In a case with broad implications for the eRate program, a Wisconsin group has filed a lawsuit challenging the state’s right to offer telecommunications subsidies to parochial schools. Observers say the suit could well determine whether K-12 religious schools are eligible for future eRate funding.

The suit, filed in U.S. District Court in Madison Nov. 4, targets a new state program called “Educational Telecommunications Access,” which offers discounts on high-speed internet access and video data lines to public and private Wisconsin schools and colleges. The plaintiffs, a Madison-based group called Freedom from Religion Foundation Inc. and three of its members, claim that parochial schools should not be allowed to receive the discounts because their participation constitutes an illegal state subsidy of religion.

Schools approved to participate in the Wisconsin program would pay about $100 a month for internet access through a T-1 line, and the state would foot the rest of the bill. So far, the state has approved at least 26 religious K-12 schools and 10 religious colleges for the discounts, which are expected to begin next year.

But Jeffrey Kassel, a lawyer for the plaintiffs, calls the program “a subsidy to religious schools” that violates the First Amendment’s prohibition of government endorsement or support of religion.

According to Kassel, the courts have let the government help pay for certain non-religious activities for parochial schools, such as transportation costs. But the courts have barred the government from subsidizing services related to a school’s religious mission, he said.

Kassel argues that state-subsidized internet access violates the First Amendment in two ways. First, it could be used by teachers and students to access church materials online. Second, even if the internet were used for a seemingly secular purpose—like gathering information for a history class—the government still would be advancing a religious cause because the information would be presented in a religious setting.

Sharon Schmeling, associate director of the Wisconsin Catholic Conference, disputed Kassel’s arguments. Schmeling told the New York Times that the subsidies come from the state’s universal service fund, which is paid for by telecommunications companies. “The money is not taxpayer money,” Schmeling said.

Schmeling also said that to argue the program violates the First Amendment is to argue that churches should not be able to use the emergency 911 number, because that is paid for by the universal service fund as well.

But Kassel said that analogy doesn’t work because offering an emergency service to a religious institution is not the same as providing a benefit that could advance its religious cause. He also said the source of the fund is irrelevant—what matters is that the government is involved. “The state is taxing the [telecommunications] companies, collecting money from the businesses and passing it on to private schools,” he told the Times.

If the lawsuit is successful, it could set a damaging precedent for parochial schools participating in the eRate. But Tom Magee, an attorney with Vorys, Sater, Seymour and Pease LLP, a firm that handles eRate issues for Ohio schools, told eRate Update he thinks the suit has little merit.

“It appears to me that you’ve got almost the same situation as a government paving a road to a Catholic school,” Magee said. “I don’t see how providing internet access is any different—the state is giving the school a road to the computer superhighway.”

It’s not just the religious schools that benefit from internet access, Magee pointed out; all the sites on the world wide web, and their users, benefit from the connection as well. “From a public policy perspective, I don’t see what the problem is,” he said.

While lawyers for the state of Wisconsin were busy with the Freedom from Religion Foundation suit, a challenge to the Telecommunications Act of 1996—the law that established the eRate—landed before a federal appeals court Dec. 1.

Attorneys arguing the case before the 5th U.S. Circuit Court of Appeals in New Orleans questioned the FCC’s formula for setting payments that local telephone companies receive from long-distance companies to support universal service discounts to schools and libraries.

Two major providers of rural telephone service, GTE Corp., based in Irving, Texas, and SBC Communications Inc., of San Antonio, told the three-judge panel that the FCC’s formula provides too little money to companies with large numbers of rural customers, which cost more to service on a per-line basis.

Local-service companies, despite deregulation, still have the right to recover their costs and receive a reasonable profit, said William Barr, attorney for GTE. “The government cannot force someone to do something below cost,” he said.

The telephone companies also complained that the eRate would allow such providers as America Online, which does not have its own telephone circuits, to participate in the program without having its customers pay subsidies. But FCC attorney Christopher Wright said AOL does pay into the universal service fund indirectly because it pays telephone line charges.

BellSouth Corp.of Atlanta, Ga., had joined the suit but withdrew Nov. 24, stating that it believes “that most major issues…will be resolved through the regulatory process in place today. The company also believes that…it is in the best interest of BellSouth and its customers in the education sector to withdraw this appeal.”

The 5th Circuit did not indicate when it would rule.