Home AdvocacyPolicyWashington Notes2002 Jan

• ESEA Update
• E-Rate Staves-Off Another Attack
• FCC and SLD Changes

Congress Passes ESEA
After a year of immense struggle, and over the objections of a number of prominent education associations and the nation's Governors, Congress finally passed the reauthorization of the Elementary and Secondary Education Act this week. Despite a deeply divisive battle over full funding of special education programs, which the Conference Committee on the bill ultimately rejected, HR 1, the No Child Left Behind Act, passed by wide margins in the House (381–41) and the Senate (87–10). President Bush will sign HR 1 into law shortly.

H.R. 1 features a number of major changes in education policy. It requires all states to annually test students in grades 3–8 in reading and mathematics and holds schools accountable for the results of those tests. Remedies for failure to make adequate yearly progress range from the provision of federal and state technical assistance to wholesale school reorganization. HR 1 also significantly increases the flexibility accorded to states and districts in their use of federal funds. Under the newly adopted transferability provisions, for instance, states will be permitted to transfer as much as half of all funds that they receive from formula grants (except Title I) to other educational programs. Additionally, HR 1 establishes a new Reading First program, funded at $975 million, to improve early childhood reading skills. Finally, HR 1 makes a strong commitment to serving disadvantaged children by increasing the funding authorization level for Title I.

From an education technology perspective, HR 1 contains both good and bad news. While HR 1 consolidates into a single block grant two very successful national education technology programs, the Technology Innovation Challenge Grant program (TICG) and the Technology Literacy Challenge Fund (TLCF), it authorizes as much as $1 billion each year for the new block grant. Moreover, HR 1 as passed protects vastly more funds from the new transferability provisions by requiring that at least 50% of block grant funds distributed from states to local districts be transmitted through competitions, with the remainder being distributed by Title I formula. Thus, if the block grant were to be fully funded at $1 billion, only up to $250 million (representing half of the funds distributed to districts via Title I formula) could be transferred by districts to non-education technology purposes.

The Preparing Tomorrow's Teachers to Use Technology (PT3) program received mostly good news through this reauthorization process. Although PT3 faced elimination by consolidation into the new block grant in the early stages of the reauthorization process, the final bill separately reauthorizes it, albeit with no specific authorization level. Furthermore, HR 1 moves PT3 to Title II of the Higher Education Act, which means that it will have to fight for survival again when the Higher Education Act comes up for reauthorization in the next Congress.

The news for a number of other programs is much murkier. HR 1 separately reauthorizes the Star Schools, Community Technology Centers (CTC), and Ready to Teach programs but moves them under the Fund for the Improvement of Education (FIE) program, in which a number of unrelated programs and earmarks are lodged. Under this arrangement, these programs will now have to compete for FIE funds with all of these other programs as well as Congressional pet projects. In order for these programs to continue to operate, the Secretary of Education must elect to use FIE funds that he controls to finance them or Congressional appropriators must specifically earmark FIE funds for them. In either case, the continued existence of CTCs, Star Schools, and Ready to Teach will be an uphill struggle each year.

Congress Completes Labor, Health and Human Services and Education FY02 Appropriations
Buoyed by the completion of H.R. 1, Congress completed action this week on FY02 education appropriations. The overall funding level for the Labor, HHS and Education Departments was $123.1 billion, an increase of $4 billion.

The final funding bill provides $48.9 billion for all federal education programs, amounting to a $7 billion increase over FY01 spending. While education in general received a large increase, education technology programs did not fare as well. The agreement provides $700.5 million for the education technology block grant, which represents a $100 million increase over the combined appropriations of the two programs that it consolidates (the Technology Literacy Challenge Fund and Technology Innovation Challenge Grants). However, most individual education technology programs, particularly those operated nationally by the Department of Education, sustained severe funding cuts.

• Preparing Tomorrow's Teachers to Use Technology program—$62.5 million, a $62.5 million cut
° Star Schools—$28 million, a $31 million cut
° Community Technology Centers—$32 million, a $33 million cut
• Ready to Learn—$22 million, a $6 million increase
• Ready to Teach—$12 million, a $3.5 million increase

E-Rate Staves-Off Another Attack

The past several weeks witnessed yet another attempt to undermine the E-Rate program: this time it came in the guise of an effort to expand the Rural Health Care program (RHC) and finance that expansion by using as much as $390 million of E-Rate funds. Thanks to the assistance of House Commerce Ranking Member Dingell (D-MI), this attack was thwarted and the E-Rate funding stream protected.

The genesis of this situation lies in 1996, when both the E-Rate program and the RHC program were established within the universal service provisions of the Telecommunications Act of 1996. The RHC program, which was intended to assist rural hospitals to engage in telemedicine, only provided discounts on the difference between telecommunications rates charged to rural health care providers and those charged to urban health care providers. With so few costs covered under this program, very few rural hospitals opted to apply for discounts. In fact, even though the FCC decided that the program’s annual cap should be $400 million, discount applications in any of the four years of the program’s existence never totaled more than $7 million. As a result of the lack of interest in the program, the FCC instructed USAC to collect from telecommunications providers only $10 million per year to fund the program.

Following this year's anthrax attacks in New York and Washington, it became clear that many rural hospitals lacked electronic connections to the Centers for Disease Control, and vice versa, thereby preventing a rapid interchange of information in the event of further bioterrorism incidents. In order to remedy this situation, House Commerce Chairman Tauzin (R-LA) proposed to use bioterrorism legislation (HR 3448) that he was drafting as a vehicle to change the RHC program to mirror the E-Rate, thus allowing rural hospitals to receive discounts on the same array of services that schools and libraries enjoy under the E-Rate. Recognizing that these changes would likely stimulate more applications for the program and consequently require additional funding, Chairman Tauzin proposed to allow -- for at least the next 2 years -- all Rural Health Care application dollars above the $10 million already annually collected and below the $400 million cap to come from the E-Rate pot. This solution also neatly ensured that no additional collections from telecommunications carriers would be necessary and that consumers would see no increases on their telephone bills.

The school and library community was extremely concerned that if this proposal became law, up to $390 million might be removed from the E-Rate program and, under the current priority system, numerous low-income schools and libraries would lose internal connections funding. Therefore, E-Rate supporters turned to Rep. Dingell who negotiated a compromise under which Rep. Tauzin’s original proposal was deleted and replaced with a provision that supports rural, urban and Indian rural health care connectivity by diverting all Technology Opportunities Program funds for the next two years to those priorities.

Rep. Tauzin’s bioterrorism bill passed, with the compromise language included, by an overwhelming vote in the House. Its Senate companion (S. 1765), authored by Senators Kennedy (D-MA) and Frist (R-TN) contains provisions to improve communications and coordination efforts between states and the Federal Government, including providing information technology and communications equipment to health care facilities and public health officials for use in responding to a biological threat or attack. The Senate version contains no mention of funding these improvements through either the E-Rate or the TOP programs. The full Senate has not yet taken-up S. 1765.

Year 4 Update As of December 12, the Schools and Libraries Division had committed $1.73 billion in discounts to eligible applicants. Of that sum, $799 million was committed for internal connections to applicants eligible for 90% discounts. No determination has been made yet as to whether any applicants below the 90% level will receive internal connections funding.

FCC and SLD Changes

In December, FCC Chairman Michael Powell reappointed National School Boards Association Executive Director Anne Bryant to another term on the Schools and Libraries Committee. He also appointed Anne Leslie Campbell, Director of the National City Public Library to take the place on that Committee of K.G. Ouye, a California librarian who was one of the original Committee board members. Finally, Chairman Powell appointed to a vacant industry slot on that Committee James R. Coltharp, the Senior Director of Public Policy for Comcast Corporation. Mr. Coltharp previously served as counsel to former FCC Commissioner James Quello.

During this past month, a decision on the nominee for the open Democratic slot on the FCC was finally revealed. President Bush announced the nomination of Jonathan Adelstein, the telecommunications aide to Senate Majority Leader Tom Daschle (D-SD), to this vacancy. At this writing, the Senate had still not confirmed Mr. Adelstein.