Home AdvocacyPolicyWashington Notes1999 Oct

Contents

• House Holds Hearing on E-Rate’s Future, But Is Unlikely To Act Soon
• Court Finds in Favor of E-Rate
• Computer Tax Credit Bill Fails
• FY2000 Spending Still Uncertain
• Ed Tech Funding Targeted in House Committee
• Senators Support Education Funding
• ESEA Reauthorization Moves Forward
• Filtering Included Juvenile Justice and Appropriations Bills
• Santorum’s Alternative to Filtering Bills
• Hearing Held on Ed Tech
• E-Rate Wrap Up; Administrative News
• GAO Finds Federal Ed Tech Programs Waste-Free

House Holds Hearing on E-Rate’s Future, But Is Unlikely to Act Soon

On September 30, 1999, the House Commerce Subcommittee on Telecommunications, Trade, and Consumer Protection held a hearing on H.R. 1746 (the Schools and Libraries Internet Access Act), legislation that could potentially undermine the E-Rate program.

Committee Chair Billy Tauzin (R-LA) introduced this legislation as a first step toward putting the E-Rate under congressional control. As written, H.R. 1746 would dissolve the E-Rate and create a similar program under the Commerce Department’s jurisdiction. The new program would be administered by the National Telecommunications and Information Administration (NTIA) and would receive an annual appropriation from Congress making it possible for Congress to manage the funding and administration of the program. Under the FCC’s jurisdiction, as prescribed by Congress in the 1996 Telecommunications Act, the E-Rate’s administrators have enjoyed broad discretion in making decisions on the structure and nature of the program. E-Rate advocates fear that if H.R. 1746 is enacted, Congress will move quickly to impose new limits on the E-Rate—or even phase it out completely.

At the hearing, Republican lawmakers emphasized that they consider the E-Rate to be an illegal tax. Several members also criticized the FCC for its “misinterpretation” of Congress’s intent in the Telecommunications Act of 1996. On the other hand, Democrats at the hearing argued that the recent federal court decision upholding the E-Rate proves that it is a lawful program. They also noted that the E-Rate has already had a significant effect on promoting technology and learning nationwide.

Though the E-Rate has received much attention this year, action on H.R. 1746 will almost certainly be postponed at least until 2000 because of a busy schedule with unpassed appropriations bills and other contentious legislation. The popularity of the program also puts action in doubt before the election. Tauzin spokesman Ken Johnson said that although the House won’t consider the bill this year, the legislation is “something that [Tauzin] is committed to doing.” Similar legislation in the Senate sponsored by Conrad Burns (R-MT) is also unlikely to be examined before next year.

Court Finds in Favor of E-Rate

On July 30, 1999, the 5th Circuit Court of Appeals ruled in the longstanding challenge against universal service and the E-Rate. This case was filed more than two years ago and challenged the legality of including internal connections as eligible for discounts and whether or not the E-Rate is an unconstitutional tax on consumers.

The 5th Circuit Court determined that the obligation of telecommunications carriers to contribute to the universal service fund is not an unconstitutional tax because the sums raised to support the universal service program are not within the definition of the origination clause.

Universal service contributions are part of a particular program supporting the expansion of and increased access to the public institutional telecommunications network. ... Each ... carrier benefits from a larger and larger network and ... the universal service scheme exact(s) payments from those companies benefiting.

The Court also determined that the FCC is permitted to include Internet access and internal connections as part of the discount program. Additionally, the Court concluded that the FCC has the authority to permit nontelecom carriers to receive payments out of the universal service fund. The FCC, according to the Court decision is allowed to use the federal universal service fund to support intrastate services, and under prevailing case law, the FCC has the discretion to make “all commercially available services eligible for discounts.”

The one relevant area where the FCC was not upheld was the decision to include intrastate revenues in the base for calculating a carrier’s contributions. The court concluded that this approach violated the jurisdictional separation between interstate and intrastate matters and there was nothing in the statute allowing the FCC to overcome that separation. The practical effect of this is that to raise the same amount of money the FCC will have to require carriers to contribute a greater share of interstate revenues.

There is still the potential for appeal, but there is a general optimism that this will close this chapter on the debate over the legality of the E-Rate as interpreted by the FCC.

Computer Tax Credit Bill Fails

Education advocates have succeeded in temporarily defeating a bill that would create lucrative tax credits for businesses that donate used computers up to three years old to schools.

The bill would have made it possible for businesses to donate computers up to three years old for a tax credit equaling 30 percent of the computer’s resale value. Previously, tax law allowed businesses to donate computers that are less than two years old, and received a less valuable tax deduction. A broad coalition of educators has opposed this bill arguing the legislation will discourage companies from donating new, more useful equipment to schools—and also may stop local communities from investing in needed educational technology.

The tax credit was included last month in the Senate tax relief legislation, but was not included in the final GOP tax bill. It is likely, however, that its supporters will try to add the legislation to another bill in the near future.

FY2000 Spending Still Uncertain

Congressional leaders are still scrambling to find solutions to ensure adequate funding for education programs in fiscal year 2000. As written, the current House appropriation will fund education at $209 million below FY1999. Congress has not yet been able to find a balance between a reasonable level of funding for domestic social programs and a boost in defense spending.

Because of limitations imposed by budget caps and the Social Security surplus, GOP leaders have continued to fund other government programs with money originally designated for the Labor-HHS-Education allocation. This strategy is proving problematic in budget negotiations, with both House and Senate estimates for education spending woefully low.

Although Republicans have discussed a variety of accounting gimmicks—the use of “emergency spending” or the addition of a 13th month in the fiscal year—it is still unclear how much Congress will be able to fund the final Labor-HHS-Education budget. Unless Congress takes steps to raise spending caps or use accounting tricks, the FY2000 education budget will fall far short of expectations.

Ed Tech Funding Targeted in House Committee

Educational technology programs may suffer more severe cuts than those from overall budget reductions. The House Labor-HHS-Education Appropriations Committee passed a bill that zero-funds the critical Preparing Tomorrow’s Teachers To Use Technology (PT3) program (a program under which ISTE recently received a $1.94 million grant to fund the next phase of the NETS Project), currently funded at $75 million. At the Labor-HHS-Education markup last week, an amendment was passed by a voice vote that would transfer $50 million from Technology Challenge Funds to state block grants for vocational education. Sponsored by Rep. John Peterson (R-PA), this legislation would seriously cut already-reduced technology education funds. With the possibility of a reduction in overall education spending, the need for a commitment to technology in schools becomes even more important. This amendment would prevent a critical investment in education technology. ISTE Update went to press before the bill was debated on the House floor (October 6 or 7), although it does not appear that there are enough votes to pass the bill. The Senate Labor-HHS Bill provides full funding for the principal ed tech programs.

Senators Support Education Funding

At a September 22, 1999, press conference, four Democratic Senators urged Congress to boost education spending. Senators Tom Harkin (D-IA), Ted Kennedy (D-MA), Patty Murray (D-WA), and Jeff Bingamin (D-NM) lobbied to create a separate education appropriations bill and increase federal education spending to a level above the FY1999 budget. The Senators argued that the GOP leadership has exploited education funding for other, lesser important purposes. “If the Republicans really felt that education was a top priority, education funding would be a great deal more than 1.6% of the entire federal budget,” said Sen. Murray.

ESEA Reauthorization Moves Forward

In the coming weeks, Congress will finally begin substantive work on the reauthorization of the Elementary and Secondary School Education Act (ESEA), the legislation that provides federal funding for public schools nationwide, including Title III education technology programs.

Although Senate leaders have indicated that they plan to offer bipartisan legislation, it appears increasingly likely that House members will continue to offer a number of titles as separate bills. The House GOP may use the ESEA as a testing ground for educational policy issues in the 2000 elections, although it appears as though high-profile issues, such as vouchers, are off the table. The Title I bill may include controversial plans for making Title I funds “portable,” so that children in failing schools can change schools without losing their Title I funds. By all accounts however, Title III will escape major revision in the House authorization.

Draft legislation will probably be introduced in the House and the Senate sometime this month.

Filtering Included Juvenile Justice and Appropriations Bills

Mandatory Internet filtering may be one step closer to schools and libraries if Reps. Bob Franks (R-NJ) and Charles Pickering (R-MS) have their way.

Franks and Pickering succeeded in attaching their bill to the version of the Juvenile Justice Act (H.R. 1501) that the House passed this summer. If enacted, this legislation would withhold E-Rate discounts to any school or library that fails to install a filtering system that blocks material “harmful to minors” on computers with Internet access. If a school or library does not comply, they must forfeit all subsequent discounts.

At the same time, Rep. Ernest Istook (R-OK) succeeded in adding a far broader filtering mandate—reaching all federal funds that even indirectly support Internet access in schools and libraries.

Education advocates have long opposed this legislation because it imposes a one-size-fits-all solution to a complex, local problem and intrudes on local decision making. They also point out that filtering can often be ineffective, expensive, and undesirable. Many, if not most, school communities already enforce acceptable use policies, some of which require the use of filtering software.

The House and Senate are meeting to reconcile different versions of the Juvenile Justice Act. While the future of the bill is in doubt due to high-profile disagreement over gun control, it is not yet clear whether the conferees will strike the filtering requirement. The future of the Istook amendment is also unsure. The Senate Labor-HHS bill does not include such a provision, and overall, the bill faces substantial opposition.

Santorum’s Alternative to Filtering Bills

In response to the flurry of mandatory filtering bills advancing in Congress, Sen. Rick Santorum (R-PA) has introduced “The Neighborhood Children’s Internet Protection Act,” S. 1545. Santorum is a relatively conservative senator with a commitment to both the E-Rate and to local control over education. The Santorum bill would give schools and libraries receiving E-Rate subsidies a choice—either install filtering software or implement an acceptable use policy regarding minor’s access to the Internet. Furthermore, if a school chooses the filtering option, the legislation requires installation, but it does not specify that the software has to be used in all circumstances.

Sen. Santorum will soon be seeking co-sponsors for his bill, which may serve as a moderate alternative if and when mandatory filtering bills make their way through the legislative process.

Hearing Held on Ed Tech

On September 22, 1999. several education and industry experts testified on advances in the use of technology in education at a House hearing, “Overcoming Barriers to the Utilization of Technology in the Classroom.”

Held by Chairwoman Connie Morella (R-MD) of the House Subcommittee on Technology and Chairman Lamar Smith (R-TX) of the Subcommittee on Basic Research, the hearing explored the importance of integrating technology into public education. The representatives and the witnesses lauded advances in education technology and emphasized that teacher training will be a key priority in successfully bringing technology into schools.

Experts testifying at the hearing included: Dr. George O. Strawn, National Science Foundation; Alan Spoon, Washington Post, representing the CEO Forum; Dr. Elizabeth Glowa, Montgomery County Public Schools; and James Fallon, Jr., East Hartford School District.

E-Rate Wrap Up; Administrative News

More schools and libraries will benefit from increased E-Rate funding this year. With a greater pool of money, it appears that nearly all E-Rate applicants eligible for 65% (or greater) discounts will receive full funding for internal connections requests this year. Although the Schools and Libraries Division has not announced any definite figure, their spring projections seem to indicate that the Year Two cutoff will fall around 65%.

As of Oct. 4th, the SLD has mailed nearly 3,000 commitment letters to school and library applicants, promising more than $1.018 billion in subsidies. Unlike last year, when Congress pressured the FCC to scale back funding by $1 billion, the SLD will disburse the full $2.25 billion allowed by the 1996 Telecom Act.

GAO Finds Federal Ed Tech Programs Waste-Free

In late August, the U.S. General Accounting Office released a long-awaited report to two powerful House Chairmen on federal programs that fund educational technology. Rep. Tom Bliley (R-VA), chairman of the House Commerce Committee, and Rep. William Goodling (R-PA), chairman of the House Education and Workforce Committee, directed the GAO to conduct a study of all the federal programs that help schools and libraries with their telecommunications and information technology efforts to identify any potential for duplication or any evidence of fraud, waste, or abuse.

The request came a year ago, after the two chairmen held a joint hearing on federal educational technology efforts where witnesses, including federal officials, defended the value of these programs. At that hearing, the chairmen pressed federal officials for a total sum of federal spending on technology, arguing that programs like Title I, which may in some cases be used for technology, duplicated other technology efforts.

The report completely rejected this view. It found that not only were the programs under review not duplicative but the Office of Educational Technology in the Department of Education and the Office of Science and Technology Policy in the White House ensured needed coordination and collaboration between programs and federal agencies. Finally the report found no systematic evidence of abuse, waste, or fraud in any of the programs. Visit www.gao.gov.

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