WASHINGTON-Sen. Ted Stevens (R-Alaska), in a fit of anger last week, threatened to eliminate the Federal Communications Commission if it continues to embrace Vice President Gore’s goal of wiring all schools, libraries and rural hospitals to the Internet by 2000 at the expense of poor and rural citizens who rely on universal service subsidies for basic telephone service.
“I’m just appalled at the way the program has been accelerated for political purposes. I think you’re going to end up destroying the universal service fund,” Stevens barked at FCC Chairman Bill Kennard at last Thursday’s appropriations subcommittee hearing.
When asked if the FCC had studied the financial impact of Internet wiring on universal service, Kennard replied, “No.”
Kennard explained to Stevens, who-like other lawmakers with rural constituencies-is closely focused on universal service, that Internet wiring is not taking away from telecom subsidies for poor and rural citizens.
“We’re not robbing Peter to pay Paul,” said Kennard. But Stevens did not buy the explanation, arguing the $2.25 billion a year for educational Internet wiring could not help but siphon off money from traditional universal service recipients.
The FCC budget proposal for fiscal 1999-$213 million-was overshadowed by telecom policy controversies that had Kennard on the defensive for most of the hearing.
While the 1996 telecom act directs the FCC to link schools, libraries and rural health-care facilities to the Internet, there is suspicion that Gore’s desire to achieve that goal by 2000 is designed to bolster his presidential bid even though universal phone service could suffer as a result.
“I hope you’re serious about this because I’m very serious about it,” said Stevens. “I think that if the FCC can’t learn how to follow the law and not try to see how far it can stretch it, we ought to get a new mechanism for telecommunications in this country.”
On Tuesday, Stevens got a provision included in a FY 1998 supplemental appropriations package that requires the FCC to report back to Congress with a financial assessment of wiring schools, libraries and rural hospitals to the Internet and carrying out traditional universal-service fund obligations.
The wireless industry opposes universal-service obligations that force carriers to pay into the state and federal funds without having much chance of drawing on the subsidy pool.
In addition, the industry believes the amount wireless carriers are charged is inaccurately calculated because it is based on a wireline telecom model.
Internet service providers are not required to pay into universal service funds but can apply for telecom subsidies.
Indeed, Sen. Jay Rockefeller (D-W.Va.), a co-sponsor of the Internet-access provision in the ’96 telecom act, said last week that ISPs should be covered by universal-service requirements and that federal regulators should re-examine what wireless service providers are required to contribute.
At the same Senate communications subcommittee hearing last Wednesday, George Reed-Dellinger, a telemedia analyst at HSBC Securities Inc., agreed that policy makers should rethink universal service. He added that wireless carriers are best positioned to provide service to rural and low-income families.
Kennard also took heat for salaries paid to executives of Schools and Libraries Corp., which former FCC chairman Reed Hundt created to implement the discount Internet plan for schools and libraries.
The General Accounting Office has declared the organization illegal.
Ira Fishman, a former FCC and White House official, is paid $200,000 and has a $50,000 performance bonus option. Other top managers make more than $100,000.
Some lawmakers say a cut of those salaries should be going toward school and library Internet hookups rather than to bureaucrats. Others reply that the organization’s staff is small, they put in long hours and their salaries are on par with other not-for-profit groups.
