ALAWON: American Library Association Washington Office Newsline Volume 8, Number 46 May 25, 1999 In this issue: [1] FET Bill Ruffles E-rate Waters; Strong Support Needed from E-rate Advocates [2] Correction: Billion, Not Million, in ALAWON v8, n43 [1] FET Bill Ruffles E-rate Waters; Strong Support Needed from E-rate Advocates ACTION NEEDED: A strong show of support is needed to protect the E-rate. Library advocates should contact their Senators and Representatives to express support for the current E-rate program and for the FCC setting a collection level of $2.25 billion to support telecommunications discounts scheduled to begin on July 1, 1999. The most recent attacks come just prior to the Federal Communications Commission vote on the collection level to support E-rate discounts for Year Two set for Thursday, May 27 and an FCC reauthorization hearing set for Wednesday, May 26. To send messages of support to your legislators visit ALA's Legislative Action Center at: http://congress.nw.dc.us/ala/elecmail.html Or, register at EdLiNC's E-rate Action Center at: http://erateaction.policy.net/grassroots/ In the week and a half since the introduction of the Schools and Libraries Internet Access Act (S. 1004 and H.R. 1746), it has become apparent that this piece of legislation is playing a role in making the E-rate a presidential election issue. Introduced on May 11 by Rep. Billy Tauzin (R-LA) and by Sen. Conrad Burns (R- MT), the bill would replace the universal service discounts for schools and libraries commonly known as the E-rate. FCC Chairman William Kennard and Commissioner Susan Ness have publicly stated their intention to vote Thursday to increase the collection level to $2.25 billion, the existing cap for the program. However, if Congressional and popular support for proposals such as Rep. Billy Tauzin's outweighs support for the E- rate as it now stands, the $2.25 billion collection level may be in danger of not receiving the full three FCC votes needed for approval. The cosponsors for H.R. 1746 include Reps. Jerry Weller (R-IL), Vito Fossella (R-NY), John Shimkus (R-IL), Ed Whitfield (R-NY), John Sununu (R-NH), Gary Miller (R-CA), Rick Boucher (D-VA), Porter Goss (R-FL), Thomas Tancredo (R-CA) and James Rogan (R-CA). Cosponsors for S. 1004 include Sen. James Inhofe (R-OK). BACKGROUND: The legislation attempts to address the contention of some members of Congress that the E-rate is funded through what they consider to be an illegal tax. Rep. Tauzin and Sen. Burns, as well as other cosponsors and supporters, continue to call the E-rate the "Gore tax." Last week the Republican National Committee sent out an alert encouraging its supporters to complain about the E-rate to the Federal Communications Commission (FCC) and to Congress. The same alert supports the Tauzin bill as an alternative to the E-rate. According to Sen. Burns, the 3 percent telephone excise tax is an "outdated tax designed to fund World War I and was instituted in an era where telephones were a luxury." Logistically, this may prove to be difficult since the tax is currently placed in the government's general fund to support all government programs. If the tax is re-directed, cuts will have to be found in current funding for other federal programs to make up the difference in the general fund. The House and Senate bills are identical. The legislation uses a reduced telephone excise tax to fund school, library and rural health care telecommunications grant program. It is estimated that the proposed 1/3 of the 3 percent excise tax would provide between $1.7 and 2 billion, significantly less than the current requests. The Universal Service Program for Schools and Libraries has an annual cap of $2.25 billion with approximately $1.9 billion available in the first year. In addition, that funding is exclusively for schools and libraries. Under the Tauzin/Burns proposal, only $1.7 billion is available each year through 2004 and $500 million each subsequent year if the funds are available. This funding would also have to cover discounts for rural health care providers, in addition to the schools and libraries. In addition to eliminating the current universal service funding mechanism and replacing it with the telephone excise tax, the functions of the E-rate program would be taken away from the FCC and given to the Department of Commerce. The Department of Commerce would be required to distribute the funding as state block grants to state departments of education (DEA's). DEA's would then be able to split the monies between schools, libraries, and rural health care facilities. It is difficult to see how library constituents to the program would have a voice in its administration or how the funds would be fairly divided among the eligible entities in any one state. It is unclear whether the scope of services in the Tauzin/Burns proposal is intended to be the same or to vary from the current program. However, by giving authority for the program to a different Federal agency and each state education agency, it is possible that every state could have a different group of supported services. The proposed legislation would end the program's funding guarantee on October 1, 2004. The Tauzin/Burns proposal suggests that $500 million be available from the general fund in subsequent years, but does not guarantee any ongoing funding source for the program. The Tauzin/Burns proposal also does not provide for any transition from the current program to an alternative structure. It is unclear what would happen to the libraries and schools that have applied for the round of discounts that are set to begin July 1, 1999 should this legislation pass. [2] Correction: Billion, Not Million, in ALAWON v8, n43 In the May 14, 1999 ALAWON (v8, n43) on the Tauzin/Burns bill, we stated that: "The draft also shows that funding for the grants would come from a reduced federal excise tax, producing approximately $1.7 billion. This level is more than half a million dollars less than the $2.25 billion that Federal Communications Commission Chairman William Kennard recently recommended for the program." Actually, the level is more than half a billion dollars less. Thanks to the alert reader who brought this to our attention. ****** ALAWON (ISSN 1069-7799) is a free, irregular publication of the American Library Association Washington Office. 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