As educators waited to find out how much the Federal Communications Commission (FCC) would approve for second-year eRate funding, the political debate that threatened to undermine the program last year took center stage again in the days leading up to the agency’s decision, which was expected to come at a May 27 meeting.
FCC chairman William Kennard called for full funding to the $2.25 billion cap, and editorials in the New York Times and the Boston Globe supported his position. But some critics of the eRate sought to play partisan politics at the program’s expense.
In an eMail message sent to its activist list May 17, the Republican National Committee (RNC) urged its members to oppose any increase in funding for the eRate. In the message, titled “Gore: Reach Out and Tax EveryoneVeep to Double Despised ‘Gore Tax,'” the RNC said that the vice president “is set to double the tax on your phone bill by hiking the ‘Gore tax’ and socking taxpayers with billions of dollars in new taxes.”
Although the plan “sounds innocent enough,” the message said, Gore “wasted countless taxpayer dollars by paying his old political crony, Ira Fishman, $250,000 a year to run the program (more than any other federal employeeincluding Bill Clinton), and just 4% of the $2 billion that schools requested so far has gone to pay for actual internet accessthe rest went for bureaucratic overhead, and ripping up walls, repairing carpets and other extra costs.”
The message, which was also posted to the RNC’s web site, went on to say that “Gore also missed the news that over 80% of schools are already on the Net” and that the FCC “is set to finalize the Gore phone tax hike at the end of May, unlessof courselisteners keep Gore and the FCC’s phones ringing.”
The RNC’s message echoes most of the same criticisms that were leveled at the eRate by critics last yeardespite the fact that some are just plain wrong. “Ripping up walls” and repairing carpets are not expenses that are eligible for discounts, and the message fails to note that $1.5 billion went to schools and libraries last year for telecommunications services and internal connections.
Though former Schools and Libraries chief executive Ira Fishman initially was hired at a base salary of $200,000, with the option of a $50,000 bonus, the FCC cut his salary to $150,000 and denied the bonus in response to last year’s rebukes. Vice President Gore, meanwhile, had nothing to do with setting the salary of Fishman, who resigned last August.
Despite raising some legitimate concerns about the program’s first-year expenses, the RNC’s message puts politics ahead of the interests of communities, according to American Library Association deputy executive director Lynne Bradley.
“This truly validates that some would make a good public program that’s good for school kids and good for communities into a partisan political battle,” Bradley said. “Here’s a program with positive real world benefits to citizens and local communities, and it seems to be now having the blush of presidential and other partisan politics.”
Locking horns over funding
Not every Republican supported the RNC’s campaign. A contingent of 33 senatorsincluding four GOP memberslobbied the FCC to fully fund the program. In a letter sent May 14 to Kennard, the senatorsled by John Rockefeller, D-W.Va., and Olympia Snowe, R-Maineargued that anything less than $2.25 billion in funding wouldn’t allow the program to reach the neediest schools and libraries.
Criticism of the eRate first surfaced last year when telecommunications carriers (telcos), which currently pay for the eRate through universal service fees collected by the FCC, began passing on the program’s expense to their customers in the form of line-item charges on phone bills. As they stand now, those charges generally run about $1 per line per month.
FCC Chairman Kennard told the National Consumers League May 17 that he planned to fight for full funding for the program, despite the fact that it would mean a $1 billion increase in fees collected from telcos during the next 12-month period. The public wouldn’t have to bear the brunt of this increase, Kennard said, if long distance carriers would only pass along the nearly $500 million in access charge savings they are likely to see this year.
At a May 17 conference sponsored by the American Enterprise Institute, economists Robert Crandall of the Brookings Institution and Leonard Waverman of the London Business School disagreed. They argued that the eRate is based on a valid social goal, but doesn’t make good economic sense because its benefits aren’t related primarily to the telecommunications industry, even though the industry funds it.
But figures submitted to the FCC by the Schools and Libraries Division (SLD) of the Universal Service Administrative Co. show that many large telecommunications carriers, such as Bell South and GTE, have been the biggest beneficiaries to date from the eRate. Based on data covering less than $200 million in spending out of the $1.7 billion committed for the 1998 program year, Bell South has received $14 million, GTE $12 million, U.S. West $10.2 million, SBC $9.6 million, and Bell Atlantic $5.3 million so far.
Still, in response to industry complaints, a movement is underway in Congress to change the way the eRate would be funded. The RNC’s message goes on to support legislation introduced by Rep. Billy Tauzin, R-La., chairman of the House Telecommunications Subcommittee, that would reduce an existing 3 percent telephone excise tax by one-third and use the remaning one percent to fund the eRate.
Tauzin’s bill, which would generate an estimated $1.9 billion per year in eRate funding, also would transfer control of the fund from the FCC to the Commerce Department’s National Telecommunications and Information Administration, which would distribute the money to the states in the form of block grants for them to administer.
A companion measure to Tauzin’s bill has been introduced in the Senate by Conrad Burns, R-Mont., chairman of the Senate Communications Subcommittee. But eRate supporters fear both bills would serve to undermine the program’s effectiveness. After five years, funding would be subjected to the annual appropriations process and would be capped at $500 million per year.
In a May 15 editorial, the New York Times argued, “[Burns’ and Tauzin’s] proposal would destabilize a program that works, and, worse, cut assistance even as telecommunications become increasingly important in education.”
A bipartisan poll commissioned by members of the Education and Library Networks Coalition (EdLiNC), meanwhile, suggests that an overwhelming majority of Americans support the eRate. According to the poll of 1,000 households by Lake, Snell, Perry & Associates and the Tarrance Group, 87 percent of respondents said they support continuing discounts to needy schools and libraries, while 83 percent believe that internet access in schools and libraries will improve educational opportunities for all Americans.