FCC pushes e-rate to the max

Despite objections by two commissioners and several Republican lawmakers, the FCC last week boosted annual funding to the $2.25 billion maximum allowed for the controversial education-rate program that subsidizes Internet access and other services for schools and libraries.

The $900 million increase over last year's e-rate funding will tack an extra 10 cents to 15 cents on customers' long-distance telephone bills, the FCC estimates. All interstate carriers contribute to the e-rate program, and most pass the cost on to consumers-a fee critics charge amounts to an illegal tax.

But FCC Chairman William Kennard defended the program, saying it has brought the Internet and other high-tech services to the nation's most disadvantaged students. Only 39% of poor school districts had Internet access before the e-rate program began last year, compared with 62% in wealthier districts, he said. Since then, $1.7 billion has been given to more than 80,000 schools and libraries, most of them in poor and rural areas.

"We can't afford not to make this investment in our children," Kennard said.

Congress authorized the e-rate program as part of the Telecommunications Act of 1996, but some members have criticized its administration and funding. FCC Commissioners Michael Powell and Harold Furchtgott-Roth voted against full funding, saying the program lacks oversight to ensure that the money is spent aslegally required. The program needs "fiscal discipline and restraint," said Powell.

GTE PARES LOCAL LINES Citizens Utilities agreed to purchase 187,0000 access lines in Arizona, California and Minnesota from GTE for $664 million in cash. The transaction, which will close in 2000 pending regulatory approval, covers all of GTE's exchanges in Arizona and Minnesota.

PRODIGY, BELL ATLANTIC SIGN DSL DEAL Prodigy Communications Corp. has teamed with Bell Atlantic to offer its customers digital subscriber line services throughout Bell Atlantic's territory. This summer Prodigy will begin selling the Infospeed DSL service as a premium upgrade to its members.