Tauzin: E-Rate war of words

A congressional hearing on legislation that would restructure the Clinton administration's E-Rate program turned into a true war of words Thursday.

Proponents of the Schools and Libraries Internet Access Act say the legislation would eliminate the unfair phone "tax" levied on users of long-distance service as a way to support the E-Rate program.

But officials from the Federal Communications Commission said there is no such "tax," but a fair "fee" that telephone companies charge consumers to fund the program, which provides discounts of 20 percent to 90 percent on telecommunications services, Internet access and internal connections for schools and libraries across the country.

Reps. Billy Tauzin (R-La.) and Jerry Weller (R-Ill.) drafted H.R. 1746 to abolish the FCC's control of the E-Rate program through its Universal Service Administration Company (USAC) and put it under the administration of the National Technology and Information Administration (NTIA).

The congressmen and other bill supporters said the FCC and USAC lack the authority to tax the American people because Congress is the only body with taxation authority.

But Christopher Wright, FCC general counsel, noted that in July, the 5th Circuit Court in New Orleans ruled in favor of the FCC in nine out of 10 arguments made by two telecommunication companies.

In light of those decisions, "there is no legal need to modify the current method of administration in order to provide support to schools and libraries seeking assistance in obtaining Internet connections," Wright said.

Still, Rep. Christopher Cox (R-Calif.) pointed out that the ruling did not specifically rule on the constitutionality of the fee. The ruling skirted the question by simply including a footnote that stated there was no basis for reversal.

FCC's position is bolstered by the fact that NTIA does not want to take over administering the E-Rate program, according to Kelly Levy, acting associate administrator in NTIA's office of policy analysis and development.

"Congressional oversight, including input from the House Commerce Committee, and a two-tiered auditing process have helped to ensure that USAC is running the E-Rate program efficiently and that schools and libraries are using E-Rate money to fund only eligible services," Levy said. "In its current operating mode, NTIA does not possess the resources or infrastructure to run the proposed E-Rate program."

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