American Library Association

AT&T Corporation

“Falling Through the Net II: New Data on the Digital Divide”

Federal Communications Commission

General Accounting Office

House Speaker Newt Gingrich

House Ways and Means Committee

ISIS 2000

Kentucky Department of Education

MCI Telecommunications Corporation

National Education Association

National Telecommunications and Information Administration

Rep. Earl Blumenauer

Rep. John Dingell

Rep. Joe Scarborough

Rep. Billy Tauzin

Schools and Libraries Corporation

Senate Commerce Committee

Sen. Conrad Burns

Sen. John McCain

Sprint Corporation

Tennessee Department of Education

U.S. Department of Education


What now?

As the SLC continues to review applications to make sure they comply with program rules, the corporation has identified four main areas where supporting documentation may be necessary:

1. Eligible services. To verify that services you’ve listed on your Form 471 are eligible for discounts, you may be asked to provide:

• copies of all contracts and written communication with service providers

• copies of RFPs and RFQs

• copies of work orders issued to, or invoices submitted by, service providers

• explanation and documentation making clear that similar services are distinct, so the SLC knows you aren’t billing them twice for the same service

2. Mixed eligible and ineligible services, or services shared between eligible and ineligible entities. If you’re bundling eligible and ineligible services, you may be asked to provide documentation showing the separation of costs, such as your Form 471 Pre-Discount Cost Calculation Option Grid.

3. Discount percentage. If the SLC is unable to verify your discount percentage, you may be asked to provide proof such as:

• your most recent documentation meeting federal or state reporting requirements about participation of your students in the national school lunch program

• data from Aid to Families with Dependent Children or tuition scholarship programs, or proof of participation in other income-assistance programs

4. Adequacy of supporting resources. The SLC will want to see that you’ve secured access to the computers, training, software, maintenance, and electrical connections necessary to make effective use of discounted services. You may be asked to provide:

• a copy of your technology plan

• a copy of your approved 1998 budget(s)

• copies of contracts or receipts for purchases

Once the SLC has reviewed all applications, you’ll receive a funding commitment letter identifying the SLC’s approval or disapproval of discounts on a line-item basis. You’ll then need to submit your Form 486 to the SLC within five (5) days for services that are already being rendered.

A draft copy of Form 486 is being reviewed by the FCC. When approved, the form will be available online at the SLC web site and also will be mailed out with your funding commitment letter.

Form 486 will ask you to certify that you have an approved technology plan. It will ask you to name the agency that approved the plan. If your technology plan hasn’t been approved by your state education agency or another SLC-certified institution, you should get it approved now.

If you applied for a discount on a service you’ve already paid for in full, you’ll have to submit a special Applicant Invoice to the SLC in order to be reimbursed. The SLC will review it and approve it for payment through your service provider in the form of a check or credit. A draft of the Applicant Invoice will be available on the SLC’s web site in the next few weeks.

Once you’ve submitted your Form 486, vendors can begin invoicing the SLC for your discounts. Vendors may submit invoices on paper or electronically. A draft of the Service Provider Invoice also will be available on the SLC’s web site shortly.

If you disagree with the SLC’s decision not to approve a service, you’re entitled to an appeal. You’ll have to write a letter to the SLC stating your objection. Include any supporting materials that may help your case, such as the documentation listed above.

Send all letters of appeal to: Debra Kriete, General Counsel, Schools and Libraries Corp., P.O. Box 34351, Washington, D.C. 20043-4351.


Kentucky’s discount dilemma

Tennessee isn’t the only state whose application is embroiled in controversy. The Kentucky Department of Education has petitioned the FCC to let it submit a single aggregate discount for the state—an approach that may anger some people in light of the FCC’s decision to limit funding for internal connections.

In 1990, in response to constitutional challenges from several school districts, Kentucky amended its state constitution to provide equal funding for all districts. Every student in the state receives the same opportunities and the same level of support, regardless of where he or she lives.

Kentucky has carried this equity approach beyond funding and into buying power as well. The state has set up master contracts with vendors to supply each district with several choices, but pricing remains constant for each district along comparative levels of service.

Under the SLC’s rules, Kentucky districts would qualify for discounts of between 40 and 90 percent. But department officials fear that funding each district at the level it qualifies for would undermine the equity approach the state has worked so hard to establish.

Kentucky officials want to submit a uniform discount for each district, calculated as an aggregate total for the state. Kentucky’s discount would be calculated like a single district’s, but weighted by district instead of by school building.

Since 105 of Kentucky’s 176 districts qualify for 80 or 90 percent discounts, this approach yields an aggregate discount for the state of 80 percent. Because 80 percent is also the projected cutoff for funding wiring projects, though, some observers argue that Kentucky’s approach would fund wiring for the state’s less-poor districts at the expense of more deserving districts outside of Kentucky.

The FCC has solicited public comment on Kentucky’s petition. Though it’s too late to respond, you can read the state’s petition on the FCC’s web site. Kentucky expects a decision from the agency soon.


Universal service groups submit reorganization plan

The SLC will become a division of the Universal Service Administrative Co. (USAC) on Jan. 1, under a proposal submitted to the FCC in July. The plan was submitted in response to criticism of the program’s bureaucracy from many members of Congress, but the Burns-Tauzin legislation suggests that lawmakers still aren’t satisfied with the proposed changes.

The plan would give the USAC control over all three universal service programs—the schools and libraries program run by the SLC as well as the rural health care program administered by the Rural Health Care Corp. (RHCC) and the low-income, high-cost program run by the USAC.

The merger would save money by streamlining the groups’ administrative functions, according to officials. The new organization would operate under a single budget with a combined office space, mail and purchasing functions, accounting systems, auditing staff, and insurance plan.

The SLC would continue to administer the eRate, but as a division of the USAC called Schools and Libraries. USAC’s 18-member board of directors also would contain a separate Schools and Libraries Committee, which would include representation from three schools, one library, one internet service provider, and one at-large member.

The proposal would call for the Schools and Libraries division to keep the same responsibilities it has now—including outreach and support for eRate applicants—but under management of the USAC and with more outsourcing of functions. Though officials said the SLC’s responsibilities wouldn’t change, a shake-up of staff would be likely.

USAC chief executive officer Cheryl Parrino said she might reduce office staff because there would be obvious areas where functions of the three groups overlap, such as payroll and recordkeeping. She said her goal would be to keep the three units “fairly small.”

The consolidation is intended to appease Congress and the GAO, which issued a report in February stating that the FCC overstepped its legal authority when it created two semi-private corporations, the SLC and the RHCC, to administer the new universal service programs created by the Telecommunications Act of 1996.

Following the USAC’s proposal, FCC chairman William Kennard said his agency would act quickly to get a new administrative structure in place. “Further debates over universal service should be about policy choices, not administrative structure,” he said.

Already, though, there are signs the proposal may not go far enough in addressing opponents’ concerns about the program.

In addition to the Burns-Tauzin legislation, FCC Commissioner Harold Furchtgott-Roth—who has criticized his agency’s handling of the eRate—questioned whether separate divisions and board committees for the different programs even are necessary.

“All decisions regarding where the money should be going and how it should be distributed should—indeed must—be made by the Commission,” Furchtgott-Roth said. “In establishing an entity to review and process the applications, the Commission [should be] merely contracting out administrative functions.”


Tennessee locked in bitter contract dispute

With funding for the first year of the eRate finally set, the FCC now must turn its attention to interpreting the program’s rules. How the FCC resolves a dispute involving Tennessee’s statewide application may have far-reaching effects for both service providers and schools.

Under FCC rules, building or upgrading a state-owned wide area network can’t be done with eRate funds. Tennessee, which owned a statewide education network called ConnecTEN, sold the network to a private company called Education Networks of America (ENA) and now pays ENA for upgraded internet access to its 1,600 schools. Tennessee is requesting $17 million in eRate discounts for this upgraded service.

Depending on whom you ask, Tennessee’s application is either “creative” or “a deceptive shell game.”

Jackie Shrago, director of ConnecTEN, said the state worked with an attorney familiar with the FCC to make sure it followed the program’s rules. There are no rules prohibiting the sale of an existing network to a private owner, Shrago said.

But ISIS 2000, the loser in a bid to provide service for the state, contends that Tennessee’s contract with the ENA violates the rules’ intention. ISIS 2000 wants the FCC to throw out the state’s application.

Rudolph Geist, an attorney for ISIS 2000, said that ENA is using a loophole in the program to fund upgrades to the network by transferring its ownership out of the state’s hands.

“What [Tennessee is] doing raises extremely important questions about program integrity and what is eligible for discounts,” said Geist. “These are important questions for the future of the program.”

Service providers and education officials from other states are watching closely to see how the FCC rules in this case. If Tennessee’s application is approved, some fear it could open the program to widespread abuse.

If the state’s application is rejected, however, thousands of Tennessee students might have to wait for expanded internet access.

Stretching the rules?

In its request for proposals, the state asked bidders to come up with “creative” ways of using eRate discounts to provide students with the best possible internet service, given a fixed contribution from the state of $5 million per year.

ENA won the contract, even though its bid of $74 million over three years was $23 million higher than ISIS 2000’s. The reason, according to Geist: ENA’s proposal could generate more federal money.

Through an ingenious but “suspect” proposal, Geist said, ENA offered to buy the state’s existing public education network. ConnecTEN is a two-year old project linking at least one computer in each of Tennessee’s schools to the internet.

In return, ENA would charge the state for “turnkey” internet service to all its public schools. Turnkey service means all equipment, access, security, and support—from the school to the internet and back—are supplied by the provider.

As part of its service, ENA offered to install a point of presence (POP) at each school so it could charge the state for direct internet access only rather than routers, hubs, switches, T-1 lines, or similar equipment.

But transferring the network to ENA’s hands lets the company upgrade the network’s connections using federal eRate funds, Geist said.

Furthermore, Tennessee’s application stretches the definition of “internet access” far beyond what the FCC intended, Geist said.

“For the six-month period from July 1 to December 31, the state requests $17 million in eRate discounts just for internet access,” Geist said. “That’s almost 20 percent of the total [$88 million] requested for internet access by all 30,000 applicants.”

The Joint Board that set the rules of the eRate defined internet access as “basic conduit,” Geist said—that is, non-content access from a school or library to the backbone internet network.

ENA’s contract with the state includes services such as filtering and web site caching, Geist said—services that are ineligible for discounts. The state’s application includes these services under the rubric “internet access” as well, he said, without making any attempt to unbundle them from eligible services.

A question of semantics

ENA President Al Ganier painted an entirely different picture.

“We’re providing internet access; we’re not selling bandwidth or hardware back to the state,” he said. “We designed a comprehensive program with the teachers and students of Tennessee in mind.”

The state chose ENA because it offered a superior proposal, Ganier said, and ISIS 2000 is just disgruntled because it wasn’t chosen. “There is no comparison between our services, delivery, or design,” he said.

ENA’s $74 million proposal meets the needs of schools much better than ISIS 2000’s plan would have, Ganier said. He cited time constraints as one problem schools face in particular. ENA’s plan calls for a three-level caching system to store web sites so teachers don’t have to wait for frequently visited sites to download during peak hours, he said.

Other features of ENA’s proposal that Ganier called superior are its filtering and security measures and its capacity for growth. The state’s goal is to increase the number of its school computers hooked up to the internet from 50,000 to 90,000 by supplementing existing wiring with sufficient bandwidth and equipment.

Such features constitute an internet service plan that should qualify for the eRate when it is offered to schools, Ganier said. Aside from being more school-friendly, ENA’s approach is no different from that of any other internet service provider, he said.

“At a cost of $15 per student per year, we are dramatically cheaper than if the state had contracted with, for example,” Ganier said. “And we deliver a much more school-oriented approach.”

The FCC shouldn’t question Tennessee’s plan, Ganier said, given that the state agrees the solution it has purchased is cost-effective.

A review board including members of the legislature and Tennessee Supreme Court, the state’s comptroller, and its chief financial officer unanimously upheld the state’s contract with ENA back in April.

“The only thing we’re billing the FCC for is internet access,” Ganier said. “There’s nothing in the FCC rules saying that purchasing existing equipment is not allowed.”

That may be true, but Tennessee’s application raises a host of questions the Joint Board could not have anticipated when it set the program’s rules. At the very least, the state’s bundling of eligible and ineligible services—if Geist’s allegations prove true—may force the SLC to reject the state’s application.


Lawmakers propose eRate overhaul

Unhappy with the FCC’s implementation of the eRate, lawmakers from both sides of the Capitol have introduced bills that would overhaul the program.

In a coordinated effort, Sen. Conrad Burns, R-Mont., and Rep. Billy Tauzin, R-La., introduced bills July 23 that would 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 instead of the FCC.

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.

Some members of Congress, Burns and Tauzin included, have blasted the FCC for creating a nonprofit corporation—the SLC—to administer the eRate. Critics of the program also bristle at surcharges that long-distance companies have added to their customers’ bills to help pay for it.

Burns and Tauzin call their legislation a compromise between the program’s critics and its supporters. “In the face of calls to discontinue this program entirely, I hope the administration would support what is indeed a rational compromise,” Burns said.

“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 tax generated $4.5 billion for the federal treasury last year—more than double the cost of the eRate.

Using money from an existing phone tax to fund the eRate would eliminate the need for long-distance companies to raise their rates to pay for the program, according to the lawmakers.

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.

House Speaker Newt Gingrich has endorsed the Burns-Tauzin legislation, saying, “I think it’s very dangerous and, frankly, wrong to allow any bureaucracy to raise taxes on the American people.” But education groups reacted to the Burns-Tauzin legislation with caution.

“We’re very happy that Burns and Tauzin see the merit in the program and want to fund it, particularly the wiring and internal connections as well,” said Jon Bernstein, a lobbyist for the National Education Association. “That being said, we’re concerned with some of the mechanisms they’re proposing.”

The five-year sunset provision, the fact that only $1.7 billion is earmarked for 1999, and the absence of a dollar amount specified for the remaining four years of the program are causes for concern, Bernstein said.

Because the legislation doesn’t peg a dollar amount for the eRate beyond the first year, he said, the program’s funding could be subjected to the appropriations process each year—which, given the current climate in Congress, may spell trouble for the program.

Linda Roberts, director of the Education Department’s Office of Technology, also raised concerns about the Burns-Tauzin legislation in an interview with online news source C/Net.

“The problem with a block grant is that individual states may not make the same kinds of distribution decisions that the FCC made,” Roberts said. “I really think the FCC Joint Board of state and federal regulators made an incredible decision [when they] said, ‘No matter where you live in this country…we are really going to try to level the playing field for you.'”

Block grants also would penalize the small, rural states, Roberts said: “If [they are] allocated the way most block grants are allocated, they will be allocated on the basis of population. This is where the rural states will get hurt tremendously.”


eRate survives the summer

The eRate withstood another flurry of assaults in early August and won a short reprieve as Congress took a three-week recess. The program was pronounced “unconstitutional” during a hearing of the House Ways and Means subcommittee on oversight, and lawmakers threatened to kill the program with an appropriations bill amendment. But in the end, no decisive action was taken before Congress adjourned for the summer Aug. 7, 1998.

The fate of 30,000 applications seemed to hinge upon semantics as Congress held an oversight hearing Aug. 4 to determine whether the eRate in its present form constitutes a “tax”—and therefore is unconstitutional—or a “fee.”

“The charges that the FCC has imposed on telecommunications carriers [to pay for the eRate] appear to be taxes,” said subcommittee chair Nancy L. Johnson, R-Conn. “If [the program] is indeed a tax, it has not been levied by Congress but by an executive branch agency and therefore is illegal.”

Finding funding for the eRate is a priority, Johnson said, but “we must follow the constitutionally prescribed process.”

Ranking minority member William Coyne, D-Penn., agreed. If Congress determines that the eRate is a tax, Coyne said, then “we should exercise our jurisdiction and attach an amendment to the Commerce appropriations bill which would block funding of the program.”

But FCC General Counsel Christopher Wright disputed the subcommittee’s characterization. Wright argued that the courts have ruled repeatedly that the federal universal service fund—as administered by the Commission since 1934—is a fee, not a tax.

Besides, Wright said, Congress itself authorized the eRate under Section 254 of the Telecommunications Act of 1996, which extended universal service discounts on telecommunications services to schools and libraries.

The “tax” vs. “fee” dispute was raised by protests from long-distance companies, which pay the bulk of the eRate’s cost in the form of surcharges to the FCC. AT&T has passed the cost of these surcharges on to its customers as a “federal universal service fee” of 93 cents per month, while MCI charges its customers a 5 percent universal service fee on their interstate calls.

In response to the rate hikes from these companies, critics of the eRate have labeled it the “Gore Tax.”

Though no action was taken by the subcommittee, the constitutionality of the eRate remains in question. The issue has appeared before the courts again, as telecommunications companies (telcos) have filed suit against the FCC declaring the eRate unconstitutional. The Fifth Circuit Court of Appeals in New Orleans is scheduled to hear arguments in the case later this year.

Growing divide

While the House Ways and Means committee debated the legality of the eRate, the full House was considering its Commerce appropriations bill. Rep. Joe Scarborough, R-Fla., had vowed to attach an amendment to the bill that would block the FCC from collecting any more money from long-distance carriers to pay for the eRate, but the bill passed the House Aug. 5 without such action.

An aide to Rep. Scarborough told eRate Update the congressman decided not to introduce his amendment at the last minute, but he remains committed to a similar stand-alone bill he introduced in July.

Scarborough’s bill—H. R. 4065, the “eRate Tax Moratorium Act of 1998″—would temporarily suspend the collection of fees from telcos until Congress has had the chance to examine the program more closely.

“We had an outcry from constituents when they learned about the so-called ‘Gore tax,'” said David Stafford, Rep. Scarborough’s press secretary. “So we took what we thought was a balanced approach to protect consumers.”

Stafford said H. R. 4065 would allow the FCC to disburse the current amount collected from telcos—now about $800 million—to schools, while freezing the rest until the lingering concerns of Congress can be addressed.

Sources on Capitol Hill, though, were hinting that the Clinton administration’s renewed push for the eRate may have granted the program at least a temporary reprieve.

Bolstered by the latest Commerce Department study showing that the digital divide is growing, Education Secretary Richard Riley delivered a July 29 address reaffirming the administration’s support of the program.

“Let me tell you in no uncertain terms,” Riley said, “President Clinton, Vice President Gore, and I will continue to fight any efforts to dismantle the eRate and widen the digital divide.”

“This debate has never been about technology,” he continued. “It has been about what our children have the opportunity to do. What good is it to be the richest nation in the world…if the ability to benefit from technology is dependent on whether a student goes to a particular school?”

The study Riley referred to, “Falling Through the Net II: New Data on the Digital Divide,” was conducted by the Commerce Department’s National Telecommunications and Information Administration.

A follow-up to the department’s 1995 report, the study confirmed what educators have suspected: Overall home computer and internet use has increased during the past three years, but so has the disparity between the technology “haves” and “have-nots.”

Rep. Earl Blumenauer, D-Ore., himself a strong supporter of the eRate, told the trade publication Communications Daily that members of Congress didn’t want to be seen as “anti-education, anti-library, anti-high tech, or anti-kid” as they headed home for recess Aug. 7.

Be that as it may, educators should brace for another flurry of action when Congress resumes Aug. 31. In addition to pending bills from the Republican side of the aisle (see “Lawmakers,” page 3), Rep. John Dingell, D-Mich., the ranking minority member of the House Commerce Committee, is working on his own measure.

Like bills introduced by Sen. Burns and Rep. Tauzin, Dingell’s legislation would use part of an existing telephone excise tax to pay for the eRate.

Dingell’s legislation wouldn’t convert the funds to block grants as would the Burns and Tauzin bills, but it would restrict the amount of bandwidth schools could apply for discounts on and would restrict eligibility to only the neediest schools.


eRate progress report

An audit of the SLC by Congress’ investigative arm has turned up inconsistencies in the agency’s procedures. Result: you’ll have to wait even longer for your discount.

The General Accounting Office (GAO) told the SLC it must tighten its program integrity assurance controls before committing any funds this year. The GAO’s report means that schools and libraries won’t see eRate discounts until at least the fall.

The GAO had audited the SLC at the request of Sen. John McCain, R-Ariz. A vocal critic of how the eRate is being implemented, McCain has blasted what he calls the program’s “bloated bureaucracy” and questioned whether effective safeguards are in place to prevent fraud and abuse.

During a Senate Commerce Committee hearing July 16, the GAO presented the findings of its audit. While noting that the SLC has made “substantial progress” in establishing the program, the GAO also voiced several concerns:

• The SLC has taken longer than expected to implement the eRate. As of July 7, just 62 percent of the 30,000 applications had been processed;

• Not all applications were treated consistently. Rules regarding the eligibility of services were changed after 9,000 applications had been processed, and the SLC had failed to go back and reexamine those 9,000 applications; and

• The SLC planned to send out funding- commitment letters before addressing key issues. For example, the corporation had yet to set up procedures for auditing applications, evaluating the high-risk ones, or disbursing funds.

“Reviews of high-risk applications are not scheduled to occur until sometime after funding commitment letters are sent to applicants,” Judy England-Joseph, director of the GAO’s housing and community development issues, told the committee.

“Should the [SLC] find major problems at this time with the applications reviewed, it may have to reduce or withdraw funding commitments from those applicants,” she continued.

The GAO also found that the SLC had not yet worked out a procedure for processing vendor invoices.

“We are particularly concerned about this, because the [SLC] estimates that invoice payment could begin to arrive as soon as 15 days after commitment letters are sent out,” England-Joseph said. “If disbursement procedures and internal controls are not in place when commitment letters are issued, the [SLC] may find itself unable to process vendor invoices in a timely manner.”

Based on its findings, the GAO submitted a list of recommendations to Congress. Before the SLC commits or disburses any money to schools, England-Joseph said, the corporation should:

• Conduct a detailed review of randomly sampled applications to assess the soundness of applications and the effectiveness of program safeguards;

• Establish procedures, automated systems, and internal controls for the post-commitment phase of the program, including the disbursement of funds;

• Thoroughly review high-risk applications and all supporting documents to ensure they meet program rules; and

• Obtain a report from its independent auditor stating that the SLC has developed appropriate safeguards against waste, fraud, and abuse.

Ira Fishman, SLC’s chief executive officer, agreed with the GAO’s findings. Fishman promised to implement the group’s recommendations before committing any funds to applicants.

When pressed by McCain to reveal how long this would take, Fishman said the SLC probably could make funding commitments “in early fall.”

Although the GAO’s audit showed room for improvement, Fishman noted that the controls already in place are working.

For example, McCain had raised concerns that some schools applied for discounts on carpeting, paint, and asbestos removal—none of which are covered by the program. Of 7,000 applications sampled, the SLC found only one instance in which a subsidy for paint had been requested and none for carpeting or asbestos removal, Fishman said.

Said McCain: “I give everybody an ‘A’ for effort but cannot give you very high grades for what you have accomplished, since the bottom line is that not one school or library has yet received this service. The expectations were that this program would be on the road long ago.”


Schools and Libraries chief resigns

The executive in charge of the eRate has resigned effective Aug. 28. Ira Fishman, chief executive officer of the Schools and Libraries Corp. (SLC), made his announcement Aug. 13, 1998.

Fishman announced his resignation after it appeared the eRate had survived another round of congressional and legal challenges, at least until fall. Following repeated attacks on the program’s implementation, the eRate earned a short reprieve when Congress adjourned for summer recess.

As head of the SLC, Fishman was responsible for putting all the people, procedures, and systems in place to administer the eRate.

Kate Moore, the corporation’s chief operating office, will become acting CEO when Fishman leaves. Moore had been chief financial officer of the United Way of America before joining the corporation.

Fishman became a lightning rod for eRate opponents who criticized the program’s bureaucracy.

But Fishman, who said he was under no pressure to resign, said the controversy over the program did not drive him to leave.

“The political heat has not been a direct issue,” he said. “It obviously has impact on that balance of family life and professional life.”

Fishman has had his congressional supporters as well as detractors. “Like every new program, the eRate has faced numerous challenges throughout its startup period,” said Sen. Jay Rockefeller, D-W.Va. “Ira has tackled each and every one and made important changes to the program’s implementation based on recommendations by Congress and auditors.”

Fishman and the Federal Communications Commission (FCC), which oversees the SLC, have taken steps to address critics’ concerns about the program, including making sure the poorest schools and libraries get discounted hookups first.

Fishman’s initial $200,000-a-year salary, which was set by the corporation’s board, was criticized by leading telecommunications lawmakers as lavish. In response, the FCC adopted rules barring any SLC employee from being paid more than $151,000 a year, effective July 1. The FCC also withdrew a potential $50,000 bonus for Fishman.

In an interview with eRate Update, 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.

The CEO position was slated to be terminated at the end of the year in any case, Fishman explained. That’s 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 SLC’s first CEO 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 applications for discounts.

Fishman said he doesn’t know what he’ll do next. He denied rumors he would join the presidential campaign of Vice President Al Gore, who has been a principal eRate proponent.

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. Yet 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 will be running it,” Fishman said.

Moore 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.

Schools and libraries have not yet received any discounted services through the program, which is in its first year. Some 30,000 applications are pending, and no money is expected to be disbursed until the fall.


Different—Not More—Professional Development Is Most Important To Teachers’ Success

School Planning and Management, August 1998, p. 13

A vice president of sales for ITC Learning Corp. maintains that the solution to improving teacher technology training is not to increase the amount of training, but to address the method of the instruction. Current professional development models, Shillcutt says, depend on classroom-style instruction that doesn’t allow participants to apply in a hands-on way what they learn. Moreover, Shillcutt says technology classes for teachers often come at 3:30 p.m., right after a long day of teaching, which means teacher’s have less energy and less ability to retain what they’re taught.

Shillcutt recommends that teachers acquire skills via the Internet, school intranets, and multimedia training packages on a desktop computer.