FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT: May 27, 1999 Emily Hoffnar 202/418-0253 COMMISSION ESTABLISHES YEAR 2 FUNDING LEVELS FOR THE SCHOOLS, LIBRARIES, AND RURAL HEALTH CARE FEDERAL UNIVERSAL SERVICE SUPPORT MECHANISM Commission Funds the Federal Universal Service Support Mechanism for Schools and Libraries at $2.25 Billion For Year 2 Today the Commission took steps to ensure that additional universal service support will be available to eligible schools and libraries, particularly those in rural America, during the second funding year of the support mechanism. The Commission's decision will ensure that the Universal Service Administrative Company (USAC) is able to allocate support to eligible schools, libraries, and rural health care providers at a level that is equal to or greater than the level of support that was allocated in the first funding year. USAC estimated that demand for discounts in the second funding year of the schools and libraries universal service support mechanism will be $2.435 billion, up from $2.02 billion for the first funding year. Based on USAC's demand estimates, the Commission set the funding amount at the $2.25 billion cap adopted in the Commission's 1997 Universal Service Order. The Commission directed USAC to collect only as much as required by demand, but in no event more than $562.5 million per quarter for the third and fourth quarters of 1999 and the first and second quarters of 2000 to support the schools and libraries universal service support mechanism. The Commission recognized that, even by setting the funding level at $2.25 billion for the schools and libraries federal universal service support mechanism, some applicants' needs will not be met in full. Funding at the $2.25 billion cap, however, will be sufficient to fund fully all requests for telecommunications services and Internet access, and to fund fully requests by the neediest schools and libraries for internal connections to at least the same level of discount that was supported during the first funding year. Consistent with demand projections submitted by USAC, the Commission also established a maximum funding amount of $12 million for the second year of the federal rural health care support mechanism. The Commission directed USAC to collect no more than $3 million per quarter for the third and fourth quarters of 1999 and the first and second quarters of 2000 for the rural health care universal service support mechanism. Action by the Commission, May 27, 1999, by Twelfth Order on Reconsideration in CC Docket No. 96-45 (FCC 99-121); Chairman Kennard, Commissioners Ness and Tristani, with Commissioner Furchtgott-Roth dissenting and Powell dissenting in part; Chairman Kennard, Commissioners Ness, Tristani, Furchtgott-Roth and Powell issuing statements. COMMON CARRIER BUREAU CONTACT: Matthew Vitale at (202) 418-7400. CC Docket No. 96-45 Report No: 99-16 - FCC -