Telecom Discount Fund Is Safe--But Lower

Staff -- School Library Journal, 1/1/1998

Despite last-minute maneuvering by opponents, the new federal telecommunications discounts for schools and libraries will go into effect as planned on January 1. Earlier this month, ALA's Washington office issued an "action alert" saying that long-distance companies AT&T and MCI, required to help pay for universal service, planned to list their payments to the telecom discount fund as a line item on customers' phone bills. "The message appears to be to blame universal service and the school/library discount program for increases in long distance rates," the association said. Carol Henderson, Executive Director of the Washington office, said the phone companies' announcement caused "serious discussion" of the new discount program on Capitol Hill and at the Federal Communications Commission. Ultimately, the FCC decided to start the discount on schedule, but it substantially lowered the amount available for subsidies. Under the original plan, the commission said it would provide up to $2.25 billion for school and library discounts in 1998. Last week, however, the commission cut the discount fund to $625 million for the first six months of the year. The $2.25 billion annual cap, however, will remain in place. The long-distance companies, meanwhile, now will list the universal service charge only on business, not residential bills, Henderson said.