The Telecommunications Act of 1996 generated a storm of controversy. The indecency provisions of the new law hit the courts and grabbed headlines across the nation. Web pages went black to mourn the dark day for free speech. And Americans quickly saw the effect of deregulation in a series of megamedia mergers that led to dramatic new concentrations of media ownership.
But hidden behind the bad news was a glimmer of light: a little-publicized section (SEC. 254) of the act that called for telecommunications carriers to provide discounted services to schools and public libraries. This “universal service” concept was created in the Communications Act of 1934 to ensure access for all Americans to the then-emerging communication technology — the telephone. Since then, the industry has been required to subsidize phone service for poor Americans and for customers in rural areas where the costs of phone service are high. And now the 1996 Telecom Act has broadened the definition of “universal service” to include Internet technologies.
In November 1996, a joint board of the Federal Communications Commission and state public utilities officials unanimously recommended that a whopping $2.25 billion a year in high-tech discounts be made available to elementary schools, secondary schools, and libraries by the start of the 1997-98 school year. Discounts would range from 20 to 90 percent, based on need, and would cover Internet access, internal wiring among classrooms, and telecommunications services, including monthly phone bills.
Three of the FCC’s four commissioners served on the joint board, making the proposal a sure thing when it goes before the full commission later this spring. FCC Chairman Reed Hundt has called it “a major step forward in our quest to bring the benefits of the Information Age to every person in the country.” While half the nation’s K-12 schools are online, only 14 percent of their classrooms currently have Internet access.
Kevin Taglang, a policy analyst for the Benton Foundation, a nonprofit that promotes the public interest in communications policy, calls the discount provision of the Telecom Act “one of the brightest things that’s happened in Washington in a long time.” But he notes that the discounts will go only so far — they will not cover the purchase of personal computers and software or ongoing expenses for systems maintenance and teacher training.
That’s just fine, though, for financially strapped schools that need services far more basic than Internet access. “It’s the big thing now to talk about the wonders of the Internet, but the fact of the matter is we’re in a district where we’re concerned with teaching children to read and write,” says Eugene Stovall, network coordinator for the Oakland Unified School District. He adds that the district’s goal is to have seven computers in each classroom, but that basic phone service is the priority.
For the most part, the telecommunications industry appears to agree with the intent of the schools-and-libraries discount. “In the long run, this is what the country needs,” says Frank Gumper, vice president of federal regulatory planning for NYNEX Corp.
It’s in the details that industry leaders disagree — like the $2.25 billion in discounts they’d have to provide each year. Gumper says $1.5 billion a year is sufficient for wiring, access, and telecom services. Other issues of contention include whether the costs of wiring inside classrooms should be discounted, or if it is outside the FCC’s jurisdiction to regulate internal wiring, as the Pacific Telesis Group argues.
Then there’s the issue of who pays for the discounts. The FCC joint board wants telecommunications carriers to pay into a fund, which would reimburse companies that provide discounts. But the rule requires telecommunications carriers to pay into the fund based on a percentage of their interstate and intrastate revenues, and federal rules affecting revenues regulated by state laws are bound to cause jurisdictional tiffs. In addition, while both telecom carriers and Internet service providers (ISPs) would have to discount their services, and would both get cash back from the fund, ISPs wouldn’t be required to pay into it, Gumper charges, leaving carriers like NYNEX to subsidize ISPs like CompuServ.
(Whether the NYNEXes of America get to pass any of these discounts off as rate hikes on consumers’ phone bills is yet to be determined. But even if it does happen, says Mark Cooper, research director for the Consumer Federation of America, it won’t amount to more than 90 cents on the average residential phone bill. “Do I think it’s good public policy? Absolutely,” he says.)
This checklist of issues doesn’t approach the level of controversy generated by the indecency provisions of the Telecom Act. But some of it is likely to wind up in court after the FCC’s May decision, making it questionable that discounts will be available to schools in the fall. Insiders insist, though, that the telecommunications industry will furnish schools with most of what the FCC asks.
Michelle Richards, a lobbyist for the National School Boards Association, agrees: “I think they’ve sort of seen the writing on the wall.”
Leslie Weiss is Managing Editor of Earth Island Journal.