To ensure full and expeditious enforcement of the provisions of the Communications Act of 1934 that seek to bring about competition in local telecommunications markets, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE ---, 1999

Mr. HOLLINGS introduced the following bill; which was read twice and referred to the Committee on ___________

A BILL

To ensure full and expeditious enforcement of the provisions of the Communications Act of 1934 that seek to bring about competition in local telecommunications markets, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Telecommunications Competition Enforcement Act of 1999".

SEC. 2. FINDINGS.

The Congress finds:

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(1) The Telecommunications Act of 1996 put in place the proper framework to achieve competition in local telecommunications markets.

(2) The Telecommunications Act of 1996 required that all incumbent local exchange carriers open their markets to competition by interconnecting with and providing network access to new entrants, a process to be overseen by Federal and State regulators.

(3) To increase the incentives of the Bell operating companies to open their local networks to competition, the Telecommunications Act of 1996 allows the Bell operating companies to provide interLATA long distance service in their service region only after opening their local networks to competition.

(4) While significant progress has been made in opening local telecommunications markets, 3 years after passage of the Act, not a single Bell operating company has opened its network to competition as required by the Telecommunications Act of 1996.

(5) It is apparent that the incumbent local exchange carriers do not have adequate incentives to cooperate in this process and that regulators have not exercised their enforcement authority to require compliance.

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(6) By improving mandatory penalties on Bell operating companies and incumbent telephone companies that have not opened their network to competition, there will be greater assurance that local telecommunications markets will be opened wore expeditiously and, as a result, American consumers will obtain the full benefits of competition.

SEC. 3. PURPOSE.

The purpose of this Act is to impose penalties on telephone companies that have not complied with the Telecommunication Act of 1996 in order to ensure that local telecommunications markets are opened more rapidly to full, robust, and sustainable competition.

SEC. 4. ENFORCEMENT AUTHORITY.

Title 2 of the Communications Act of 1934 (47 U.S.C. 201 et seq.) is amended by adding at the end the following new section:

"SEC. 262. ENFORCEMENT AUTHORITY."

(a) IN GENERAL.---

"(1) If the Commission finds that a Bell operating company has not fully implemented the competitive checklist in section 271(c)(2)(B) for all telecommunications (including voice, video, and data) for at least one-half of the States in its region by February 8, 2001, as determined by the Commission [begin page 4] under Commission policies adopted as of June 1, 1999, the Commission shall assess on such company a forfeiture penalty of $100,000 for each day of the continuing violation until the Commission determines that the Bell operating company has fully implemented section 271(c)(2)(B).

"(2) If the Commission finds that a Bell operating company has not fully implemented the competitive checklist in section 271(c)(2)(B) for all telecommunications (including voice, video, and data) in all States in its region by February 8, 2003, as determined by the Commission under Commission policies adopted as of June 1, 1999, the Commission shall order the Bell operating company to divest itself of its telecommunications network facilities within 180 days in States in which it has not fully implemented the requirements of section 271(c)(2)(B). The Bell operating company owning or controlling those telecommunications network facilities shall provide neither telecommunications nor information services to subscribers who are telecommunications carriers in States in which it is in violation of section 271(c)(2)(B) until the Commission finds that effective facilities-based local competition exists in the relevant market.

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"(b) ENSURE MARKETS ARE OPEN TO COMPETITION.---

"(1) For an incumbent local exchange carrier (as defined in section 251(h)), other than a Bell operating company, with more than 5 percent of the access lines in the nation the Commission shall ensure, upon receipt of a petition from any interested party, that the company's markets are open to competition by completing an investigation within 120 days to determine whether such incumbent local exchange carrier has fully complied with section 251(c) for all telecommunications (including voice, video, and data).

"(2) In determining compliance with section 251(c), the Commission shall consult with the relevant State regulators and shall use as a benchmark the practices and performance of other incumbent local exchange carriers in the State and region.

"(3)(A) If the Commission finds that such incumbent local exchange carrier is not in full compliance with section 251(c) for all telecommunications (including voice, video, and data), the Commission shall explicitly state the reasons for such carrier not being in full compliance and allow the carrier 60 days to come into full compliance.

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"(B) If such carrier does not come into full compliance at the end of the 60-day period, the Commission shall---

"(i) assess on the carrier a forfeiture penalty of $50,000 per day of the continuing violation; and

"(ii) order, the carrier to cease and desist in marketing and selling long distance services to new customers.

"Such forfeiture penalty and cease and desist order shall continue until the Commission finds that the carrier is in compliance with section 251(c).

"(c) POST APPROVAL PROTECTIONS.---

"(1) IN GENERAL.---If at any time after the approval of an application consistent with the requirements of section 271, the Commission determines that a Bell operating company has ceased to meet one or more of the requirements of section 271(c)(2)(B) for all telecommunications (including voice, video, and data), the Commission shall, after notice and opportunity for a hearing assess on the company a forfeiture penalty of $100,000 for each violation and for each day of the continuing violation.

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"(2) PENALTY.---If at any time after the approval of an application consistent with the requirements of section 271, the Commission determines that a Bell operating company has willfully, knowingly, and repeatedly ceased to meet one or more of the requirements of section 271(c)(2)(B) for all telecommunications (including voice, video, and data), the Commission shall, after notice and opportunity for a hearing order the company to divest itself of its telecommunications network facilities within 180 days in States in which it has ceased to meet the requirements of section 271(c)(2)(B).

"(d) AUTHORITY.---Notwithstanding any other provision of this Act, the Commission shall have full authority to order, implement, and enforce the provisions of this section. In implementing this section, the Commission shall ensure that it does not alter the policies and standards in effect as of June 1, 1999 for ensuring compliance with section 271 of the Act.

"(e) ADDITIONAL PROVISIONS.---The provisions, of this section are in addition to the penalties and forfeitures provided by title 5 of this Act.".