FCC, Congress battle over access: School and library program could be threatened

Funding for a program that gives schools and libraries discounts on Internet access and other telecommunications services may be cut off July 1 if Congress and the FCC can't resolve disputes over how to pay for and operate the program.

Legislators who oversee the FCC, including Senate Commerce Committee Chairman John McCain, R-Ariz., have asked the agency to stop collecting money for the program, which allows schools and libraries to buy various telecom services at discounts of 20% to 90%. They are seeking major changes, possibly including new limits on funding and new administrators.

The brouhaha, which has simmered for weeks, involves a first-time expansion of universal service funding to schools, libraries and rural medical facilities under the Telecommunications Act of 1996. Universal service has traditionally subsidized local telephone service in rural and high-cost universal areas. All interstate carriers pay for the program through contributions to a federally administered fund.

Schools and libraries have filed more than 30,000 applications with an estimated price tag of $2.02 billion, but no money can be dispensed until funding for all of 1998 is decided, said the FCC staff member.

Outright killing of the program seems unlikely, but many complaints have been generated, partly by AT&T's and MCI's announcements that they will start listing new charges July 1 on residential customers' bills to reflect the higher cost of universal service for schools and libraries (see figure).

Both Congress and FCC Chairman William Kennard said they support full disclosure of the charges, but they disagreed on t new line items on billing and the size of the fund.

Critics fear that without careful administration, carriers could end up paying for illegitimate requests, and funding for more important universal-service recipients-rural and high-cost local telcos-could be threatened.

Action on the issue was expected on June 12.