================================================================= ALAWON Volume 6, Number 37 ISSN 1069-7799 May 16, 1997 American Library Association Washington Office Newsline In this issue: (183 lines) PRELIMINARY ANALYSIS OF FCC DECISION ON DISCOUNTED TELECOMMUNICATIONS RATES FOR LIBRARIES AND SCHOOLS _________________________________________________________________ PRELIMINARY ANALYSIS OF FCC DECISION ON DISCOUNTED TELECOMMUNICATIONS RATES FOR LIBRARIES AND SCHOOLS On May 7, 1997, the Federal Communications Commission voted unanimously on a rule to implement discounted telecommunications services to libraries and schools as part of their decision on universal service. The mandate to provide discounted telecommunications rates for libraries and K-12 schools was part of the Telecommunications Act of 1996 signed into law last year. Below is a preliminary analysis of the FCC's rule on telecommunications discounts for schools and libraries. The numbers in parentheses refer to paragraph numbers in the May 7, 1997 FCC ruling from which this information was derived. The full text of the FCC ruling is available at http://www.fcc.gov/ccb/universal_service/fcc97157/. For additional information visit http://www.ala.org/oitp/univserv.html. 1. When do the discounts start? January 1, 1998 (607) 2. What institutions are eligible? Generally public libraries, public and private elementary and secondary schools, and consortia consisting of these eligible institutions. Specifically, eligible libraries must: 1) meet the definition of libraries in the Library Services and Technology Act (LSTA); 2) be operating as a non-profit organization; and 3) have a budget that is "separate from any institution of learning" such as an elementary school, secondary school, college or university. (558) Eligible schools must be elementary and secondary schools as defined by the Elementary and Secondary Education Act of 1965. Eligible schools must also have endowments of less than $50 million. (554) Consortia consisting of eligible libraries, school, and rural health care providers (which are also eligible for universal service discounts) along with public sector (i.e. governmental customers) may apply for discounts. Discounts may only be allocated to consortia members that are eligible for discounts -- libraries, schools, and rural health care providers. The definition of a library consortia in LSTA was accepted, except for consortia which are an "international cooperative association of library entities" which the FCC excluded from being eligible for discounts. (478, 560-563) Resale of services. Resale of discounted services is prohibited. However, sharing services with other eligible entities is not resale. The rule requires universal service providers to keep records of cost allocation between eligible and ineligible entities in consortia. The rule also requires state commissions to undertake measures to allow eligible and ineligible entities to aggregate their purchases. (566-569) 3. How do we apply for the discounts? Service providers will bill eligible institutions for the discounted amount and receive reimbursement from the universal service fund administrator. (586) In order to receive the discount, eligible institutions must send a discount application to the universal service fund administrator. Applications will be processed on a first-come-first serve basis. No date has yet been set for accepting applications for the discounts beginning January 1, 1998. Forms have yet to be designed and the interim fund administrator has not been set up. However, the rule states that a discount application must include: a) A certification made by an eligible institution's procurement officer as to the level of discount based on economic need. Economic need is measured by the number of students eligible for the national free and reduced school lunch program. Libraries would use the measure of school lunch for the school district in which they reside or the nearest district. Discounts can be calculated on a system-wide or on an individual school or library basis. (522-525) b) A technology plan covering hardware, software, training, internal connection, and maintenance contracts currently available or budgeted for along with a plan for how the technology will be used. Independent approval of the technology plan by state education of library agency, or other yet to be determine reviewer will be required. (572-574) c) A description of the services sought. (575) d) Certification as to the eligibility of the institution or consortia, that discounted services will not be resold and used only for educational purposes; and that the applicant has and will continue to comply with all applicable state and local procurement processes. (577) 4. Where will we send the discount application? The National Exchange Carrier Association (NECA) has been named the interim fund administrator, and an additional FCC rule is expected in late May to enable NECA to actually begin its work. A federal advisory committee will be convened to choose a permanent fund administrator. (861, 863, 867) Applications will need to be submitted each year to the fund administrator to receive discounts, even if discounts were granted in a prior year. (537) No date has yet been set for accepting applications for the discounts beginning January 1, 1998. Forms have yet to be designed and the interim fund administrator has not been set up. 5. What services are eligible for discount? Any commercially available telecommunications service is eligible for discount. In addition, Internet access and internal connections are also eligible. (431, 444-448, 450-463) The federal universal service fund can also be used for discounts on intrastate services, conditional upon state adoption of discount levels at least equal to the interstate discounts. (550) Any telecommunications carrier or non-telecommunications carrier providing eligible services it eligible for support from the universal service fund. (449, 599) 6. What kind of discounts will a library or school receive? Discounts range from 20% to 90% depending on the level of economic need as measured by the percentage of students eligible for the national school lunch program. Discounts are slightly higher for institutions in rural areas. Discounts can be calculated per school or library, or averaged for the entire school district or library system. (492, 523, 524) Discounts are taken off of a prediscount price known as the lowest corresponding price. The lowest corresponding price is the lowest price provided under tariff or contract for similar services in the providers' geographic service area and acts as a ceiling on the prediscount price. (485-488) Carriers must self-certify their lowest corresponding price and appeal on the lowest corresponding price can be made to the FCC for interstate rates; state commissions for intrastate rates. (490) Discounts can apply to existing contracts for eligible services but will not apply to voluntary extensions of the contracts. (545) 7. How much money is available for the discounts? For the period from January 1, 1998 thru June 30, 1998, not more than $1 billion will be available for these discounts. The program is designed so that approximately $2.25 billion will be available annually with a rollover to the next year of up to half of any unused portion of the authorized amounts. The fund administrator will make quarterly reports on the funds expenditures and needs for the next quarters. (529, 532) _________________________________________________________________ ALAWON is a free, irregular publication of the American Library Association Washington Office. To subscribe, send the message: subscribe ala-wo [your_firstname] [your_lastname] to listproc @ala.org. ALAWON archives at http://www.ala.org/washoff/alawon. Visit our Web site at http://www.alawash.org. ALA Washington Office 202.628.8410 (V) 1301 Pennsylvania Ave., NW, #403 202.628.8419 (F) Washington, DC 20004-1701 800.941.8478 (V) Lynne E. Bradley, Editor Deirdre Herman, Managing Editor Contributors: Andrew Magpantay All materials subject to copyright by the American Library Association may be reprinted or redistributed for noncommercial purposes with appropriate credits. =================================================================