) by amending paragraphs (2) through (4) to read as
follows:
``(2) Eligibility criteria.--
``(A) In general.--In addition to the criteria
specified in paragraph (1), the Commission shall
establish such additional eligibility criteria for the
receipt of universal service support by eligible
communications service providers as it deems necessary
and in the public interest. The criteria established in
paragraph (1) and the criteria established by the
Commission pursuant to this paragraph shall be used by
State commissions in determining which providers shall
be designated as eligible recipients of universal
service support for the purpose of paragraph (3).
``(B) Additional designation.--The Commission may
establish a life-line service provider designation that
is not subject to the eligibility requirements in
paragraph (1) or the eligibility criteria established
in subparagraph (A).
``(3) Designation of eligible recipients.--A State
commission shall, upon its own motion or upon request,
designate as an eligible recipient of universal service support
only those providers meeting the requirements of paragraphs (1)
and (2).
``(4) Grandfather provision.--
``(A) Eligibility requirements.--A communications
service provider who was a recipient of high-cost
support in any service area prior to the date of
enactment of the Universal Service Reform Act of 2010
shall, for those areas where high-cost support provided
by section 254(e)(3) is available and the
communications service provider elects to receive such
support, meet the eligibility requirements for an
eligible communications service provider--
``(i) as described in paragraphs (1)(A)
through (D), within 1 year after the date of
enactment of the Universal Service Reform Act
of 2010; and
``(ii) as described in paragraph (1)(E),
within 5 years after such date of enactment.
``(B) Failure to meet requirements.--Failure of
such recipient to maintain and meet the eligibility
requirements within the period required by subparagraph
(A) shall require the automatic termination of specific
Federal universal service support to such recipient,
and such recipient shall simultaneously be relieved of
its obligation under this section, except as described
in subparagraph (E).
``(C) Partial compliance.--
``(i) In general.--Such recipient is
permitted to maintain and meet the eligibility
requirements in part of its service territory
and is eligible to continue to receive specific
Federal universal service support in those
service areas within its service territory in
which it meets the eligibility requirements.
``(ii) Definition.--For the purposes of
clause (i), the term `service territory' means
all of the service areas in which the
communications service provider is offering, or
is designated by the Commission or by a State
commission to offer, services that are
supported by Federal universal service support
mechanisms.
``(D) Rule of construction.--Nothing in this
paragraph shall be construed to prohibit such recipient
from obtaining a waiver under paragraph (1)(E).
``(E) Life-line and link-up exception.--A recipient
of universal service support in any service area prior
to the date of enactment of the Universal Service
Reform Act of 2010 that relinquishes its eligible
telecommunications carrier or eligible communications
service provider designation shall continue to offer
and receive support for providing life-line and link-up
service to its subscribers throughout its service area
unless another provider is designated as an eligible
communications service provider or a life-line service
provider in all or part of that service area.'';
(3) in paragraph (6)--
(A) in the heading, by striking ``Common carriers''
and inserting ``Communications service providers'';
(B) by striking ``common carrier'' each place it
appears and inserting ``communications service
provider'';
(C) by striking ``eligible telecommunications
carrier'' each place it appears and inserting
``eligible communications service provider''; and
(D) by striking ``carrier'' and inserting
``provider''; and
(4) by adding at the end the following:
``(7) Amount of specific federal universal service support
available to mobile wireless communications service
providers.--
``(A) In general.--The Commission shall establish
the amount of high-cost support to be distributed to
all mobile wireless communications service providers
designated as eligible communications service providers
under this subsection through a competitive bidding
process established by the Commission.
``(B) Limitation.--The amount of such high-cost
support available to be distributed annually to mobile
wireless communications service providers shall not
exceed the amount of high-cost support received by all
mobile wireless communications service providers for
rural, insular, or high cost areas in the last full
calendar year immediately preceding the date of
enactment of the Universal Service Reform Act of 2010.
``(8) Competitive bidding.--Within 1 year after the date of
enactment of the Universal Service Reform Act of 2010, the
Commission shall adopt a competitive bidding process for mobile
wireless communications service providers to provide service to
rural, insular, or high cost areas that incorporates the
following:
``(A) To participate in the competitive bidding
process, a mobile wireless communications service
provider shall--
``(i) be designated as an eligible
communications service provider under this
subsection or commit to immediately seeking
such designation under this subsection if the
Commission selects its bid; and
``(ii) establish that it is legally,
technically, financially, and otherwise
qualified to serve a rural, insular, or high
cost area.
``(B) The Commission shall determine whether a
mobile wireless communications service provider is
legally, technically, financially, and otherwise
qualified to serve a rural, insular, or high cost area
in approximately the same manner as the Commission uses
to qualify participants for the Commission's wireless
spectrum auctions.
``(C) The Commission shall seek competitive bids to
provide mobile wireless communications service in
rural, insular, or high cost areas where there are at
least 3 mobile wireless communications service
providers qualified to bid. In rural, insular, or high
cost areas where there are not at least 3 mobile
wireless communications service providers qualified to
bid, the Commission shall continue to provide support
at the per-line level in effect as of the day before
the date of enactment of the Universal Service Reform
Act of 2010, subject to adjustment over time pursuant
to the interim cap on support to competitive eligible
telecommunications carriers adopted by the Commission
prior to such date of enactment.
``(D) Prior to soliciting competitive bids, the
Commission shall issue a request for proposals
identifying the area a winning bidder must serve and
the minimum requirements for serving such area. In
determining the appropriate service area for
competitive bidding, the Commission shall take into
account existing service areas for providing mobile
wireless communications service, including the areas
where mobile wireless communications service providers
are licensed to provide service.
``(E) No more than 2 mobile wireless communications
service providers shall be selected by the Commission
to receive high-cost support in each service area based
on the Commission's evaluation of the competitive bids
received for each service area. In evaluating
competitive bids received for each service area, the
amount of the bid and the minimum broadband speeds
proposed by each mobile wireless communications service
provider shall be primary factors in selecting a
winning bid, but the Commission may take into account
other factors, including timing of service buildout.
``(F) When awarding bids to mobile wireless
communications service providers, the Commission shall
prioritize funding as follows:
``(i) First, to service areas where no
mobile wireless communications service provider
offers voice service.
``(ii) Second, to service areas where no
mobile wireless communications service provider
offers high-speed broadband service.
``(iii) Third, to all other service areas.
``(G) If the Commission selects a bid from a mobile
wireless communications service provider that has not
been designated as an eligible communications service
provider in that service area, the mobile wireless
communications service provider shall apply for such
designation within 1 month after the date the
Commission selects its bid. The Commission or
applicable State commission shall act on such
application within 6 months after the date of its
receipt.
``(H) Each mobile wireless communications service
provider selected as a Federal universal service
provider for a service area shall receive high-cost
support based on each mobile wireless communications
service provider's respective bid for a multi-year
period, up to 10 years, as determined by the Commission
to be appropriate, after which time the area shall be
rebid.
``(I) If high-cost support is made available to a
second mobile wireless communications service provider
in an area that is subject to competitive bidding, the
amount of such support shall be based on that mobile
wireless communications service provider's bid and
shall be no more than the amount of high-cost support
awarded by the Commission to the first mobile wireless
communications service provider in such area.
``(J) Each mobile wireless communications service
provider that is selected to serve each service area
shall execute a service contract with the Commission.
``(K) The Commission shall provide for a transition
to competitive bidding from the current system of high-
cost support for wireless providers that shall last no
longer than 3 years after the date of enactment of the
Universal Service Reform Act of 2010. As of the date
the Commission implements competitive bidding,
provider-specific Federal universal service adjustments
to wireless support imposed by the Commission in effect
as of the date of enactment of the Universal Service
Reform Act of 2010 shall also be superseded.''.
(b) Definitions.--Paragraph (5) of section 214(e) is amended to
read as follows:
``(5) Service area defined.--As used in this subsection,
the term `service area' means a targeted geographic area
determined by the Commission as requiring universal service
support and used by the Commission for the purpose of
determining universal service obligations and support
mechanisms for eligible communications service providers except
that an eligible communications service provider's service area
shall not include geographic areas that the provider is not
authorized to serve. In the case of an area served by a rural
local exchange carrier, such term means such carrier's `study
area' or the licensed or authorized service area of any other
communications service provider serving an area that overlaps
with the service area of a rural local exchange carrier.''.
(c) Payphone Service.--Nothing in this Act or in the amendments
made by this Act shall limit the authority of the Joint Board
established under section 254 of the Communications Act of 1934 (47
U.S.C. 254) to recommend or of the Federal Communications Commission to
define payphone service as a service supported by Federal universal
service support mechanisms under such section as such authority existed
on the day before the date of enactment of this Act.
SEC. 105. REMOVAL OF IMPEDIMENTS TO SUFFICIENT SUPPORT MECHANISMS.
Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is
further amended by adding at the end the following new subsection:
``(m) Removal of Limitations on Universal Support Mechanisms.--The
limitations on universal service support contained in section 54.305 of
the Commission's regulations (47 CFR 54.305) and the individual caps
imposed upon carriers contained in section 36.631 of the Commission's
regulations (47 CFR 36.631) shall cease to be effective on the date of
enactment of the Universal Service Reform Act of 2010.''.
SEC. 106. SCOPE OF SUPPORT.
Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is
further amended by adding after subsection (m), as added by section 105
of this Act, the following new subsection:
``(n) Scope of Support.--The Commission, in implementing the
requirements of this section (as amended by the Universal Service
Reform Act of 2010 with respect to the distribution and use of high-
cost support), shall not limit the distribution and use of high-cost
support to a single connection or primary line, and all residential and
business lines served by an eligible communications service provider
shall be eligible for high-cost support.''.
SEC. 107. APPLICATION OF ANTIDEFICIENCY ACT; INVESTMENT OF
CONTRIBUTIONS.
Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is
further amended by adding after subsection (n), as added by section 106
of this Act, the following new subsections:
``(o) Proper Accounting of Universal Service Contributions.--
``(1) From all budgets.--Notwithstanding any other
provision of law, the receipts and disbursements of universal
service contributions under this section shall not be counted
as new budget authority, outlays, receipts, deficit, or surplus
for purposes of--
``(A) the budget of the United States Government as
submitted by the President;
``(B) the Congressional budget;
``(C) the Balanced Budget and Emergency Deficit
Control Act of 1985; or
``(D) any other law requiring budget sequesters.
``(2) Additional exemptions.--Section 1341, subchapter II
of chapter 15, and sections 3302, 3321, 3322, and 3325 of title
31, United States Code, shall not apply to--
``(A) the collection and receipt of universal
service contributions, including the interest earned on
such contributions; or
``(B) disbursements or other obligations authorized
by the Commission under this section.
``(p) Investment of Universal Service Support Contributions.--
Notwithstanding any other provision of law, including sections 3302,
3321, 3322, and 3325 of title 31, United States Code, the cash balance
of receipts of universal service support contributions collected
pursuant to this section shall be invested by the Commission or its
designee in conservative, liquid, interest-bearing investment vehicles
of Government backed securities until such time as such receipts are
disbursed pursuant to this section.''.
SEC. 108. STATE AUTHORITY.
Section 254(f) of the Communications Act of 1934 (47 U.S.C. 254(f))
is amended to read as follows:
``(f) State Authority.--
``(1) In general.--A State may adopt regulations not
inconsistent with the Commission's rules to preserve and
advance universal service. In adopting those rules, a State may
require communications service providers to contribute to
universal service on the basis of a billing address or service
address assigned to that State for--
``(A) revenues derived from the provision of
intrastate telecommunications services by
communications service providers;
``(B) working telephone numbers used by
communications service providers; or
``(C) any other current or successor identifier
protocols or connections to the network used by
communications service providers.
``(2) Disregard of interstate component.--With respect to a
combination of services that includes interstate services, the
Commission shall determine how States may calculate the
proportion of intrastate services for which they are permitted
to make an assessment.
``(3) Guidelines.--Regulations adopted by a State under
this subsection shall result in a specific, predictable, and
sufficient mechanism to support universal service and shall be
competitively and technologically neutral, equitable, and
nondiscriminatory.''.
SEC. 109. MINIMUM DATA RATE REQUIREMENTS.
Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is
further amended by adding after subsection (p), as added by section 107
of this Act, the following new subsection:
``(q) Minimum Data Rate Requirements.--
``(1) In general.--Within 90 days after the date of
enactment of the Universal Service Reform Act of 2010, the
Commission shall adopt a minimum data rate requirement for
high-speed broadband service.
``(2) Commission speed adjustment requirements.--Beginning
in the sixth year after the date of enactment of the Universal
Service Reform Act of 2010 and periodically thereafter, the
Commission shall review the minimum data rate requirement in
paragraph (1) and shall make adjustments, if necessary, as the
advancement and deployment of technology allows eligible
communications service providers to provide broadband service
at increased minimum data rates to end users in an economically
rational manner.''.
TITLE II--ACCOUNTABILITY
SEC. 201. PERFORMANCE MEASURES.
Within 1 year after the date of enactment of this Act, the Federal
Communications Commission shall establish and implement outcome-
oriented performance goals and measures for each universal service
support program.
SEC. 202. AUDITS.
The Federal Communications Commission shall, within 270 days after
the date of enactment of this Act, establish rules to--
(1) determine the appropriate audit methodology for audits
of recipients of Federal universal service support;
(2) ensure that universal service support auditors are
trained in universal service support program compliance and
audit only in connection with such compliance;
(3) provide that auditors may not penalize recipients of
universal service support by requesting and auditing for
program compliance records, including copies of invoices for
equipment purchased or maintained with program disbursements,
that are older than records that recipients of universal
service support are required to retain pursuant to the Federal
Communications Commission's rules; and
(4) provide that any appeal of a finding by the Universal
Service Administrative Company or any successor organization in
connection with a program audit is resolved by the Federal
Communications Commission within 180 days after the date of
filing of such appeal.
SEC. 203. REPORT TO CONGRESS.
The Federal Communications Commission shall, not later than 3 years
after the date of enactment of this Act and triennially thereafter,
report to Congress regarding the availability of the services
designated by the Commission as universal services, including the
availability of such services to schools, libraries, rural health care
providers, and low income consumers. Such report shall include the
outcome-oriented performance goals and measures for each universal
service support program, an analysis of the implementation of such
goals and measures, and an analysis of the progress towards meeting
such goals and measures.
TITLE III--INTERCARRIER COMPENSATION REFORM
SEC. 301. INTERCARRIER COMPENSATION REFORM.
(a) Authority.--
(1) In general.--Notwithstanding any other provision of
law, the Federal Communications Commission shall have authority
to reform intercarrier compensation systems for both interstate
and intrastate traffic.
(2) Deadline.--The Federal Communications Commission shall
complete an initial intercarrier compensation reform proceeding
within 1 year after the date of enactment of this Act.
(3) Private arrangements.--Entities that are required to
participate in intercarrier compensation shall be permitted to
enter into arrangements by mutual agreement for the exchange of
traffic without regard to the rules established by the Federal
Communications Commission pursuant to this subsection.
(b) Intercarrier Compensation Recovery Mechanism.--If, at any time
after the date of enactment of this Act, the Federal Communications
Commission mandates that intercarrier compensation revenues be
recovered through an alternate revenue recovery mechanism, the Federal
Communications Commission may establish such mechanism to be included
as high-cost support.
SEC. 302. NETWORK TRAFFIC IDENTIFICATION ACCOUNTABILITY STANDARDS.
Part II of title II of the Communications Act of 1934 is amended by
adding at the end the following:
``SEC. 262. NETWORK TRAFFIC IDENTIFICATION ACCOUNTABILITY STANDARDS.
``(a) Network Traffic Identification Standards.--A communications
service provider shall ensure, to the degree technically possible and
in accordance with industry standards, that all traffic that originates
on its network contains or, in the case of non-originated traffic,
preserves sufficient information in call signaling to allow for traffic
identification by other communications service providers that transport
or terminate such traffic, including the telephone number of the
calling and called parties and such other information as the Commission
deems appropriate. Except as otherwise permitted by the Commission, to
the degree technically possible, a communications service provider that
transports traffic between communications service providers shall
transmit without altering the call signaling information it receives
from another communications service provider.
``(b) Network Traffic Identification Rulemaking.--The Commission
shall establish rules for traffic identification consistent with this
section within 180 days after the date of enactment of the Universal
Service Reform Act of 2010.
``(c) Network Traffic Identification Enforcement.--The Commission
shall adopt and enforce penalties, fines, and sanctions under this
section.''.
SEC. 303. TRAFFIC PUMPING.
(a) Traffic Stimulation Charge.--The term ``traffic stimulation
charge'' means any switched access or reciprocal compensation charge
assessed by a local exchange carrier upon a connecting carrier for
delivery of telecommunications during which a free or below cost
service or product is provided by an entity with which the local
exchange carrier has a business, financial, or contractual arrangement
relating directly or indirectly to switched access or reciprocal
compensation revenues from the offering of such service or product.
(b) Prohibition.--The assessment of a traffic stimulation charge
constitutes an unreasonable practice under section 201(b) of the
Communications Act of 1934 (47 U.S.C. 201(b)), and local exchange
carriers are prohibited from assessing traffic stimulation charges.
(c) No Presumption of Validity.--Nothing in this Act shall be
construed as indicating that traffic stimulation charges assessed prior
to the effective date of this Act were just, reasonable, or in
accordance with the Communications Act of 1934 or any other statute,
regulation, tariff, or policy.
TITLE IV--RURAL HEALTH CARE SUPPORT MECHANISMS
SEC. 401. RURAL HEALTH CARE SUPPORT MECHANISMS.
(a) Amendment.--Subparagraph (A) of section 254(h)(1) of the
Communications Act of 1934 (47 U.S.C. 254(h)(1)(A)) is amended to read
as follows:
``(A) Health care services for rural areas.--Within
180 days after the date of enactment of the Universal
Service Reform Act of 2010, the Commission shall
prescribe regulations that provide that a
communications service provider shall, upon receiving a
bona fide request, provide covered services which are
necessary for the provision of health care services in
a State, including instruction relating to such
services, to any public or not-for-profit health care
provider that serves persons who reside in rural areas
in that State at rates that are reasonably comparable
to rates charged for similar services in urban areas in
that State. A communications service provider providing
service under this subparagraph shall be entitled to
have an amount equal to the difference, if any, between
the rates for services provided to health care
providers for rural areas in a State and the rates for
similar services in urban areas in that State treated
as a service obligation as a part of its obligation to
participate in the mechanisms to preserve and advance
universal service.''.
(b) Definition of Health Care Provider.--Subparagraph (B) of
section 254(h)(7) of such Act (47 U.S.C. 254(h)(7)(B)) is amended to
read as follows:
``(B) Health care provider.--The term `health care
provider' means--
``(i) post-secondary educational
institutions offering health care instruction,
teaching hospitals, and medical schools;
``(ii) community health centers or health
centers providing health care to migrants;
``(iii) local health departments or
agencies;
``(iv) community mental health centers;
``(v) not-for-profit hospitals;
``(vi) critical access hospitals;
``(vii) rural hospitals with emergency
rooms;
``(viii) rural health clinics;
``(ix) not-for-profit nursing facilities or
not-for-profit skilled nursing facilities;
``(x) hospice providers;
``(xi) emergency medical services
facilities;
``(xii) rural dialysis facilities;
``(xiii) elementary, secondary, and post-
secondary school health clinics; and
``(xiv) consortia of health care providers
consisting of one or more entities described in
clauses (i) through (xiii).''.
(c) Definition of Rural for Health Care Support.--Section 254(h)(7)
of such Act (47 U.S.C. 254(h)(7)) is further amended by adding at the
end the following new subparagraph:
``(J) Rural area.--Within 180 days after the date
of enactment of the Universal Service Reform Act of
2010, the Commission shall prescribe regulations that
provide that, for purposes of the rural health care
universal service support mechanisms established
pursuant to this subsection, a `rural area' is--
``(i) any incorporated or unincorporated
place in the United States, its territories and
insular possessions (including any area within
the Federated States of Micronesia, the
Republic of the Marshall Islands and the
Republic of Palau) that has no more than 20,000
inhabitants based on the most recent available
population statistics from the Census Bureau;
``(ii) any area located outside of the
boundaries of any incorporated or
unincorporated city, village, or borough having
a population exceeding 20,000;
``(iii) any area with a population density
of fewer than 250 persons per square mile; or
``(iv) any place that qualified as a `rural
area' and received support from the rural
health care support mechanism pursuant to the
Commission's rules in effect prior to December
1, 2004, and that continues to qualify as a
`rural area' pursuant to such rules.''.
(d) Schools, Libraries, Rural Health Care, Life-Line, Link-Up, and
Toll Limitation Hold Harmless.--Except as provided in subsections
(h)(1)(A), (h)(7)(B), and (h)(7)(J) of section 254 of the
Communications Act of 1934 (47 U.S.C. 254), as amended by this
section--
(1) nothing in this Act (and the amendments made by this
Act) shall be construed as limiting, changing, modifying, or
altering the amount or means of distribution of or, with
respect to schools and libraries, eligibility to receive
universal service support for the schools, libraries, rural
health care, life-line, link-up, and toll limitation programs;
and
(2) the Federal Communications Commission shall ensure that
such amendments do not result in a decrease of such support to
a level below the level for the fiscal year preceding the
fiscal year in which this Act is enacted.
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