Pub.L. 104-105 To amend the Farm Credit Act of 1971 to provide regulatory relief, and for other purposes. <> ...

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in fulfilling the requirements of this part, if such regulations are not 
inconsistent with the provisions of this part.
    ``(c) Additional State Requirements.--Nothing in this part precludes 
a State from imposing requirements on a telecommunications carrier for 
intrastate services that are necessary to further competition in the 
provision of telephone exchange service or exchange access, as long as 
the State's requirements are not inconsistent with this part or the 
Commission's regulations to implement this part.''.
    (b) Designation of Part I.--Title II of the Act is further amended 
by inserting before the heading of section 201 the following new 
heading:

                 ``PART I--COMMON CARRIER REGULATION''.

    (c) <<NOTE: 47 USC 151 note.>>  Stylistic Consistency.--The Act is 
amended so that--

[[Page 110 STAT. 80]]

            (1) the designation and heading of each title of the Act 
        shall be in the form and typeface of the designation and heading 
        of this title of this Act; and
            (2) the designation and heading of each part of each title 
        of the Act shall be in the form and typeface of the designation 
        and heading of part I of title II of the Act, as amended by 
        subsection (a).

SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

    (a) In General.--Section 214 (47 U.S.C. 214) is amended by adding at 
the end thereof the following new subsection:
    ``(e) Provision of Universal Service.--
            ``(1) Eligible telecommunications carriers.--A common 
        carrier designated as an eligible telecommunications carrier 
        under paragraph (2) or (3) shall be eligible to receive 
        universal service support in accordance with section 254 and 
        shall, throughout the service area for which the designation is 
        received--
                    ``(A) offer the services that are supported by 
                Federal universal service support mechanisms under 
                section 254(c), either using its own facilities or a 
                combination of its own facilities and resale of another 
                carrier's services (including the services offered by 
                another eligible telecommunications carrier); and
                    ``(B) advertise the availability of such services 
                and the charges therefor using media of general 
                distribution.
            ``(2) Designation of eligible telecommunications carriers.--
        A State commission shall upon its own motion or upon request 
        designate a common carrier that meets the requirements of 
        paragraph (1) as an eligible telecommunications carrier for a 
        service area designated by the State commission. Upon request 
        and consistent with the public interest, convenience, and 
        necessity, the State commission may, in the case of an area 
        served by a rural telephone company, and shall, in the case of 
        all other areas, designate more than one common carrier as an 
        eligible telecommunications carrier for a service area 
        designated by the State commission, so long as each additional 
        requesting carrier meets the requirements of paragraph (1). 
        Before designating an additional eligible telecommunications 
        carrier for an area served by a rural telephone company, the 
        State commission shall find that the designation is in the 
        public interest.
            ``(3) Designation of eligible telecommunications carriers 
        for unserved areas.--If no common carrier will provide the 
        services that are supported by Federal universal service support 
        mechanisms under section 254(c) to an unserved community or any 
        portion thereof that requests such service, the Commission, with 
        respect to interstate services, or a State commission, with 
        respect to intrastate services, shall determine which common 
        carrier or carriers are best able to provide such service to the 
        requesting unserved community or portion thereof and shall order 
        such carrier or carriers to provide such service for that 
        unserved community or portion thereof. Any carrier or carriers 
        ordered to provide such service under this paragraph shall meet 
        the requirements of paragraph (1) and shall be designated as an 
        eligible telecommunications carrier for that community or 
        portion thereof.

[[Page 110 STAT. 81]]

            ``(4) Relinquishment of universal service.--A State 
        commission shall permit an eligible telecommunications carrier 
        to relinquish its designation as such a carrier in any area 
        served by more than one eligible telecommunications carrier. An 
        eligible telecommunications carrier that seeks to relinquish its 
        eligible telecommunications carrier designation for an area 
        served by more than one eligible telecommunications carrier 
        shall give advance notice to the State commission of such 
        relinquishment. Prior to permitting a telecommunications carrier 
        designated as an eligible telecommunications carrier to cease 
        providing universal service in an area served by more than one 
        eligible telecommunications carrier, the State commission shall 
        require the remaining eligible telecommunications carrier or 
        carriers to ensure that all customers served by the 
        relinquishing carrier will continue to be served, and shall 
        require sufficient notice to permit the purchase or construction 
        of adequate facilities by any remaining eligible 
        telecommunications carrier. The State commission shall establish 
        a time, not to exceed one year after the State commission 
        approves such relinquishment under this paragraph, within which 
        such purchase or construction shall be completed.
            ``(5) Service area defined.--The term `service area' means a 
        geographic area established by a State commission for the 
        purpose of determining universal service obligations and support 
        mechanisms. In the case of an area served by a rural telephone 
        company, `service area' means such company's `study area' unless 
        and until the Commission and the States, after taking into 
        account recommendations of a Federal-State Joint Board 
        instituted under section 410(c), establish a different 
        definition of service area for such company.''.

SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 and 
following) is amended by redesignating sections 34 and 35 <<NOTE: 15 USC 
79z-6, 79.>>  as sections 35 and 36, respectively, and by inserting the 
following new section after section 33:

``SEC. 34. <<NOTE: 15 USC 79z-5c.>>  EXEMPT TELECOMMUNICATIONS 
            COMPANIES.

    ``(a) Definitions.--For purposes of this section--
            ``(1) Exempt telecommunications company.--The term `exempt 
        telecommunications company' means any person determined by the 
        Federal Communications Commission to be engaged directly or 
        indirectly, wherever located, through one or more affiliates (as 
        defined in section 2(a)(11)(B)), and exclusively in the business 
        of providing---
                    ``(A) telecommunications services;
                    ``(B) information services;
                    ``(C) other services or products subject to the 
                jurisdiction of the Federal Communications Commission; 
                or
                    ``(D) products or services that are related or 
                incidental to the provision of a product or service 
                described in subparagraph (A), (B), or (C).
        No person shall be deemed to be an exempt telecommunications 
        company under this section unless such person has applied to the 
        Federal Communications Commission for a determination under this 
        paragraph. A person applying in good faith for such a 
        determination shall be deemed an exempt telecommunications 
        company under this section, with all of the exemptions

[[Page 110 STAT. 82]]

        provided by this section, until the Federal Communications 
        Commission makes such determination. <<NOTE: Notification.>>  
        The Federal Communications Commission shall make such 
        determination within 60 days of its receipt of any such 
        application filed after the enactment of this section and shall 
        notify the Commission whenever a determination is made under 
        this paragraph that any person is an exempt telecommunications 
        company. <<NOTE: Rules.>>  Not later than 12 months after the 
        date of enactment of this section, the Federal Communications 
        Commission shall promulgate rules implementing the provisions of 
        this paragraph which shall be applicable to applications filed 
        under this paragraph after the effective date of such rules.
            ``(2) Other terms.--For purposes of this section, the terms 
        `telecommunications services' and `information services' shall 
        have the same meanings as provided in the Communications Act of 
        1934.

    ``(b) State Consent for Sale of Existing Rate-Based Facilities.--If 
a rate or charge for the sale of electric energy or natural gas (other 
than any portion of a rate or charge which represents recovery of the 
cost of a wholesale rate or charge) for, or in connection with, assets 
of a public utility company that is an associate company or affiliate of 
a registered holding company was in effect under the laws of any State 
as of December 19, 1995, the public utility company owning such assets 
may not sell such assets to an exempt telecommunications company that is 
an associate company or affiliate unless State commissions having 
jurisdiction over such public utility company approve such sale. Nothing 
in this subsection shall preempt the otherwise applicable authority of 
any State to approve or disapprove the sale of such assets. The approval 
of the Commission under this Act shall not be required for the sale of 
assets as provided in this subsection.
    ``(c) Ownership of ETCS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company that is 
exempt under section 3 of this Act shall be permitted, without condition 
or limitation under this Act, to acquire and maintain an interest in the 
business of one or more exempt telecommunications companies.
    ``(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding company 
shall be permitted (without the need to apply for, or receive, approval 
from the Commission, and otherwise without condition under this Act) to 
acquire and hold the securities, or an interest in the business, of one 
or more exempt telecommunications companies.
    ``(e) Financing and Other Relationships Between ETCS and Registered 
Holding Companies.--The relationship between an exempt 
telecommunications company and a registered holding company, its 
affiliates and associate companies, shall remain subject to the 
jurisdiction of the Commission under this Act: Provided, That--
            ``(1) section 11 of this Act shall not prohibit the 
        ownership of an interest in the business of one or more exempt 
        telecommunications companies by a registered holding company 
        (regardless of activities engaged in or where facilities owned 
        or operated by such exempt telecommunications companies are 
        located), and such ownership by a registered holding company

[[Page 110 STAT. 83]]

        shall be deemed consistent with the operation of an integrated 
        public utility system;
            ``(2) the ownership of an interest in the business of one or 
        more exempt telecommunications companies by a registered holding 
        company (regardless of activities engaged in or where facilities 
        owned or operated by such exempt telecommunications companies 
        are located) shall be considered as reasonably incidental, or 
        economically necessary or appropriate, to the operations of an 
        integrated public utility system;
            ``(3) the Commission shall have no jurisdiction under this 
        Act over, and there shall be no restriction or approval required 
        under this Act with respect to (A) the issue or sale of a 
        security by a registered holding company for purposes of 
        financing the acquisition of an exempt telecommunications 
        company, or (B) the guarantee of a security of an exempt 
        telecommunications company by a registered holding company; and
            ``(4) except for costs that should be fairly and equitably 
        allocated among companies that are associate companies of a 
        registered holding company, the Commission shall have no 
        jurisdiction under this Act over the sales, service, and 
        construction contracts between an exempt telecommunications 
        company and a registered holding company, its affiliates and 
        associate companies.

    ``(f) Reporting Obligations Concerning Investments and Activities of 
Registered Public-Utility Holding Company Systems.--
            ``(1) Obligations to report information.--Any registered 
        holding company or subsidiary thereof that acquires or holds the 
        securities, or an interest in the business, of an exempt 
        telecommunications company shall file with the Commission such 
        information as the Commission, by rule, may prescribe 
        concerning--
                    ``(A) investments and activities by the registered 
                holding company, or any subsidiary thereof, with respect 
                to exempt telecommunications companies, and
                    ``(B) any activities of an exempt telecommunications 
                company within the holding company system,
        that are reasonably likely to have a material impact on the 
        financial or operational condition of the holding company 
        system.
            ``(2) Authority to require additional information.--If, 
        based on reports provided to the Commission pursuant to 
        paragraph (1) of this subsection or other available information, 
        the Commission reasonably concludes that it has concerns 
        regarding the financial or operational condition of any 
        registered holding company or any subsidiary thereof (including 
        an exempt telecommunications company), the Commission may 
        require such registered holding company to make additional 
        reports and provide additional information.
            ``(3) Authority to limit disclosure of information.--
        Notwithstanding any other provision of law, the Commission shall 
        not be compelled to disclose any information required to be 
        reported under this subsection. Nothing in this subsection shall 
        authorize the Commission to withhold the information from 
        Congress, or prevent the Commission from complying with a 
        request for information from any other Federal or State 
        department or agency requesting the information for purposes

[[Page 110 STAT. 84]]

        within the scope of its jurisdiction. For purposes of section 
        552 of title 5, United States Code, this subsection shall be 
        considered a statute described in subsection (b)(3)(B) of such 
        section 552.

    ``(g) Assumption of Liabilities.--Any public utility company that is 
an associate company, or an affiliate, of a registered holding company 
and that is subject to the jurisdiction of a State commission with 
respect to its retail electric or gas rates shall not issue any security 
for the purpose of financing the acquisition, ownership, or operation of 
an exempt telecommunications company. Any public utility company that is 
an associate company, or an affiliate, of a registered holding company 
and that is subject to the jurisdiction of a State commission with 
respect to its retail electric or gas rates shall not assume any 
obligation or liability as guarantor, endorser, surety, or otherwise by 
the public utility company in respect of any security of an exempt 
telecommunications company.
    ``(h) Pledging or Mortgaging of Assets.--Any public utility company 
that is an associate company, or affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State commission 
with respect to its retail electric or gas rates shall not pledge, 
mortgage, or otherwise use as collateral any assets of the public 
utility company or assets of any subsidiary company thereof for the 
benefit of an exempt telecommunications company.
    ``(i) Protection Against Abusive Affiliate Transactions.--A public 
utility company may enter into a contract to purchase services or 
products described in subsection (a)(1) from an exempt 
telecommunications company that is an affiliate or associate company of 
the public utility company only if--
            ``(1) every State commission having jurisdiction over the 
        retail rates of such public utility company approves such 
        contract; or
            ``(2) such public utility company is not subject to State 
        commission retail rate regulation and the purchased services or 
        products--
                    ``(A) would not be resold to any affiliate or 
                associate company; or
                    ``(B) would be resold to an affiliate or associate 

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