Home AdvocacyPolicyWashington Notes2005 July

July, 2005 Contents

• Funding Update: Senate Appropriations Committee Restores EETT Funding to $425 Million
• E-Rate Update: FCC Launches Inquiry into Universal Service and E-Rate
• DO IT Update: DO IT Bill Advocates Ed Tech Trust Fund

Funding Update

Senate Appropriations Committee Restores EETT Funding to $425 Million

On July 14th, the Senate Appropriations Committee approved its version of the FY06 appropriations bill following the Subcommittee on Labor, HHS, and Education's approval of the bill earlier in the week. In total, the bill provides $145.7 billion in discretionary spending for all programs in its jurisdiction, which is $2.7 billion more than the amounts provided in the House and $3.7 billion more than the amount requested in the President's FY06 Budget. In all, the Department of Education received $56.7 billion, an increase of $132.2 million over FY05 levels and $490.3 million more than the President's request. The full Senate will likely take up the bill on the Senate floor in September.

As advocates for education technology, ISTE and its members were especially pleased by the Senate's near-full restoration of the Enhancing Education Through Technology (EETT) program to $425 million. The action, says ISTE CEO Don Knezek, shows that "the Senate Subcommittee recognizes EETT as a technological lifeline to students and teachers, and as a great leveler for low-income and rural learners."

Important Victory, But More Hurdles Ahead

While the Senate figure represents a $71 million cut from FY05, it is $125 million higher than the amount the House approved for EETT last month. Though encouraging, Senate action does not spell out a clear victory for EETT just yet. The EETT program must still survive a vote on the Senate floor, which will not occur until after August recess, and a House and Senate Conference Committee, where the final appropriation levels will be determined. It is also important to note that, given the tight fiscal situation in Congress this year, advocates for programs that sustained cuts could be jockeying for increases and may target EETT funds to funnel to other program.

Key Senators Change Allocations

The Senate's funding restorations for EETT and a myriad of other education, health, and labor programs were spearheaded by Subcommittee Chairman Arlen Specter (R-PA) and Ranking Member Tom Harkin (D-IA), and were met with widespread bipartisan support. Although the Senate's original allocations were less than those of the House, the Senate wielded an accounting trick that allowed Social Security payments to be postponed until the FY07 cycle, therefore freeing up approximately $2.8 billion for other spending purposes, including education. While many senators on the Appropriations Committee praised the Chairman for this move, leadership on the House side has indicated that it will not accept Chairman Specter's accounting trick as valid, and this discrepancy may provoke further cuts to programs such as EETT in the Conference Committee this fall.

Below is a list of the Senate Appropriations Committee's funding allocations for the major education programs:

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E-Rate Update

FCC Launches Inquiry into Universal Service and E-Rate

While the House and Senate continue to drag their feet this summer on their respective E-Rate reform bills, the Federal Communications Commission (FCC) took preemptive action on June 14th by launching a broad inquiry into the administration, management and oversight of the Universal Service Fund (USF), including the E-Rate program.

Formula Grants Contemplated

The most controversial question posed in the Notice of Proposed Rulemaking (NPRM) is whether the E-Rate program should be restructured into a formula grant program where money would be distributed directly to schools and libraries. ISTE's is very concerned about the long term effects on school access if E-Rate moves toward a formula grant program.

Although the NPRM will not have an immediate impact on the functioning of the E-Rate program, as initial comments to the FCC are not due until October at the earliest, the FCC's inquiry may alter or further delay Congress' efforts to reform Universal Service and E-Rate through the legislative process.

Other Proposed Changes to E-Rate

Regarding the management and administration of the E-Rate program, the NPRM asks how the FCC can improve the disbursement of funds, streamline the application process, and ensure competitive bidding. Some of the proposals in the NPRM, particularly one that suggests adopting a streamlined multi-year application for Priority 1 services (telecommunications and Internet access services), would be highly beneficial for schools as it would reduce both costs and the potential for error on application forms.

Other questions raised in the NPRM include: more extensive performance measures for the E-Rate program (beyond basic connectivity); an annual cap for program applicants; and whether the current program administrator for all of Universal Service, the Universal Service Administrative Company (USAC), should be replaced by another type of administrative entity. FCC Chairman Kevin Martin has made known his interest in treating all programs equally and applying uniform rules across all universal service programs. Thus, the NPRM also seeks comment on extending various rules that currently apply to the E-Rate program—including audit requirements, document retention, fund recovery and audit limitation period rules—to the high cost, low income and rural health care programs.

Should Schools Pay for Their Own Audits?

The second area explored in the NPRM is how the FCC can improve oversight of the universal service programs in order to reduce waste, fraud and abuse. The first proposed deterrent mechanism is to strengthen the audit system by requiring that schools receiving significant amounts of E-Rate support contribute or pay in full the cost of independent or USAC-administered audits. The NPRM also contemplates going beyond current program rules which permit debarment of applicants and vendors only after criminal convictions or civil liability judgments related to the E-Rate. It seeks public comment on whether greater scrutiny of future applications should attach to rule violators who have not been convicted criminally or held liable civilly and proposes setting performance goals or reporting standards for known previous rule violators. Finally, the rulemaking also proposes stricter debarment rules and asks how to consistently and fairly administer sanctions for rule violators.

Ironically, the release of the NPRM, which included the FCC's specific inquiry into auditing procedures for the universal service fund, occurred at roughly the same time as the Senate Appropriations Subcommittee on Commerce, Justice, and Science agreed to include within its FY06 spending bill (which was later passed by the full Committee) language that permits the FCC to move up to $20 million in universal service funds to conduct oversight and audits of the four universal service programs, including E-Rate. While this provision, if enacted, might relieve schools of some responsibility to pay for audits out of their pockets, the new provision would likely raise the question of whether it is appropriate to direct $20 million in universal service funds to oversight measures instead of using them to fund services to underserved areas and populations.

Congress Slow to Act on E-Rate

Despite this action by the Senate Appropriations Committee, Congress has generally been slow to act on comprehensive legislation on E-Rate and universal service this year. A long awaited E-Rate reform bill that House Energy and Commerce Chairman Joe Barton (R-TX) is developing, and which will likely cover many of the same issues as the NPRM does, has still not been introduced. Additionally, no action on overall universal service reform, including shoring up the solvency of the universal service fund by altering what entities will pay into the fund, has transpired on Capitol Hill. One obvious reason that universal service legislation expected from Rep. Lee Terry (R-NE) has not been introduced is that both the House and Senate Commerce Committees have been consumed by Digital Television Transition legislation.

Cable Service Providers at Issue

Another reason may be the US Supreme Court's recent decision in the Brand X case, in which it held that cable Internet service was an information service, not a cable service, and thus not required to offer customers choices of Internet service providers. Since only regulated telecommunications providers are required to pay into the universal service fund, some have raised questions about whether the Supreme Court's ruling means that only by specific action from Congress or the FCC can the FCC collect universal service fees from cable companies based on their Internet service revenues.

Anti-Deficiency Ruling Key

Despite Congress' slow plod on comprehensive reform to the E-Rate program, it has been quicker to respond to the much-needed exemption for the E-Rate and all of Universal Service from the Anti-Deficiency Act (ADA). The Senate and House have both introduced bills, S. 241 and H.R. 2533 respectively, that would make permanent the current temporary exemption that is set to expire on December 31, 2005. The application of ADA provisions to the program last year - which essentially required that funding commitments be made only if there was enough cash on hand to cover the obligations - delayed the delivery of Funding Commitment Decision Letters to schools and libraries, resulting in the virtual shutdown of the E-Rate program for three months. The Senate bill, sponsored by Senators Olympia Snowe (R-ME) and John D. Rockefeller (D-WV), currently has 40 cosponsors, and the House companion bill, sponsored by Rep. Barbara Cubin (R-WY) currently has 37 cosponsors. The Senate Commerce Committee may mark-up and pass S. 241 out of committee prior to the August recess. While the House bill may not move soon, it received a boost from a June 28 letter from the Congressional Rural Caucus, signed by over 60 members, which stated that the Universal Service Fund should not be subject to the ADA.
Prepare to Speak Up!

ISTE urges all readers of Washington Notes to visit the Ed Tech Action Network (ETAN), http://www.edtechactionnetwork.org/, often, and stay apprised of the status of E-Rate and EETT policies. Policy makers in Congress and the FCC need to hear from you how these proposed changes impact you in your schools and districts. And they need to hear from you in a timely fashion!

Initial comments on the FCC's Proposed Rulemaking on E-Rate, for example, are due to the FCC within 90 days of publishing the Notice in the Federal Register. That's your window for input. The Notice has just been published, so you have until mid-October. The best approach is to begin right away collecting your stories and evidence of education technology program impacts. ETAN can help you get started.

ISTE also continues to work with education and library associations and industry leaders as part of the Mission Critical Campaign (MCC) and as part of the Education and Libraries Network Coalition (EdLiNC) to ensure that E-Rate is exempted from the Anti-Deficiency Act and that the interests of schools are heard in the proceeding at the FCC.

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DO IT Update

DO IT Bill Advocates Ed Tech Trust Fund

Senators Chris Dodd (D-CT), Conrad Burns (R-MT), Olympia Snowe (R-ME), and Minority Whip Richard Durbin (D-IL) are actively urging their colleagues to co-sponsor S. 1023, the Digital Opportunity Investment Trust (DO IT). Their Dear Colleague letter advocates financing DO IT through the revenues received from spectrum auctions and recommends establishing a trust fund to be used for a variety of education technology initiatives, including the development of software-based learning models to enhance learning, the digitization of library materials, and research development for new learning resources. The Digital Promise Project, the leading organization promoting DO IT, has aided in this process with a letter writing campaign to members of the Senate. Additionally, on July 12th two members of the Digital Promise Coalition, John Lawson, the President of the Association of Public Television Stations, and Michael Calabrese, the Vice President of the New America Foundation, testified before the Senate Commerce Committee to urge Congress to include DO IT in any Digital Television legislation that the House and Senate Commerce Committees reviews this fall.

Meanwhile, the House version, H.R. 2512, which was referred to the House Subcommittee on Select Education, is co-sponsored by Reps. Ralph Regula (R-OH), Ed Markey (D-MA), Paul Gillmor (R-OH), Rush Holt (D-NJ), Richard Baker (R-LA), Sherrod Brown (D-OH), and Major Owens (D-NY). The four lead co-sponsors, Regula, Markey, Gillmor and Holt have also sent out their own "Dear Colleague" letter to all members of the House.

The House and Senate bills are similar but not identical. While both versions of the bill would require that the Treasury allocate exactly 30% of funds from all auctions of the publicly owned electro-magnetic spectrum, the bills differ in their allowable uses of funds and reporting requirements. In addition, the House Bill requires that the monies in the Trust Fund be subject to appropriations. Other smaller differences exist, but these issues would likely be easily resolved in the Conference Committee, should the bills pass.

Although momentum on DO IT continues to build, the legislation may still face significant hurdles, as Congress is unlikely to authorize the use of federal spectrum funds given the tight FY07 fiscal budget.

For more information about how you can be involved, please visit http://www.edtechactionnetwork.org/, or call Hilary Goldmann, ISTE's Director of Government Relations, at 202.861.7777

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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)

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