Home AdvocacyPolicyWashington Notes2004 Jul

• Budget and Appropriations Update: While the Senate and the House remain in deadlock on a Congressional Budget Resolution for FY05, the House and Senate Appropriations Committees have begun consideration of the FY05 spending bills.
• FCC Sides with Education on ITFS Spectrum: FCC unanimously adopts Rule and Order protecting the ITFS spectrum for education entities.
• E-Rate Hearings on the Hill: E-Rate Hearings on the Hill: The House Subcommittee on Oversight and Investigations held a hearing on E-Rate waste, fraud and abuse in Puerto Rico and will likely hold additional hearings on other E-Rate problems. Both Congress and the FCC are actively contemplating further changes to the program’s rules that would improve program oversight.

Budget and Appropriations Update

Since the passage of their respective budget resolutions, the Senate and House have been unable to reach an agreement on the FY05 budget resolution. The leadership in the House and Senate has tried to reach a consensus but their significant philosophical differences have prevented them from making a final agreement. Although the budget resolution is non-binding and is not sent to the President for his signature, it is used by Congress as its blueprint for federal funding levels. Congress in the past has moved its appropriations bills absent a budget resolution.

The major point of contention for House and Senate Budget negotiators is their differing positions on “pay as you go” or pay/go rules, which mandate that any spending increases be offset by funding cuts or tax increases. Senate Democrats and several moderate Senate Republicans support the pay/go rules, whereas House Republicans oppose them on the grounds that they would also be applied to tax cuts.

Despite its inability to agree on a Congressional Budget Resolution, Congress has begun to move its appropriations bills with an eye towards completing the bills before the July recess. The Senate Appropriations Committee has allocated $814 billion for discretionary funding to cover the thirteen appropriations bills, whereas the House Appropriations Committee has allocated $821.4 billion for FY05. The Senate is expected to shift approximately $7 billion allocated for the Defense appropriations bill to emergency spending (which is not counted within discretionary funding), thereby matching the total spending level of the House.

In late spring, House Appropriations Committee Chairman Bill Young (R-FL) announced funding allocations for each appropriations subcommittee. He set aside $142.3 billion, an increase of $3.3 billion over FY04 totals, for the Labor, Health Human Services and Education appropriations bill, which contains funding for federal education programs including the education technology programs. The Senate Appropriations Committee, led by Chairman Ted Stevens (R-AK), has also allocated $142.3 billion for its FY05 Labor, Health and Human Services, and Education bill. Education programs are expected to receive an overall increase, though a number of smaller education programs such as Star Schools and Community Technology Centers program, may be reduced.

The looming presidential elections and the political conventions will likely result in Congress considering an Omnibus Appropriations bill which would encompass a number of appropriations bills. It is unlikely that Congress will pass the Omnibus Appropriations bill until after the elections.

FCC Sides with Education Organizations on ITFS Spectrum

Earlier this year, the Federal Communications Commission (FCC) had proposed changing the licensee eligibility rules for the Instructional Television Fixed Service (ITFS) spectrum, which is used to provide distance learning, professional development and digital programming, to allow commercial entities to purchase ITFS licenses outright. Current rules permit only non-profit, education entities to hold ITFS licenses, but allow education license holders to sublease portions of their spectrum slots to commercial entities. The proposed rule change would have reduced the amount of spectrum available for educational purposes, thereby negatively impacting the millions of students and teachers who make use of educational programming carried over the ITFS spectrum.

After a broad-based campaign by educational organizations against the rule change, including a letter from ISTE opposing the sale of the ITFS spectrum or any reduction in the spectrum available for education entities, the FCC voted unanimously to preserve the ITFS spectrum’s current licensee eligibility requirements. Although commercial entities may still lease spectrum from educational entities, they are prohibited from buying the spectrum outright. As part of its ruling, the FCC also issued new technical rules that will make it easier for educators and their commercial partners to use their spectrum allowance to explore new technological advances, such as wireless broadband. The FCC is expected to issue a Further Notice of Proposed Rulemaking (FNPRM) to deal with some of the issues that will arise in transitioning to a new “band plan” under new technical rules, although a timeline for that FNPRM was not set.

E-Rate Hearings on the Hill

Capping a month of negative news stories about the E-Rate program, including articles in USA Today and the New York Times and stories on NBC Nightly News and National Public Radio, the House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing on allegations of widespread mismanagement, waste, and potential fraud by the Puerto Rico Department of Education (PRDE) in connection with the E-Rate program. While the Chair of the Subcommittee, Representative Jim Greenwood (R-PA), and numerous other panel members repeatedly criticized the program’s administrator and the Federal Communications Commission for the events in Puerto Rico, many Subcommittee members took great pains to express admiration for the goals and accomplishments of the E-Rate and expressed a desire to fix it rather than eliminate it.

According to hearing testimony, over the program's first three years, the PRDE received over $100 million to connect all 1500 of its schools and their classrooms to the Internet. One-third of this funding went to the Puerto Rico Telephone Company (PRTC) to install T1 lines to the schools; the remaining two-thirds went to Internet provider DRC to connect the insides of each building and for the purchase and installation of $23 million in wireless network cards for computers. Representatives from both companies testified that they fulfilled their contracts and indicated that they brought to the attention of the PRDE significant electrical infrastructure problems and vandalism issues that hampered their efforts. Despite this significant investment in developing a system that both providers claimed provided Internet access, the lines were rarely or never used because the PRDE failed to buy any of the 100,000 computers needed to make use of the connections. As a consequence, the $23 million in wireless network cards have remained in storage -- unused, growing obsolete, and deteriorating -- for three and one-half years. When the Universal Service Administrative Company (USAC), the E-Rate program’s administrator, discovered in late 2001 that the 100,000 computers had not been purchased, despite application form certifications by PRDE that it had the money to purchase them and would do so, USAC ceased providing Puerto Rico funding. To date, PRDE's E-Rate applications from Year 4 onwards remain on hold.

Blame for the situation in Puerto Rico was leveled in multiple directions. The current Secretary of Education for Puerto Rico testified that his predecessor, currently in jail on unrelated fraud charges, failed to plan for the build-out and to oversee the vendors. The vendors themselves came in for some sharp rebukes from Subcommittee members for "overengineering" the PRDE program.

However, the harshest criticism from Subcommittee members was reserved for USAC and the FCC regarding their inability to effectively audit the program. According to the FCC Inspector General, half of the 122 audits that his office conducted showed that applicants were either non-compliant with program rules (which he termed substantial violations) or technical regulations. According to the FCC Inspector General, these findings represented only the tip of the iceberg.

Two major proposals that gained traction in this hearing were: 1) providing the FCC Inspector General's office with more funding to hire more auditors; and 2) requiring each program beneficiary to audit themselves, either using their own money or E-Rate funds. The latter proposal, pressed by Chairman Greenwood, was discussed at some length during the hearing and two potential issues with implementing it were raised: 1) many applicants do not receive significant sums from the program and requiring them to audit even such small contracts would be economically infeasible; and 2) if E-Rate funds are permitted to be used for auditing purposes, a significant drain on E-Rate funds could occur.

The Subcommittee's next hearing is expected to be the first week in July and focus on corporate roles in waste, fraud and abuse situations. Meanwhile, the FCC is working on new E-Rate rule changes that would allow USAC to collect erroneously disbursed funds directly from applicants rather than through providers and codify more stringent record keeping requirements. As a result of this hearing and the barrage of negative news stories, the FCC may also be contemplating lowering the top-level discount for internal connections to ensure that applicants have greater reason to spend program resources wisely.

Join the Ed Tech Action Network

If educational technology issues are important to you, then please join the ISTE/CoSN Ed Tech Action Network at http://www.EdTechActionNetwork.org. This online advocacy tool will allow you to easily send important messages to your Representative and Senators, learn more about timely ed tech issues, and receive tips for communicating with elected officials. Your voice is critical for impacting the decisions of policy-makers.

Glossary

Conference Committee – A committee composed of temporary panelists from the House and Senate that meet to reconcile differences between the House and Senate versions of a bill.

Fair use - A somewhat nebulous concept that is often misused by consumer groups, private organizations, and lawmakers alike. The definition, as set forth in Section 107 of the 1976 Copyright Act, states that fair use is the doctrine that allows an individual who has violated copyright to justify that use under "recognized public purposes." Such public purposes may include, "criticism, comment, news reporting, teacher (including multiple copies for classroom uses), scholarship, or research."

Individuals with Disabilities Education Act (IDEA) - The 1997 reauthorzation of IDEA guarantees equal access to public education for people with disabilities. IDEA also includes a grant program to states and LEAs aimed at facilitating the education of children with disabilities by providing increased access to high quality programs and services.

Pay-as-you-go (PAYGO) - A Budget procedure that ensures that all legislation affecting direct spending or receipts is budget neutral in each fiscal year. Thus, any spending increases must be offset by funding cuts in other areas or tax increases.

Universal Design - "The term 'universal design' means a concept or philosophy for designing and delivering products and services that are usable by people with the widest possible range of functional capabilities, which include products and services that are directly usable (without requiring assistive technologies) and products and services that are made usable with assistive technologies." (Source: H.R. 4278, Improving Access to Assistive Technology for Individuals with Disabilities Act of 2004, Section 3)