[Congressional Record Volume 150, Number 135 (Saturday, November 20, 2004)]
[Extensions of Remarks]
[Page E2121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF THE ``UNIVERSAL SERVICE ANTIDEFICIENCY SUSPENSION ACT''

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                      Saturday, November 20, 2004

  Mr. MARKEY. Mr. Speaker, I rise to introduce the ``Universal Service 
Antideficiency Suspension Act,'' legislation that is necessary to 
address an abrupt change in the accounting requirements for the E-rate 
program which has led to a suspension of funds previously committed to 
K-12 schools and libraries around the country.
  Mr. Speaker, a few months ago, the Federal Communications Commission 
(FCC), at the behest of the Bush Administration's Office of Management 
and Budget, decided to require that certain provisions of the 
``Antideficiency Act'' (as contained in various provisions of title 31 
U.S.C.) apply to the E-rate program for K-12 schools and libraries.
  The result of the FCC's decision was that millions of dollars in 
committed funding to schools and libraries around the country was held 
up, and millions more put in jeopardy of not being released in timely 
fashion under the E-rate program. The decision to apply the provisions 
of the Antideficiency Act to the E-rate program also implicates other 
similar universal service programs for low income consumers and rural 
consumers in high cost areas.
  Moreover, the FCC's decision will likely mean an unnecessary increase 
in consumer fees to all residential and business consumers starting 
January 1st to cover the new accounting requirements. This is why this 
bill needs to pass before Congress adjourns for the year.
  The purpose of this legislation is to suspend the requirements of the 
Antideficiency Act for programs within the Universal Service Fund 
(USF), including the E-rate program, from the date of enactment through 
December 31, 2005. This will rectify for a period of time the problems 
caused by the FACC's decision to alter the accounting rules which 
govern such programs. This legislation is similar to legislation 
introduced in the Senate yesterday by Senator Olympia Snowe and Senator 
Jay Rockefeller.
  The E-rate program has helped transform our country's schools and 
libraries. Since it was adopted as part of the Telecommunications Act 
of 1996, it has assisted bringing the future into America's classrooms. 
While in 1996 only a small handful of classrooms and libraries were 
Internet capable, now approximately 95 percent of all public Internet 
access and over 90 percent of all K-12 classrooms have Internet access. 
It has become part of the educational experience for millions of 
schoolkids across the nation.
  That's the reason why I named the program the ``E-rate,'' for 
``education rate''--because I wanted to underscore the central 
educational mission for the program, especially for those poorer 
schools or more remote classrooms which might have been adversely 
affected by a ``digital divide'' in access to the skill set these kids 
would need in a new economy. The E-rate has been indispensable in 
assisting these schools and provides discounts between 20 and 90 
percent to such educational entities depending upon their resources. I 
know from first-hand experience from my own State that this program has 
proven educational importance and value to millions of kids. In the 
last 5 years alone, over $180 million in supportive funding has gone to 
Massachusetts schools and libraries.
  When I was Chairman of the Telecommunications Subcommittee in 1993, 
while that panel was considering proposals to revamp our nation's 
telecommunications laws, I wrote to the CEOs of the top 20 telephone 
and cable companies at that time to request that they provide free 
telecommunications links to our nation's schools. Only 3 reported their 
willingness to do so. As a result, I fought to make sure that our 
telecommunications legislation would include a requirement that such 
telecommunications companies better serve our schools because I felt 
this was vital for our educational system going into the digital era.

  During the Subcommittee mark-up on the bill on the 1st of March, 
2004, I introduced and successfully added the E-rate provision as an 
amendment to the pending telecommunications legislation. That bill, 
H.R. 3636, later passed the House of Representatives in June, 2004, by 
a vote of 423-4. Unfortunately, the Senate failed to pass similar 
legislation in that Congress and my legislative effort to establish the 
E-rate died on the Senate side prior to the 1994 elections. In the next 
Congress, with Republicans taking control of the House and Senate, 
similar efforts to pass a comprehensive Telecommunications Act were 
successful, and the E-rate provision was added to the Senate bill in 
the Senate Commerce Committee by Senator Olympia Snowe (R-ME), in an 
amendment that was also cosponsored by Senators Rockefeller (D-WV), 
Exon (D-NE), Kerrey (D-NE), and several others.
  To administer this E-rate provision, as well as other universal 
service provisions from the Telecommunications Act of 1996, the 
Universal Service Administration Company (USAC) was established. This 
is the entity that received the directive from the FCC to implement new 
accounting rules to govern the E-rate program. USAC had previously 
utilized accounting rules that private sector entities use, but now 
USAC has been compelled to utilize government accounting rules which 
compel it to hold large cash reserves on its books by the end of the 
fiscal year to cover its commitments. Since this accounting decision 
came late in the fiscal year, USAC struggled to comply and was forced 
to freeze the E-rate program. And while USAC and the FCC believe that 
the program can begin again to act upon applications for E-rate 
funding, USAC has notified the Commission that the new accounting rules 
will compel it to raise the USF contribution level. This increase will 
likely be passed along to consumers.
  While the last hours of this session are approaching, I believe that 
this legislation can still pass and must pass now, as a standalone bill 
such as this one I am offering, or as part of another package of 
bills--and I urge my colleagues to join in efforts to correct the 
problem that the Bush Administration's OMB and the FCC have created for 
this invaluable program. This legislation is simply designed to rectify 
this situation until a long-term solution can be achieved.

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