Irate over e-rate

When Congress passed the Telecommunications Act of 1996, e-rate, the component that would bring high-tech to the nations’s classrooms, libraries and rural health centers was hailed as a model of public/private cooperation and creativity.

The Federal Communication Commission’s decision last week to slash the program by nearly half shows what happens when greed and gutlessness intervene.

The noble idea two years ago was that savings telephone companies would enjoy through FCC revisions in how they did business with each other would be converted into subsidies, from 20 to 90 percent, based upon need, to wire and connect the technological have-nots. That was then.

Now, now that the phone companies have gotten used to their $2 billion-plus break, they cherish it far too much to hand it over to a bunch of schools, libraries and rural health centers. So the big players, such as AT&T and MCI, recently announced they intend to list their e-rate contribution as a separate line-item on every phone bill as a surcharge of about 5 percent. A phone bill that was $20 before e-rate would be $20 still, only it would show up as $19 plus $1.

If this was a calculated attempt to rile up bill-payers, and, by extension, members of Congress, it worked perfectly. So intense was the heat, it’s a miracle that three members of the FCC voted last Friday to merely cut the progam from $2.3 billion to $1.3 billion and did not scrap it entirely, as the other two preferred. It did not help that Vice President Al Gore so closely identified himself with e-rate that some Republicans, led by Speaker Newt Gringrich, whose interest in technology is exceeded only by his interest in partisan politics, began calling that little $1 addendum the Gore Tax. Nor did it help that Congress, not wanting its fingerprints on such a major expenditure, left the details of carrying out this massive undertaking to the FCC, thus ensuring it would always be able to accuse the five-member appointed board of overstepping its authority when things got sticky.

To their credit, not all members of Congress are taking the low road to the billpayers’ hearts. Sen. Olympia Snowe, whose name is on the Telecommunications Act amendment that created e-rate, is so livid at the phone companies’ skulduggery that she is calling for legislation requiring them to include on bills not just those line items related to their obligations to the public, but the subsidies they receive from the public as well, along with all the little goodies customers pay for that are utterly unrelated to communications. Imagine, Sen. Snowe wonders, how MCI customers would welcome seeing exactly what their share is of the new $175 million MCI Center sports arena in Washington, D.C.

The impact of this e-rate slashing can be profound. The Bangor Public Library, for example, spends about $1,000 per month on telecommunications. According to the guidelines in effect before the FCC went limp last Friday, the library would have been eligible for a discount of about 60 percent.

That extra $600 in the library’s pocket could have bought a lot of books. Of course, that calculation was based upon the assumption that e-rate was about sharing the wealth and doing good. Now it’s clear it was about money and politics all along. But then, when it comes to telephone companies and Congress, what isn’t?