Summary of E-Rate Bills
in the 106th Congress

This page summarizes the following bills:

• HR 692, the "E-Rate Termination Act" (Tancredo).
• HR 727, the "Telecommunications Trust Act" (Klink).
• HR 1746, the Schools and Libraries Internet Access Act (Tauzin-Weller-Tancredo).
• S 1004, the Schools and Libraries Internet Access Act (Burns).
• HR 3011, the Truth in Telephone Billing Act (Bliley).
• HR 3022, the Rest of the Truth in Telephone Billing Act (Markey).

Introduction. HR 692 would simply end the e-rate. HR 727 would not. However, it would change the source of funding for all universal service subsidies, including the e-rate. HR 727 would fund universal service out of the existing excise tax on phones. Sen. Burns and Rep. Tauzin are likely to soon re-introduce a bill that would fund the e-rate out of the excise tax on phone for a finite time period.

The E-Rate.

The e-rate is a new program which provides subsidies to schools, libraries,and rural health clinics for various telecommunications services and computer networking equipment. It is currently based upon the 1996 Telecommunications Act. Section 254 of that Act codifies the long standing practice of providing "universal service" support for telephone service in high cost rural areas. However, the Act also includes a subsection which extends universal service support for any school, library and rural health clinic.

The regulatory agency with responsibility for implementing universal service, the Federal Communication Commission, issued an Order on May 8, 1997 which expanded universal service support for schools, libraries, and rural health clinics to include various types of networking hardware, including hubs, routers, network servers, and cable. It set an initial level of funding at $2.25 Billion per year.  In June, under pressure from the Congress, the FCC reduced the subsidy level to $1.275 Billion for1998.

HR 692, the "E-Rate Termination Act."

Sponsor. Rep. Tom Tancredo (R-CO). Original cosponsors. Bob Stump (R-AZ), Charles Taylor (R-NC), Pete Sessions (R-TX), Edward Royce (R-CA), Jim Saxton (R-NJ), Cass Ballenger (R-NC), Jay Dickey (R-AZ), William Thornberry (R-TX), Dan Burton (R-IN), George Radanovich (R-CA), Thomas Petri (R-WI), J.D. Hayworth (R-AZ), John Shadegg (R-AZ), John Doolittle (R-CA). Additional cosponsors. Tom DeLay (R-TX), Gary Miller (R-CA), James Talent (R-MO), Barbara Cubin (R-WY), Tom Coburn (R-OK), Ron Paul (R-TX), Steve Largent (R-OK), Paul Ryan (R-WI), Ernest Istook (R-OK), Peter Hoekstra (R-MI), Roscoe Bartlett (R-MD), Helen Chenoweth (R-ID), Chris Cannon (R-UT), Jim DeMint (R-SC), Richard Pombo (R-CA), Ron Packard (R-CA), Walter Jones (R-NC), Tom Latham (R-IA), Larry Combest (R-TX), Richard Baker (R-LA), Mark Sanford (R-SC), James Sensenbrenner (R-WI).

Republicans: 37. Democrats: 0.

Summary. HR 692, the "E-Rate Termination Act," is a short bill that would simply delete from Section 254 of the Telecommunications Act of 1996 the language upon which the e-rate program is based.

Status. This bill was introduced on February 10, 1999, and referred to the House Commerce Committee. No action has been taken on this bill.

Legislative History.

• 2/10/99. HR 692 IH introduced in House, and referred to House Commerce Committee.
• 2/10/99. Statement by Rep. Tom Tancredo.
• 3/1/99. HR 692 referred to the Telecommunications Subcommittee.

HR 727, the "Telecommunications Trust Act."

Sponsor. Rep. Ron Klink (D-PA). Cosponsors. Jay Dickey (R-AR), Tim Holden (D-PA), Robert Brady (D-PA), Gene Green (D-TX), and Phil English (R-PA).

Summary. This bill would provides that the Federal Communications Commission's universal service subsidies would be funded from the existing excise tax on telephones.

Status. This bill was introduced on February 11, 1999. No action has been taken.

Legislative History with Links to Related Materials.

• 2/11/99. HR 727 IH introduced in the House.
• 2/11/99. HR 727 referred to both the Commerce and Ways and Means Committees.
• 3/1/99. HR 727 referred to the Telecommunications Subcommittee.

HR 1746, the Schools and Libraries Internet Access Act.

Sponsor. Rep. Billy Tauzin (R-LA) (web site | bio). Original cosponsors: Jerry Weller (R-IL), Tom Tancredo (R-CA), Vito Fossella (R-NY), John Shimkus (R-IL), Ed Whitfield (R-KY), John Sununu (R-NH), Gary Miller (R-CA), Rick Boucher (D-VA), Porter Goss (R-CA), James Rogan (R-CA). Additional cosponsors: Chip Pickering (R-MS), Mark Green (R-WI), Nick Smith (R-MI), Nathan Deal (R-GA), Thomas Ewing (R-IL), Thomas Reynolds (R-NY), Steve Chabot (R-OH), Roy Blunt (R-MO), Larry Combest (R-TX), Ron Lewis (R-KY), Barbara Cubin (R-WY), Ralph Regula (R-OH), John Linder (R-GA).

Republicans: 23. Democrats: 1.

Summary. HR 1746 IH reforms the e-rate program.

First, HR 1746 strikes the language of Section 254 of the Telecommunications Act of 1996 upon which the FCC's e-rate program is based. (See, Section 2.) Second, HR 1746 reduces the existing excise tax on phones from 3% to 1% for five years, and after 5 years, eliminates the tax altogether. (See, Section 3.)

Next, the bill creates a new "Telecommunications Technology Trust Fund" to be funded with the proceeds of the excise tax on phones, and to be administered by the National Telecommunications and Information Administration (NTIA). This is the same as the version of the bill introduced last year. However, Rep. Tauzin and others have stated and written that their proposal now provides that the Department of Education will administer the program. Hence, the reference in HR 1746 IH to the NTIA may be a error based on using a 1998 draft of the bill.

Then the bill provides that the Department of Education (or NTIA) is to distribute the funds in the form of block grants to the states. The state education departments would then distribute the money.

The main changes made to the current FCC run program by HR 1746 are as follows:

• Administration is shifted from the FCC to the Dept. of Education (or NTIA).
• The source of funding is switched from an FCC mandated tax on phone users under the authority of universal service, to the existing excise tax on phones.
• Funding goes to the states in the form of block grants to the state education departments, rather than directly to schools.
• Funding is limited to five years, rather than in perpetuity.
• Funding is limited to the amounts raised by the excise tax.

Status. This bill was introduced on May 11, 1999. The House Telecommunications Subcommittee held a hearing on September 30, 1999. No other action has been taken.

Legislative History with Links to Related Materials.

• 5/11/99. HR 1746 IH introduced in the House. See also:
  • Press release of Rep. Tauzin.
  • Press release of Rep. Jerry Weller.
  • TLJ story.
• 5/11/99. HR 1746 referred to the Committee on Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 5/25/99. HR 1746 referred to the Telecommunications Subcommittee.
• 9/30/99. Hearing before the Telecommunications Subcommittee on the e-rate.

S 1004, the Schools and Libraries Internet Access Act.

Sponsor. Sen. Conrad Burns (R-MT). Original cosponsor. James Inhofe (R-OK). Additional cosponsor. Spencer Abraham (R-MI).

Summary. S 1004 IS is the companion bill to HR 1746 IH. So, read the above summary of HR 1746.

Status. This bill was introduced on May 11, 1999. No action has been taken.

Legislative History with Links to Related Materials.

• 5/11/99. S 1004 IS introduced in the Senate. See also:
  • Press release of Sen. Burns.
  • Statement in Congressional Record of Sen. Burns.
  • TLJ story.
• 5/11/99. S 1004 referred to the Senate Finance Committee.

HR 3011, the Truth in Telephone Billing Act.

Sponsor. Rep. Tom Bliley (R-VA). Original cosponsors. Billy Tauzin (R-LA), Mike Oxley (R-OH), Roy Blunt (R-MO).

Summary. HR 3011 IH

Status. This bill was introduced on October 5, 1999. No action has been taken.

Legislative History with Links to Related Materials.

• 10/5/99, HR 3011 IH introduced in the House. See also:
  • Statement by Rep. Bliley.
  • Tech Law Journal story.
• 10/5/99, HR 3011 referred to the House Commerce Committee.

HR 3022, the Rest of the Truth in Telephone Billing Act.

Sponsor. Rep. Ed Markey (D-MA). Cosponsors. None.

Summary. HR 3022 IH

Status. This bill was introduced on October 5, 1999. No action has been taken.

Legislative History with Links to Related Materials.

• 10/5/99, HR 3022 IH introduced in the House. See also:
  • Statement by Rep. Markey.
  • Tech Law Journal story.
• 10/5/99, HR 3022 referred to the House Commerce Committee.