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.”