A r c h i v e d  I n f o r m a t i o n


July 31, 1997

Honorable Reed E. Hundt
Chairman
Federal Communications Commission
1919 M Street, N.W.
Washington, DC 20554

Re: Federal-State Joint Board on Universal Service


Dear Chairman Hundt:

In Section X of the May 8, 1997 Federal Communications Commission Report and Order on Universal Service, you unanimously created the E-rate, under which almost all of the nation's elementary and secondary schools and public libraries will be entitled to deep discounts from the lowest corresponding rates for telecommunications and other eligible services. In paragraphs 571 and 574 of that ruling the Commission requested recommendations from the Department of Education on the design of E-rate applications that schools and libraries will submit, and on alternative measures for the required approval of technology plans. 1

We consider the establishment of the E-rate to be of historic significance in the development of this nation's elementary and secondary school and public library telecommunication systems. We applaud you and your fellow Commissioners for having carried out the intention of the Snowe-Rockefeller-Exon-Kerrey Amendment to the Telecommunications Act of 1996 in such a comprehensive and effective manner. When staff from the Department and the National Telecommunications and Information Administration of the Department of Commerce met with the Commission's staff just prior to the ruling, 2 we offered broad assistance in the implementation of the E-rate, including the specific matters later assigned to us. We were pleased to receive the assignment and have proceeded quickly to complete our work to ensure that the system is ready to process applications before funding starts on January 1.

Although you requested assistance only from this Department (and the Institute of Museum and Library Services, in the case of alternative approval measures for library technology plans), we believed that we could do a more effective job by continuing to work with our sister agencies, the Departments of Agriculture and Commerce, with whom we have collaborated since the inception of the Commission's consideration of the E-rate. In addition, we wanted to formally recognize the contribution of the Education and Library Networks Coalition (EdLiNC), an ad hoc alliance of 33 representative organizations from the elementary/secondary education and library communities, in the creation of the E-rate, by more fully utilizing the practical expertise of its members in technology planning and procurement. Accordingly, the enclosed report was developed by a Working Group composed of the four Federal agencies and EdLiNC.

The report of the Working Group deals primarily with the specific assignments that the Commission gave us. It also covers certain other matters that we found necessary to consider in order to address the specific assignments. In formulating our recommendations, we attempted to adhere to certain bedrock principles:

  1. Protection of the integrity and accountability of the Universal Service Fund, including the prevention of fraud, waste and abuse, is of paramount importance. In particular, we should be faithful to the intent of Congress and the Commission in targeting schools and libraries with high rates of poverty and in rural areas for special discounts, the full benefits of which should be received by the intended beneficiaries.

  2. We should minimize the burden on schools and libraries, and maximize their flexibility in applying for E-rate discounts.

  3. We should fit the E-rate application process to the existing complex, varied and decentralized processes by which schools and libraries inventory existing technology components, plan for their use and further acquisitions, and procure telecommunications and other eligible services. We should minimize the need for those existing processes to be changed to accommodate the E-rate application process.

  4. We should fit the E-rate application process to the existing, varied governance structures for schools and libraries created by State and local law and minimize the creation of new Federal requirements.

  5. We should facilitate competition among service providers by providing them with needed information and by preserving the technological neutrality of the application process.

In certain areas, potential inconsistencies among these bedrock principles posed real challenges for the Working Group. We believe, however, that as a result of the deliberations we managed to achieve the best balance among the principles in terms of satisfying the requirements of the Telecommunications Act of 1996 and preserving the public interest.

We believe the Working Group has been a very productive collaboration and the Department stands ready to continue to work with the other members of the group in providing whatever additional assistance the Commission may need. We will be in touch with you shortly to set up a meeting to discuss the report and any further assistance that might be helpful to the Commission.


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