BUSH PLAN TO ROLL E-RATE INTO EDUCATION DEPT. OPPOSED

E-rate supporters are preparing concerted opposition to provision in President Bush’s education reform package that would roll e-rate into larger technology plan and potentially alter its funding structure. Program to subsidize school and library Internet connections currently is funded at $2.4 billion annually through surcharges on long distance bills, called “Gore tax” by its detractors since former Vice President pushed hard for its inclusion in Telecom Act and for program to be funded at high level by FCC. Moving program into Education Dept. and requiring annual appropriations “would be a major step backwards, and I will fight it aggressively,” Sen. Rockefeller (D-W.Va.) said. “It would utterly change the program,” said spokesman for Sen. Snowe (R-Me.).

It wasn’t clear exactly how Bush’s plan would work. “There are some ideas there, but it’s very short on detail,” said Claudette Tennant of American Library Assn. States, rather than individual schools, would apply for money and funds would be distributed “by a formula,” which Bush plan said “ensures that schools will not have to submit multiple grant applications and incur the associated administrative burdens.” They could be used for software and teacher training in addition to wiring and technology infrastructure. States would be encouraged to set “performance goals to measure how federal technology funds are being used to improve student achievement.”

Including e-rate in Education Dept. budget at same level would mean finding $2.4 billion in offsets while eliminating its authorizing language in Telecom Act. “That’s not going to happen,” said Richard Hershman, policy analyst for National Education Knowledge Industry Assn. Tennant said, “There is considerable concern that this might be a back way into eliminating the program.” Another source said block-granting federal programs was traditional first step toward slashing them by eliminating their lobbying “constituency.” Another problem: “Private and parochial schools are going to be at a disadvantage,” Hershman said. Currently eligible for discounts on Internet services based on wealth of their student population just as public schools are, private and parochial schools “probably would have to go through their state agencies, which would put a lot of requirements on them” that might make the program not worth it, he said. And, Tennant said, “I don’t see how public libraries would be addressed” if the program were run out of the Education Dept.

It wasn’t clear how hard Bush would push for e-rate changes, with some e-rate advocates speculating that proposal seemed negotiable. We're told Bush Administration essentially simply converted vague campaign promise about block-granting federal programs into preliminary language without much research. It wasn’t known whether Bush was committed to that specific position with regard to e-rate, which is considered one of more flexible of federal programs for individual schools and libraries and which proponents feel fits into the President’s overall educational philosophy of local control. “We all need to have some discussion with the Bush folks,” Tennant told us. Regardless of how strongly Bush feels, “I don’t think Congress will go down that route,” Hershman said. “The e-rate has strong success in Congress because it works,” said Snowe’s spokesman. While almost all schools and libraries now have some Internet connection, he said e-rate hadn’t completed its purpose. “The technology changes so quickly. We need to make certain that schools and libraries continue to have it.”

House Telecom Subcommittee Chmn. Upton (R-Mich.) already has promised to look into Bush’s proposal, and he and Commerce Committee Chmn. Tauzin (R-La.) both have been among critics of “Gore Tax.” “Of course we'll have hearings in the House,” said e- rate supporter. “It’s been the most studied program that I can remember in telecom.” But source said e-rate’s support remained very high in the Senate. Meanwhile, although phone companies have complained about having to collect e-rate funds, effectively raising their customers’ bills, they weren’t celebrating publicly this week. In general, “we're happy if anything is taken off the bill that gets sent to everyone’s home every month,” USTA spokesman said. But he said local phone companies wouldn’t burn any political capital pushing for e-rate changes: “We've got a lot more irons in the fire.” WorldCom spokeswoman said company “supports the goals of the e-rate program” and would continue to “support the program” at whatever level govt. saw fit. AT&T declined to comment at all.

In absence of changes such as Bush’s proposal, e-rate proponents saw no reason why FCC shouldn’t continue to manage program at high levels, despite departure of former Chmn. William Kennard, who had been major supporter. New Chmn. Powell “has not been an outspoken detractor of the program,” Tennant said. “I wouldn’t think his becoming chairman should be considered a threat.”