Implementation of the
Schools and Libraries Program

The Congress codified the Federal Communications Commission's longstanding practice of providing universal service support for telecommunications services for high cost rural and low income areas in Section 254 of the Telecommunications Act of 1996. The section also instructed the FCC to extend universal service support to schools, libraries, and rural health care clinics.

The Federal Communications Commission (FCC) issued a report on May 7, 1997 stating that it would extend subsidies to schools and libraries, not only for telecommunications services, but also for Internet access and internal connections, computer networking, network servers, and server software.  The May 7 report also established a sliding scale discount rate, based on the percentage of students on the school lunch program, and whether or not the school or library is rural or urban.

The report also announced the creation of a $2.25 Billion dollar per year fund to subsidize the schools and libraries program. The FCC also created a Schools and Libraries Corporation (SLC) under the control of the FCC, to administer the program. The FCC also created a second coorporation, called the Rural Health Care Corporation (RHCC),

The General Accounting Office (GAO) issued a report that FCC illegally formed the SLC and RHCC. As a result of this, and pressure from Congress, the FCC transferred administration of the programs to the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC).

After receiving extensive criticism from the Congress, on June 12, 1998, the FCC reduced the size of the Schools and Libraries program. On May 27, 1999 the FCC voted 3-2 to increase funding back to $2.25 Billion per year.

Relevant Statutes and Regulations:

• 47 USC 254, "Universal Service."
• 47 USC 706, "Advanced Telecommunications Incentives."
• CFR, Title 45, Part 54, Subpart F, "Universal Service Support for Schools and Libraries."

FCC Documents:

• May 7, 1997, FCC Universal Service Report and Order.  FCC 97-157.  Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order. 12 FCC Rcd 8776 (1997).  Section X. - Schools and Libraries:

  A. Overview.

  B. Telecommunications Carrier Functionalities and Services Eligible for Support.

  C. Discount Methodology.

  D. Restrictions Imposed on Schools and Libraries.

  E. Funding Mechanisms for Schools and Libraries.

  F. Access to Advanced Telecommunications and Information Services.

  G. Sections 706 and 708 of the 1996 Act.

  H. Initiation.

• 4/10/98, FCC Report to Congress on Universal Service.
• 5/1/98, SLC Report to FCC.
• 5/8/98, FCC Report to Congress (regarding SLC).
• 5/13/98, FCC Request for Comment on 1998 Collection Amounts for SLC.
• 6/12/98, FCC Order modifying universal service support for schools and libraries.   This Order is described in an FCC press release.
• FCC Request for Comments on SLC, RHCC, and USAC Report proposing merger.

Miscellaneous Letters, Speeches, Press Releases, and other Records:

• 3/27/98, Rep. Blumenauer Letter to William Kennard (with 102 House signatories).
• 3/31/91, GAO Report that the SLC was formed illegally.
• 5/7/98, NSBA Press Release regarding "Save the E-Rate".
• 5/21/98, Consumer's Union Press Release announcing opposition to e-rate.
• (5/27/98), Text of AT&T's proposed line item billing explanation of universal service charge.
• 5/28/98, William Kennard Statement attacking AT&T.
• 6/1/98, FCC Commissioner Furchtgott-Roth Statement supporting AT&T billing statement.
• 6/2/98, William Kennard Statement attacking MCI.
• 6/2/98, Sen. John McCain Letter to William Kennard.
• 6/3/98, FCC Notice of 6/9/98 meeting to deal with phone company billing statements.  (Meeting cancelled 6/5/98.)
• 6/3/98, Sen. Burns Press Release regarding "Gore Tax".
• 6/4/98, Rep. John Dingell Letter to William Kennard.
• 6/4/98, Letter from Chairmen and Ranking Members of House and Senate Commerce Committees to William Kennard in opposition to SLC.
• 6/5/98, Bill Clinton Speech on "Digital Divide."
• 6/5/98 Rep Blumenauer Press Release in support of SLC.
• 6/5/98, Rep. Bobby Rush Press Release in support of SLC.
• 6/5/98, William Kennard Statement in support of SLC.
• 6/5/98, Transcript of Joint Press Conference by Sen. Rockefeller, Sen. Snowe, Rep. Rush, Rep. Blumenauer, and Secretary of Education Riley.
• 6/10/98, Statement of Sen. John McCain at Communications Subcommittee Hearing on FCC.
• 6/10/98, Statement of Sen. Conrad Burns at Communications Subcomm. Hearing on FCC.
• 6/10/98, Press Release of Al Gore on "digital divide" and e-rate.
• 6/11/98. FCC Public Notice, reaffirming May 7, 1997 Order.
• 6/11/98, Press Release of Reps. Lofgren and Dooley on Congressional support for SLC.
• 6/11/98, Dear Colleague Letter of Rep. Tauzin seeking support for Schools and Libraries program reform bill.
• 6/12/98, FCC Press Release on Order adopted 6/12/98.
• 6/12/98, FCC Public Notice on Order adopted 6/12/98.
• 6/12/98, Press Release of Rep. Tom Bliley, criticizing FCC Order of 6/12/98.
• 6/12/98, Press Release of Sen. John McCain, criticizing FCC Order of 6/12/98.
• 6/12/98, Press Release of Rep. John Dingell,criticizing FCC Order of 6/12/98.
• 6/12/98, Press Release of Al Gore.
• 6/12/98, Press Release of Rep. Bobby Rush.
• 6/12/98, Press Release of Sen. Snowe and Sen. Rockefeller.
• 6/12/98, Statements of each of the five FCC Commissioners on the FCC 6/12/98 Order modifying the Schools and Libraries program.  Furchtgott-Roth | Kennard | Ness | Powell | Tristani.
• 6/18/98, AT&T Press Release on Universal Service Fees.
• 6/21/98, William Kennard Speech to U.S. Mayors Conference on E-Rate.
• Report of SLC, RHCC, and USAC to FCC re merger.
• Kennard Speech to NAACP on e-rate.
• 7/16/98, GAO Testimony to the Senate Commerce Committee, "Schools and Libraries Corporation: Action Needed to Strengthen Program Integrity Operations Before Committing Funds."
• 7/16/98, Opening Statement of Sen. McCain at Senate Commerce Committee hearing on SLC.
• 7/16/98, William Kennard letter to Ira Fishman re SLC.
• 7/16/98, Press Release of Sen. Conrad Burns re SLC and Rural Universal Service.
• 7/23/98, Press Release of Rep. Billy Tauzin on introduction of HR 4324, Schools and Libraries Internet Access Act.
• 7/23/98, Press Release of Sen. Conrad Burns on introduction of S 2348.
• 7/23/98, Transcript of Joint Press Conference (excerpts) of Rep. Tauzin, Rep. Weller, and Sen. Burns.
• 7/24/98, Press Release of House Ways & Means Committee announcing hearing on e-rate funding.
• 7/29/98, Speech by Education Sec. Riley (excerpts) on e-rate and criticizing Tauzin-Burns proposal.
• 8/4/98, Statement by Rep. Jerry Weller at Ways and Means Oversight Subcommittee hearing on e-rate funding.
• 8/4/98, Statement by Rep. Earl Blumenauer Weller at Ways and Means Oversight Subcommittee hearing on e-rate funding.
• 8/4/98, Statement by Christopher Wright at Ways and Means Oversight Subcommittee hearing on e-rate funding.
• 8/18/98, Press Release of National Taxpayers Union opposing Schools and Librairies Program.
• 9/10/98, Press Release of Sen. McCain regarding meeting with Kate Moore, COO of SLC.
• 11/23/98, Al Gore Press Release on disbursing e-rate funds.
• 11/24/98, BellSouth Press Release re withdrawal from suit challenging e-rate.
• 2/19/99, Statement by FCC Chairman William Kennard re funding.
• 4/7/99, Larry Irving (NTIA) wrote a letter to William Kennard urging the FCC to require e-rate subsidy recipients to adopt an Internet use policy for protecting children from pornography. (See, letter and press release and story.)
• 5/5/99. Al Gore speech regarding filtering Internet access.
• 5/5/99. Speech by William Kennard regarding increasing e-rate funding.
• 5/5/99. Press release from FCC regarding increasing e-rate funding.
• 5/5/99. Statement from Commerce Secretary Daley in support of increased e-rate funding.
• 5/21/99. FCC press release regarding e-rate.
• 5/26/99. Statement of Rep. Bobby Rush at press conference in support of e-rate increase.
• 5/26/99. Letter from Rep. James Clyburn (on behalf of the Congressional Black Caucus) to William Kennard supporting e-rate increase.
• 5/26/99. Letter from U.S. Conference of Mayors to William Kennard supporting e-rate increase.
• 5/27/99. FCC Press Release regarding universal service support in high-cost and rural areas.
• 5/27/99. Statement by Chairman William Kennard regarding e-rate increase.
• 5/27/99. Statement by Commissioner Powell opposing e-rate increase.
• 5/27/99. Statement by Commissioner Furchtgott-Roth opposing e-rate increase.
• 5/27/99. Statement by Education Secretary Richard Riley supporting e-rate increase.
• 5/27/99. Press release of Rep. Tom Bliley and Rep. Billy Tauzin opposing e-rate increase (with attached tables showing uneven distribution of e-rate subsidies).
• 5/27/99. Press release of Sen. Conrad Burns opposing e-rate increase.

Bills Pending in the 106th Congress (1999-2000).

• HR 692 IH, the "E-Rate Termination Act," sponsored by Rep. Tom Tancredo (R-CO).
• HR 727 IH, the "Telecommunications Trust Act," sponsored by Rep. Ron Klink (D-PA),
• HR 1746 IH, the "Schools and Libraries Internet Access Act," sponsored by Rep. Billy Tauzin (R-LA).
• S 1004 IS, the "Schools and Libraries Internet Access Act," sponsored by Sen. Conrad Burns (R-MT).

Bills Introduced in the 105th Congress (1997-1999). (None of which became law).

• S 1618 ES. Senate anti-slamming, anti-spamming, and truth in billing act.
• HR 4018 IH. House "truth in billing" act. Sponsored by Rep. Earl Blumenauer (D-OR).
• HR 3648 IH.  A bill to repeal the excise tax on phones. Sponsored by Rep. Jennifer Dunn (R-WA) and Rep. Billy Tauzin (R-LA).
• HR 4324 and S 2348. Schools and Libraries Internet Access Act. Sponsored by Rep. Billy Tauzin (R-LA) and Sen. Conrad Burns (R-MT). These bills would reform the schools and libraries program by terminating the SLC, shifting administration of the program from the FCC to the NTIA, ending universal service funding, funding the program out of the existing excise tax on phones, and distributing funds to the states in the form of block grants.
• HR 4032. House bill introduced by Rep. Sensenbrenner (R-WI) to delete several subsections of Section 254.
• HR 4065. House bill introduced by Rep. Joe Scarborough (R-FL) to end universal service funding for the e-rate.

Websites of Governmental Entities.

• Schools and Libraries Division.
• Universal Service Administrative Company.
• Federal Communications Commission.
• FCC Common Carrier Bureau.
• FCC CCB Accounting Policy Division.
• NECA.
• Department of Education | E-Rate Information Page.
• House Commerce Committee.
• Senate Commerce Committee.

Websites of Some Affected Telephone Companies.

• AT&T | AT&T Page on Access Charges and Universal Service.
• MCI Communications.
• Sprint.
• GTE.

Websites of Education Entities Supporting the SLC.

• American Association of School Administrators.
• National Association of Independent Schools.
• National Catholic Educational Association.
• National Education Association.
• National School Boards Association.
• The U.S. Catholic Conference's Department of Education.
• See also, E-Rate Website of Education Groups.

Tech Law Journal Stories:

• General Accounting Office Reports that SLC is Illegal, 3/31/98.
• Congress Decries Federal Computer Commission, 3/31/98.
• SLC Report to FCC, 5/6/98.
• Senate Holds Hearing on Common Carrier Bureau, 5/7/98.
• FCC Report to Congress of 5/8/98, 5/11/98.
• FCC and CATO Debate Universal Service and SLC, 5/13/98.
• AT&T Announces New Universal Charges, 5/29/98.
• Debate Over "Gore Tax" Heats Up, 6/4/98.
• Schools & Libraries Corp. In Trouble on Capitol Hill, 6/8/98.
• SLC Supporters Fight Back, 6/8/98.
• Clinton Condemns Digital Divide in America, 6/8/98.
• Dept. Education Waits in the Wings to Run E-Rate, 6/8/98.
• Senate Communications Subcommittee Berates FCC, 6/11/98.
• FCC Modifies Schools and Libraries Program, 6/15/98.
• E-Rate Debate Continues, 6/22/98.
• Gingrich Criticizes FCC Management of E-Rate, 7/1/98.
• William Kennard Speech on E-Rate, 7/15/98.
• Senate Hearing On Schools and Libraries Corporation, 7/20/98.
• Tauzin and Burns Introduce E-Rate Reform Bill, 7/24/98.
• Comparison of Schools and Libraries Programs, 7/27/98.
• Riley Attacks Burns-Tauzin Proposal to Reform E-Rate, 7/30/98.
• House Subcommittee Debates E-Rate Funding, 8/5/98.
• E-Rate Divide Follows Partisan Lines, 8/10/98.
• National Taxpayers Uhnion Seeks End to Gore Tax, 8/19/98.
• E-Rate Funds Disbursement to Begin, 11/25/98.
• E-Rate Temination Bill Filed in House, 2/17/99.

FCC Personnel, Common Carrier Bureau, 2100 M St. NW, 8th Floor, Washington, DC, 20554.

• Lisa Gelb, Chief, Accounting Policy Division, 202-418-7400, 418-1592.
• Lisa Boehley, Accounting Policy Division, 202-418-7395.
• Irene Flannery, attorney, 202-418-7383.
• Sheryl Todd, 202-418-7386.
• Maryanne McCormack.
• Matthew Vitale, 202-418-0866.
• Francis Downey, 202-418-7371.

National Telecommunications Information Administration (NTIA). (The NTIA is an agency of the U.S. Department of Commerce. It is the Executive Branch's principal voice on domestic and international telecommunications and information technology issues. The NTIA works to spur innovation, encourage competition, help create jobs and provide consumers with more choices and better quality telecommunications products and services at lower prices. The NTIA is the executive branch agency most supportive of the computer and Internet industry. Under the Schools and Libraries Internet Access Act, introduced 7/23/98, administration of the e-rate would be transferred from the FCC and SLC to the NTIA.)

• Larry Irving, Asst. Sec. for Communications and Information, Room 4898, 202-482-1840.
• Sallilanne Fortunato, press, 202-482-7002.

Department of Education Personnel.

• Carol Wacey (e-rate policy person), 202-205-0755.
• Julie Green, Press Secretary, 202-401-1576.
• David Thomas, Office of Public Affairs, 202-401-1579.

SLD Personnel, 1023 15th St. NW, Washington, DC, 20005. 202-289-2663; fax 202-289-7836.

• Kate Moore, SLD President.

NCS Personnnel.

• Dan Geller, NCS Corp., Project Manager on contract to process Schools and Libraries fund applications. 4301 Wilson Blvd., Arlington, VA, 22203, 703-284-3690.
• Steven Kingsley, Director of Government Programs.