[Congressional Record Volume 144, Number 108 (Tuesday, August 4, 1998)]
[House]
[Pages H7001-H7002]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             LOSING PERSPECTIVE ON TELECOMMUNICATION ISSUES

  Mr. BLUMENAUER. Mr. Speaker, at times I fear we are losing our 
perspective on the telecommunication issues. Yet again this week, we 
see that the e-rate is in the cross hairs.
  I want to be very clear that I am a strong supporter of the e-rate. I 
believe that this Congress made a commitment to assist schools and 
libraries across the country in their efforts to provide America's 
school children with access to the Information Highway. Thousands have 
taken us at our word and we must honor that commitment, a commitment 
that is grounded in the Telecommunications Act of 1996, where we 
extended a part of the universal service program, in place 
administratively for the past 60 years, that provides telephone 
services to high-cost rural areas to extend that service to be clear 
that the e-rate is a part of that fundamental responsibility.
  In 1997, the FCC issued its first notice of proposed rulemaking to 
make this expenditure a reality, capping at 2-and-a-quarter billion 
dollars per year, resources for eligible schools and libraries who 
would receive discounts ranging from 20 to 90 percent, depending on 
whether that school or library is disadvantaged or located in a high-
cost area. Unfortunately, due to a variety of controversies, we found 
that this program has been dramatically reduced, and yet there are some 
who feel that it should be eliminated altogether.
  What were the controversies that initiated this problem? Well, it was 
first and foremost I think brought about by those pesky surcharges that 
appeared on items of the bills. Those surcharges appeared to be for the 
e-rate only, but in fact, those were phone charges that would be 
responsible for the entire range of universal service activities.
  For example, only 19 cents of AT&T's 93 cent surcharge would go to 
schools and libraries. But it did, in fact, stir up 2 fundamental 
issues, one dealing with the administrative problems associated with 
the program; and the second, the question about whether or not this was 
somehow a new tax to provide Internet services.
  Mr. Speaker, it is true that there have been administrative problems 
associated with the e-rate, and, in fact, I agree with the critics who 
have called it into question. But the fact is that the FCC has taken 
steps to put in place the recommendations that have been required at 
the same time that they have cut the program down to $1.9 billion.
  The second issue here is whether or not the e-rate is a tax. I think 
it is important for us to look back in history. The United States 
Appeals Court has already examined the administratively established 
universal service program and have concluded that it did not represent 
a tax, it was not an inappropriate delegation of the power to tax. The 
court found that instead, it was ensuring affordable rates for 
specified services, not designated primarily as a means of raising 
revenue.
  The addition of a support mechanism for schools and libraries does 
not change that fundamental nature of the universal service, and I 
think it is, indeed, a great stretch of the imagination to suggest that 
this is attached.
  At times I fear we are losing our perspective on the 
telecommunication industry. At a time when long-distance bills are now 
at their lowest point in history, when AT&T and MCI, GTE and Bell 
Atlantic have agreed to or are looking at mergers that total $100 
billion, at a time when the industry has saved billions of dollars as a 
result of the telecommunication reform, controversy has erupted over 
this little, tiny element which would represent less than 1 cent per 
day, per customer to provide Internet access for America's schools and 
libraries.
  Mr. Speaker, I hope that we do not abandon our commitment that 
Congress has made and that we support the

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e-rate in the course of this week's deliberations.

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