
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
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[CITE: 47USC254]

 
          TITLE 47--TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
 
                 CHAPTER 5--WIRE OR RADIO COMMUNICATION
 
                     SUBCHAPTER II--COMMON CARRIERS
 
               Part II--Development of Competitive Markets
 
Sec. 254. Universal service


(a) Procedures to review universal service requirements

         (1) Federal-State Joint Board on universal service

        Within one month after February 8, 1996, the Commission shall 
    institute and refer to a Federal-State Joint Board under section 
    410(c) of this title a proceeding to recommend changes to any of its 
    regulations in order to implement sections 214(e) of this title 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) of this title, 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 February 8, 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 February 
    8, 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) of this 
    section.

                      (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 chapter.

(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) of this section.

(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) of this title 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 February 8, 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) of this section, 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 or library consortium not eligible for assistance from 
    a State library administrative agency under the Library Services and 
    Technology Act [20 U.S.C. 9121 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 8801 of title 
        20.

        (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.

(June 19, 1934, ch. 652, title II, Sec. 254, as added Pub. L. 104-104, 
title I, Sec. 101(a), Feb. 8, 1996, 110 Stat. 71; amended Pub. L. 104-
208, div. A, title I, Sec. 101(e) [title VII, Sec. 709(a)(8)], Sept. 30, 
1996, 110 Stat. 3009-233, 3009-313.)

                       References in Text

    The Library Services and Technology Act, referred to in subsec. 
(h)(4), is subtitle B (Secs. 211-263) of title II of Pub. L. 94-462, as 
added by Pub. L. 104-208, div. A, title I, Sec. 101(e) [title VII, 
Sec. 702], Sept. 30, 1996, 110 Stat. 3009-233, 3009-295, which is 
classified generally to subchapter II (Sec. 9121 et seq.) of chapter 72 
of Title 20, Education. For complete classification of this Act to the 
Code, see Short Title note set out under section 9101 of Title 20 and 
Tables.


                               Amendments

    1996--Subsec. (h)(4). Pub. L. 104-208 substituted ``library or 
library consortium not eligible for assistance from a State library 
administrative agency under the Library Services and Technology Act'' 
for ``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.)''.


                 Universal Service Fund Payment Schedule

    Pub. L. 105-33, title III, Sec. 3006, Aug. 5, 1997, 111 Stat. 269, 
related to appropriations to the Universal Service Fund in support of 
programs established pursuant to rules implementing this section and 
adjustment of payments by telecommunications carriers and other 
providers of interstate telecommunications prior to repeal by Pub. L. 
105-119, title VI, Sec. 622, Nov. 26, 1997, 111 Stat. 2521. Section 622 
of Pub. L. 105-119 provided further that: ``This section shall be deemed 
a section of the Balanced Budget Act of 1997 [Pub. L. 105-33, see Tables 
for classification] for the purposes of section 10213 of that Act (111 
Stat. 712) [2 U.S.C. 902 note], and shall be scored pursuant to 
paragraph (2) of such section.''

                  Section Referred to in Other Sections

    This section is referred to in sections 214, 251, 253, 271 of this 
title.
