Letter from Senators McCain and Hollings and Reps. Bliley and Dingell to FCC Chairman Kennard.
Re: Universal Service Support for Schools and Libraries.
Date: June 4, 1998.
Source: House Committee on Commerce, Democrats. This document was created by scanning and converting to HTML a fax copy.

Congress of the United States
Washington, DC 20515

June 4, 1998

The Honorable William Kennard
Chairman
Federal Communications Commission
1919 M Street, NW
Washington, D.C, 20554

Dear Chairman Kennard:

Over the course of the last two and a half years, ever since the Commission began implementation of the Telecommunications Act of 1996, we have paid particularly close attention to the Commission's implementation of the universal service provisions in the Act. Congress expected that, in implementing these important provisions, the Commission would recognize the priorities established by Congress, i.e., maintain affordable local telephone rates, and help to ensure that schools and libraries had discounted access to telecommunications services.

The evidence to date, however, leads us to the unmistakable conclusion that the Commission has ignored Congress' clear priorities with regard to universal service. As a result, the Commission's efforts to implement the universal service provisions of the Act have been a spectacular failure, and -- more importantly -- a raw deal for consumers. The evidence to date is as follows.

• consumers' phone bills are set to increase, as evidenced by news that AT&T and other carriers will levy fees on their subscribers to pay for the Commission's schools and libraries program;
• the Nation's largest consumer interest groups have recently asked the Commission to suspend collection of funds for the Commission's schools and libraries program;
• the General Accounting Office has found that the Commission exceeded its statutory authority when it established two new bureaucracies to administer its new universal service programs, and has additionally been asked to evaluate the quality assurance system of the Commission's program because of concerns that sufficient safeguards may not currently be in place;  [begin page 2]
• the Congressional Budget Office has found that the Commission's schools and libraries program will cost $20 billion over the next ten years, and that consumers will have to shoulder the cost; and
• meanwhile, as the Commission spends time and resources to rescue its schools and libraries program, our Nation's core universal service program -- i.e., support for highcost and rural America -- goes unattended by the Commission.

This is not what we intended when Congress passed the Telecommunication Act of 1996.

It is our understanding that you will shortly adopt changes to rules for funding your schools and libraries program. But we believe it is too late for the Commission to rescue itself merely by tinkering with a fundamentally flawed and legally suspect program. Instead, it is time for you and your colleagues to put the mistakes of the previous Commission behind you, and start anew.

Accordingly, the Commission should immediately suspend further collection of funding for its schools and libraries program, and proceed with a rulemaking that implements all universal service programs in a manner that reflects the priorities established by Congress in the Telecommunications Act of 1996. In doing so, the Commission will protect the present and future viability of universal service, and the interests of American consumers.

Sincerely,