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758 words
June 19, 1998
Ensuring affordable phone service for all is a bedrock value that helped grow our young nation from it’s agrarian and manufacturing roots into an information-age powerhouse. When the 1996 Telecommunications Act created the "schools and libraries" initiative, this 20th century concept of universal service leapt into the 21st century. Combining the new law’s vision of ensuring our nation’s schools and libraries access to the Internet with our long-standing allegiance to preserving affordable phone service has provoked a very predictable political brawl.
The fact that long distance companies will soon bill consumers for a so-called "universal service" charge, collecting more than $1 billion a year, illustrates how high the stakes are for consumers. At the core of this struggle is the final shape and size of the "schools and libraries" initiative. Without strong leadership, this fight could get out of hand and place not only the schools and libraries initiative at risk, but also jeopardize the ideals of universal service itself.
The schools and libraries initiative must be salvaged because it helps ensure an educated citizenry that will be both an efficient work force and a literate electorate. The rescue operation begins with understanding what the Federal Communications Commission (FCC) did wrong, so we can learn how to fix it.
First, the program was much too large. The FCC got off on the wrong foot by refusing to target assistance to needy schools and insisting that all schools, no matter how well endowed, get a discount. This flaw, coupled with a failure to discipline demand for services, was a built-in time bomb.
This time-bomb started ticking when the agency failed to deliver on its promise to fund the program without raising consumer’s bills, missing an opportunity to pay for the whole initiative by cutting $8 billion of fat out of long distance access charges. Furthermore, when the FCC took narrow aim at the interstate long distance portion of consumers’ telephone bills to fund the entire program, it left the bulk of calling -- local and in-state long distance -- untapped.
The FCC botched the startup of this initiative so badly even some of its staunchest supporters have been forced to blush. Unfortunately, a genuinely noble idea has been reduced to a political football. This initiative always had enemies and they are now relishing their moment, making political hay with battle cries about a "Gore Tax". Efforts to kill the program are dead wrong, but saving it requires strong leadership.
It is time to right-size the program and refocus its energy on the worthy goal of ensuring that children and adults who do not already have access to the information superhighway get it. Local high schools with dozens of computers hooked up to the Internet should not get subsidies as long as there are schools without any computers hooked up. Neighborhoods where Internet connections proliferate should not jump in line ahead of, much less beside, less "wired" communities.
Leadership requires making choices and setting priorities. The promise of an advanced telecommunications network that will be the next century’s highway of commerce and ideas stands before us. Recent decisions by the Clinton/Gore Administration to reinvent the program on a smaller, more targeted scale is a welcome development that shows common sense. However, much more must be done to preserve universal service.
As policy makers walk the tricky path ahead, consumers want this visionary program to be funded without putting line items on their bills that cause overall rate increases. Telecommunications service providers are benefiting handsomely from deregulation of the industry, and the law clearly requires those reaping these benefits to reduce prices equal to or greater than the contributions they make to preserve universal service for all Americans.
To preserve and expand universal service, the FCC must squeeze the fat out of long distance access pricing. If the Commission adopts this bold and direct approach to fixing pricing problems, universal service costs would be more than offset by a reduction in long distance access charges.
A billion dollar program, funded from by local and long distance service providers, offset by large long distance access price reductions would have moved quietly into existence and done a great deal of good. If the current furor over the program gets us to that outcome, it is well worth the effort. If it kills the idea of schools and libraries Internet hookups or undermines support for other universal service programs like those targeted at low income households and high cost rural areas, it will be a major setback for universal service in the information age.
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Dr. Mark Cooper is Research Director of the Consumer Federation of America. Gene Kimmelman is Co-Director of the Washington Office of Consumers Union, publisher of Consumer Reports magazine.
