NEWSFebruary 8, 1996 TELECOMMUNICATIONS ACT OF 1996 ENACTS 21 PROPOSALS TO "REINVENT" AGENCY The Telecommunications Act of 1996, signed into law today by President Clinton, includes 21 legislative proposals the Commission submitted to Congress in May 1995 as part of the FCC's ongoing "Reinventing Government" initiative. When the Commission first transmitted its legislative proposals to the Congress in May 1995, the five FCC Commissioners noted in their transmittal letter that nearly all of the FCC's proposals "are deregulatory or pro-competitive in nature in that their enactment will eliminate certain Commission functions, privatize other responsibilities, reduce regulatory burdens on industry, increase telecommunications competition, save agency resources, or otherwise streamline agency processes." The 21 FCC proposals now enacted into law, for example, will: o Authorize the FCC to forbear from regulating classes of telecommunications carriers or services where unnecessary to protect the public interest; o Provide blanket licensing for the operation of radio equipment on ships and aircraft, eliminating annually over 120,000 separate license applications and related fees; o Authorize the use of non-governmental, independent testing labs to test and/or certify radio and computer equipment, speeding up the equipment authorization process; o Streamline the license renewal process for broadcast licensees; o Privatize FCC inspection of ship radio stations; o Repeal mandatory FCC setting of depreciation rates for common carriers; o Expedite the processing of applications for Instructional Television Fixed Service (ITFS); and o Eliminate the duplicative filings currently required for both a construction permit and an operating license before a broadcast station can make even minor modifications in its facilities. (over) - 2 - These FCC legislative proposals and others were first highlighted in a summary of FCC staff legislative proposals released on February 1, 1995, as Appendix A to a "Reinventing Government" report by Mary Beth Richards, Special Counsel to the Commission for Reinventing Government. The report was entitled Report to the Commissioners: Creating a Federal Communications Commission for the Information Age. That report also summarized in an Appendix B 35 other FCC staff proposals to further streamline and deregulate which can be carried out under existing legislative authority. The Commission has already implemented, or is in the process of implementing, many of these administrative streamlining proposals. Attached is an Executive Summary of the FCC's 1995 Legislative Proposals now enacted into law by S. 652, with section number and page citations to S. 652, S. Rept. No. 104-230, January 31, 1996, 104th Cong., 2nd Sess. (1996). The legislative proposals are also organized by the FCC bureaus and offices which first recommended the proposals and are now expected to implement the new laws. - FCC - For more information, please contact Steve Klitzman, Associate Director, FCC Office of Legislative and Intergovernmental Affairs, at 202-418-1900. ATTACHMENT Executive Summary of Federal Communications Commission 1995 Legislative Streamlining Proposals Enacted Into Law by S. 652, Telecommunications Act of 1996 February 8, 1996 Cable Services Bureau 1. Change in the Definition of a "Cable System" and SMATV Systems. (Sec. 602(7)(B) of the Communications Act of 1934, as amended) (Hereafter just the amended statutory section is cited.) Excludes from the definition of a "cable system" not only commonly- owned, but also separately-owned dwellings interconnected by wires which do not cross public rights-of-way. This will promote the growth of wireless cable and SMATV systems as competitors to cable systems by substantially reducing the costs of expanding such systems. (See S. 652, Sec. 301(a)(2), p. 62.*) 2. Cable "Anti-Trafficking". (Sec. 617) Deletes the "anti-trafficking" provision of the Cable Act of 1992 to allow for the free sale of cable systems. This removes an unneeded burden to a free-market, competitive environment for the cable television industry. (See S. 652, Sec. 301(i), p.65.) Common Carrier Bureau 3. Forbearance Authority. (New Sec. 10) Authorizes the FCC not to regulate classes of telecommunications carriers or services where unnecessary to protect the public interest. This will enable the FCC to forbear from, and/or streamline, regulation, e.g., by eliminating the tariff filing requirement for non-dominant long distance carriers such as MCI and Sprint. This will save resources, reduce paperwork, increase efficiency, and promote competition. (See S. 652, Sec. 401, p. 76.) 4. Physical Collocation for Expanded Interconnection. (New Sec. 251(c)(6)) Authorizes the FCC to require physical collocation for expanded interconnection. Requires FCC regulations to provide for actual collocation of equipment necessary for interconnection at the premises of a local exchange carrier, (LEC) or virtual collocation if the LEC demonstrates that actual collocation is not practical for technical reasons or if space is limited. This will permit the FCC to require the local exchange telephone carriers to open their central offices to the equipment of competitors. (See S. 652, Sec. 101(a), p. 9.) 5. Depreciation Rates. (Sec. 220(b)) Repeals mandatory FCC setting of depreciation rates for common carriers. This gives the FCC greater flexibility if it determines that setting depreciation rates for some or all telecommunications carriers no longer serves the public interest. (See S. 652, Sec. 403(d), p. 78.) 6. Use of Independent Auditors. (Sec. 220(c)) Authorizes the FCC to use independent auditors to augment its carrier audit program. Commission hiring of its own independent auditors will enable the FCC more fully to examine carrier audits. This proposal also saves money by reducing the additional staff auditors the FCC would have to hire to scrutinize the audits of the carriers' independent auditors. (See S. 652, Sec. 403(e), p. 78.) 7. Regulation of Pole Attachments. (Sec. 224) Precludes utilities from favoring one competitive entity over another in obtaining pole attachment agreements and in pole attachment rates and practices. This will help assure non-discrimination in the provision of pole attachment space as competing telecommunications services proliferate. (See S. 652, Sec. 703, p. 98.) Compliance and Information Bureau 8. Privatization of Ship Radio Inspections. (Secs. 362(b), 385) Authorizes the FCC to use private entities to conduct inspections of ship radio stations and broadens the FCC's authority to waive the now required annual ship radio station inspection. This will provide more flexibility in scheduling the required annual inspection for U.S. ships operated domestically. It also will save the Commission staff and travel resources, improve inspection service to the maritime industry, and promote private sector jobs. (See S. 652, Sec. 403(n)- (o), p. 80.) Mass Media Bureau 9. Extension of Broadcast License Term. (Sec. 307(c)) Extends radio and TV license terms to 8 years each. This will reduce costs both for the broadcasting industry and the Commission. (See S. 652, Sec. 203, p. 59.) 10. Expedited Processing of Instructional Television Fixed Service Applications. (Sec. 5(c)(1)) Expedites processing of ITFS applications by allowing staff (rather than Administrative Law Judges or the full Commission) to issue decisions in routine, paper hearings in comparative ITFS cases. This will streamline agency processes thereby expediting new or improved ITFS service. (See S. 652, Sec. 403(c), p. 78.) 11. Modification of Construction Permit Requirement. (Sec. 319(d)) Modifies the prohibition against the Commission waiving the requirement for a broadcast construction permit for minor modifications to broadcast stations. This proposal eliminates the essentially duplicative process of filing separately for both a CP and license in instances where elimination of the CP requirement will create little or no potential for interference. (See S. 652, Sec. 403(m), p. 80.) 12. Limitation on Silent Station Authorizations. (New Sec. 312(g)) Provides that a license authorization for a station silent for one year automatically cancels. This will save Commission resources, eliminate undue protection of non-operational stations, and allow operational stations greater flexibility in changing frequencies and upgrading facilities. (See S. 652, Sec. 403(l), p. 80.) 13. Simplification of Broadcast License Renewal Process. (New Sec. 309(k)) Simplifies the broadcast license renewal process by establishing a two-tiered process: first, the incumbent licensee's performance during the preceding license term will be compared only against statutory standards and not against any competing applications, and second, the renewal application will be automatically granted if the statutory standards are met or exceeded, or designated for hearing and possibly opened to competing applications if the standards are not met. This will streamline broadcast license renewal procedures, eliminating the costly process for both the agency and licensees of considering competing applications to a renewal application even though the incumbent's performance has been in compliance with Commission standards. (See S. 652, Sec. 204, p. 60.) Office of Engineering and Technology 14. Delegation of Equipment Testing and Certification to Private Labs. (New Sec. 302(e)) Authorizes the use of private, independent testing labs to test and certify radio equipment to ensure compliance with technical standards for radio frequency (RF) emissions. This will permit a reduction in the number of persons engaged in equipment testing with no adverse impact on the Commission's role in ensuring that RF emitting devices are safe. (See S. 652, Sec. 403(f), p. 79.) Office of General Counsel 15. Making License Modification Uniform. (Sec. 303(f)) Eliminates the public hearing requirement concerning changes in the frequencies, authorized power, or times of operation of any station so that the written procedure provisions of Section 316 will uniformly apply to any appropriate modifications of broadcast authorizations. This will potentially save money and increase efficiency by eliminating the need for any individual public hearings that would be required by existing Section 303(f) of the Act. (See S. 652, Sec. 403(g), p. 79.) Office of Managing Director 16. Auction Funding Availability. (Sec. 309(j)(8)(B)) Amends the competitive bidding provisions of the Communications Act to provide the FCC with more flexibility in the collection and use of auction funds by authorizing auction collections to remain available until expended. This will permit the FCC to use funds in any year to reimburse itself for the cost of conducting the auctions. (See S. 652, Sec. 710(c), p. 110.) Wireless Telecommunications Bureau 17. Permit Operation of Domestic Ship and Aircraft Radios Withour License. (Sec. 307(e)) Permits the FCC to authorize by rule rather than through individual licensing the operation of radio equipment on domestic ships, aircraft, and in some personal radio services such as the citizens band and radio control services This will streamline the process for placing radio equipment in operation by eliminating the need to obtain specific licensing authority. This amendment alone will eliminate over 120,000 applications for radio station licenses each year. (See S. 652, Sec. 403(i), p. 79.) 18. Automated Ship Distress and Safety Systems. (New Sec. 365) Authorizes the FCC to fully implement the Global Maritime Distress and Safety System (GMDSS) by giving the agency authority to relieve cargo vessel owners from the burden of current domestic radio equipment carriage requirements. This will enhance world-wide competition in the shipping industry by eliminating a requirement now generally applicable only to United States ships. (See S. 652, Sec. 206, p. 61.) 19. Modification of Amateur Radio Examination Procedures. (Sec. 4(f)(4)) Eliminates unnecessary conflict-of-interest provisions for publishers and equipment manufacturers to broaden the category of those authorized to administer amateur radio service examinations and eliminates burdensome record maintenance and annual financial certification requirements. This amendment will also eliminate numerous filings with the Commission. (See S. 652, Sec. 403(a), p. 78.) 20. Expedited Licensing for Fixed Microwave Services. (Sec. 309(b)(2)) Expedites processing of microwave applications by eliminating requirement that such applications be placed on at least 30 days public notice prior to grant. This will streamline processing by eliminating the delay in granting licenses caused by the mandatory public notice period. (Generally, these applications are not contested or could be petitioned against after the grant, so there is no need for a pre-grant public notice.) (See S. 652, Sec. 403(j), p. 79.) 21. Government-Owned Stations. (Secs. 305(b), 382(2)) Eliminates FCC jurisdiction over ship radios belonging to other government agencies such as the Department of Transportation and the Panama Canal Zone Authority. This eliminates a duplication of effort between the FCC and other Federal Government agencies by eliminating the need for the FCC to review the operations of vessels operated by other agencies. (See S. 652, Sec. 403(h), p. 79.)