[Congressional Record Volume 144, Number 75 (Thursday, June 11, 1998)]
[Senate]
[Pages S6257-S6258]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                                 E-RATE

 Ms. MOSELEY-BRAUN. Mr. President, two years ago the Congress 
joined together in a bipartisan manner to help schools and libraries 
across the nation give students and children access to modern 
technology. The Telecommunications Reform Act of 1996 created a new 
partnership between the federal government, state governments, school 
systems, and the private sector to help bring all our classrooms into 
the 21st century. The bill expanded the universal service program--
which has historically given people living in rural areas the chance to 
purchase affordable phone service--and created a new ``e-rate'' for 
schools and libraries. Creating that partnership was the most important 
act the 104th Congress took for elementary and secondary schools, and 
we have yet to match that achievement in this Congress. It was one of 
the most important steps we have taken toward ensuring that all our 
children will have the opportunity to learn the kinds of skills they 
will need to compete in the 21st century economy.
  Our children need that kind of bipartisan support. When I was growing 
up, it was possible to graduate from high school and get a job as a 
police officer, a firefighter, or a clerk, and earn enough to raise and 
support a family. Mechanics used to train for their work on the job. 
The nursing profession used to consist of women who apprenticed in 
hospitals.
  Times have changed. Now, if you want to be an airline mechanic, you 
need four years of college. Nursing is a degree program, and there are 
sub-specialties of nurses who are highly and scientifically educated. 
An ad for a ``maintenance technician'' states the job requires an 
understanding of ``basic principles of electricity, mechanical systems, 
and fluid power.''

[[Page S6258]]

  Many of our schools, however, are not giving our children the kind of 
education they will need to compete in this kind of economy. An 
estimated 60 percent of all new jobs created in the year 2000 will 
require skills held by only 22 percent of new workers. According to the 
Wall Street Journal, ``Thousands of people are being turned down for 
factory work by companies that are actively recruiting,'' because they 
lack the requisite math, communications, and computer skills.
  Given these facts, one would think that on the eve of the 
implementation of the e-rate we created two years ago, policy makers 
would be rallying around the new discounts for schools and libraries 
and celebrating the program's inauguration. Instead, duplicity and 
political opportunism have combined to cast doubt on the future of the 
e-rate.
  The duplicity began when certain telephone companies decided to add a 
new line item to customers' phone bills--a ``national access charge,'' 
or a ``universal connectivity fee.'' When customers call their phone 
companies asking about this new charge, it is my understanding they are 
often told it was the FCC who mandated that this new charge appear on 
their phone bills, or that it was the Congress who levied this new tax 
on them.
  Mr. President, that is disingenuous at best. The FCC did order long 
distance phone companies to pay into the universal service fund, in 
part to pay for the new discounts for schools and libraries. The FCC 
also, however, ordered a reduction in the access charges long distance 
companies must pay for using local phone networks--fees that can 
account for 40 or 50 percent of the cost of every long distance call. 
The reductions in access charges were greater than the new universal 
service charges. One would think, therefore, that long distance bills 
would drop as a result. Have they? Have the phone companies passed the 
savings from the access charge reductions on to their customers?
  No. The companies have not passed on all the savings from the access 
charge reductions, and have instead raised customers' bills in order to 
generate revenue for the universal service fund. They then blame the 
FCC or Congress, and customers are understandably confused, concerned, 
and upset.
  The chorus of customer complaints now appears to be rattling the 
bipartisan coalition that came together two years ago to create the e-
rate. Republican leaders have derided the new charge on phone bills as 
an ``illegal FCC tax,'' or a ``Gore tax,'' trying to pin the phone bill 
increases on the Vice President.
  I am disappointed. We have gone from partnership to partisanship. We 
have gone from cooperation to confrontation. We have gone from thinking 
about our children and our future to trying to score political points.
  We can do better than that. Thirty thousand applications have poured 
in to the FCC this year from schools and libraries seeking to tap into 
the new e-rate. Those applications represent millions of American 
children counting on our help to gain the skills they need to remain 
competitive in the next century. What are we going to tell them if the 
e-rate crumbles under the weight of partisan politics? How are we going 
to explain to them why they do not know how to use a computer?
  I hope we will not have to do that. I hope we can all come together, 
with the same bipartisanship and cooperation we shared two years ago, 
to fix this program, resolve legitimate concerns, and ensure that the 
e-rate becomes available to schools and libraries across the country.
  Members of both parties have criticized the FCC for the way it has 
implemented the program, and I do not doubt that mistakes have been 
made. I only hope we can put aside the partisan sniping and figure out 
a constructive solution to the problem we face. We ought to be proud of 
what we accomplished two years ago when we created the e-rate. Let us 
not now trade that accomplishment for short-term political gain.
  Mr. President, I ask that an editorial from yesterday's Washington 
Post on this subject be printed in the record.
  The editorial follows:

                 [Washington Post, Wed., June 10, 1998]

                        Should We Wire Schools?

       Sometime this week the Federal Communications Commission 
     will vote on whether to suspend a small program, passed as 
     part of the 1996 Telecommunications Act, that collects money 
     from long-distance phone companies and uses it to offer 
     discounts on the cost of hooking up schools and libraries to 
     the Internet. The program, known as the ``e-rate,'' has been 
     contentious from the start, but lately, as it prepares to 
     begin actually considering applications for the $650 million 
     collected so far, it has become the focus of intense 
     pressure.
       Four senators with a say over the FCC's own budget sent a 
     letter demanding that it refund the program entirely. Some 
     have hinted that the commission risks having its own budget 
     zeroed out unless it kills the schools and libraries program. 
     Others threaten investigation of what they call a ``stealth 
     tax'' imposed with questionable legality by an unelected 
     agency or, alternatively, a ``Gore tax'' designed to advance 
     the vice president's presidential prospects.
       Why the sudden fuss over a $2 billion program that passed 
     all the usual legislative hurdles in orthodox fashion two 
     years ago? The flurry began when several long-distance 
     telephone providers said they would begin adding a 
     ``universal connectivity fee'' to individual monthly 
     telephone bills to cover the schools and libraries program 
     and other subsidies, such as the generations-old (and widely 
     supported) subsidy for keeping phone service affordable in 
     hard-to-serve rural areas. The appearance of what looks like 
     a new tax on phone bills--even if it only spells out 
     subsidies previously included in the overall bill--unnerves 
     many legislators who support the subsidies in theory. Not 
     everyone realizes that the schools and libraries fund 
     constitutes only a third of the new fee. (The FCC and the 
     companies are still sparring over whether the extra charges 
     were even justified; the commission says the fees were 
     specifically calibrated to balance year-by-year savings to 
     the companies from another aspect of the 1996 bill, a drop in 
     the access fees long-distance carriers must pay to local 
     ones.)
       Much of the debate over the complex telecommunications bill 
     concerned the balance to be struck between deregulating the 
     communications industry--thus opening up the chance for phone 
     companies to make lots more money--and imposing some 
     obligations on them in return. One such obligation was to 
     safeguard equal access, including to new technologies. After 
     endless maneuvering and a veto threat by President Clinton if 
     the bill emerged without them, provisions mandating ``access 
     to advanced telecommunications services for schools, health 
     care and libraries,'' explicitly including ``classrooms,'' 
     were made part of the subsidies for ``universal service.'' 
     Telephone companies understandably balk at any creeping 
     enlargement of the universal service concept, which requires 
     them to offer phone service at average rates even in high-
     cost, hard-to-wire rural areas--and, inevitably to absorb the 
     cost by charging slightly higher phone rates across the 
     board.
       One thrust of deregulation was to make those subsidies more 
     explicit--an advantage for companies, which could compete 
     more openly on basic rates, and also for consumers, who could 
     see where their money was going. But spelling out a long-
     hidden subsidy also exposes it to political debate. Such 
     debate need not doom the e-rate, which pulls considerable 
     support in opinion polls, any more than it is likely to doom 
     the popular rural subsidies. Nor should it. Squelching it 
     would be the real ``stealth'' move.

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