ALAWON v7n65 (June 10, 1998) URL = http://hegel.lib.ncsu.edu/stacks/serials/alawon/alawon-v7n65.txt ================================================================= ALAWON Volume 7, Number 65 ISSN 1069-7799 June 10, 1998 American Library Association Washington Office Newsline In this issue: (235 lines) - SENATE COMMERCE SUBCOMMITTEE CONDUCTS JUNE 10 HEARING ON E-RATE; SUPPORTERS AND DETRACTORS SPEAK UP - FCC COMMISSIONERS COMMENT AT HEARING; KENNARD SIGNALS POSSIBLE ADJUSTMENTS TO PROGRAM _________________________________________________________________ SENATE COMMERCE SUBCOMMITTEE CONDUCTS JUNE 10 HEARING ON E-RATE; SUPPORTERS AND DETRACTORS SPEAK UP Sen. Conrad Burns (R-MT) chaired a lengthy hearing of the Senate Telecommunications Subcommittee on June 10 with the majority of the discussion focused on the e-rate controversies. Although originally called as a general oversight hearing on the reauthorization of the Federal Communications Commission (FCC), the senators and the FCC commissioners addressed many of the details and criticisms leveled at the telecommunications discount program for libraries, schools and not-for-profit rural health care providers. The only witnesses at the hearing were the five FCC commissioners: Chairman William Kennard and Commissioners Susan Ness, Harold Furchtgott-Roth, Michael Powell and Gloria Tristani. However, the commissioners did not get to speak for almost two hours as members of the subcommittee and some of their colleagues from the full Senate Commerce Committee made opening remarks on universal service and the e-rate. The full range of perspectives on the e-rate and universal service was evident in the course of the hearing. Some senators continued to call for a halt to the e-rate program pending additional FCC actions; others called for full funding based on the current schedule for money to begin flowing on July 1. Kennard offered a number of solutions to the critics, emphasizing that many of their concerns had already been, or were in the process of being addressed (see the report below. For available comments by Kennard and other FCC commissioners, see: http://www.fcc.gov). FCC action on this issue is expected on Friday, June 12. The opening remarks of Sen. Burns emphasized his overall commitment to universal service, with special support for the rural health care program as well as the e-rate. He has proposed that half of the telephone excise tax, currently a three percent line item on all phone bills, be devoted to the e-rate. He was critical, however, of what he calls the additional administrative burden and layers of bureaucracy established to administer the current programs. Sen. Ron Wyden (R-OR) was concerned that the current criticisms of the discount program were really a proxy for the larger debate on overall universal service. He is concerned that some would dismantle traditional high-cost/rural universal service programs, thus creating what he termed "communications sacrifice zones." Wyden called for a six to eight week period for the FCC and others to develop a more concrete plan on how to fix the e-rate program while preserving "a cost-effective, targeted role for government" in this arena. Sen. John McCain (R-AZ) emphasized that he is in favor of making available broadband advanced telecommunications technologies to schools, especially the neediest schools. He warned FCC Chairman Kennard that the FCC is now "haunted" by the mistakes of Kennard's predecessor, Reed Hundt, and that the previous FCC had gone beyond the will of Congress regarding the discount program. McCain argued that it had been Congress's intent to restructure and size the entire universal service fund, including the discounts for schools, libraries, rural health care -- at one time. Sens. Olympia Snowe (R-ME) and Jay Rockefeller (D-WV), two of the original four sponsors of the provision, clearly articulated their support for this program. Sen. Rockefeller expressed appreciation that Sen. Burns had scheduled the hearing and of his public support for the various parts of universal service. Sen. Rockefeller described how the telecommunications companies had come to Congress to seek a rewrite of the Communications Act emphasizing competition and deregulation. In return they had made a commitment to maintain universal service, including the schools and libraries discounts. These commitments should be kept, he emphasized. Rockefeller said that if there are problems with the program, let's work them out, but let's keep the program. Sen. Snowe recognized that this is a difficult process, but that there have already been long, comprehensive, public debates about universal service and the e-rate. She emphasized the bipartisan support for the Snowe-Rockefeller provision in Congress and in earlier proceedings before the Federal-State Joint Board on Universal Service as well as before the FCC itself (both of which were unanimous, bipartisan decisions). Snowe noted that the recently passed immigration bill which will allow more skilled foreign technology workers into the U.S. would not have been necessary if the nation had all the skilled workers it needed. It is clear that schools and libraries need the discounts, she said, especially to see that all classrooms get wired. She expressed concern that the recent debate was a covert operation to derail the provision. Sen. Fritz Hollings (D-SC) has been critical of the e-rate. He had joined Sen. McCain, chair of the full Senate Commerce Committee, and Rep. Thomas Bliley (R-VA), chair of the House Commerce Committee, and Rep. John Dingell (D-MI), ranking Democrat on the House Commerce Committee) on an earlier letter calling for a halt to the program until other policy issues were resolved by the FCC. Sen. Hollings remains gravely concerned about any increased phone bills which, he said, was definitely not what was intended when Congress passed the Telecommunications Act of 1996. Other senators speaking included Sens. John Breaux (D-LA), Sam Brownback (R-KS), Richard Bryan (D-NV), Byron Dorgan (D-ND), and John Ashcroft (R-MO). _________________________________________________________________ FCC COMMISSIONERS COMMENT AT HEARING; KENNARD SIGNALS POSSIBLE ADJUSTMENTS TO PROGRAM At the June 10 Senate Telecommunications Subcommittee hearing, FCC Chairman Kennard spoke almost exclusively about the e-rate and universal service, although he had also been prepared to speak about the larger FCC reauthorization issues. Kennard defended the E-rate program for schools and libraries, saying that most of the concerns of committee members had already been addressed. Responding to senators' calls to streamline the universal service program, Kennard responded that the Commission had already pledged to combine the Schools and Libraries Corporation and Rural Health Care Corporation into a single entity. Kennard again committed to having the two corporations combined by the end of the year, noting that the SLC and RHCC have been asked to submit proposals for their combination by July 1, 1998. Kennard also addressed the continued concern by members of the committee that the CEO of the SLC was paid too much. Although the SLC's CEO has a salary that is "in line with CEO salaries at similar non-profit corporations," Kennard said that the Commission had drafted a proposal that he expected to be adopted by the end of the week reducing the salaries of SLC's top officers. Chairman Kennard also refuted the inaccurate allegations that have been made recently in the press, claiming that the universal service program would fund a number of ineligible services. Kennard said that the FCC had clearly defined what was eligible, and was working with the SLC to ensure that the FCC's definitions were enforced. Despite recent allegations, "[c]arpeting is not funded. Computers are not funded. Painting is not funded." Kennard also noted that all applicants were required to submit a technology plan and certify that they had procured sufficient funding for all of the ineligible services needed to use the discounts, such as computers, professional development, maintenance, and electrical upgrades. In response to continued allegations that the e-rate program is fraught with waste and abuse, Kennard said that the integrity of the schools and libraries program was one of his greatest concerns. He had already ordered an independent audit of the program, which is currently underway, to examine any and all shortcomings, and said that the SLC was adapting its program based on those recommendations. He pointed out that the e-rate was already one of the most audited and scrutinized programs in the federal government though no funds had yet been distributed and the program was on its initial schedule. "I also believe that we must ensure that the most disadvantaged schools and libraries get priority," he said. The FCC has pursued several avenues to ensure that this happened, including the deepest discounts for those schools and libraries in the neediest areas and rules of priority to ensure that, if funding were to run short, those with the greatest need were given the highest priority for funding. Although some critics have called the program "unlimited," Kennard pointed out that the FCC has worked within strict guidelines to determine the amount of funding that would be available to applicants. Although the Commission initially set a cap of $2.25 billion, and demand had been estimated at $2.02 billion, the Commission had proposed that the funding level for the 1998 funding year be set at only $1.67 billion, so as not to push telephone rates up. Kennard defended the decisions of the Commission to include internal connections, pointing out that the law requires services to be made available to "elementary and secondary schools and classrooms." He also pointed out that the majority of the funding for internal connections was for low income schools, who clearly needed the infrastructure most. Finally, Kennard said that the schools and libraries program should be funded by a line item on consumers' bills for $1.00 per line per month. This charge, he said, would fund the entire program and would be "simple...direct...and easy to understand." He said that he had proposed a "truth in billing" requirement in order to help clear up much of the confusion that consumers have experienced with the myriad charges on their phone bills. Kennard also discussed the possibility of stretching out the implementation phase of the first year to 18 months for internal connections, which would be more consistent with many school year budget cycles. The other four commissioners had statements and all responded to many questions. The next issue of ALAWON will report on that phase of the hearing and related issues. _________________________________________________________________ ALAWON is a free, irregular publication of the American Library Association Washington Office. To subscribe, send the message: subscribe ala-wo [your_firstname] [your_lastname] to listproc @ala.org. 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