FCC Approves Full Funding for E-Rate Program

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The Federal Communications Commission voted last week to fully fund the federal E-rate program in its second year, despite continued opposition to the initiative from key members of Congress.

The commissioners voted 3-2 to spend $2.25 billion on the program for the funding year beginning in July, the maximum amount authorized under the Telecommunications Act of 1996.

Just a year ago, under pressure from Congress, the FCC slashed the program's funding to $1.9 billion for the first 18 months.

Federal Communications Commission Chairman William E. Kennard defends the E-rate program last week at a hearing of the Senate Commerce, Science, and Transportation Committee.
--Benjamin Tice Smith

"We've made a tremendous leap with this decision," said Linda Roberts, the director of the office of educational technology for the Department of Education.

The education-rate program, which provides discounts on telecommunications services to schools and libraries, has gained political clout because it works, Ms. Roberts argued. In the first 18 months of the program, 25,000 schools and libraries received discounts.

"What's changed is that there are real examples to point to of benefits to schools and libraries, particularly in those communities that couldn't afford the resources that other more affluent communities had in place," Ms. Roberts said.

Longtime critics of the E-rate, however, said the vote last week only reinforced the need to continue the fight to alter the program.

'Illegal Tax Increase'

"What the FCC has done is approve another illegal tax increase on telephone consumers across America," said Ken Johnson, a spokesman for Rep. W.J. "Billy" Tauzin, R-La. Mr. Tauzin has introduced a bill that would use part of an existing excise tax on telephone calls to provide money for wiring schools and libraries for five years.

Currently, the discounts are financed by fees collected by the FCC from telecommunications companies, some of which have passed along their costs to consumers.

"What the FCC has chosen to do goes beyond what Congress set up," added Ben O'Connell, the deputy press secretary for Sen. Conrad Burns, R-Mont., who has introduced a Senate bill similar to Mr. Tauzin's.

He said Mr. Burns believes the FCC lacked the authority to expand the concept of "universal service," established in 1934 to ensure affordable phone service throughout the country, to include internal wiring for the Internet in schools.

Other critics voiced their concerns at a hearing of the Senate Commerce, Science, and Transportation Committee one day before the FCC's May 26 vote.

"I don't doubt that there is a benefit to wiring schools and libraries," Sen. Kay Bailey Hutchison, R-Texas, told the five commissioners. "But to require captive consumers to pay the cost completely, it doesn't pass the fairness test. ... At the very least, I don't think fees should be increased."

FCC Chairman William E. Kennard responded that under a worst-case scenario, consumers would have to pay about 33 cents a month for the E-rate program.

"I believe that's a small price to pay to ensure that our next generation of kids have the technology they need to compete in a global economy," he said.

The strongest objections came from Sen. Ted Stevens, R-Alaska. He maintained that the commission was spending too much time and money on the E-rate program at the expense of making sure that rural and other "high cost" areas receive reasonably priced telecommunications services.

While the Telecommunications Act of 1996 includes both initiatives as part of its goal of overhauling the nation's universal-service system, Mr. Stevens argued that the law clearly gives a higher priority to addressing the problems faced by high-cost regions.

"The commission has concentrated almost exclusively on the concept of schools and libraries," said Mr. Stevens, whose state includes some of the most isolated areas of the country. "There was no timetable for that, and you did it within a year. But you didn't do what we asked you to do" within the 15-month deadline prescribed by the act.

Mr. Kennard conceded that the commission had made little progress so far on that aspect of the law, but he added that the complexity of the issue warranted a cautious approach.

"I am not here to apologize for the fact that we are moving cautiously," the FCC chief said.

Sen. Stevens' concerns were echoed at the hearing by the two commissioners who voted the next day against full funding for the E-rate program, Harold W. Furchtgott-Roth and Michael K. Powell.

94 Signatures

While criticism abounded before the vote, so also did support, as a variety of groups held events on Capitol Hill to encourage the FCC commissioners to fully fund the E-rate program.

Supporters included the black and Hispanic congressional caucuses, the Chief Officers of State Library Agencies, and the U.S. Conference of Mayors.

And 94 members of the House signed a letter to Mr. Kennard urging the FCC to go forward with the $2.25 billion amount.

That was an encouraging sign to education groups that have tried to keep the E-rate on track in the midst of numerous uncertainties and delays.

"There certainly are some vocal critics out there, and I suspect there always will be," said Michelle Richards, the director of federal programs for the National School Boards Association. "My mother always said, 'Anything worth having doesn't come easily.' "

Vol. 18, Issue 38, Pages 17-18

Published in Print: June 2, 1999, as FCC Approves Full Funding for E-Rate Program
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