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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
PRESS STATEMENT REGARDING THE SCHOOLS AND LIBRARIES CORPORATION'S FIRST WAVE OF COMMITMENT LETTERS BY FEDERAL COMMUNICATIONS COMMISSIONER HAROLD FURCHTGOTT-ROTH
Today, the Schools and Libraries Corporation announced that it has begun issuing commitment letters to schools and libraries across the country. As this program begins, it is an appropriate time to reflect upon the what Congress intended for universal service to mean and compare that to how these programs are living up to those goals as envisioned by Congress.
Under the 1996 Act, the Commission's primary universal service responsibility was to establish an explicit and sufficient universal service fund for rural America. The clear emphasis of Section 254 is to preserve and enhance universal service in rural, high-cost areas of the country. Rural, high-cost universal service is not just one of many objectives of Section 254; it should be the highest priority. There are other goals of Section 254, but it is difficult to read Section 254 in its entirety and understand how a federal universal service fund program could have as its primary emphasis anything other than rural support. It is hard to dispute that the universal service section of the Telecommunications Act of 1996 was primarily intended to aid rural America.
With that goal in mind, let us examine what has taken place. Federal universal service support has nearly doubled in size since passage of the Act. But amazingly, most of that growth has not benefited rural states. Instead, growth of universal service has been for other programs that largely flow to other areas of the country. Indeed, in this first wave of commitment letters form the Schools and Libraries Corporation, states like Alaska (only $206 thousand), Maine (only $230 thousand), Montana (only $335 thousand), North Dakota (only $241 thousand), Nevada (only $145 thousand), Vermont (only $103 thousand) and Wyoming (only $138 thousand) are all rural states that should be the primary beneficiaries of universal service, but instead they each receive less than 1/2 of one percent (.5%) of this initial distribution. Similarly, South Dakota (only $394 thousand), West Virginia (only $470 thousand), New Mexico (only $578 thousand), Nebraska (only $692 thousand), Arkansas (only $621 thousand), Colorado (only $641 thousand) and Idaho (only $462 thousand) receive less than 1%. Such a distribution cannot be what Congress envisioned.
Moreover, a close inspection of the total amounts requested by these states reveals a similar bias for urban states in this program. In their latest filing, the Schools and Libraries Corporation estimates that its first quarter 1999 will exceed $10 million.(1) If the total amount requested by every applicant were accepted and fully funded, the following rural or high-cost states would not receive as much money -- or just barely as much money -- as the Schools and Libraries Corporation estimates that it will spend in administrative expenses in the First Quarter of 1999 alone: Alaska ($10 million), Arkansas ($11 million), Idaho ($5 million), Kansas ($12 million), Maine ($3 million), Montana ($3 million), North Dakota ($4 million), Nebraska ($5 million) Nevada ($8 million), South Dakota ($4 million), Utah ($5 million), Vermont ($3 million), West Virginia (8 million) and Wyoming ($2 million). In contrast, large states like California ($277 million), Georgia ($104 million), Illinois ($109 million), New York ($138 million), and Texas ($169 million) are the big winners as they would all receive in excess of 100 million. Similarly, even if this distribution is examined on a per capita basis, many rural states would receive 60% or less than the national average: Arkansas, Idaho, Indiana, Kansas, Maine, Missouri, Montana, Nebraska, Oregon, Utah, Vermont, West Virginia, and Wyoming. Again, I do not believe that such a distribution is what Congress intended.
As of today, if one includes the Joint Board's recommended decision, the Commission will have provided universal service support for the schools and libraries program, and the rural health care program (although none of that money has been disbursed yet), provided additional support for the lifeline and link-up programs, and provided for additional universal service support for non-rural carriers. In effect, these potential universal service beneficiaries have been "promised" enormous and unending benefits, long before other potential universal service beneficiaries (specifically the rural, high-cost program) have been addressed. I fear that for the small rural carriers, there may not be any money left to help increase their support.
Congress intended -- and the 1996 Act required -- that the Commission focus its efforts on rural, high cost areas first, as opposed to finding support for these new programs that primarily benefit other areas of the country. Rural, high-cost universal service should not be viewed as the residual after enormous amounts for other federal universal service obligations have been promised; rural areas should have received the lion's share of any increase in the federal universal service fund.
1. First Quarter 1999 Program Size Projections for the Schools and Libraries Universal Service Program, dated November 2, 1998.