"FCC Preparing to Scale Back School Internet Programs" NY Times, June 6, 1998
[Note: Otherwise AT&T & MCI will have a separate separate tax line item of 4.8%, starting on the July bill.
Very, very interesting tactical response by AT&T. Perhaps the only way to deal with the FCC & the Clinton 'never saw a tax I didn't like administration.
Also note the bias in the headline. I thought at first it was written by Hillary]
While President Clinton was speaking enthusiastically Friday in favor of a program to help schools and libraries connect to the Internet, the Federal Communications Commission, under pressure from Congress, was preparing to scale back the program, officials close to the commission and to Congress said Friday.
Some 30,000 schools and libraries have submitted applications for Internet grants totaling $2.02 billion. But under the plans being considered by the commission, the program would almost certainly get less than $1.7 billion this year, and possibly less than $1.4 billion, the officials said.
Big long-distance phone companies contribute most of the money that goes into the program. The commission and lawmakers are concerned that fulfilling all the applications from schools and libraries could lead to higher long-distance telephone rates. But while some members of Congress want to cut off funds to the program completely, FCC officials want to shrink the program more modestly. Referring to the school and library program by its Washington nickname, Clinton said Friday, "I say we cannot afford not to have an e-rate,"
"Thousands of poor schools and libraries and rural health centers are in desperate need of discounts," the president said, giving a commencement address at the Massachusetts Institute of Technology in Cambridge. "If we really believed that we all belong in the Information Age, then, at this sunlit moment of prosperity, we can't leave anyone behind in the dark."
The president has set a goal of connecting every classroom to the Internet by 2000, and he said Friday that by this time next year "we will have connected well over half our classrooms, including
100 percent of the classrooms in the nation's 50 largest urban school districts."
The FCC collected $625 million for the schools and libraries program in the first half of the year. If the commission does not vote to change the program by Tuesday, the FCC will collect an additional
$690 million in the third quarter and as much as $705 million in the fourth quarter.
That would meet all of the grant applications. The commission must vote by Tuesday because the third quarter begins on July 1 and the commission has said that phone companies must know their obligations by next week in order to prepare and modify their billing systems.
But few people at the FCC believe that the commission will allow the schools and libraries fund to grow to meet the outstanding demand.
That is partly because the commission, led by William E. Kennard, a Democrat, as chairman, has insisted since last year that the schools and libraries program not increase the price of phone calls for consumers.
To achieve that goal, the commission has pegged the long-distance companies' contributions to regulated reductions in the charges, known as access fees, that the companies pay to local phone
companies to begin and end calls. Some of the access fee reductions are meant to be flowed through to consumers in the form of lower rates, and the major long-distance companies say they have done so.
But AT&T and MCI are also about to begin telling their customers that the government is making consumers pay more to support schools and libraries.
"People's bills have stayed at, say, $20," an FCC official said. "But instead of $20 they see $19 plus $1, and they focus on the plus $1."
The commission is scheduled to create $700 million to $800 million in additional annual access charge reductions on July 1. That works out to $175 million to $200 million in quarterly savings.
The commission collected $325 million for the fund in the second quarter. If that rate was increased to reflect the July 1 access fee reduction, the FCC would collect for the rest of the year at a rate of $500 million to $525 million a quarter.
In fact, a majority of the five-member commission had agreed on a plan to collect $524 million a quarter at least until the end of the year, people close to the commission said Friday. That would
have yielded a total budget for the calendar year of $1.67 billion.
On Thursday, however, the four high-ranking members of Congress wrote to Kennard urging the FCC to stop collecting for the program altogether, destroying the $524 million consensus.
The schools and libraries plan, which has its origins in the Telecommunications Act of 1996, is part of a larger program that also supports telecommunications service in poor and rural areas, known as
universal service.
"The commission's efforts to implement the universal service provisions of the act have been a spectacular failure, and -- more importantly -- a raw deal for consumers," wrote the four members
of Congress: Rep. Thomas Bliley Jr., a Republican from Virginia who is chairman of the House
Commerce Committee; Rep. John Dingell, D.-Mich., who is the ranking minority member of that committee; Sen. John McCain, R-Ariz., who is chairman of the Senate Commerce Committee, and Senator Ernest Hollings, D.-S.C., and the ranking minority member of that committee.
People on Capitol Hill said Friday that the commission was floating a plan to collect $375 million for the fund each quarter, for a 1998 total of $1.38 billion. A spokeswoman for the commission
declined to confirm that.
In a statement, Kennard said: "Ending this effort is not in the best interest of the American people. We need to find a way to insure that this effort continues. I am committed to this." |
