[EDLINC:315] Summary of Universal Service Recommendations (fwd)

[Mike Eisenberg <mike@ERICIR.SYR.EDU>]

>From: JBernst608@aol.com
>To: Multiple recipients of list <edlinc@itc.org>
>Subject: [EDLINC:315] Summary of Universal Service Recommendations
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>
>Below please find a summary that I have prepared of the Universal Service
>Recommendations as they relate to schools and libraries, Hope you find it
>helpful.
>
>On November 8, the Federal State Joint Board, comprised of three FCC
>commissioners, four state public utility commissioners and one state public
>utility consumer advocate, released its Recommendations on Universal Service.
>The eight Joint Board members approved these recommendations 8-0, except for
>those made on the proposed funding mechanism, which passed 6-2. These
>recommendations have been passed on to the full FCC, which must approve them
>for implementation by May 8, 1997.
>
>A summary of the Joint Board's significant recommendations on the schools and
>libraries portion of universal service is provided below. For ease of
>reference, the page numbers for each section are found in the parentheses
>adjacent to each section heading.
>
>1. Functionalities/Services Eligible for Support
>
> a. Telecommunications Services (235-237): Schools and libraries should have
>maximum flexibility to purchase whatever package of telecommunications
>services they believe will meet their telecommunications needs most
>effectively. Additionally, the Joint Board finds that Congress intended for
>schools and libraries to have access to and use of services beyond merely
>core services. Therefore, all telecommunications services should be available
>to schools and libraries at discounted rates.
>
> b. Internet Access (237-239): Under these recommendations, schools and
>libraries will receive discounts on internet access that includes a
>communications link to the ISP, whether through dial-up access or via a
>leased line, and the subscription fee paid to the ISP, if applicable. Any
>charges for content services would not receive a discount.
>
> c. Intra-School and Intra-Library Connections (239-249): Discounts for
>internal connections, to classrooms especially, will be available. These
>connections can include routers, hubs, network file servers, wireless LANs,
>and other services; they exclude personal computers. The Joint Board found
>adequate legislative history evidencing Congress's intent to reach
>classrooms, and were swayed by both Senator Snowe's and Senator Rockefeller's
>comments as well as those found in the 9/26/96 letter signed by 26 Senators.
>
>2. Discount Methodology
>
> a. Pre-Discount Price
>
>            1) Competitive Environment  (276-277): The Joint Board encourages
>schools to aggregate their demand in order to make their order large enough
>to attract competing offers. It also requires that schools and libraries seek
>competitive bids for services that they seek to purchase. This can take the
>form of submitting their service requirements to the universal service fund
>administrator for posting on a web site for providers. Interested providers
>should respond as if the request were an RFP.
>
>             2) Benchmark (277-280): In areas where competition exists, the
>benchmark price from which discounts will be taken is the lowest price
>charged to similarly situated non-residential customers for similar services.
>That price will serve as a ceiling for all bidders. In areas where there is
>no competition, the lowest price charged will be the pre-discount benchmark.
>In either case, the provider must self-certify  that the price offered is
>equal to or lower than the benchmark. Schools and providers can appeal to the
>FCC or state PUCs if they believe the benchmark is too high or too low.
>
> b. Discounts (280-285): Discounts on telecommunications services, not block
>grants, will be provided to schools and libraries. The Joint Board cites with
>approval the Senate Education Technology Working Group's comment that block
>grants do not address the affordability issue. In opting for a graduated
>level of discounts based on the ability of schools and libraries to pay, the
>Joint Board stated that it found compelling the recommendation of the 26
>Senators that the definition of the term "affordability" take into account
>the cost of service in an area.
>
>The discounts that the Joint Board approved will range between 20% and 90%,
>with the most economically disadvantaged schools and those schools located in
>high-cost areas receiving the deepest discounts. To determine how deep a
>discount each school will receive, the discount percentage will be tied to
>each school's percentage of students in the national school lunch program.
>The Joint Board has proposed a discount matrix that determines school
>discounts based on school lunch program numbers.
>
> c. Annual Cap (282-285): The Joint Board recommends that the FCC place an
>annual cap of $2.25 billion on the amount of funds available to schools and
>libraries to pay for their telecommunications services' discounts. Any
>portion not spent will be rolled over to the following year.
>
>3. Existing Special Rates
>
> a. State Mandated Rates (292): States are permitted to supplement any
>special rates that they are currently providing to schools with federal
>universal service funds. They also may cease offering these special rates and
>allow schools to follow the federal discount structure.
>
> b. Private Contracts (292): While unclear, the recommendations appear to
>suggest that schools with pre-existing provider contracts can have the
>federal universal service discount taken-off their special contract rates.
>These discounts will only be prospective, and will not apply to previously
>used services.
>
>4. Restrictions Imposed on Schools and Libraries
>
> a. Eligibility (305-308): Only entities defined as schools under ESEA and
>libraries with endowments of less than $50 million are eligible for
>discounts. Any organizations not directly eligible cannot receive the
>benefits of the discounts through participating in consortia with eligible
>entities. However, schools are permitted to join consortia with non-eligible
>members, with illegal discounting kept to a minimum by record-keeping. The
>Senate Working Group's support for encouraging the formation of consortia was
>one of the key reasons that the Joint Board agreed to permit this type of
>aggregation.
>
> b. Resale (308): The Joint Board recommends that schools and libraries not
>be permitted to resell, whether profiting or not profiting from the resale,
>any discounted services.
>
> c. Bona Fide Request for Educational Purposes (308-310): The Joint Board
>believes that any bona fide request from a school must be based on some
>internal assessment that the institution can provide the necessary supporting
>technologies to permit the telecommunications to be used effectively.
>Therefore, it requires schools to submit documents that certify that they
>have a plan to acquire the necessary hardware, software, teacher training
>services and wiring to support the discounted services. Additionally, schools
>must submit their requests for services to the universal service fund
>administrator, who will post them on a special web site for providers.
>Finally, schools are required to submit written requests for services to
>providers that are signed by a person with the authority to purchase
>services, and that contain an oath with respect to their eligibility for
>discounts and to their adherence to the other rules for receiving discounts.
>
> d. Auditing (310-311): Schools and libraries must maintain their normal
>procurement records when purchasing telecommunications services. The Joint
>Board recommends that schools and libraries be the subject of random audits
>by regulators to evaluate what services they are purchasing, and whether a
>need for a policy adjustment exists.
>
> e. Annual Carrier Notification Requirements (311): Telecommunications
>providers are encouraged, but not required, to notify school and library
>organizations of the availability of discounted services.
>
>5. Funding Mechanisms for Schools and Libraries
>
> a. Separate Funding Mechanisms (314-315): Funds to support school and
>library discounts should come from the same source of revenue used to support
>other universal service programs.
>
> b. Offset versus Reimbursement (315): Telecommunications carriers are free
>to choose either to be reimbursed directly for discounts provided to schools
>and libraries, or to have the discounted amount offset against their required
>contributions to the universal service fund.
>
>6. Implementation (324): The Joint Board recommends that discounts be made
>available to schools by the beginning of the 1997-1998 school year.
>
>
>
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