FCC “downsizes” discount Internet program – for public schools and libraries

Corporate pressure blocks public schools and libraries from getting information superhighway discounts

Public schools may get smaller than expected discounts on Internet
connections following recent action by the Federal Communications
Commission.

By a 3-2 vote, FCC commissioners voted to scale back the “e-rate”
— the special discounts designed to connect schools and libraries to
the information superhighway. Congress passed a law in 1996 creating
the discounted rate, but major corporations — including AT&T and
MCI — lobbied successfully for relief from some of the law’s
requirements.

Education advocates, however, decried the changes, claiming schools
already have made plans expecting the deep discounts originally
promised under the law.

“The massacre of the infant e-rate continues,” said Rep. Major
Owens (D-N.Y.), a Congressional Black Caucus member. Owens charged that
“greedy corporations” are trying to deny children “vital access to
education technology in their schools and libraries.”

Under the new plan, telecommunications companies will pay no more
than $1.92 billion into the e-rate fund during the first eighteen
months of the program, a period that will last through June 30, 1999.

But the original plan called for $2.25 billion in corporate
contributions in 1998 alone — with additional contributions expected
next year. As a result, critics note start-up funding may be only 50
percent of the program’s original projections for its first two years.

“This agreement is deeply disappointing,” said Bob Chase, president
of the National Education Association, the nation’s largest teachers’
union. “Thousands of school districts have already signed contracts and
set budgets based on the discounts that were promised.”

Schools and libraries nationwide have applied for $2.02 billion in
discounts — about $100 million more than the corporate contributions
expected by mid-1999. That figure does not include applications that
other schools and libraries expect to file by next June.

While it is unclear how the FCC decision will affect discounts,
many predict it will pit schools against each other for limited funds.
Only the poorest schools initially may get funds, even though schools
of all sizes have made technology plans — and, in many cases, signed
contracts — based on the earlier projections.

“Halting or cutting the e-rate program now would be a travesty,”
said Barbara Ford, president of the American Library Association, whose
members have long supported the e-rate concept. She added that
thousands of schools and libraries applied “in good faith for these
discounts.”

“Access to online information sources isn’t a luxury for libraries
and schools,” she continued, adding that such access is necessary to
train children and adults to work in the twenty-first century.

More than 30,000 schools and libraries already have applied for
discounts, which were to range from 20 to 90 percent depending on the
district’s financial health and poverty rates. Some analysts say
privately that the new ruling may limit assistance to less-poor schools
that still may need the discounts.

Schools and libraries apply for the e-rate through the Schools and
Libraries Corp., a federally affiliated entity managing the program. As
a further complication, the agency is off to a “slow start” in
processing applications, said Ira Fishman, the corporation’s chief
executive officer.

Some educators had expected the program to begin last year, but
Fishman said he expects few schools will get funds this summer to
install computer systems for the start of the 1998-99 academic year.
The FCC’s recent decision also “will disappoint some applicants,” he
acknowledged.

The e-rate program began with passage of the 1996
Telecommunications Act, which required major telecommunication firms —
such as AT&T, MCI, and GTE — to contribute funds. In return, these
companies received significant discounts in local access fees, among
other benefits.

The 1996 law “enriched these giant corporations by removing certain
regulations and allowing an unprecedented increase in their profits,”
Owens said.

However, the companies have argued that some of the required
contributions were onerous, eventually winning majority support at the
FCC.

Some Republicans in Congress also are pushing to terminate the
program. But so far, those efforts have been without success. And even
if it passes Congress, a repeal effort would face a likely veto from
the White House, where President Bill Clinton has expressed strong
support for the program.

COPYRIGHT 1998 Cox, Matthews & Associates



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