A major thrust of the Telecommunications Act of 1996 was to ensure that advanced telecommunications services become available to K-12 classrooms, educational consortia, libraries and rural health care providers.
Eligible services for our learning institutions must include robust, routed, asynchronous and synchronous connections that can carry voice, data, video and images to desktop workstation. These services must be scaleable, flexible, and sustainable. These services should also be technologically diverse. Service quality levels with regards to transmission, installation and maintenance must not differ from the same services offered to business and residential customers. Long-Run Marginal Costs should define the price ceiling that carriers can discount from, in order to assure the services are affordable, while at the same minimizing direct subsidies from the Universal Service Support Fund.
The definition of eligible groups and resale provisions need to encourage on-going partnerships between K-12. libraries, higher education, and education-related, non-profit groups.
Funding mechanisms must be diverse and sustainable. That is funding sources for educational discounts should come from a variety of sources, including the existing Universal Service Fund, as well as general revenues. Among the sources to be considered include a variety of new and existing opportunities. Examples include a levy from every telecommunications carrier based on market-share, using monies from fines levied as part of service quality cases and/or revenues from price cap rate reductions and, on a local level, writing educational access and affordability into franchise arrangements with carriers.
There is a need for telecommunications service in our K-12 educational institutions. Many of our schools have limited, outdated computers, and even fewer have Internet access. A recent survey indicated that less than 1/3 of the K-12 school buildings and school libraries in Illinois and less than 10% of K-12 classrooms have access to the Internet.
Currently, telecommunications costs in many areas of our state are prohibitive for schools and libraries. Universal service means addressing these situations in a manner to permit effective access to telecommunications by all schools and libraries.
We believe discounted, modern, two-way, interactive capabilities to educational institutions with discounts and capabilities over and above those offered to residential customers are critical to the Act's success.
Ultimately, educational institutions will use advanced services only to the extent they can afford to do so. In light of these realities, discounts to educational institutions are only as good as the size of the discount and the "original" non-discounted price of the service. That is, a small discount over a competitively-based price may be more effective than a large discount on a heavily marked-up price. Our recommendation is that the "ceiling" or "original" price of the services be tied to the long-run marginal cost of the service or product. Discounts should come off of this price, not from a more heavily marked-up price evident in monopoly, or lightly-competitive markets.
Another important and related eligibility issue involves the ability of educational institutions to resell services among educational consortium members. We submit that a limited form of resell, or resource sharing, by an educational consortium should be allowed.