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Introduction of the "Universal Service Anti-Deficiency Suspension Act"

Location: Washington, DC


Mr. MARKEY. Mr. Speaker, I rise to introduce the "Universal Service Antideficiency Suspension Act," legislation that is necessary to address an abrupt change in the accounting requirements for the E-rate program which has led to a suspension of funds previously committed to K-12 schools and libraries around the country.

Mr. Speaker, a few months ago, the Federal Communications Commission (FCC), at the behest of the Bush Administration's Office of Management and Budget, decided to require that certain provisions of the "Antideficiency Act" (as contained in various provisions of title 31 U.S.C.) apply to the E-rate program for K-12 schools and libraries.

The result of the FCC's decision was that millions of dollars in committed funding to schools and libraries around the country was held up, and millions more put in jeopardy of not being released in timely fashion under the E-rate program. The decision to apply the provisions of the Antideficiency Act to the E-rate program also implicates other similar universal service programs for low income consumers and rural consumers in high cost areas.

Moreover, the FCC's decision will likely mean an unnecessary increase in consumer fees to all residential and business consumers starting January 1st to cover the new accounting requirements. This is why this bill needs to pass before Congress adjourns for the year.

The purpose of this legislation is to suspend the requirements of the Antideficiency Act for programs within the Universal Service Fund (USF), including the E-rate program, from the date of enactment through December 31, 2005. This will rectify for a period of time the problems caused by the FACC's decision to alter the accounting rules which govern such programs. This legislation is similar to legislation introduced in the Senate yesterday by Senator OLYMPIA SNOWE and Senator JAY ROCKEFELLER.

The E-rate program has helped transform our country's schools and libraries. Since it was adopted as part of the Telecommunications Act of 1996, it has assisted bringing the future into America's classrooms. While in 1996 only a small handful of classrooms and libraries were Internet capable, now approximately 95 percent of all public Internet access and over 90 percent of all K-12 classrooms have Internet access. It has become part of the educational experience for millions of schoolkids across the nation.

That's the reason why I named the program the "E-rate," for "education rate"-because I wanted to underscore the central educational mission for the program, especially for those poorer schools or more remote classrooms which might have been adversely affected by a "digital divide" in access to the skill set these kids would need in a new economy. The E-rate has been indispensable in assisting these schools and provides discounts between 20 and 90 percent to such educational entities depending upon their resources. I know from first-hand experience from my own State that this program has proven educational importance and value to millions of kids. In the last 5 years alone, over $180 million in supportive funding has gone to Massachusetts schools and libraries.

When I was Chairman of the Telecommunications Subcommittee in 1993, while that panel was considering proposals to revamp our nation's telecommunications laws, I wrote to the CEOs of the top 20 telephone and cable companies at that time to request that they provide free telecommunications links to our nation's schools. Only 3 reported their willingness to do so. As a result, I fought to make sure that our telecommunications legislation would include a requirement that such telecommunications companies better serve our schools because I felt this was vital for our educational system going into the digital era.

During the Subcommittee mark-up on the bill on the 1st of March, 2004, I introduced and successfully added the E-rate provision as an amendment to the pending telecommunications legislation. That bill, H.R. 3636, later passed the House of Representatives in June, 2004, by a vote of 423-4. Unfortunately, the Senate failed to pass similar legislation in that Congress and my legislative effort to establish the E-rate died on the Senate side prior to the 1994 elections. In the next Congress, with Republicans taking control of the House and Senate, similar efforts to pass a comprehensive Telecommunications Act were successful, and the E-rate provision was added to the Senate bill in the Senate Commerce Committee by Senator OLYMPIA SNOWE (R-ME), in an amendment that was also cosponsored by Senators ROCKEFELLER (D-WV), EXON (D-NE), KERREY (D-NE), and several others.

To administer this E-rate provision, as well as other universal service provisions from the Telecommunications Act of 1996, the Universal Service Administration Company (USAC) was established. This is the entity that received the directive from the FCC to implement new accounting rules to govern the E-rate program. USAC had previously utilized accounting rules that private sector entities use, but now USAC has been compelled to utilize government accounting rules which compel it to hold large cash reserves on its books by the end of the fiscal year to cover its commitments. Since this accounting decision came late in the fiscal year, USAC struggled to comply and was forced to freeze the E-rate program. And while USAC and the FCC believe that the program can begin again to act upon applications for E-rate funding, USAC has notified the Commission that the new accounting rules will compel it to raise the USF contribution level. This increase will likely be passed along to consumers.

While the last hours of this session are approaching, I believe that this legislation can still pass and must pass now, as a standalone bill such as this one I am offering, or as part of another package of bills-and I urge my colleagues to join in efforts to correct the problem that the Bush Administration's OMB and the FCC have created for this invaluable program. This legislation is simply designed to rectify this situation until a long-term solution can be achieved.

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