Home AdvocacyPolicyWashington Notes2003 May

• Budget Update
• E-Rate Update
• IDEA Update
• ITFS Update

Budget Update
Budget Resolution Still Unresolved

Earlier this week, Congress returned from its two-week Congressional recess without reaching a compromise on the FY04 Budget Resolution. Prior to the recess, the House and Senate each passed a $784.5 billion Budget Resolution for discretionary spending, but the separate versions contained different figures for the President’s proposed tax cut. The House version came the closest to the President’s original proposed tax cut of $726 billion over 10 years, with the House approving a $550 billion tax cut package. The Senate, however, more than halved the President’s proposal – agreeing only to $350 billion in tax cuts – after two Republican Senators, Snowe of Maine and Voinovich of Ohio, balked at the President’s and the House’s higher figures. Both of those Senators as well as Democratic opponents of the tax cut package objected to large tax cuts at a time when the nation’s economy was suffering and America was involved in a war overseas.

Congressional leaders are now meeting to try and hammer-out a compromise on the tax cut package. One alternative would be for Congress to approve a higher tax cut, but provide offsets, which would likely result in cuts to discretionary spending. Many of the discretionary spending offsets would probably come from domestic spending priorities as opposed to defense or homeland security programs.

Both versions of the Budget Resolution provide $56.1 billion for discretionary education programs. They largely mirror the Administration’s Budget by consolidating a number of smaller education programs, including those focused on education technology, and increasing funding for Title I and IDEA. Specifically, the House and Senate versions of the Budget Resolution would provide the following spending in FY04:

• Title I: $12.7 billion
• Reading First: $1.15 billion
• Title II: $2.85 billion
• Education Technology Block Grant: $700.5 million
• 21st Century Community Learning Centers: $600 million

E-rate Update
FCC Acts to Improve the Universal School and Libraries Program

After nearly a year of consideration, the Federal Communications Commission (FCC) approved unanimously an order, dated April 24, that instituted a variety of E-Rate rule changes, including sanctions for waste, fraud and abuse, and a Further Notice of Proposed Rulemaking (FNPRM) that sought public comments on a number of issues. Beyond the implications for the program’s operation, the FCC’s action on the E-Rate contained added significance because it was accompanied by universal praise from the Commissioners for the E-Rate’s accomplishments. FCC Chairman Michael Powell stated, “The schools and libraries program has done a great deal to strengthen our Nation’s network of schools and libraries.” Most of the Commissioners agreed that the April 24 order represented but a first step in a longer process to address issues relating to the program. As Commissioner Michael Copps stated, “These are good and positive steps but more work remains to be done.”

Within the order portion of the Commission’s decision, the most significant change was the Commission’s adoption of new rules that would debar participation in the program for three years (or longer in extreme circumstances) to individuals convicted of criminal violations or held civilly liable for misconduct stemming from program participation. This ruling was intended to deter the instances of waste, fraud and abuse that have surfaced in the press and on Capitol Hill over the past several months. However, the ruling left open the question of whether the Commission should also be permitted to debar program participants who repeatedly and willfully violate program rules, a position that ISTE has supported over the past year. The FNPRM that accompanied the order directly raised this issue and indicated that the Commission believed that empowering it to debar rules violators who had not been convicted criminally or held civilly liable “could be an important tool for ensuring the integrity of the program.”

Another major ruling in this order, which impacts which services the Commission deems eligible for support, was the Commission’s decision to define the term “educational purposes.” The statute establishing the E-Rate requires that E-Rate support only those services used for educational purposes but did not further define this term. As a result, the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) determined that services such as voicemail and cell phones services used by school bus drivers and security personnel did not constitute “educational purposes” because they were not related to instructional activities. The FCC’s order added meat to the bones of this term, defining “educational purposes” as “activities that are integral, immediate and proximate to the education of students, or, in the case of libraries, integral, immediate and proximate to the provision of library services to patrons.” The Commission also indicated that any activities that occur on school or library property were presumed to satisfy this definition. Based on this new interpretation of the term “educational purposes,” the Commission construed voicemail and wireless services used by school personnel as educational and allowed them to receive support.

Other major rulings in the order included:

• Clarifying that requests for duplicative services, defined as services that deliver the same functionality to the same population in the same location during the same period of time, will not be funded;
• Codifying SLD’s unofficial policy that all applications containing more than 30% ineligible services requests will be denied automatically while those containing less than 30% will only receive support for eligible services;
• Creating a pilot program testing an online list of internal connections equipment that would be automatically eligible for discounts, provided the use is eligible and all other funding requirements are satisfied;
• Requiring service providers to give applicants the choice each funding year whether to pay the discounted price of a service or pay the full price and then receive reimbursement through the Billed Entity Applicant Reimbursement (BEAR) process;
• Extending permanently the time limit for filing an initial appeal with the SLD and the FCC from 30 to 60 days; and
• Allowing all appeals to be treated as filed on the date that they are postmarked.

Aside from the sanctions issue, the FNPRM seeks comment on a few streamlining issues aimed at further improving the operation of the program. The issues on the table include: 1) the feasibility of an online computerized eligible services list for telecommunications services and Internet access; 2) new procedures to implement the FCC’s decision to carry forward unused funds from the program in subsequent funding years; 3) the timing of certification of applicants’ technology plans; and 4) additional measures that will limit waste, fraud and abuse within the program.

Initial comments on the FNPRM are due 30 days from its date of publication in the Federal Register, an event that has not yet occurred.

IDEA Update
House Passes IDEA Reauthorization Bill

On April 30, 2003, the U.S. House of Representatives passed H.R. 1350, Improving Education Results for Children with Disabilities Act of 2003, legislation to reauthorize the Individuals with Disabilities Education Act (IDEA), by a vote of 251-171. Among several significant developments during floor debate of HR 1350 was the failure of two amendments that would have established voucher programs within the new IDEA. In hard fought votes, the House rejected: an amendment by Rep. Jim DeMint (R-SC), which would have allowed the US Department of Education to develop parental choice programs where federal money would follow special education students to public or private schools; and an amendment by Rep. Marilyn Musgrave (R-CO), which would have allowed school districts the option of offering parents of children with disabilities in private schools a certificate equal to the per-pupil proportionate IDEA dollars to be used for their child’s specific special education needs. The House approved a Manager’s package of amendments, sponsored by Rep. Mike Castle (R-DE) and Education & Workforce Chairman John Boehner (R-OH), which included revised language that would permit news programs to be captioned and video described through 2006.

The Senate is expected to introduce its version of the bill on May 2, 2003. Although the Senate bill is touted as a bi-partisan effort, it is widely anticipated that that there will be much discussion, lobbying and Democratic attempts at amending the legislation during committee markup and during consideration on the Senate floor. Senator Judd Gregg (R-NH), the Chairman of the Senate Health, Education, Labor and Pensions Committee anticipates holding the HELP Committee markup at least two weeks following the introduction of the bill in order to allow ample time for public review and comment.

ITFS Update
FCC Tackles the Future of the ITFS Spectrum

For the second time in less than two years, the Federal Communications Commission is seeking comment on the future of the Instructional Television Fixed Service (ITFS), a portion of the spectrum reserved for educational purposes. For thirty years, ITFS has been an important mechanism for delivering video distance learning to k-12 schools and higher educational institutions. More recently, ITFS has begun to serve as a provider of broadband services, allowing two-way and interactive capabilities. In 2001, the FCC considered whether to move educators out of the highly desirable 2500-2690 MHz band, in order to make way for third generation (3G) wireless phone services. Although a broad coalition of educators and licensees came together to defeat that proposal in September 2001, the FCC has now issued a new Notice Of Proposed Rulemaking (NPRM), which again places the educational mission of the spectrum at risk.

The NPRM was spurred by the need to develop new technical rules for the spectrum in order to facilitate the transition of the spectrum to two-way digital services. While many educational licensees continue to use ITFS principally for high power video based distance learning, many are working with industry partners to transition to digital, which will not only bring advanced services into schools but into the community as well. The NPRM’s proposals for new technical rules, which reflect in part a proposal by the National ITFS Association, the Catholic Television Network and the Wireless Communications Association, have generally been welcomed by ITFS licensees as well as industry, who have found it difficult to move to broadband under technical rules devised for analog systems. There are complicated technical questions in the NPRM that licensees need to closely examine and comment on at the FCC, but it is not the technical rules that are the cause of alarm.