================================================================= ALAWON Volume 6, Number 121 ISSN 1069-7799 December 31, 1997 American Library Association Washington Office Newsline In this issue: (119 lines) UNIVERSAL SERVICE UPDATE: FCC'S FOURTH ORDER ON RECONSIDERATION RELEASED _________________________________________________________________ UNIVERSAL SERVICE UPDATE: FCC'S FOURTH ORDER ON RECONSIDERATION RELEASED On the eve of the New Year and the January 1, 1998 effective date of the universal servicec library and school discount program, here's a recap of what's been happening. Most recently, the Federal Communications Commission issued on December 30 an order providing a number of clarifications and mid-course corrections on issues raised by petitioners and commenters on the Commission's previous orders on universal service issues. The FCC's Fourth Order on Reconsideration (FCC 97-420) pages will be the subject of one or more upcoming ALAWON issues. This new order of some 190 pages covers certain implementation details; it does not change the schedule or start-up date of the program. Meanwhile, 60,000 application forms for telecommunications services have been mailed to public libraries, K-12 school districts and private schools. The forms were sent beginning December 11 by the Schools and Libraries Corporation, the nonprofit organization established by the Federal Communications Commission to administer the discount program. The FCC on December 16 voted to restructure the contribution schedule of the universal service fund for libraries and schools. After a period of controversy stemming from some major long distance companies' announced intention to put a line item on customers bills for universal service, the new FCC order reduces what companies will need to contribute during the first six month period from $1 billion to $625 million. The change affects collections from telecommunications companies but not disbursements to libraries and schools. The annual ceiling will remain at $2.25 billion. Funds will be collected from service providers on an as-needed basis. Companies providing service to libraries and schools at discounts of from 20-90 percent will be reimbursed from the fund for the amount of the discount (For more information, see the December 17 ALAWON, v. 6, n. 115). In addition, some major long-distance companies indicated they would not put a line item on residential long distance bills for the first six months, but would do so on business bills. According to press reports, both AT&T and MCI intend to include a line item charge on business customers' bills for interstate service. AT&T has indicated that they will assess a 4.9% charge starting in February 1998. MCI has indicated that they will assess a 4.4% charge, beginning in January 1998. The FCC's May order on universal service states that the universal service contribution is not a federally mandated direct end-user surcharge, and that it would be misleading for a carrier to characterize its contribution as a surcharge. If companies choose to pass through their contributions and specify that on customers' bills, they must convey information to customers accurately. As FCC Chairman William Kennard announced in releasing the December 16 order, the FCC has "not prohibited any disclosure. But I hope that companies tell the whole story -- that overall rates are declining at the same time that universal service mechanisms are implemented, and that without these mechanisms, some rates around the country would surely be higher." The universal service mechanism is not new; it has kept rural residential rates affordable and supported low-cost basic phone service for low-income individuals for many years. The major new aspect of this policy is its extension to libraries, schools, and rural health care providers. The Telecom Act's deregulatory nature resulted in lower charges for telecommunications companies in other areas -- such as the access charges long distance companies pay local companies to complete long distance calls. Such reductions were expected to more than offset universal service contributions. Carol Henderson, executive director of the ALA Washington Office, said, "We're disappointed in any downward adjustment in the program, and we're assessing the effect of new charges on business bills on libraries and schools as business customers. However, we're pleased that the kick-off of the school/library discounts is on schedule. We believe there will be sufficient funds for the expected startup. This policy was enacted with strong bipartisan support, and we'll continue to work with the library community to support improved library services for all students and communities as a result of this program." _________________________________________________________________ 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. To unsubscribe, send the message: unsubscribe ala-wo 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: Carol C. Henderson Andrew Magpantay Aleck Johnson All materials subject to copyright by the American Library Association may be reprinted or redistributed for noncommercial purposes with appropriate credits. =================================================================