– eSchool News Exclusive –

Ira Fishman, chief executive officer of the Schools and Libraries Corp. (SLC), told eSchool News on Aug. 13 that he’ll be gone from the beleagured agency by the end of the month. The SLC currently administers the eRate, a federal program to help schools and libraries connect to the internet.

Fishman’s announcement came shortly after educators staged a “Save the eRate” rally outside the Capitol and officials announced schools’ long-awaited eRate payments would be delayed yet again–this time by audit procedures of Congress’ General Accounting Office (GAO). At press time, officials estimated that payments would begin sometime this fall.

Fishman had been at the center of the controversy that swirled around the SLC since its inception. Some, mostly Republican, members of Congress objected to Fishman’s $200,000 salary and to the way the agency handled the eRate application process.

In an interview with eSchool News, Fishman said he was leaving the SLC to spend more time with his family.

“When I agreed to do this, I made certain commitments to my family, and I am no longer able to [meet] my commitments here and to my family,” Fishman said.

He also cited recent changes to his position and salary made by the Federal Communications Commission (FCC). Critics in Congress have been complaining that Fishman’s $200,000 annual compensation was lavish. The FCC responded by slashing the CEO’s base salary by $45,000 and withdrawing a potential $50,000 bonus.

Fishman’s departure, therefore, was not a surprise. The position is to be terminated in any case, Fishman explained, when the SLC undergoes a merger with another agency. In May, the FCC voted to streamline the administration of the eRate by folding the SLC and the Rural Health Care Corp. into a single entity.

“When I took this on, there was a whole package of things that were important to me, [such as] having a stable position and fair compensation,” Fishman said. But the merger and salary cut changed all that, he said.

The resignation of the first CEO of the SLC comes at an inopportune time. eRate funding commitment letters are due to be sent this fall, and the SLC is still developing procedures for reviewing vendor invoices and protecting against fraud. More than 30,000 institutions have submitted qualified applications for discounts.

Fishman said he doesn’t yet know what he’ll do next. He denied rumors he would join the presidential campaign of Vice President Al Gore.

The eRate program has come under intense scrutiny in recent months. Vocal Republicans in Congress want to limit or dismantle the program, which derives its funds from contributions from telecommunications companies. Fishman said the program would survive.

“I wouldn’t be leaving if I thought [the eRate] wasn’t on solid footing. I feel very comfortable about that and about Kate Moore and the others who wil be running it,” Fishman said.

Kate L. Moore is the SLC’s chief operating officer. She will take over as acting chief executive officer on Aug. 28.

Moore, formerly chief financial officer at United Way of America, currently oversees the day-to-day operations of the SLC, including the development of the SLC web site, the process by which eRate applications are reviewed, and the organization’s operating budget.

Audit delays funds

In thousands of letters and eMail messages to Congress and at a “Save the eRate Rally” at the U.S. Capitol in August, educators expressed their support for the beleaguered program. Nonetheless, schools won’t see this year’s long-awaited eRate discounts until at least this fall because an audit of the SLC by Congress’ investigative arm has turned up inconsistencies in SLC procedures.

Exactly what the source of eRate funding will be also is subject to change. In a coordinated effort, Sen. Conrad Burns, R-Mont., and Rep. Billy Tauzin, R-La., introduced bills to divert part of an existing 3 percent telephone excise tax to pay for the eRate. The bills also would give states the authority to administer the program.

The Burns-Tauzin legislation, called the Schools and Libraries Internet Access Act, would cut the current 3 percent phone tax to 1 percent and funnel the proceeds to a “telecommunications technology trust fund” beginning next year.

The fund would be controlled by the Commerce Department’s National Telecommunications and Information Administration (NTIA), which would award the money as block grants to states. The states would pass the money along to schools, libraries, and health care providers.

Burns and Tauzin call their legislation a compromise between the program’s critics and its supporters.

“In a nutshell, what we’re doing is cutting taxes for nearly everyone in America and saving the eRate program in the process,” Tauzin said. “In politics, that’s known as a win-win.”

The telephone excise tax was instituted in 1914, when telephone service was considered a luxury, to help finance World War I. It was kept in place to combat the budget deficit. The excise tax generated $4.5 billion for the federal treasury last year–more than double the amount that would be needed to pay for the eRate.

As drafted now, the Schools and Libraries Internet Access Act would provide $1.7 billion for fiscal year 1999 and “such sums as may be necessary for each of the four succeeding fiscal years.” The money would fund both the eRate and universal service discounts to rural health care providers. The latter program currently is administered by the Rural Health Care Corp.

Sen. Conrad Burns

Rep. Billy Tauzin

Schools and Libraries Corp.

National Telecommunications and Information Administration

Federal Communications Commission

National Education Association

Telecommunications and Information Infrastructure Assistance Program

Benton Foundation

Mississippi Department of Education

General Accounting Office

Sen. John McCain