Home AdvocacyPolicyWashington Notes1999 May

Contents

• E-Rate Stability Legislation Introduced in the Senate and House
• EdLiNC Releases E-Rate Report
• SLD and FCC Call for Increased E-Rate Funds
• Opposition to Increased E-Rate Funding on Capitol Hill
• E-Rate Wrapup: Year One News
• Kennard Supports Acceptable Use Requirements
• Gore Announces Parents’ Protection Page
• Clinton Signs Ed-Flex Bill
• Distance Education Study
• Congress Plans Cuts in Education Funding

Senator Conrad Burns (R-MT) introduced a bill on May 11, 1999, to improve the Schools and Libraries, or E-rate, program, which is intended to help connect schools and libraries to the Internet. Burns’ bill would separate the Schools and Libraries Program from the Universal Service Fund, which was originally intended to ensure affordable telephone services for people in rural and underserved areas. Attaching the Schools and Libraries Program to the Universal Service Fund has led to higher telephone bills for consumers.

Instead of funding the program through the Universal Service Fund, the bill would cut the 3% federal excise tax on telephone calls to 1%. The funds generated from the remaining tax would be redirected to the Schools and Libraries Program through grants to the states. Such a program would have generated roughly $1.9 billion for schools in 1998, compared to the $1.66 billion the FCC distributed that year.

All of the FCC commissioners expressed initial support for such a funding mechanism at a Senate Commerce Committee hearing in 1998.

Under Burns’ bill, the program would be administered by the National Telecommunications and Information Administration (NTIA), which administers a number of technology grant programs for the federal government.

“The Schools and Libraries program is extremely important for schools that cannot afford the initial costs of connecting to the Internet, which has become an invaluable educational tool,” Burns said. “I want to see this program reach its full potential for success, and the best way to do that is [to] provide a stable structure that is not subject to the FCC’s whims.”

This bill ensures the continued viability of the Schools and Libraries program by tying it to a specific, predictable funding mechanism. The bill also makes sure that Universal Service is saved for its original objective—providing affordable telephone service for folks in rural areas.

“Aside from stabilizing the E-rate and Universal Service programs, this bill gives Americans a significant tax cut. It’s a win–win situation for our children and our wallets.”

Some have argued that projected savings by telephone companies due to reduced access charges will provide additional funding for the E-rate program. Burns said he did not think the government should force companies to use potential consumer savings for an open-ended entitlement.

Burns is chairman of the Senate Communications Subcommittee, which oversees many Internet issues.

Rep. Billy Tauzin (R-LA) introduced companion legislation today in the House of Representatives.

Below are links to the bills and to the introductory statements.

Four On The Gore: Four Republican lawmakers offered a measure to rewire the budgeting system for the E-rate discount, attacking the current funding system as unconstitutional and deriding it as a “Gore tax.”

The Schools and Libraries Internet Access Act would cut the telephone excise tax by two-thirds and allow the Department of Education, not the FCC, to administer the remaining $1.9 billion in funds to the E-rate system. That’s the same rate as this year’s funding, but below the $2.25 billion the FCC has said it wants for full funding of the program. The bill is sponsored in the House by Reps. Tom Tancredo (R-CO,
http://nationaljournal.com/members/campaign/1998/bios/tancredo.htm),
Billy Tauzin (http://nationaljournal.com/members/almanac/1998/la03.htm),
and Jerry Weller (R-IL, http://nationaljournal.com/members/almanac/1998/il11.htm), and in the Senate by Sen. Burns (http://nationaljournal.com/members/almanac/1998/mts2.htm).

The current E-rate structure, sponsors say, has the FCC collecting funds for the program from long distance telephone companies, which have passed those costs on to consumers. The “illegally imposed Gore tax” is currently mired in a court challenge, and Tauzin said that unless the tax is constitutionally collected and voted on by Congress, it poses a threat to the future of E-rate funding.

“Think about the day a court strikes the Gore tax down,” Tauzin said. “Then everyone’s going to be rushing to this legislation.”

Both Burns and Tauzin, noting that the current 3% telephone excise tax was first enacted to pay for World War I, commented that the war’s bill has long since been paid. In its stead, a 1% tax would remain for five years to pay for capital construction costs of wiring schools and libraries for the Internet.

EdLiNC Releases E-Rate Report

EdLiNC, a coalition of education and industry interests, including ISTE, released a report this week measuring the success of the E-Rate program after its first year.

The study, “E-Rate: Connecting Kids and Communities to the Future,” found that the E-Rate is playing an instrumental role in bringing technology to the nation’s schools and libraries and is supported by an overwhelming majority of Americans.

The EdLiNC report documented key findings that show how the E-Rate is reshaping the classroom and local library for Americans. EdLiNC found in a nonpartisan poll that 87% of Americans support discounts for education technology; schools and libraries want to incorporate technology into curricula, but have lacked the funding to do so; information technology in the school environment gives students a chance to get ahead; and the E-Rate program has only been hampered by a shortage of funding.

Another report, issued by the Annenberg Public Policy Center, found that 84% of parents with “online” kids said that the Web helps their children with their homework. More significant, however, was the finding that 60% of parents believe that kids who do not have Internet access are at a disadvantage.

EdLiNC unveiled the new report at a May 5 press conference, at which FCC Chairman William Kennard spoke and voiced his support for full funding.

“Today’s EdLiNC study gives me concrete evidence of something that I have seen with my own eyes: the E-Rate is working,” he said.

Also attending in support of the E-Rate were representatives of schools and libraries that received E-Rate support as well as important members of the business community, including Apple Computer, Bell Atlantic, BellSouth, Ameritech, and Compaq.

The EdLiNC report is available online at www.edlinc.org. Kennard’s speech is available at www.fcc.gov/Speeches/Kennard/spwek917.html.

SLD and FCC Call for Increased E-Rate Funds

Federal officials and politicians are calling for a significant increase in Year 2000 E-Rate funding in response to the overwhelming demand for discounts in second year E-Rate applications. Last month, the Schools and Libraries Division (SLD, the agency that administers the E-Rate program) announced that they received 2,000 more applications for funding than in the program’s first year, requesting a sum greater than $2.4 billion.

The SLD said that $931 million (31%) of the total money requested is for telecommunications services and Internet access. Another $1.5 billion was requested for internal connections funding.

If the FCC does not change 1998 funding levels for Year Two applicants, only $1.3 billion will be available for all applications. All telecommunications requests would be funded at that level, but only $369 million would be available for internal connections and wiring costs—meeting just 25 percent of the applicants’ requests. That funding will be awarded by priority to the neediest applicants.

At an April 5 EdLiNC press conference, FCC Chairman William Kennard announced that he supports using the full $2.25 billion that the FCC permits for E-Rate funding.

“The E-Rate is not only more affordable, it is vital,” he said. “By following this course, we will be able to wire 528,000 public school classrooms to the Internet.”

In March, Senators Olympia Snowe (R-ME), Jay Rockefeller (D-WV), and Robert Kerrey (D-NE), had urged Kennard to support full FCC funding of the E-Rate.

Many other politicians and advocates across the country also lobbied the FCC for full funding.

Teachers, librarians, and administration officials expressed their support for Kennard’s proposal. FCC Commissioners Susan Ness and Gloria Tristani have also announced their commitment to full funding, giving Kennard the support of a majority of the commissioners.

In a separate statement, the SLD announced that it will ask the FCC to fund the entire $2.4 billion requested by schools and libraries in Year Two applications—even though that figure exceeds the $2.25 billion cap.

A recent National Journal article on the funding issue quoted Leslie Harris, making the case for the FCC’s support of full funding. Leslie Harris, a consultant for the Consortium for School Networking (CoSN) and the International Society for Technology in Education (ISTE), said the increased funding request is the result of “pent-up demand” by schools that didn’t receive their full request last year.

“I think it’s an appropriate amount of money,” she said. “The FCC needs to step up to the plate to make sure this is fully funded.”

The FCC will vote on the level of Year 2000 E-Rate funding before July 1.

Opposition to Increased E-Rate Funding on Capitol Hill

Several key lawmakers have responded to planned increases in funding for the E-Rate’s second fiscal year. Rep. Billy Tauzin (R-LA) has already announced plans to introduce legislation that would curb E-Rate funding and change its funding structure. Last year, Tauzin and Sen. Conrad Burns (R-MT) sponsored bills that would have funded the E-Rate through an existing telephone excise tax—not through universal service contributions. Those regulations would limit funding to $1.7 billion annually, far short of the current $2.25 billion cap.

“We’re not going to let the FCC become the tooth fairy,” Tauzin said in a recent statement. Burns is reportedly interested in reviving the legislation in the Senate, but has not yet announced any plans to do so.

Consumer groups too are planning to lobby against any increases in E-Rate funding. They have long argued that increases in E-Rate spending will force telecommunications carriers to raise long distance rates.

“We’re winding up for a big fight,” said the Consumer Federation of America’s Mark Cooper. “They better find a way to fund it without increasing residential phone bills, particularly for the little guys.”

FCC spokeswoman Joy Howell said that the commission is studying the matter and does not know whether phone bills will become more expensive. FCC Commissioners Kennard and Ness, however, maintain that an expected $1 billion reduction in charges to long distance carriers should eliminate the need for a rate hike.

Last year, a coalition of consumer groups and legislators successfully curbed E-Rate funding, reducing $2.25 billion of annual funding to just $1.9 billion over 18 months.

E-Rate Wrapup: Year One News

Although schools and libraries across the country have been busy finishing Year Two E-Rate applications, the SLD recently released a few reminders for first year applicants.

Applicants who appealed their 1998 funding commitments can expect written notification of SLD’s decision by the end of May. Appeals may be denied, granted, or partially granted. Those whose appeals are granted, either in whole or in part, will receive a follow-up commitment letter for funding by the end of May. Applicants who wish to appeal their decision can do so by submitting a new appeal to the FCC within 30 days of receiving notification from the SLD. More information is available online at www.sl.universalservice.org/Reference/appeals.asp.

Year One applicants who want to claim reimbursements for rendered services should use the Billed Entity Applicant Reimbursement (BEAR) process. Thousands of applicants have already received checks for 1998 services by using the BEAR program; SLD has already disbursed $200 million in reimbursements. BEAR forms can be submitted at any time. In fact, the SLD encourages schools and libraries to file quarterly BEARs instead of one year-long request. For tips on completing BEAR forms, see www.sl.universalservice.org/Reference/472/BEAR.asp.

Kennard Supports Acceptable Use Requirements

FCC Chairman William Kennard announced his support for a Commerce Department plan that would require all E-Rate recipients to implement an Acceptable Use Policy (AUP) as a qualification for receiving E-Rate funds.

Under the proposed plan, schools and libraries would have to draft an Acceptable Use Policy as part of their E-Rate application. Last month, the Commerce Department’s National Telecommunications and Information Administration (NTIA) petitioned the FCC to consider the plan—though they did not suggest how to monitor or implement it. Kennard said the FCC would “ask for public comment on this idea.”

In his remarks, Kennard was responding to a report released by the Annenberg Public Policy Center claiming that parents are “deeply fearful about the Internet’s influence on their children.” Kennard also unveiled an FCC information page (called “Parents, Kids, and Communications”) about protecting children form inappropriate content. Kennard said that “guiding a child through the Internet is a challenging task” and cautioned that everyone must work hard to ensure that “Internet connections are used to enhance the educational experience, not distort it.”

Congressional lawmakers too have shown a strong interest in establishing appropriate content guidelines. Sen. Conrad Burns (R-MT) proposed an Acceptable Use bill last year—and received much support from education advocates.

Some legislators, however, have urged stronger restrictions for E-Rate participants. Sen. John McCain (R-AZ) and Rep. Bob Franks (R-NJ) have introduced the “Children’s Internet Protection Act” (S. 97, H.R. 543), legislation that would require all E-Rate participants to use filtering or blocking software on their computers. Education advocates have opposed this plan as ineffective, too expensive, and restrictive of local decision making.

The text of the NTIA letter can be read at
www.ntia.doc.gov/ntiahome/fccfilings/acceptableuseltr.htm.

Kennard’s remarks are available online at
www.fcc.gov/Speeches/Kennard/spwek916.html.

Gore Announces Parents’ Protection Page

On May 5, Vice President Gore announced the public-private creation of a “Parents’ Protection Page,” a Web site that will give parents a collection of tools that they can use to monitor their child’s Internet activity. The site will be featured on the home pages of nearly every major Internet provider as early as July.

Among the services included on the Web site will be technology to filter or block access to inappropriate content (as determined by the parent) and software that will track which Web sites and chat rooms a child visits. It will also let parents limit the amount of time their children spend online, provide access to a “guide to good content” and Internet safety tips, and give parents the ability to restrict their child’s e-mail so that children cannot give out personal information.

“This new Parents’ Protection Page will help ensure that children are not surfing into dangerous waters when they surf the Web,” Gore said. “By establishing one simple place to block and monitor what children will see, the Parents’ Protection Page puts control of the computer keyboard back into the hands of America’s parents, where it really belongs.”

The site is the creation of a large coalition of the Internet industry, in consultation with the federal government. Gore predicted that the Parent’s Protection Page will be linked to the default home page of 95% of Internet users. Sources also said that the industry will fund an extensive marketing campaign for the new page.

The companies involved in the agreement are: America Online, AT&T, At Home Network, Bell Atlantic, Commercial Internet eXchange, Disney Online, Excite, Lycos, MCI WorldCom, Microsoft, MindSpring Enterprises, Netscape Communications, Network Solutions, Prodigy Communications, and Yahoo!

Clinton Signs Ed-Flex Bill

In May, President Clinton signed the Education Flexibility Partnership Act, bipartisan legislation that will permit all states to participate in the popular Ed-Flex program.

Under Ed-Flex, states are given broad authority to use federal funds for a number of educational programs—regardless of federal restrictions. Advocates believe that Ed-Flex will give states the ability to meet educational challenges through innovation and locally focused programs. The Ed-Flex bill was crafted to establish strong accountability standards to make sure that these programs produce results. The Secretary of Education has the authority to revoke a state’s waiver for Ed-Flex if he determines that the state has failed to meet challenging educational standards.

The Ed-Flex legislation was an important issue for the GOP leadership in Congress—and received strong support from both Republicans and Democrats. President Clinton had called for the legislation in a speech last year to the National Governors’ Association.

Distance Education Study

Two weeks after a Congressional mandated deadline for issuing its report, the United States Copyright Office has still not publicly released its report outlining whether and how the copyright laws should be updated for digital networks. There has been no public explanation for the delay, although there is speculation that there is some disagreement between Congress and the Copyright Office concerning the report’s recommendations. When the report is released, it will be posted at http://lcWeb.loc.gov.

Congress Plans Cuts in Education Funding

Last month, Congress took steps to cut education funding and related programs in the fiscal year 2000 budget. The pending budget would neglect important education initiatives and eliminate many of President Clinton’s proposed programs.

Both the House and the Senate adopted conference reports that would reduce education funding at a level $200 million below a funding freeze—and $2.9 billion below the President’s budget request.

According to the report language, the FY 2000 budget will cause deep cuts and freezes in higher education funding and other Function 500 programs.

Although the current budget does make generous increases for elementary and secondary education—mostly targeted toward special education—the budget does not address critical educational challenges like school modernization, principal and teacher shortages, professional development, adult education, technology initiatives, and access to higher education. The budget falls far short of the $5 billion increase in spending that education advocates have called for.

Negotiations will next occur within Appropriations committees; they will be allocating funds to subcommittees.

Prepared by Leslie Harris, Adeena Colbert, and Phil Ugelow
On behalf of the International Society for Technology in Education.