Section by Section Summary of Sen. Stevens' Telecom Reform Bill

May 1, 2006. The following is a section by section summary of S 2686 [135 pages in PDF], the "Communications, Consumer's Choice, and Broadband Deployment Act of 2006", introduced by Sen. Ted Stevens (R-AK) on May 1, 2006.

Interoperability of Emergency Communications Systems. Title I is titled "War on Terrorism". However, its only significant provision addresses the interoperability of emergency communications systems.

This "War on Terrorism" title is misleading. This part of the bill contains nothing regarding wiretaps, interceps, bugs, access to stored communications, or other search, seizure or surveillance provisions. Nor does it amend the Communications Assistance for Law Enforcement Act (CALEA), mandate surveillance or data retention by service providers, or regulate the use or export of any communications, encryption, software or hardware products.

§ 103 (at page 4) calls for the FCC to "take such action as may be necessary to reduce the cost of calling home for Armed Forces personnel who are stationed outside the United States".

§ 151 (at pages 6 through 12) pertains to interoperability of emergency communications systems.

The House Commerce Committee's (HCC) COPE Act contains no war on terrorism related title. However, there is a proposal, which Rep. Joe Barton (R-TX) supports, to add a universal surveillance, or data retention, section. It is contained in an amendment [2 pages in PDF] offered, and withdrawn, at the HCC's mark up session on April 26, 2006, by Rep. Diana DeGette (D-CO).

The House bill also codifies by reference a provision regarding "the needs of law enforcement" in its Title II network neutrality provisions. The Stevens bill uses similar language in its network neutrality study provision.

Universal Service and VOIP Service. Title II of the bill is primarily directed at reforming the existing universal service tax and subsidy programs. However, it also addresses VOIP interconnection, and VOIP disability access regulation.

In contrast, HCC's COPE Act addresses neither universal service taxes nor subsidies.

Sen. Stevens said that "Our measure is based on a series of bills. The contribution mechanism we adopted is based on S. 2256, the Burns Universal Service Fund bill and S. 1583, the Smith-Dorgan measure which was also cosponsored by Senator Pryor. It authorizes the FCC to adopt a contribution mechanism based upon revenues, numbers, or connections. Such a step is necessary to stabilize this important program. It also includes Senator Smith’s concept of a separate broadband fund to address the needs of unserved areas."

He added that "We have included S. 241, the Snowe-Rockefeller ADA exemption after failing in our efforts to work this out as an issue with the Administration. While the Burns and Smith-Dorgan-Pryor bills were also the basis for our Universal Service Fund title, we also used important concepts from H.R. 5072, the Terry-Boucher bill, and we applaud them for their leadership in the House and thank them for their contribution to this effort. Lastly, we have included S. 2378, the Inouye measure which will improve the E-rate program for Native Americans. Senators McCain, Burns, Dorgan, and I have joined in cosponsoring that bill."

§ 211 (at page 12-19) addresses universal service taxes. It provides that the FCC may tax "the interstate, intrastate, or international portions of communications service". It permits service providers to inform their customers on bills that they are being taxed.

The bill also expands the tax base to include broadband service and certain VOIP services. The taxed communications service providers are any "telecommunications service, broadband service, or IP-enabled voice service (whether offered separately or as part of a bundle of services)". (Parentheses in original.)

The bill then defines "IP-enabled voice service" to mean "the provision of real-time 2-way voice communications offered to the public, or such classes of users as to be effectively available to the public, transmitted through customer premises equipment using TCP/IP protocol, or a successor protocol, for a fee (whether part of a bundle of services or separately) with 2-way interconnection capability such that the service can originate traffic to, and terminate traffic from, the public switched telephone network." (Parentheses in original.)

§ 212 (at pages 19-21) makes some modifications to the FCC's e-rate tax and subsidy program for schools and libraries.

§ 213 (at page 21-22) pertains to modification of the rural video service exemption and interconnection.

§ 214 (at pages 22-23) provides that "IP-enabled voice 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" and "shall have the same rights, duties, and obligations as a telecommunications carrier under sections 225, 255, and 710."

§ 215 (at pages 23-27) addresses universal service subsidies and broadband. It first provides that after five years, entities are not eligible for subsidies if they do not provide broadband service, or obtain an FCC waiver. The bill provides that "an eligible communications carrier may not receive universal service support under section 254 more than 60 months after the date of enactment of the Internet and Universal  Service Act of 2006 if it has not deployed broadband service within its service area before the end of that 60-month period unless it receives a waiver".

§ 252 (at page 27-32) of the bill creates a universal service account titled "Broadband for Unserved Areas Account".

§ 253 (at pages 32-33) addresses eligibility of universal service subsidies generally.

§ 254 (at page 33) provides that the FCC, in giving subsidies, "shall not limit such distribution and use to a single connection or primary line, and all residential and business lines served by an eligible telecommunications carrier shall be eligible for Federal universal service support."

§ 255 (at pages 33-34) addresses phantom traffic. § 256 (at page 35) provides for random audits. § 257 (at pages 35-37) addresses waste, fraud, and abuse of the universal service programs.

Video Franchising. Title III pertains to video franchising. The HCC's COPE Act would create a national cable franchise. In contrast, the Stevens bill would amend 47 U.S.C. § 521, et seq. It would not create a national franchise. Rather, it would further regulate the state and local franchising process.

Sen. Stevens stated that these provisions are based "largely on legislation introduced by Senator Ensign, S. 1504, cosponsored by Senators McCain, Lott, DeMint, and Vitter. Senators Smith and Rockefeller introduced a similar measure. Consistent with the Inouye/Burns Principles, the measure retains local franchise involvement, but is based upon the Alaska model which uses expedited procedures, consistent with what is called the shot clock principle in the Inouye/Burns Principles."

§ 311 (at pages 37-39) replaces the term "cable operator" with "video service provider", and requires the FCC to conduct rulemaking proceeding to implement other provisions of Title III of the bill.

§ 312 (at pages 39-42) provides that "It is the purpose of this title to establish a comprehensive Federal legal framework for the franchising of video services that use public rights-of-way."

It further provides that "a franchising authority shall grant a franchise to provide video service with in its franchise area to a video service provider within 30 calendar days after receiving a franchise application from the video service provider that is complete ...", and that franchising authorities shall use a standard application form devised by the FCC.

It also provides that "No State or local government may regulate direct broadcast satellite services".

§ 313 (at pages 42-43) sets forth the basics of the standard application form, and § 314 (at pages 44-47) provides definitions.

§ 331 (at pages 47-64) contains details regarding state and local franchising.

§ 332 (at pages 64-66) addresses revocation and renewal of franchises.

§ 333 (at pages 66-69) addresses public, educational and governmental (PEG) access and institutional network (iNet) obligations of video service providers. § 334 (at page 69) pertains to services, facilities and equipment. § 337 (at pages 69-70) pertains to shared facilities and access to programming for shared facilities. § 338 (at page 71) pertains to consumer protection. § 339 (at pages 72-73) pertains to redlining.

§ 351 (at pages 73-75) contains miscellaneous provisions regarding video services. In particular, this section provides that "No provision of this title shall be construed to prohibit a local or municipal authority that is also, or is affiliated with, a franchising authority from operating as a multichannel video programming distributor in the franchise area, notwithstanding the granting of one or more franchises by the franchising authority."

§ 381 (at pages 76-79) provides for effective dates, and the phase in, of the provisions of the video franchising provisions of this bill.

Video Content, Anticompetitive Conduct by MVPDs, Broadcast Flags. Title IV pertains to regulation of video content. There is no parallel provision or set of provisions in the HCC's COPE Act.

Sen. Stevens said that "While satellite companies are barred from hoarding exclusive sports programs, the so-called terrestrial loophole does not impose the same mandate on cable companies. As a result, through the acquisition of regional sports networks by cable operators, competition with satellite providers has been stymied. The Sports Freedom Act included in this bill is patterned after a provision in the Ensign Bill which is cosponsored by Senators McCain, Lott, DeMint, and Vitter."

§§ 401-403 are named the "Sports Freedom Act of 2006". It gives the FCC authority to adjudicate complaints against multichannel video programming distributors (MVPDs) for violations of competition law principles to be articulated by the FCC in regulations.

§ 402 (at pages 79-96) provides, in part, that "It is unlawful for an MVPD, an MVPD programming vendor in which an MVPD has an attributable interest, or a satellite broadcast programming vendor to engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or to prevent any MVPD from providing MVPD programming or satellite broadcast programming to subscribers or consumers."

It further requires the FCC to write implementing regulations, and provides detailed guidance to the FCC on how to write these regulations. It also provides that aggrieved parties have the remedy of an adjudicatory proceeding at the FCC. It sets forth procedures and remedies in these proceedings. It also provides exemptions for certain existing contracts.

Finally, it provides that "Any provision that applies to an MVPD under this section shall apply to a common carrier or its affiliate that provides video programming by any means directly to subscribers."

§ 431 (at page 96) is a provision designed to benefit the states of Alaska and Hawaii, which are represented by the Chairman and ranking Democrat on the Committee. It provides that "Notwithstanding any other provision of law, before the Federal Communications Commission grants a license under the Communications Act of 1934 (47 U.S.C. 151 et seq.) to a satellite carrier (as defined in section 338(k)(5) of that Act (47 U.S.C. 338(k)(5))), it shall ensure that, to the greatest extent technically feasible, if the license is granted the service provided by that carrier pursuant to the license will be available to subscribers in the noncontiguous States to the same extent as that service is available to subscribers in the contiguous States." (Parentheses in original.)

§§ 451-454 are named the "Digital Content Protection Act of 2006"

§ 452 (at page 97-99) requires the FCC "to implement its Report and Order in the matter of Digital Broadcast Content Protection, FCC 03-273 and its Report and Order in the matter of Digital Output Protection Technology and Recording Method Certifications, FCC 04-193". FCC 03-273 is better known as the FCC's broadcast flag rule. On May 6, 2005, the U.S.Court of Appeals (DCCir) issued its opinion [34 pages in PDF] in American Library Association v. FCC, overturning these broadcast flag rules, for lack of statutory authority. See, story titled "DC Circuit Reverses FCC's Broadcast Flag Rules" in TLJ Daily E-Mail Alert No. 1,131, May 9, 2005. This bill would give the FCC authority, and instructions, to rewrite its broadcast flag rule.

§ 453 (at pages 99-100) then authorizes the FCC to promulgate digital audio broadcast flag rules. And finally, § 454 (at pages 100-105) would set up a Digital Audio Review Board.

Municipal Broadband, Non-Discrimination, and Right of First Refusal. Title V pertains to municipal provision of services. There is a related provision in the HCC's COPE Act. However, the COPE Act does not contain the same degree of specificity in the non-discrimination provisions; nor does it contain a right of first refusal provision, as does Sen. Stevens' bill.

Sen. Stevens stated that "the bill we introduce today will allow local governments to offer their own broadband service, so long as they do not compete unfairly with the private sector. The provision is based largely on Senator McCain’s and Lautenberg’s bill, S. 1294 cosponsored by Senator Kerry, but includes elements to protect the private sector from unfair government competition from Senator Ensign’s bill, S. 1504 which is also cosponsored by McCain, Lott, DeMint, and Vitter."

§ 502 (at pages 105-111) provides that "No State or local government statute, regulation, or other State or  local government legal requirement may prohibit or have the effect of prohibiting any public provider from providing, to any person or any public or private entity, advanced communications capability or any service that utilizes the advanced communications capability provided by such provider."

However, it goes on to set forth in detail that state and local governments cannot discriminate in favor of their own services. For example, it provides that "To the extent any public provider regulates competing providers of advanced communications capability, it shall apply its ordinances and rules and policies, including those relating to the use of public rights-of-way, permitting, performance bonding and reporting, without discrimination in favor of itself or any advanced communications capability provider that it owns or is affiliated with, as compared to other providers of such capability or services."

It also provides that "If a public provider initiates a project to provide advanced communications capability to the public, it shall grant to a requesting non-governmental entity the right to place similar facilities in the same conduit, trenches, and locations as the public provider for concurrent or future use under the same conditions as the public provider. A public provider may limit, or refuse to grant, such a right to a requesting non-governmental entity with respect to any such conduit, trench, or location for public safety reasons."

It also provides that the same laws must apply to both the public sector provider and the private sector competitor.

The bill also includes a right of first refusal.

Broadcast White Space. Title VI pertains to the use of broadcast white space for wireless broadband services.

§§ 601 and 602 are named the "Wireless Innovation Act of 2006" or the "WIN Act of 2006". § 602 (at pages 111-114) requires the FCC to complete its broadcast white space rulemaking proceeding, to permit unlicensed, non-exclusive use of unassigned, non-licensed television broadcast channels.

This is based upon a bill sponsored by Sen. George Allen (R-VA) and others. On February 17, 2006, Sen. Allen introduced S 2327, the "Wireless Innovation Act of 2006". See, story titled "Sen. Allen Introduces Bill to Allow Unlicensed Wireless Use of Broadcast White Space" in TLJ Daily E-Mail Alert No. 1,314, February 21, 2006.

Sen. Stevens commented that his bill "adds some protections that broadcasters requested to prevent harmful interference by requiring any new device to be tested in an FCC certified lab before deployment." He added that "The concept of using vacant TV channels for broadband deployment through Wi-Fi, Wi-Max and other technologies is strongly endorsed by consumer groups and the technology community."

DTV Transition. Title VII pertains to digital television. § 701 (at pages 111-128) pertains to the DTV transition.

Sen. Stevens stated that "This legislation includes guidance on the DTV transition that was not possible in the Reconciliation bill because, again, of the Byrd Rule. Much of the language we included is based on a provision Senator Inouye worked on to address consumer education issues. It also includes an international coordination element requested by Senator Hutchison to address interference on the U.S.-Mexico border that will also benefit other border states, such as our home State of Alaska, Washington, Montana, North Dakota, and Maine."

§ 702 (at pages 129-130) contains a digital stream requirement for the blind.

Sen. Stevens said that "we have included S. 900, Senator McCain’s Television Information Enhancement for the Visually Impaired Act which Senator Inouye and I cosponsored, along with Senator Smith. That bill authorizes an existing FCC rule requiring TV stations to offer some video description of television shows so blind listeners may be able to follow the action. The existing rule was struck down by the courts on the grounds that the FCC lacked authority for such a rule. Today this bill will provide them the authority they need. As the son of a father who was blind for a period of time, this is an issue of personal importance to me."

Finally, § 703 (at pages 130) pertains to international coordination.

Child Porn (CP). Title VIII pertains to CP. § 801 (at pages 130-131) provides that the FCC shall "promulgate regulations to require a video service to prevent the distribution" of CP.

Network Neutrality. Title IX pertains to network neutrality. There is no network neutrality mandate. The bill only requires the FCC to study, report, and make recommendations.

§ 901 (at pages 131-132) provides that the FCC shall report annually on "(1) the developments in Internet traffic processing, routing, peering, transport, and interconnection; (2) how such developments impact the free flow of information over the public Internet and the consumer experience using the public Internet (3) business relationships between broadband service providers and applications and online user services; and (4) the development of and services available over public and private Internet offerings." It also allows the FCC to make recommendations.

It also includes an extraneous reference to the "needs of law enforcement agencies". The FCC policy statement incorporated into the HCC COPE Act has similar language.

FCC Secrecy. Title X is is titled "Miscellaneous".

§ 1001 (at pages 132-134) pertains to FCC transparency. The FCC currently conducts many of its activities and operations with a lack of transparency. The FCC evades, and sometimes violates, various provisions of Title 5 of the U.S. Code intended to promote transparency. This section of Sen. Stevens' bill relaxes some Title 5 requirements regarding public meetings so that the FCC may more conveniently act in secrecy.

§ 1002 (at pages 134-135) is a standard severability clause.