FCC likely to double funds for linking schools, Internet

Nation's telephone bill could rise as much as $1 billion next year


WASHINGTON -- In a move critics say could boost next year's phone bills by as much as $1 billion, federal regulators are expected to nearly double the amount the government is spending to wire the nation's schools and libraries for Internet access.

Federal Communications Commission Chairman William E. Kennard has proposed that the FCC authorize $2.25 billion to hook up schools and libraries to the Internet -- a nearly $1 billion increase from this year.

The funds would be raised by boosting subsidies paid by local, long-distance and wireless phone companies starting in July. The phone companies have not decided how much of the increase they would pass along to consumers, but many experts expect some increase in federal charges listed in monthly phone bills.

Kennard's proposal, which is expected to be approved by the FCC next week, came amid renewed efforts on the part of some in Congress to reel in the controversial wiring program.

New research also suggests that increases in government mandated telephone taxes have all but erased any benefits from telephone competition for many consumers.

Now that the nation's more than 500 long-distance phone carriers have slashed calling rates to as low as 7 cents a minute, new and expanded taxes for wiring schools and libraries and other projects make up nearly 20 percent of some consumers' total phone bill, according to the Telecommunications Research & Action Center, a Washington watchdog group.

Critics charge that some of the money for the so-called e-rate wiring program has been spent to gold-plate schools' regular phone systems. In the Fresno, Calif., school district, for instance, telephone equipment giant Lucent Technologies installed a "homework hot line" that was paid, in part, by funds from the federal Internet wiring program.

Under the 1996 Telecommunications Act, the FCC was directed to subsidize the wiring of schools, libraries and rural health care facilities for high-speed Internet access. The money, in part, was to come from fees long-distance carriers pay local phone companies to connect long-distance calls.

Kennard insists telephone rates need not be raised if long-distance companies passed through rate reductions the FCC also will authorize.

That would be a departure from last year, when many long-distance carriers passed along the cost.

AT&T Corp., for instance, began listing new charges of $1.78 a month last summer. MCI/Worldcom levied a $1.07-a-month charge and is taking additional fees equal to 6 percent of its customers' international and interstate toll charges.

Pub Date: 5/19/99

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