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Published in Print: September 9, 1998, as New Twist on an Old Law

New Twist on an Old Law

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The Telecommunications Act of 1996 authorized the E-rate program under a 64-year-old concept called universal service.

That philosophy began with a federal law in 1934 that assumed every person in the United States was entitled to affordable telephone service. Under universal service, Americans who pay little for phone installation subsidize service for Americans living in areas where installation is pricier.

The 1996 act expanded the definition of universal service to include "advanced telecommunications and information services.'' It also made changes in the process of how universal-service fees are collected.

With advice from the telecommunications industry, the Federal Communications Commission decided that $2.3 billion from those fees should go each year to the E-rate, a discounted rate on telecommunications services for schools and libraries. Some critics say the program is too large, particularly since the FCC hasn't ironed out how to meet the law's stipulations for updated universal service to rural and other high-cost areas.


Vol. 18, Issue 1, Page 41

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