FCC Eyes Education Technology Fund

Companies lobby for competitive advantages as

The $3.8 billion educational-infotech market will likely receive a major boost from the Federal Communications Commission's revision of the universal service rules.

An extra "$2 billion would be wonderful, but I don't think we can hope for that much," said Stanley Zenor, director of the Washington-based Association for Educational Communications & Technology.

The new universal service rules are being drafted by the FCC's Joint Board, which includes federal and state officials. The draft will be released Nov. 8 and win final approval from the five FCC commissioners next May.

The rewrite is required by the 1995 telecommunications reform law, which imposes a tax on all telecommunications carriers, including those carrying Internet traffic, to fund telecommunications services for schools, libraries, rural areas and poor people.

But before the FCC can finalize the education fund, it must resolve difficult questions over how the universal service plan, including the education fund, will be collected, distributed and spent. For example, the regional Bell operating companies and the long distance companies disagree on how the funding should be collected and spent, while software publishers, computer companies and systems integrators such as IBM Corp. are pushing to expand the fund for education technology.

Officials for MCI Communications Corp. say the existing universal service scheme could be reformed and reduced by $14 billion per year to roughly $5 billion. The education fund also could be kept at $531 million, said MCI officials.

Before any decision is finalized on the education fund, government, education and industry officials should determine "what can help the education process... [and] what the schools can use," said Richard Notebaert, chief of Ameritech Corp., a regional Bell phone company based in Chicago. "We need a larger mosaic to put this [question] into," he said.

For AT&T, "competition [in the education market] is the cornerstone," said Carol Wilner, AT&T's director of federal government relations. Rules promoting competition will help AT&T -- and the other long distance firms -- compete for education infotech dollars against the Bells, which currently dominate the market for local telecommunications service.

To help settle these issues, the secretaries of Commerce, Education and Agriculture on Oct. 10 urged the FCC to give a basic package of free telecom services, including Internet access, to every public school and library in the United States. Additional support should also be given to schools and libraries in low-income or high-cost areas, such as rural regions and where great distances and low populations increase the per-unit cost of telecom services, according to an Oct. 10 letter sent to the FCC by the three secretaries.

"Nobody really knows" the true cost of this package of services, said Linda Roberts, director of the education technology office at the Department of Education. Although hardware prices are dropping and there is increasing competition among infotech companies, schools' educational demands are changing, making it very difficult to estimate how much money will be needed, she said.

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