[Congressional Record Volume 151, Number 8 (Tuesday, February 1, 2005)]
[Senate]
[Page S749]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Rockefeller, Mr. Stevens, and Mr. 
        Inouye):
  S. 241. A bill to amend section 254 of the Communications Act of 1934 
to provide that funds received as universal service contributions and 
the universal service support programs established pursuant to that 
section are not subject to certain provisions of title 31, United 
States Code, commonly known as the Antideficiency Act; to the Committee 
on Commerce, Science, and Transportation.
  Ms. SNOWE. Mr. President, I rise today along with Senator Rockefeller 
and the distinguished Chairman and Ranking Member of the Committee on 
Commerce, Science, and Transportation, Senators Stevens and Inouye, to 
introduce legislation to safeguard the Universal Service Fund, or 
``USF,'' the institution that allows rural and low-income Americans to 
obtain affordable telephone service, allows America's schools and 
libraries to provide Internet access to all segments of society through 
the E-Rate program, and permits rural health care providers to obtain 
telecommunications and Internet services at reduced rates. The concept 
of Universal Service has been with us nearly as long as the telephone 
itself, and this bill today marks one key step in ensuring that this 
vital policy remains intact in the 21st Century.
  The legislation introduced today pertains specifically to the 
Universal Service Administration Company, or ``USAC,'' the private, 
nonprofit corporation that Congress created to administer the USF. This 
bill is very similar to S. 2994, a Universal Service bill that I 
introduced during the last session of Congress and that was passed 
right before adjournment as part of a larger telecommunications 
package, H.R. 5419. That bill temporarily exempted USAC from complying 
with new, arbitrarily-imposed accounting rules that had severely 
disrupted the E-Rate program and threatened to cause huge spikes in 
consumers' telephone bills. Many will recall that hundreds of millions 
of dollars in E-Rate funding for schools and libraries stayed unissued 
for months because of the accounting rule change, and immediate action 
was necessary to resolve the problem.
  According to USAC's Federal regulators, these new accounting rules 
needed to be imposed to ensure that the USF was compliant with the 
federal Anti-Deficiency Act, a law which prevents government agencies 
from incurring financial obligations beyond the amount that has been 
appropriated to them by Congress. However, USAC, in administering the 
USF, does not receive any appropriated funds from Congress. Rather, the 
USF is funded by a regular disbursement, on a more-or-less monthly 
basis, of monies derived from a surcharge placed on the revenue 
generated from interstate telephone calls. The existence of this 
predictable revenue stream negates any of the risks and concerns that 
the Anti-Deficiency Act was designed to prevent.
  After government accounting rules were imposed on USAC last summer, 
the entire E-Rate program was frozen. On the eve of the start of the 
school year, this program--which has enabled 93 percent of schools and 
libraries in the country to hook up to the Internet--was unable to 
review and act upon the funding recommendations of thousands of 
applicants. Many recipients of E-Rate funding actually shut off their 
Internet connections because they had no money available to maintain 
service. In order to alleviate this problem, Congress decided last fall 
to exempt the USF from the Anti-Deficiency Act for one year until a 
permanent solution to this problem was found. Senator Rockefeller and I 
decided to pursue a one-year exemption in order to ensure speedy 
passage of the legislation before adjournment, so that schools and 
libraries could receive their funding again. Today's legislation 
provides that permanent solution: a permanent exemption from the Anti-
Deficiency Act.
  Clear precedent exists for such an exemption. Numerous other federal 
programs already are exempt from complying with the Anti-Deficiency 
Act, including the National Park Service and the Conservation Trust. 
Moreover, an exemption is the rational solution to ensure that this 
problem does not continue to recur. As I previously mentioned, an 
exemption is particularly appropriate in this instance because the USF 
has a funding mechanism different from most federal programs. The USF 
functioned very well for many years utilizing the Generally Accepted 
Accounting Principles used by the entire American business world. 
Trying to engraft special government rules onto USF is akin to forcing 
a square peg into a round hole. And the result would be another 
stoppage in E-Rate--and likely the USF Rural High Cost Fund as well--
and also a spike in the USF surcharge on consumers' telephone bills.
  Finally, I want to ensure my colleagues that a permanent exemption 
from the Anti-Deficiency Act poses no risk of increased fraud or abuse 
in the E-Rate Program or in Universal Service as a whole. Some well-
publicized abuses of E-Rate did in fact occur, and I will fully support 
efforts to stamp out such government waste. But the Federal 
Communications Commission has repeatedly stated that there is 
absolutely no connection between the Anti-Deficiency Act land the 
ability of the Inspector General to effectively monitor the program to 
stamp out waste, fraud, and abuse. As such, government waste cannot be 
used as a valid reason for opposing this bill.
  Last fall we undertook a bipartisan effort among Members on the 
committees of jurisdiction in both Houses of Congress to enact a 
temporary exemption for the USF from unnecessary, burdensome 
regulations. In undertaking that effort we worked closely with the 
Federal Communications Commission, and enjoyed widespread support among 
the telecom industry, educators, and State and local governments. I am 
grateful of the continuing bipartisan support of the Chairman and 
Ranking Member, as well as of Senator Rockefeller, and it is my hope 
that we can proceed in similar fashion to make this exemption 
permanent.
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