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At whose expense: E-rate program an education boon or boondoggle?

Monday, January 31, 2000

By Jack Torry, Post-Gazette National Bureau

Second in a four-part series

HERNDON, Va. - In a business lab at Herndon High School, junior Sana Ghaznavi is working on a computer, redesigning a logo for an imaginary company. Two doors down the hall, Cheng-Chia Chan is learning to balance a checkbook by computer. In another wing of the school, art teacher Joyce Dotterweich is proudly displaying three-dimensional computer art created by a prize-winning student.

 
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At the guidance counselor's office, a student interested in applying to Ohio State University asks her to check it out. In seconds, all the information a prospective student would want pops up on the screen. The student can even apply online.

Meanwhile, secretaries keep track of whether students show up for class with a few quick strokes on a computer keyboard. Parents of students with unexcused absences are notified with automated telephone messages.

And hanging from the ceiling of every classroom is a 36-inch color TV screen capable of showing live programs on the Internet from around the world.

So it goes every school day at Herndon, a sprawling red-brick school in the Virginia suburbs of Washington, D.C., where the teachers, clerical staff and 2,325 students spend much of their day on the more than 650 computers scattered throughout the school.

"This is what I call real-time learning," said Jim Watts, the technology coordinator. "It can't be more current than this. Already, we are starting to see the beginnings of what I believe will be the entire replacement of textbooks. The body of knowledge that we want to convey to students will be delivered over the Internet."

This dramatic technological advance at Herndon and other schools across the country is in large part due to congressional efforts to end the digital divide that separates computer-haves with computer-have nots.

Thanks to a few paragraphs in the 1996 Telecommunications Act and the backing of the Clinton administration, the Federal Communications Commission funneled $2.25 billion last year to help more than 1 million classrooms and libraries across the country gain access to the Internet. A year earlier, the FCC sent $1.7 billion to schools and libraries.

The money is used to guarantee that schools and libraries will have a discount on the costs of connecting to the Internet. Rural and poorer schools qualify for larger discounts than wealthier ones. The discount, known as the E-rate, allowed schools in Fairfax County, Va., where Herndon is located, to save $1.6 million in telephone charges during an 18-month period.

"Most of our schools had already been wired by the time the E-rate came into existence," said Michael Shaulis, of the Department of Information Technology for Fairfax schools. "But the discounts in telecommunications have been a great boon for us and other school systems across the country. The money we're saving on communications is definitely helping our budgets."


Politics in the classroom

The handful of paragraphs in the Telecommunications Act giving discounts to schools and libraries, so enthusiastically supported in 1996 by President Clinton and Vice President Al Gore, have provoked an intense political and constitutional struggle that has yet to be resolved and could still end up before the Supreme Court.

It has extended far beyond the question of whether schools and libraries in poor districts should have access to the Internet. Instead, it is a battle over how far a federal agency can go to bring the information highway into the classroom.

A growing number of conservatives and a handful of Democrats contend that the FCC has expanded the program beyond what Congress had envisioned. They insist that it is a hidden tax on Americans because the FCC raises the money by imposing a fee on long-distance carriers, which in turn pass those costs on to consumers in the form of higher monthly bills - precisely the opposite of what was supposed to happen when Congress deregulated the industry in the telecommunications law.

Those critics maintain that the federal government is paying not only for discounted phone rates, but also for the more costly wiring and installation. They claim the program is largely unnecessary because 90 percent of the nation's schools already have at least some access to the Internet. And they say that Gore's political allies on the FCC have tailored the program to boost his chances for this year's Democratic presidential nomination.

Rep. Billy Tauzin, R-La., the second-ranking Republican on the House Commerce Committee, has introduced a bill that would end the FCC's authority to run the program. At a hearing in September in which FCC officials testified, Tauzin complained that this "type of what I consider to be illegal taxation certainly was not the intention of Congress."

But even supporters of Tauzin's bill concede it has little chance of passage next year, which suggests that rich and poor schools will continue to save money while adding new computers.


How poor schools win

The Stafford County, Va., school system - south of Herndon - will receive $140,000 in subsidies this year, which cushions the increasing costs for computerization. In addition, Stafford officials have budgeted $526,000 this year for new hardware - computers, upgrades, and printers. The county's two high schools - Stafford and Brooke Point - each have about 500 computers.

"We're still working through some of the issues of the E-rate," said Robert White, assistant superintendent for administration and personnel for Stafford County Public Schools. "They've created a bureaucracy to administer it and we've had some growing pains with it. [But] it's a good program and it's really helping the libraries and schools. And the way it's set up is nice because the less affluent [schools] qualify for a higher discount."

A good example are the schools Brunswick County, Va., a rural area 70 miles from Richmond. According to the National Institute for Literacy, Brunswick County in 1998 had the highest rate of illiteracy of any county in Virginia. Those who live in the county are so poor that school officials qualify for a 90 percent discount compared with 40 percent for wealthier Stafford.

"We're extremely poor," said Cathy Cheely, director of technology and secondary service for Brunswick schools. "So when a program like E-rate comes along, it makes a tremendous difference."

With some state money and a handful of county dollars, Cheely has helped bring cyberspace and the Internet to Brunswick. Just a few years ago, there were only one or two computer sites in each of the schools, usually running into the library or the principal's office.

In contrast, the school system now has nearly 800 computers for 2,600 students, allowing students in each school to hook up to the Internet. Cheely said Brunswick officials received $385,000 in federal subsidies this year and anticipate $512,000 next year.

Such a financial boost will allow the school to find the money to buy 80 additional computers and 100 more printers.

"We're able to take the E-rate and put in Internet access to the schools because it subsidized our telephone bills," said Cheely. "We take the savings on our telephone bill and spend it on computers.

"I can't say enough good things about what we've been able to do. When you're in a rural area like this, many of our students have never seen an ocean and never seen a mountain because they've never left Brunswick County. The reality frame of reference is what they get out of everyday life or what they get out of TV.

"We can't even get [public broadcasting stations]. And you can forget about cable.

"So by having the computer and by having Internet access and having a teacher there to guide the student in learning on the computer, allows that student to access resources that we could never in a million years afford to buy."

Like Stafford County's White, Cheely conceded there is one major headache and that is dealing with the paper requests and rule changes from the federal government. "The right hand does not know what the left hand is doing. They'll tell you one thing one day, and 30 days later change the rules. It has been a paperwork nightmare." But she added, "Having said that, it's worth it."

Whether it is worth it to the country has been the question on Capitol Hill. During the 1995 floor debate on the telecommunications bill, the Senate killed, 58-36, an amendment proposed by Sen. John McCain, R-Ariz., that would have deleted the discount rate from the measure.

The section was saved, in large part, because of intense lobbying by the Clinton administration and Sen. Jay Rockefeller, a Democrat from West Virginia who warned that McCain's amendment "strikes a dagger into the heart of Main Street, USA."

While large schools in wealthy states could afford the Internet, Rockefeller said during the floor debate, the small schools dotting his mountainous home state would "not have the money to pay commercial rates to be online." Rural America, Rockefeller concluded, would have the "equivalent of a dirt road" when it comes to the information superhighway and high-tech communications.

Rockefeller said in an interview last fall that the E-rate will "change the entire way people are educated. It is the great equalizer in the most important fight of all, and that is to make our kids technologically adequate for the future."


Opponents line up

A host of anti-tax conservatives has stepped up an aggressive campaign to abolish the E-rate. The National Taxpayers Union, a conservative organization opposed to tax increases, offers a web site called Goretax.com. The site features Gore's picture on a dollar bill and denounces the E-rate as "a multibillion- dollar tax hike forced on the phone companies and consumers without a direct vote of Congress."

Tauzin's bill would slash from 3 percent to 1 percent a current excise tax on long-distance customers. That would provide enough money for schools and libraries to receive $1.7 billion annually for five years, which Tauzin and supporters claim would be enough to wire up every school and library. Then the 1 percent excise tax would be abolished.

But Tauzin has not offered to cut any federal programs to compensate for the lost federal revenue nor has he dealt with how schools would continue to pay for ever-increasing Internet access charges.

"The idea was to provide some kind of relief on the rates charged by the telephone companies for schools and libraries as opposed to this grandiose scheme that Gore's come up with," complained Rep. Michael Oxley, R-Ohio, one of the authors of the 1996 telecommunications law.

Although conservative Republicans have been the harshest critics, a few Democrats have chimed in. When the FCC announced last year that it would increase the money for the program, Rep. John Dingell, D-Mich., the ranking Democrat on the House Commerce Committee, issued a statement declaring:

"The unfortunate reality is that this money must come from someone. That someone is the American telephone consumer, who will pay higher telephone bills so that the FCC can dole out money for plainly illegal purchases never approved by the Congress. I fail to see why the phone customer in inner city Detroit or southeast Washington, D.C., should subsidize the wiring of classrooms [in the wealthy suburbs]."

Yet for all the furious words summoned by critics, there is little chance that the E-rate will be scrapped by Congress. Even if Tauzin and his allies could muster the votes to pass his bill, which is highly unlikely, Clinton would kill it with a veto.

In July, a three-judge panel for the 5th U.S. Circuit Court of Appeals upheld the E-rate, concluding that while "the statute and its legislative history do not support the FCC's interpretation, the language of the statute is ambiguous enough to require deference" to the federal government.

So the FCC continues to collect and spend the money, even though not a single congressional committee appropriates the money. During a congressional hearing in September, Tauzin repeatedly grilled FCC General Counsel Christopher Wright about the financing of the E-rate.

"Does any appropriator oversee the collection and the expenditure of this money?" Tauzin asked.

"I don't know the answer to that," Wright replied.

"So, it never goes to the Treasury [Department], but it's on our budget and the appropriators never appropriate it or manage it in any respect," Tauzin fired back. "Do I have it accurate now?"

But Rockefeller said he "would never trust the appropriators on an annual basis to handle something which is as nation-changing as the E-rate. Appropriators, by and large, will always find something that they want to do more. Technology is not in everybody's interest."


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