School eRate funding under attack

Sen. John McCain, R-Ariz., chairman of the Senate Commerce Committee and an outspoken critic of the eRate, introduced a bill on Feb. 10 that would tie eRate discounts to internet access restrictions. The move came less than a month after the FCC voted to scale back the collection of eRate subsidies from $1 billion, as originally planned, to $625 million through the first half of 1998.

The FCC’s surprise move lowers the amount of money that telecommunications carriers must contribute to the Universal Service Fund, which subsidizes the eRate. Carriers contribute to the fund based on a sliding scale. Money from the fund is then handed back to companies who service schools and libraries to pay for the discounts.

Maryanne McCormick, a spokeswoman for the FCC, told eSchool News the cutback merely anticipates less of a demand for eRate discounts through the first half of the year than originally thought.

“We don’t want to have money just sitting around in the fund,” McCormick said. “We want to collect only as much as we think we are going to need.”<

McCormick said the demand for discounts will be less through the first six months of 1998 partly because the program is new, and partly because of the length of time it will take before the discounts actually go into effect. The delay in opening the program to applications until Jan. 30 and the 75-day filing window mean that schools won’t receive discounts until April at the earliest.

But many people question whether the FCC is telling the whole story. In the wake of protests by telecommunications carriers, some lawmakers have voiced concern that carriers may raise residential phone bills to offset the cost of funding the eRate. One week before the FCC’s decision, House Commerce Committee chair Thomas Bliley, R-VA, had asked the FCC to delay implementing the eRate to ensure it would not raise residential rates. Such political pressure, many are saying, is the real reason behind the FCC’s reversal.

The FCC has maintained all along that residential rates will not increase because of the eRate. But extra fees have already cropped up on some AT&T and MCI invoices for their business customers.

Educators fear that the cutbacks in eRate funding will spell less money for their schools. “What is unclear about the FCC’s action,” said Don Feuerstein, a senior adviser for the U.S. Department of Education, “is whether it will ultimately reduce the amount of money available for discounts.”

In May, the FCC adopted a $2.25 billion annual eRate cap. When the commission set the cap, FCC Commissioner Susan Ness explained, the agency was trying to reassure telecommunications companies that the eRate was not a blank check and to reassure schools and libraries that the program would have sufficient funds to do what it promised—underwrite their telecommunications services.

McCormick insisted the $2.25 billion cap would remain intact. But she said the FCC is not required to provide subsidies at the maximum level each year unless the demand warrants it.

The FCC will vote later in the spring to determine how much money will be collected from telecommunications carriers through the second half of the year. Unless the FCC approves more than $1.6 billion in subsidies through the second half of 1998—instead of the $1.25 billion originally planned—the $2.25 billion total will not be collected.

Feuerstein offered this scenario: “If less than $2 billion is collected in 1998, but $2.25 billion in discounts are requested by schools, will the difference be reimbursed from the fund? If 1999 collections can’t be used for 1998 expenditures, then they’ve changed the amount of the cap.”

Though FCC officials assured eSchool News that the cap will be met if necessary, the agency has no contingency plan about where to find the money should demand exceed the program’s funding this year.

If potential cutbacks in the eRate funding weren’t enough to worry some educators, McCain’s announcement might have been. The senator, who made his remarks in a statement outlining his legislative agenda for 1998, was not available for comment, but a staff member from his office told eSchool News the bill’s objective would be to “ensure that federal subsidies do not fund children’s access to pornography.”

As details of the senator’s plan emerged at press time, it became clear that his bill would require schools to install filtering software to qualify for the eRate.

Education officials were disturbed by the implications of McCain’s proposal. The press secretary for the U.S. Department of Education, Julie Green, told eSchool News, “We would be concerned about any effort to mandate that schools must follow a particular agenda in order to qualify.”

Telecommunications lobbyists and Democratic aides in the Senate, speaking on condition of anonymity, doubted McCain’s proposal could either pass Congress or win the support of the Clinton administration. So far, the administration has taken a hands-off approach in regulating internet access, leaving decisions about how to shield children from questionable content to individual communities.

That’s the way it should remain, said Kari Arfstrom, legislative specialist for the American Association of School Administrators. “Decisions about whether, and how, to restrict internet access should not be made by the federal government,” Arfstrom told eSchool News. “These decisions belong at the school level.”


U.S. Department of Education

Federal Communications Commission

Senator John McCain

American Association of School Administrators

Dennis Pierce

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