================================================================= ALAWON Volume 5, Number 16 ISSN 1069-7799 April 4, 1996 American Library Association Washington Office Newsline In this issue: (412 lines) ALA PREPARES FILING FOR FCC NOTICE OF PROPOSED RULEMAKING ON UNIVERSAL SERVICE OUTLINE OF ALA RESPONSE TO FCC NPRM ON UNIVERSAL SERVICE _________________________________________________________________ ALA PREPARES FILING FOR FCC NOTICE OF PROPOSED RULEMAKING ON UNIVERSAL SERVICE ALA is preparing to file comments with the Federal Communications Commission (FCC) on April 10 as part of the FCC's universal service proceedings (Docket 96-45). The original deadline for filing formal comments with the FCC was April 8. ALA has learned that the FCC has granted a short extension through April 12 for most groups filing comments. ALA and others participating in a series of panels before the FCC and the Joint Board on April 12, are required to file comments with the FCC by April 10. ALA President Betty Turock has accepted an invitation to participate in a library-education panel before the FCC and the Joint Board at their meeting in Washington, D.C. on April 12. ALA is particularly addressing the issues of universal service that affect library and education access through discounted telecommunications rates. Below is an outline of the comments ALA has composed. As previously requested in ALAWON, interested librarians and library supporters are encouraged to send comments and examples of leading edge library usage to REPLIES@ALAWASH.ORG or to the Washington Office by fax. For background information on this issue and request for input, please see ALAWON, Vol. 5, No.14, March 22, 1996. OUTLINE OF ALA RESPONSE TO FCC NPRM ON UNIVERSAL SERVICE ALA JOINT COMMENTS. ALA will make comments to the FCC in two ways in CC Docket 96-45, Federal-State Joint Board on Universal Service. ALA is participating in a joint filing with several educational organizations, including the National School Boards Association, the National Education Association, the National Association of Independent Schools, the Council of Chief State School Officers, the Consortium for School Networking, and others. This filing, prepared with the assistance of the law firm of Miller, Canfield, Paddock, and Stone, recommends discounts for libraries and schools under three universal service mechanisms: discounts for core and special universal services; further discounts through rate averaging for core and special universal services in rural, insular, and high cost areas; and the equivalent of a lifeline subsidy for institutions in especially needy areas. This filing emphasizes the needs of K-12 education and includes many examples of technology uses and needs in schools. ALA SEPARATE COMMENTS. ALA will also file comments separately. Its separate comments will emphasize the library situation, library examples, and library needs. Further, ALA will elaborate on a concept it developed with the help of legal, technical, and economic expertise. This is the concept of recommending that any telecommunications service offered commercially in the geographic area served by a library/school or library/educational consortium or network be made available at the lower of the lowest rate currently offered by a carrier to any customer, or a discounted or wholesale rate known as the Total Service Long Run Incremental Cost. Libraries/schools in rural, insular, and high cost areas would receive further discounts through the universal service mechanisms. THANKS FOR INPUT. This double strategy ensures that the FCC receives the fullest possible information about libraries and ALA's recommendations. This outline does not include the examples and appendices we intend to include based on the information provided by many in the library community in response to our call for input. We thank you. Both sets of comments will be made available when complete. ENDORSEMENTS WELCOME. Organizations that wish to be listed as endorsing the separate ALA filing are encouraged to contact Andrew Magpantay at ALA's Office for Information Technology Policy -- oitp@alawash.org, or 202-628-8421; fax 202-628-8424. UNDERLYING ASSUMPTIONS. In commenting on this broad and complex 70-page Notice of Proposed Rulemaking, ALA will focus on areas in which: Librarians have a direct and immediate interest in decisions (where libraries are explicitly mentioned in the Telecommunications Act of 1996, for example); and Librarians have expertise and responsibility, such as for providing the widest possible public access to information. Sec. I. Introduction (executive summary of recommendations will be added) Sec. II. Goals & Principles of Universal Service Support Mechanism In comments on the universal service principles in statute: Libraries should be viewed, not as recipients of universal service benefits, but as institutional providers of public access and hence as instruments of universal service policy. Sec. III. Support for Rural, Insular, and High Cost Areas and Low-Income Consumers "Core" universal services will be the foundation on which "special services" for libraries and schools will be built. Many libraries will be offering information services to their patrons over the telecommunications system. Libraries have a responsibility to provide public access to information; librarians have expertise about serving the information needs of their communities. The core definition should be established, among other considerations, by the level of service technology required for entry level access to the Internet. The scope of support for core universal service should extend beyond residential and single line businesses to libraries and schools in rural, insular, and high cost areas. Libraries/schools should receive core universal services at discounted rates; libraries/schools in rural, insular, and high cost areas should have access to core universal services at further discounts through the universal service fund mechanisms. The FCC should reconsider the core universal service definition every five years. Sec. IV. Schools, Libraries, and Health Care Providers Library Mission and Roles; Functionalities Needed Libraries need access to communications services that support their primary mission. That mission, in the world of electronic information, is to provide their patrons with access to the full panoply of electronic information resources available either commercially, or in the public domain. They serve this mission both by providing access to global electronic resources, and by creating and offering their own public electronic information services. In the current environment, then, libraries provide terminals through which patrons can access the Internet and such applications as the World Wide Web, and they operate their own web pages. (Examples will be given.) Thus, libraries require communications services that allow them to provide access to most commercially or publicly available information resources available at the time over public communication lines. Since many of the most interesting and useful of these services are offered at the technological leading edge, this implies that "special services" for libraries be interpreted as broadly as possible to include any communications services commercially available within the regions they serve. This interpretation allows libraries to serve multiple roles: -- providing leading edge access to new services that may not yet be broadly available or affordable; -- providing access to resources that, while available to the residence, are either expensive or infrequently used; and -- providing basic access for those patrons who, for may possible reasons, do not otherwise have access. CORE Libraries/schools should receive core universal services at discounted rates; libraries/schools in rural, insular, and high cost areas should have access to core universal services at further discounts through the universal service fund mechanisms. SPECIAL - DEFINITION Special universal services for libraries should be defined to include any telecommunications service offered in the geographic area served by an eligible library or library consortium or network (1) under tariff or (2) by contract arrangement. Such services would meet the definition of telecommunications services and network capacity, but need not be limited to regulated services. This definition of special services would be self- advancing as technology advanced, since it would constantly evolve to include new services offered commercially. No rulemaking would be required to advance the definition. However, a periodic review of the impact of the Commission's Section 254 rules on libraries and schools is recommended to determine whether other adjustments are needed. SPECIAL - DISCOUNT METHODOLOGY TSLRIC. Special universal services for libraries should be offered to libraries at the lower of the lowest rate currently offered by a carrier to any customer, or the Total Service Long Run Incremental Cost (TSLRIC). TSLRIC is a forward looking incremental cost concept used in the telecommunications and other industries; it covers the cost impact of a service on the company offering it, plus a modest profit component. In short, it is a wholesale rate. TSLRIC is a formula for cost allocation that is well established and accepted by economists and regulators. It is being used in some state regulatory processes. The impact, if any, on the universal service fund would be minimal, and might only include the small percentage of service volume needing to be offered below the TSLRIC rate or through alternate technologies in order to effectively provide special services to libraries in rural, insular, and high cost areas. The offering of special services to libraries at the TSLRIC rate would have a minimal impact on the universal service fund, and would not require that companies provide offsets to their universal service contributions because the rate covers costs and such discounted access for libraries and schools will generate tangible and significant economic benefits to the telecommunications providers and to the broader information industry in the forms both of avoided costs and increased demand. These economic benefits will be, in general, non- appropriable. That is, they would accrue not only to a particular firm making the investment, but to the industry (and the economy) as a whole. This is another powerful argument for taking an expansive approach to defining special discounted services for libraries. Particular benefits include: -- Libraries will directly increase the market demand for specialized information services by concentrating sub-threshold individual demands in the community; -- Libraries will provide public exposure for new services; -- Libraries will provide user testbeds for new services; and -- Libraries will improve user literacy. This interpretation of special services offers simplicity, imposes minimal bureaucratic requirements, adds minimally if at all to universal service fund needs, and self-advances as technology evolves. TERMS AND CONDITIONS. CARRIERS. The publicly available information required to enable this discount mechanism to work effectively includes: -- information about tariffed services; -- information about services offered under contract; and -- information about the TSLRIC rate for a needed service. Some of this information is not now required to be made public. This requirement could be developed to avoid disclosure of the most proprietary information through publication of only aggregated data. Companies could be required to certify that the quoted rate is the TSLRIC rate and that no customer is being offered the service at a lower rate. EDUCATIONAL PURPOSES. Public libraries, libraries in educational institutions, and libraries meeting conditions required for participation in not-for-profit interlibrary cooperative arrangements receiving public funding serve an educational function and use telecommunications services for educational purposes, as required by the Act. Examples are provided as well as documentation regarding libraries' educational roles, their roles in promoting literacy (including technological literacy) and the high value the public places on libraries' educational roles. Therefore, libraries meeting the Act's eligibility requirements should be considered to be using discounted telecommunications services and network capacity for educational purposes. Eligible libraries and library entities should be able to certify to this effect with the understanding that the same telecommunications services and network capacity that is used to support public and student services is also being used for library and school administrative and system support purposes, teacher and librarian professional and technical support and development, etc. RESELLING, ETC. The Act's requirement that discounted telecommunications services and network capacity may not be "sold, resold, or otherwise transferred by such user in consideration for money or any other thing of value" should be interpreted with care by the FCC. As the NPRM notes, the requirement should not discourages libraries/schools from sharing a network with parties not eligible to receive support nor discourage partnerships between libraries/schools and their communities. Certain approaches are recommended. Restrictions on resale of telecommunications services or network capacity should not be interpreted to preclude computer lab fees for students, or user fees for special applications, resources, or services. Transferring services/capacity for money or other value among eligible entities should not be forbidden, so that state and regional consortia and cooperatives of libraries and schools are not precluded from customary collaborative activity. Multitype library and educational arrangements using public funding to enable the sharing of library resources and educational information from, as an example, higher education institutions to schools and public libraries should be able to require membership financial or other support for telecommunications services without triggering ineligibility of the cooperative arrangement for the discount. An educational or library-resource sharing network eligible for the discount should not become ineligible simply through sharing a network with governmental entities, community social service agencies or other nonprofit entities. BONA FIDE REQUEST. The FCC suggestion that any person qualified under State or local law to order telecommunications services for school or libraries be deemed capable of making a "bona fide request" for discounted services seems simple and reasonable. However, the FCC should recognize that this may include persons not directly connected with schools or libraries, such as the state government procurement office or telecommunications department. Similarly, the suggested certifications requirements should be all that is needed to ensure compliance with terms and conditions imposed on libraries/schools such as "for educational purposes" and not "sold, resold," etc. A certification requirement is also sufficient to ensure compliance with library eligibility conditions-- that a library not operate as a for-profit business; and that it is eligible for participation in state- based applications for library services and technology funds under Title III of the Library Services and Construction Act. HARMONIZATION. This discount methodology could be adapted for intrastate as well as interstate services, thus achieving the harmonization sought by the FCC in its NPRM. Sec. V. Enhancing Access to Advanced Services for Schools, Libraries, and Health Care Providers Based on the law's use of such phrases as "information services" and legislative history discussing the ability for libraries to obtain specific kinds of materials such as government information, "advanced" services for libraries should include a broader group of services than "core" and "special" services for libraries. The same definition of libraries should apply. ALA will comment further on this section in its reply comments in future phases of this regulatory proceeding. _________________________________________________________________ An irregular publication of the American Library Association Washington Office, 1301 Pennsylvania Ave., NW, #403, Washington, DC 20004-1701, ; 202-628-8410 (V); 202-628- 8419 (F). Contributors: Carol H. Henderson, J. Andrew Magpantay, & Rick W. Weingarten; Editor: Lynne E. Bradley . ALAWON is available free of charge, only in electronic form. 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