[Senate Report 108-422]
[From the U.S. Government Publishing Office]
108th Congress Report
SENATE
2d Session 108-422
_______________________________________________________________________
Calendar No. 809
RURAL UNIVERSAL SERVICE EQUITY ACT OF 2003
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. H.R. deg. 1380
DATE deg.December 7, 2004.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred eighth congress
second session
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
FRANK LAUTENBERG, New Jersey
Jeanne Bumpus, Staff Director and General Counsel
Rob Freeman, Deputy Staff Director
Samuel Whitehorn, Democratic Staff Director and Chief Counsel
Margaret Spring, Democratic Senior Counsel
Calendar No. 809
108th Congress Report
SENATE
2d Session 108-422
======================================================================
RURAL UNIVERSAL SERVICE EQUITY ACT OF 2003
_______
December 7, 2004.--Ordered to be printed
_______
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 1380]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill joint resolution deg. (S.
H.R. deg. 1380) TITLE deg. to distribute
universal service support equitably throughout rural America,
and for other purposes, having considered the same, reports
favorably thereon without amendment deg. with
amendments deg. with an amendment (in the nature of a
substitute) and recommends that the bill joint
resolution deg. (as amended) do pass.
Purpose of the Bill
The primary objective of this legislation is to require the
Federal Communications Commission (FCC) to distribute certain
universal service funding based on the per line costs in a
specific area of service, rather than the current State-by-
State basis.
Background and Needs
The Communications Act of 1934 requires the FCC to ``make
available, so far as possible, to all the people of the United
States, . . . a rapid, efficient, Nation-wide, and world-wide
wire and radio communications service with adequate facilities
at reasonable charges . . .'' \1\ From 1934 until 1996, the FCC
developed this general mandate into a body of regulations which
came to be known as ``universal service.'' The original concept
of universal service was to create Federal rules ensuring that
telecommunications services would be affordable to all
Americans, even those in rural and high cost areas.
---------------------------------------------------------------------------
\1\ Section 1, Communications Act of 1934 (47 U.S.C. 151).
---------------------------------------------------------------------------
The Telecommunications Act of 1996 (the ``1996 Act'')
codified this concept by creating a Federal universal service
fund (USF), that supports the widespread availability of
eligible telecommunications services. The 1996 Act also
extended the scope of Federal universal service beyond its
traditional focus on low-income consumers and those in rural
and high cost areas to also include eligible schools,
libraries, and rural health care providers. The total amount of
universal service support disbursed from the USF for Fiscal
Year (FY) 2003 was over $5 billion.
NON-RURAL CARRIER SUPPORT
One of the funds established by the FCC within the USF is the
Federal high-cost universal service support mechanism for non-
rural telephone companies. Non-rural carriers are generally the
largest local exchange companies serving greater than 100,000
access lines. The FCC's distribution mechanism for support from
this fund compares the statewide average cost per line for non-
rural carriers to a nationwide cost benchmark. The FCC has
found that, since States set intrastate telephone rates and
hold the primary responsibility of ensuring comparability of
these rates within their borders, the Federal mechanism should
operate by shifting money from relatively low-cost States to
relatively high-cost States. As a result, non-rural carriers
receive support in only ten states (Alabama, Kentucky, Maine,
Mississippi, Montana, Nebraska, South Dakota, Vermont, West
Virginia, and Wyoming). In 2004, carriers in these States
received over $200 million in support from this fund.
In 2001, the 10th Circuit Court of Appeals remanded the FCC's
decision on how to distribute support from this fund to the FCC
directing it to explain how this program satisfied the
statutory requirement to achieve reasonably comparable phone
rates among rural and urban areas. In October 2003, the FCC
adopted an order reaffirming its conclusion that comparing
statewide average costs is an appropriate means to determine
high-cost support for non-rural carriers.
Although non-rural carriers in many different States serve
high-cost areas, their statewide average costs, under the FCC's
rules, are often not high enough to receive support. This bill
would require the FCC to change the current formula to
distribute the funding by basing it on a specific area of
service, rather than the current State-by-State basis.
Legislative History
This bill was introduced by Senator Smith on July 9, 2003,
and is co-sponsored by 32 Senators.
On September 22, 2004, the Committee voted to report the bill
favorably without amendment to the full Senate.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
October 21, 2004.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1380, the Rural
Universal Service Equity Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Melissa E.
Zimmerman.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
S. 1380--Rural Universal Service Equity Act of 2003
S. 1380 would make changes to the formula used by the
Universal Service Fund (USF) program to calculate funding
levels for states with high-cost telecommunications services.
As a result, more states would be eligible for funding;
however, USF funds collected for high-cost services would not
change, so total expenditures under this program would not
change.
Universal Service is a program intended to promote the
availability of telecommunications services at affordable
rates. Charges imposed by the federal government on
telecommunications services to support Universal Service are
recorded in the federal budget as revenues. Because the bill
would not make any changes to the total amount of funding
collected and distributed for high-cost services, CBO estimates
that enacting S. 1380 would not affect revenues or direct
spending. The bill would not have a significant effect on
spending subject to appropriation.
S. 1380 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA), but the change in
the formula for part of the Universal Service Fund would alter
the distribution of money among the states. The bill contains
no new private-sector mandates as defined in UMRA.
The CBO staff contacts for this estimate are Melissa E.
Zimmerman (for federal costs), Sarah Puro (for the state and
local impact), and Jean Talarico (for the private-sector
impact). The estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
NUMBER OF PERSONS COVERED
The legislation affects the calculations for disbursement of
funds from the Universal Service Fund under its Non-Rural
Carrier support mechanism. The number of persons covered by
this legislation should be consistent with current levels of
individuals affected by this program.
ECONOMIC IMPACT
This bill would adjust calculations for disbursement of
Federal Universal Service funds.
PRIVACY
This legislation will not have any adverse impact on the
personal privacy of the individuals affected.
PAPERWORK
S. 1380 would require the Comptroller General to submit to
Congress a report on the need to reform the high cost support
mechanism for rural, insular and high cost areas.
Section-by-Section Analysis
Section 1. Short title
Section 1 would set forth the short title of the bill as the
``Rural Universal Service Equity Act of 2003.''
Section 2. Findings
Section 2 would make certain findings related to the FCC's
high cost fund.
Section 3. Comptroller general report on need to reform high cost
support mechanism
Section 3 would require the Comptroller General to submit a
report to Congress on the need to reform the high cost support
mechanism for rural, insular, and high cost areas.
Section 4. Eligibility for universal service support for high cost
areas
Section 4 would require the FCC to change its current
mechanism for calculating high cost areas to provide support to
each wire center in which an incumbent telephone company's
average cost per line exceed the national average cost per line
by an amount to be defined by the FCC. Currently the FCC
provides support to large telephone companies based on their
average cost per line throughout an entire State. Thus, the new
mechanism would have the effect of distributing the high cost
fund in a manner that is different than today.
This section would also keep the total amount of support for
the high cost fund the same as it is at the time of enactment.
The section would also require the FCC to hold harmless any
State that would receive less support under the new mechanism
than it would under the old mechanism, up to 10 percent of the
total support distributed. Finally, this section would require
the FCC to implement the bill within 180 days.
Section 5. No effect on rural telephone companies
Section 5 would state that nothing in the legislation shall
be construed to affect the support provided to rural telephone
companies.
Rollcall Votes in Committee
On a rollcall vote of 13 yeas and 9 nays, the Committee
ordered S. 1380 favorably reported.
YEAS--13 NAYS--9
Mr. Burns Mr. Stevens\1\
Mrs. Hutchison Mr. Lott
Mr. Brownback Ms. Snowe
Mr. Smith Mr. Ensign
Mr. Fitzgerald\1\ Mr. Inouye\1\
Mr. Allen Mr. Rockefeller
Mr. Sununu Mr. Breaux
Mr. Hollings Mr. Nelson
Mr. Dorgan Mr. Lautenberg
Mr. Wyden
Mrs. Boxer
Ms. Cantwell
Mr. McCain
\1\By proxy
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
COMMUNICATIONS ACT OF 1934
SEC. 254. UNIVERSAL SERVICE
[47 U.S.C. 254]
(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 (7)(A) with an endowment of more
than $50,000,000, or is a library or library consortium
not eligible for assistance from a State library
administrative agency under the Library Services and
Technology Act.
(5) Requirements for certain schools with computers
having Internet access.--
(A) Internet safety.--
(i) In general.--Except as provided
in clause (ii), an elementary or
secondary school having computers with
Internet access may not receive
services at discount rates under
paragraph (1)(B) unless the school,
school board, local educational agency,
or other authority with responsibility
for administration of the school--
(I) submits to the Commission
the certifications described in
subparagraphs (B) and (C);
(II) submits to the
Commission a certification that
an Internet safety policy has
been adopted and implemented
for the school under subsection
(l); and
(III) ensures the use of such
computers in accordance with
the certifications.
(ii) Applicability.--The prohibition
in clause (i) shall not apply with
respect to a school that receives
services at discount rates under
paragraph (1)(B) only for purposes
other than the provision of Internet
access, Internet service, or internal
connections.
(iii) Public notice; hearing.--An
elementary or secondary school
described in clause (i), or the school
board, local educational agency, or
other authority with responsibility for
administration of the school, shall
provide reasonable public notice and
hold at least 1 public hearing or
meeting to address the proposed
Internet safety policy. In the case of
an elementary or secondary school other
than an elementary or secondary school
as defined in section 14101 of the
Elementary and Secondary Education Act
of 1965 (20 U.S.C. 8801), the notice
and hearing required by this clause may
be limited to those members of the
public with a relationship to the
school.
(B) Certification with respect to minors.--A
certification under this subparagraph is a
certification that the school, school board,
local educational agency, or other authority
with responsibility for administration of the
school--
(i) is enforcing a policy of Internet
safety for minors that includes
monitoring the online activities of
minors and the operation of a
technology protection measure with
respect to any of its computers with
Internet access that protects against
access through such computers to visual
depictions that are--
(I) obscene;
(II) child pornography; or
(III) harmful to minors; and
(ii) is enforcing the operation of
such technology protection measure
during any use of such computers by
minors.
(C) Certification with respect to adults.--A
certification under this paragraph is a
certification that the school, school board,
local educational agency, or other authority
with responsibility for administration of the
school--
(i) is enforcing a policy of Internet
safety that includes the operation of a
technology protection measure with
respect to any of its computers with
Internet access that protects against
access through such computers to visual
depictions that are--
(I) obscene; or
(II) child pornography; and
(ii) is enforcing the operation of
such technology protection measure
during any use of such computers.
(D) Disabling during adult use.--An
administrator, supervisor, or other person
authorized by the certifying authority under
subparagraph (A)(i) may disable the technology
protection measure concerned, during use by an
adult, to enable access for bona fide research
or other lawful purpose.
(E) Timing of implementation.--
(i) In general.--Subject to clause
(ii) in the case of any school covered
by this paragraph as of the effective
date of this paragraph under section
1721(h) of the Children's Internet
Protection Act, the certification under
subparagraphs (B) and (C) shall be
made--
(I) with respect to the first
program funding year under this
subsection following such
effective date, not later than
120 days after the beginning of
such program funding year; and
(II) with respect to any
subsequent program funding
year, as part of the
application process for such
program funding year.
(ii) Process.--
(I) Schools with internet
safety policy and technology
protection measures in place.--
A school covered by clause (i)
that has in place an Internet
safety policy and technology
protection measures meeting the
requirements necessary for
certification under
subparagraphs (B) and (C) shall
certify its compliance with
subparagraphs (B) and (C)
during each annual program
application cycle under this
subsection, except that with
respect to the first program
funding year after the
effective date of this
paragraph under section 1721(h)
of the Children's Internet
Protection Act, the
certifications shall be made
not later than 120 days after
the beginning of such first
program funding year.
(II) Schools without internet
safety policy and technology
protection measures in place.--
A school covered by clause (i)
that does not have inplace an
Internet safety policy and
technology protection measures
meeting the requirements
necessary for certification
under subparagraphs (B) and
(C)--
(aa) for the first
program year after the
effective date of this
subsection in which it
is applying for funds
under this subsection,
shall certify that it
is undertaking such
actions, including any
necessary procurement
procedures, to put in
place an Internet
safety policy and
technology protection
measures meeting the
requirements necessary
for certification under
subparagraphs (B) and
(C); and
(bb) for the second
program year after the
effective date of this
subsection in which it
is applying for funds
under this subsection,
shall certify that it
is in compliance with
subparagraphs (B) and
(C). Any school that is
unable to certify
compliance with such
requirements in such
second program year
shall be ineligible for
services at discount
rates or funding in
lieu of services at
such rates under this
subsection for such
second year and all
subsequent program
years under this
subsection, until such
time as such school
comes into compliance
with this paragraph.
(III) Waivers.--Any school
subject to subclause (II) that
cannot come into compliance
with subparagraphs (B) and (C)
in such second year program may
seek a waiver of subclause
(II)(bb) if State or local
procurement rules or
regulations or competitive
bidding requirements prevent
the making of the certification
otherwise required by such
subclause. A school, school
board, local educational
agency, or other authority with
responsibility for
administration of the school
shall notify the Commission of
the applicability of such
subclause to the school. Such
notice shall certify that the
school in question will be
brought into compliance before
the start of the third program
year after the effective date
of this subsection in which the
school is applying for funds
under this subsection.
(F) Noncompliance.--
(i) Failure to submit
certification.--Any school that
knowingly fails to comply with the
application guidelines regarding the
annual submission of certification
required by this paragraph shall not be
eligible for services at discount rates
or funding in lieu of services at such
rates under this subsection.
(ii) Failure to comply with
certification.--Any school that
knowingly fails to ensure the use of
its computers in accordance with a
certification under subparagraphs (B)
and (C) shall reimburse any funds and
discounts received under this
subsection for the period covered by
such certification.
(iii) Remedy of noncompliance.--
(I) Failure to submit.--A
school that has failed to
submit a certification under
clause (i) may remedy the
failure by submitting the
certification to which the
failure relates. Upon submittal
of such certification, the
school shall be eligible for
services at discount rates
under this subsection.
(II) Failure to comply.--A
school that has failed to
comply with a certification as
described in clause (ii) may
remedy the failure by ensuring
the use of its computers in
accordance with such
certification. Upon submittal
to the Commission of a
certification or other
appropriate evidence of such
remedy, the school shall be
eligible for services at
discount rates under this
subsection.
(6) Requirements for certain libraries with computers having
Internet access.--
(A) Internet safety.--
(i) In general--Except as provided in clause
(ii), a library having one or more computers
with Internet access may not receive services
at discount rates under paragraph (1)(B) unless
the library--
(I) submits to the Commission the
certifications described in
subparagraphs (B) and (C); and
(II) submits to the Commission a
certification that an Internet safety
policy has been adopted and implemented
for the library under subsection (l);
and
(III) ensures the use of such
computers in accordance with the
certifications.
(ii) Applicability.--The prohibition in
clause (i) shall not apply with respect to a
library that receives services at discount
rates under paragraph (1)(B) only for purposes
other than the provision of Internet access,
Internet service, or internal connections.
(iii) Public notice; hearing.--A library
described in clause (i) shall provide
reasonable public notice and hold at least 1
public hearing or meeting to address the
proposed Internet safety policy.
(B) Certification with respect to minors.--A
certification under this subparagraph is a
certification that the library--
(i) is enforcing a policy of Internet safety
that includes the operation of a technology
protection measure with respect to any of its
computers with Internet access that protects
against access through such computers to visual
depictions that are--
(I) obscene;
(II) child pornography; or
(III) harmful to minors; and
(ii) is enforcing the operation of such
technology protection measure during any use of
such computers by minors.
(C) Certification with respect to adults.--A
certification under this paragraph is a certification
that the library--
(i) is enforcing a policy of Internet safety
that includes the operation of a technology
protection measure with respect to any of its
computers with Internet access that protects
against access through such computers to visual
depictions that are--
(I) obscene; or
(II) child pornography; and
(ii) is enforcing the operation of such
technology protection measure during any use of
such computers.
(D) Disabling during adult use.--An administrator,
supervisor, or other person authorized by the
certifying authority under subparagraph (A)(i) may
disable the technology protection measure concerned,
during use by an adult, to enable access for bona fide
research or other lawful purpose.
(E) Timing of implementation.--
(i) In general.--Subject to clause (ii) in
the case of any library covered by this
paragraph as of the effective date of this
paragraph under section 1721(h) of the
Children's Internet Protection Act, the
certification under subparagraphs (B) and (C)
shall be made--
(I) with respect to the first program
funding year under this subsection
following such effective date, not
later than 120 days after the beginning
of such program funding year; and
(II) with respect to any subsequent
program funding year, as part of the
application process for such program
funding year.
(ii) Process.--
(I) Libraries with internet safety
policy and technology protection
measures in place.--A library covered
by clause (i) that has in place an
Internet safety policy and technology
protection measures meeting the
requirements necessary for
certification under subparagraphs (B)
and (C) shall certify its compliance
with subparagraphs (B) and (C) during
each annual program application cycle
under this subsection, except that with
respect to the first program funding
year after the effective date of this
paragraph under section 1721(h) of the
Children's Internet Protection Act, the
certifications shall be made not later
than 120 days after the beginning of
such first program funding year.
(II) Libraries without internet
safety policy and technology protection
measures in place.--A library covered
by clause (i) that does not have in
place an Internet safety policy and
technology protection measures meeting
the requirements necessary for
certification under subparagraphs (B)
and (C)--
(aa) for the first program
year after the effective date
of this subsection in which it
is applying for funds under
this subsection, shall certify
that it is undertaking such
actions, including any
necessary procurement
procedures, to put in place an
Internet safety policy and
technology protection measures
meeting the requirements
necessary for certification
under subparagraphs (B) and
(C); and
(bb) for the second program
year after the effective date
of this subsection in which it
is applying for funds under
this subsection, shall certify
that it is in compliance with
subparagraphs (B) and (C). Any
library that is unable to
certify compliance with such
requirements in such second
program year shall be
ineligible for services at
discount rates or funding in
lieu of services at such rates
under this subsection for such
second year and all subsequent
program years under this
subsection, until such time as
such library comes into
compliance with this paragraph.
(III) Waivers.--Any library subject
to subclause (II) that cannot come into
compliance with subparagraphs (B) and
(C) in such second year may seek a
waiver of subclause (II)(bb) if State
or local procurement rules or
regulations or competitive bidding
requirements prevent the making of the
certification otherwise required by
such subclause. A library, library
board, or other authority with
responsibility for administration of
the library shall notify the Commission
of the applicability of such subclause
to the library. Such notice shall
certify that the library in question
will be brought into compliance before
the start of the third program year
after the effective date of this
subsection in which the library is
applying for funds under this
subsection.
(F) Noncompliance.--
(i) Failure to submit
certification.--Any library that
knowingly fails to comply with the
application guidelines regarding the
annual submission of certification
required by this paragraph shall not be
eligible for services at discount rates
or funding in lieu of services at such
rates under this subsection.
(ii) Failure to comply with
certification.--Any library that
knowingly fails to ensure the use of
its computers in accordance with a
certification under subparagraphs (B)
and (C) shall reimburse all funds and
discounts received under this
subsection for the period covered by
such certification.
(iii) Remedy of noncompliance.--
(I) Failure to submit.--A
library that has failed to
submit a certification under
clause (i) may remedy the
failure by submitting the
certification to which the
failure relates. Upon submittal
of such certification, the
library shall be eligible for
services at discount rates
under this subsection.
(II) Failure to comply.--A
library that has failed to
comply with a certification as
described in clause (ii) may
remedy the failure by ensuring
the use of its computers in
accordance with such
certification. Upon submittal
to the Commission of a
certification or other
appropriate evidence of such
remedy, the library shall be
eligible for services at
discount rates under this
subsection.
(7) 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 section 9101 of the Elementary and
Secondary Education Act of 1965.
(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.
(D) Minor.--The term ``minor'' means any
individual who has not attained the age of 17
years.
(E) Obscene.--The term ``obscene'' has the
meaning given such term in section 1460 of
title 18, United States Code.
(F) Child pornography.--The term ``child
pornography'' has the meaning given such term
in section 2256 of title 18, United States
Code.
(G) Harmful to minors.--The term ``harmful to
minors'' means any picture, image, graphic
image file, or other visual depiction that--
(i) taken as a whole and with respect
to minors, appeals to a prurient
interest in nudity, sex, or excretion;
(ii) depicts, describes, or
represents, in a patently offensive way
with respect to what is suitable for
minors, an actual or simulated sexual
act or sexual contact, actual or
simulated normal or perverted sexual
acts, or a lewd exhibition of the
genitals; and
(iii) taken as a whole, lacks serious
literary, artistic, political, or
scientific value as to minors.
(H) Sexual act; sexual contact.--The terms
``sexual act'' and ``sexual contact'' have the
meanings given such terms in section 2246 of
title 18, United States Code.
(I) Technology protection measure.--The term
``technology protection measure'' means a
specific technology that blocks or filters
Internet access to the material covered by a
certification under paragraph (5) or (6) to
which such certification relates.
(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.
(l) Internet Safety Policy Requirement for Schools and
Libraries.
(1) In general.--In carrying out its responsibilities
under subsection (h), each school or library to which
subsection (h) applies shall--
(A) adopt and implement an Internet safety
policy that addresses--
(i) access by minors to inappropriate
matter on the Internet and World Wide
Web;
(ii) the safety and security of
minors when using electronic mail, chat
rooms, and other forms of direct
electronic communications;
(iii) unauthorized access, including
so-called ``hacking'', and other
unlawful activities by minors online;
(iv) unauthorized disclosure, use,
and dissemination of personal
identification information regarding
minors; and
(v) measures designed to restrict
minors' access to materials harmful to
minors; and
(B) provide reasonable public notice and hold
at least one public hearing or meeting to
address the proposed Internet safety policy.
(2) Local determination of content.--A determination
regarding what matter is inappropriate for minors shall
be made by the school board, local educational agency,
library, or other authority responsible for making the
determination. No agency or instrumentality of the
United States Government may--
(A) establish criteria for making such
determination;
(B) review the determination made by the
certifying school, school board, local
educational agency, library, or other
authority; or
(C) consider the criteria employed by the
certifying school, school board, local
educational agency, library, or other authority
in the administration of subsection (h)(1)(B).
(3) Availability for review.--Each Internet safety
policy adopted under this subsection shall be made
available to the Commission, upon request of the
Commission, by the school, school board, local
educational agency, library, or other authority
responsible for adopting such Internet safety policy
for purposes of the review of such Internet safety
policy by the Commission.
(4) Effective date.--This subsection shall apply with
respect to schools and libraries on or after the date
that is 120 days after the date of the enactment of the
Children's Internet Protection Act.
``(m) Universal Service Support for High Cost Areas.--
(1) Calculating support.--In calculating Federal
universal service support for eligible
telecommunications carriers that serve rural, insular,
and high cost areas, the Commission shall, subject to
paragraphs (2) and (3), revise the Commission's support
mechanism for high cost areas to provide support to
each wire center in which the incumbent local exchange
carrier's average cost per line for such wire center
exceeds the national average cost per line by such
amount as the Commission determines appropriate for the
purpose of ensuring the equitable distribution of
universal service support throughout the United States.
(2) Hold harmless support.--In implementing this
subsection, the Commission shall ensure that no State
receives less Federal support calculated under
paragraph (1) than the State would have received, up to
10 percent of the total support distributed, under the
Commission's support mechanism for high cost areas as
in effect on the date of the enactment of this
subsection.
(3) Limitation on total support to be provided.--The
total amount of support for all States, as calculated
under paragraphs (1) and (2), shall be equivalent to
the total support calculated under the Commission's
support mechanism for high cost areas as in effect on
the date of the enactment of this subsection.
(4) Construction of limitation.--The limitation in
paragraph (3) shall not be construed to preclude
fluctuations in support on the basis of changes in the
data used to make such calculations.
(5) Implementation.--Not later than 180 days after
the date of the enactment of this subsection, the
Commission shall complete the actions (including
prescribing or amending regulations) necessary to
implement the requirements of this subsection.
(6) Definition.--In this subsection, the term
``Commission's support mechanism for high cost areas''
means sections 54.309 and 54.311 of the Commission's
regulations (47 CFR 54.309, 54.311), and regulations
referred to in such sections.