`SEC. 254. UNIVERSAL SERVICE.
`(a) PROCEDURES TO REVIEW UNIVERSAL SERVICE REQUIREMENTS-
`(1) FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE- Within
one month after the date of enactment of the Telecommunications
Act of 1996, the Commission shall institute and refer to a
Federal-State Joint Board under section 410(c) a proceeding to
recommend changes to any of its regulations in order to
implement sections 214(e) and this section, including the
definition of the services that are supported by Federal
universal service support mechanisms and a specific timetable
for completion of such recommendations. In addition to the
members of the Joint Board required under section 410(c), one
member of such Joint Board shall be a State-appointed utility
consumer advocate nominated by a national organization of State
utility consumer advocates. The Joint Board shall, after notice
and opportunity for public comment, make its recommendations to
the Commission 9 months after the date of enactment of the
Telecommunications Act of 1996.
`(2) COMMISSION ACTION- The Commission shall initiate a
single proceeding to implement the recommendations from the
Joint Board required by paragraph (1) and shall complete such
proceeding within 15 months after the date of enactment of the
Telecommunications Act of 1996. 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. Thereafter, the
Commission shall complete any proceeding to implement
subsequent recommendations from any Joint Board on universal
service within one year after receiving such recommendations.
`(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 AND HIGH COST AREAS- Consumers in all
regions of the Nation, including low-income consumers and those
in rural, insular, and high cost areas, should have access to
telecommunications and information services, 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) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS- All
providers of telecommunications services should make an
equitable and nondiscriminatory contribution to the
preservation and advancement of universal service.
`(5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS- There
should be 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 is an evolving level of
telecommunications services that the Commission shall establish
periodically under this section, taking into account advances
in telecommunications and information technologies and
services. 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 telecommunications 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 telecommunications carriers; and
`(D) are consistent with the public interest,
convenience, and necessity.
`(2) ALTERATIONS AND MODIFICATIONS- The Joint Board may, from
time to time, recommend to the Commission modifications in the
definition of the services that are supported by Federal
universal service support mechanisms.
`(3) 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).
`(d) TELECOMMUNICATIONS CARRIER CONTRIBUTION- Every
telecommunications carrier that provides interstate
telecommunications services shall contribute, on an equitable and
nondiscriminatory basis, to the specific, predictable, and
sufficient mechanisms established by the Commission to preserve and
advance universal service. The Commission may exempt a carrier or
class of carriers from this requirement if the carrier's
telecommunications activities are limited to such an extent that
the level of such carrier's contribution to the preservation and
advancement of universal service would be de minimis. Any other
provider of interstate telecommunications may be required to
contribute to the preservation and advancement of universal service
if the public interest so requires.
`(e) UNIVERSAL SERVICE SUPPORT- After the date on which
Commission regulations implementing this section take effect, only
an eligible telecommunications carrier designated under section
214(e) shall be eligible to receive specific Federal universal
service support. A carrier that receives such support shall use
that support only for the provision, maintenance, and upgrading of
facilities and services for which the support is intended. Any
such support should be explicit and sufficient to achieve the
purposes of this section.
`(f) STATE AUTHORITY- A State may adopt regulations not
inconsistent with the Commission's rules to preserve and advance
universal service. Every telecommunications carrier that provides
intrastate telecommunications services shall contribute, on an
equitable and nondiscriminatory basis, in a manner determined by
the State to the preservation and advancement of universal service
in that State. A State may adopt regulations to provide for
additional definitions and standards to preserve and advance
universal service within that State only to the extent that such
regulations adopt additional specific, predictable, and sufficient
mechanisms to support such definitions or standards that do not
rely on or burden Federal universal service support mechanisms.
`(g) INTEREXCHANGE AND INTERSTATE SERVICES- Within 6 months after
the date of enactment of the Telecommunications Act of 1996, the
Commission shall adopt rules to require that the rates charged by
providers of interexchange telecommunications services to
subscribers in rural and high cost areas shall be no higher than
the rates charged by each such provider to its subscribers in urban
areas. Such rules shall also require that a provider of interstate
interexchange telecommunications services shall provide such
services to its subscribers in each State at rates no higher than
the rates charged to its subscribers in any other State.
`(h) TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVIDERS-
`(1) IN GENERAL-
`(A) HEALTH CARE PROVIDERS FOR RURAL AREAS- A
telecommunications carrier shall, upon receiving a bona
fide request, provide telecommunications services which are
necessary for the provision of health care services in a
State, including instruction relating to such services, to
any public or nonprofit 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 telecommunications
carrier providing service under this paragraph 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 provided to other customers in comparable
rural 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) EDUCATIONAL PROVIDERS AND LIBRARIES- All
telecommunications carriers serving a geographic area
shall, upon a bona fide request for any of its services
that are within the definition of universal service under
subsection (c)(3), provide such services to elementary
schools, secondary schools, and libraries for educational
purposes at rates less than the amounts charged for similar
services to other parties. The discount shall be an amount
that the Commission, with respect to interstate services,
and the States, with respect to intrastate services,
determine is appropriate and necessary to ensure affordable
access to and use of such services by such entities. A
telecommunications carrier providing service under this
paragraph shall--
`(i) have an amount equal to the amount of the
discount treated as an offset to its obligation to
contribute to the mechanisms to preserve and advance
universal service, or
`(ii) notwithstanding the provisions of subsection
(e) of this section, receive reimbursement utilizing
the support mechanisms to preserve and advance
universal service.
`(2) ADVANCED SERVICES- The Commission shall establish
competitively neutral rules--
`(A) to enhance, to the extent technically feasible and
economically reasonable, access to advanced
telecommunications and information services for all public
and nonprofit elementary and secondary school classrooms,
health care providers, and libraries; and
`(B) to define the circumstances under which a
telecommunications carrier may be required to connect its
network to such public institutional telecommunications
users.
`(3) TERMS AND CONDITIONS- Telecommunications services and
network capacity provided to a public institutional
telecommunications user under this subsection may not be sold,
resold, or otherwise transferred by such user in consideration
for money or any other thing of value.
`(4) ELIGIBILITY OF USERS- No entity listed in this
subsection shall be entitled to preferential rates or treatment
as required by this subsection, if such entity operates as a
for-profit business, is a school described in paragraph (5)(A)
with an endowment of more than $50,000,000, or is a library not
eligible for participation in State-based plans for funds under
title III of the Library Services and Construction Act (20
U.S.C. 335c et seq.).
`(5) DEFINITIONS- For purposes of this subsection:
`(A) ELEMENTARY AND SECONDARY SCHOOLS- The term
`elementary and secondary schools' means elementary schools
and secondary schools, as defined in paragraphs (14) and
(25), respectively, of section 14101 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8801).
`(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) rural health clinics; and
`(vii) consortia of health care providers consisting
of one or more entities described in clauses (i)
through (vi).
`(C) PUBLIC INSTITUTIONAL TELECOMMUNICATIONS USER- The
term `public institutional telecommunications user' means
an elementary or secondary school, a library, or a health
care provider as those terms are defined in this paragraph.
`(i) CONSUMER PROTECTION- The Commission and the States should
ensure that universal service is available at rates that are just,
reasonable, and affordable.
`(j) LIFELINE ASSISTANCE- Nothing in this section shall affect
the collection, distribution, or administration of the Lifeline
Assistance Program provided for by the Commission under regulations
set forth in section 69.117 of title 47, Code of Federal
Regulations, and other related sections of such title.
`(k) SUBSIDY OF COMPETITIVE SERVICES PROHIBITED- A
telecommunications carrier may not use services that are not
competitive to subsidize services that are subject to competition.
The Commission, with respect to interstate services, and the
States, with respect to intrastate services, shall establish any
necessary cost allocation rules, accounting safeguards, and
guidelines to ensure that services included in the definition of
universal service bear no more than a reasonable share of the joint
and common costs of facilities used to provide those services.