Home AdvocacyPolicyWashington Notes2002 Feb

• Administration Releases FY03 Budget Request
• ESEA Implementation Process
• E-Rate Update
• Copyright Update

Administration Releases FY03 Budget Request

The Administration released its FY03 Budget request which represents the opening salvo in what promises to be a grueling budget debate. As expected, the new budget proposal attempts to concentrate resources in three areas—defense spending, homeland security, and economic recovery—while reducing funding for other domestic priorities, including education technology. Although the budget increases total education spending by 2.8%, it cuts total education technology funding from $857 million to $722.5 million. The budget eliminates funding for the Preparing Tomorrow's Teachers to Use Technology (PT3), Star Schools, Community Technology Centers (CTC), and Ready to Teach programs for FY03. Additionally, the budget request only level funds the education technology state grant program at $700.5 million and the Ready to Learn program at $22 million.

Beyond the cuts in proposed FY02 funding, the Administration also appears interested in refighting last year’s appropriations laws. The Administration proposes to pay for a $1.3 billion FY02 supplemental for Pell grants by rescinding FY02 appropriations for 40 so-called "lower priority programs", which includes the PT3, Star Schools and CTC programs. The lower priority programs are classified as programs that the Administration did not support during the reauthorization of ESEA, H.R. 1. It should be noted that these programs are authorized programs in H.R. 1 which the President has already signed into law. The news of these rescissions has met stiff resistance from Congressional appropriators and authorizers on both sides of the aisle and it is unlikely that this effort will succeed.

The following is a list of the budget requests for various education programs:

• Title I Basic Grants: $11.35 billion; an increase of $1 billion
• Improving Teacher Quality: $2.85 billion; level funding
• Education Technology State Grants: $700.5 million; level funding
• Preparing Tomorrow's Teachers to Use Technology: $0; decrease of $62.5 million
• Ready to Learn: $22 million; level funding
• Fund for the Improvement of Education (FIE) (programs include Community Technology Centers, Star Schools and Ready to Teach): $84 million; a decrease of $749 million
• 21st Century Community Learning Centers: $1 billion; level funding
• Reading First/Early Reading First: $1.075 billion; an increase of $100 million

ESEA Implementation Process

The Department of Education is working feverishly to establish rules to govern the implementation of H.R. 1 at the state and local district levels. Currently, the Department is seeking comments concerning Title I and various programs included therein. A recent issue of the Federal Register, www.ed.gov/legislation/FedRegister/proprule/2002-1/011802a.html, solicits this input. After the collection of these comments is completed in late February, the Department will choose a subset of organizations to begin a "negotiated rulemaking period". Working in conjunction with those selected, the Department will sort through the comments and issues that must be addressed in federal regulations and release for public review a series of proposed regulations in April. The final regulations will be implemented in August, which means that states will receive funds under the formula programs before the start of the 2002-2003 school year.

Most importantly for education technology advocates, the Department has not scheduled a rulemaking period for the new education technology state grant program. Although the Department cannot disseminate technology funds to states until the Department allocates Title I funds, it has decided to send states some funds to cover the costs related to maintaining staff and implementing the new program. In addition, discretionary education funds for the PT3, Star Schools, and CTC programs are expected to be available from March to September 2002.

E-Rate Update

On January 25, 2002, the Federal Communications Commission issued a Notice of Proposed Rulemaking (NPRM) addressing a number of issues related to the operation of the E-Rate.

Although this NPRM does not address the two biggest issues facing the program—the size of the annual cap and the status of the funding priorities, it does take on another issue of major interest—how to dispose of unused E-Rate funds. Over the course of the program's first four years, large sums of E-Rate funding have not been disbursed to applicants for a number of reasons, including the applicants' failures to file proper requests for disbursement of funding and their inability to use funds for which they applied because they received late commitment notices from the program’s administrator. Despite rules established by the FCC at the program's inception that funds unused in one funding year should be rolled over to the next, the FCC has elected to use some of these funds to provide telecommunications providers with a credit on their future contributions to the fund. The unused funds issue will be a major source of controversy in this rulemaking.

In this NPRM, the Commission incorporates a decision to reject three petitions that object to the commission crediting back to universal service fund contributors unused funds from Funding Year 1. The Commission refused to allow unspent funds to go to applicants, stating that it reasonably determined that it could best satisfy the needs of the program by using unspent funds to reduce contributions in successive years. In a dissent, Commissioner Copps asserts that this decision "creates ambiguity where none need exist" because the Commission's rules clearly indicated that schools and libraries should be able to use unused funds from prior program years.

The NPRM seeks comment on a number of other issues as well, including:

1. Whether to change the current eligible services process to allow applicants to seek support only for services that have been pre-approved;
2. Whether to increase the three-year period of time over which Wide Area Network capital expenses can be recovered (in order to reduce the annual burden on the program);
3. Whether to broaden eligibility for wireless services and make voicemail an eligible service;
4. Whether to permit applicants to receive discounts on Internet access packages that include content, even when that content is available separately
5. Whether there are alternatives to the administrator’s use of the rule that rejects applications which contain 30% or more ineligible services;
6. Whether to require that applicants certify that E-Rate services will be used in compliance with the Americans with Disabilities Act, IDEA and the Rehabilitation Act of 1973;
7. Whether providers must provide applicants the option of using the Billed Entity Applicant Reimbursement (BEAR) process;
8. Whether restrictions should be placed on applicants transferring E-Rate supported services and equipment to schools and libraries ineligible for discounts;
9. Whether and under what circumstances what criteria communities may use E-Rate services for non-educational purposes;
10. Whether to extend the period for filing appeals from 30 to 60 days and to deem appeals as having been filed on the basis of the postmarked date rather than the date received;
11. Whether to authorize the administrator to require independent audits of recipients and service providers at their expense; and
12. Whether to establish penalties for entities that willfully or repeatedly fail to comply with program rules.

Interested parties will have 45 days in which to submit comments after the NPRM is published in the Federal Register.

Copyright Update

House Judiciary Committee Continues to Stall on TEACH ACT. The TEACH Act (S.487), legislation intended to update the distance learning provision of the Copyright Act that passed the Senate last year, remains mired on the House side. Although educators hoped that the House Judiciary Committee would move the bill quickly, it now appears that the legislation is being intentionally held up as part of a larger jurisdictional dispute between several committees. The Judiciary Subcommittee on Courts, the Internet and Intellectual Property moved quickly to approve the bill shortly after its Senate passage. But since that time, the Full Committee, chaired by Rep. James Sensenbrenner, (R. WI) has refused to consider the measure, placing its consideration behind several bills which have been the subject of considerable disagreement between key House Committees. The bill's supporters worry that tying consideration of TEACH to resolution of controversies on unrelated measures will put passage of the bill at risk.

The TEACH Act would extend the distance learning exemption to “anytime, anywhere” learning, permit educational institutions to use "reasonable and limited" portions of audiovisual works and sound recordings in distance learning courses without permission or payments, and permit educators in certain instances to digitize and freely use works that are not already available in digital form. The education and library community has advocated a change in the law for several years with the support of the United States Copyright Office.