In the second week of the Universal Service/Network Democracy on-line seminar, we will go over the following topics:
Thanks to Laurie Maak for providing these statistics. I also want to thank everyone who has contributed to the discussion so far and to encourage those who have just been listening to speak up regularly in the upcoming weeks.
There will be an effort to focus the discussion on specific issues relating to the FCC's implementation of Universal Service provisions of the Telecommunications Act, and I will try to keep the discussion on-track in this direction. If I send you a note asking that you send a particular message as a private communication to the person to whose message you are responding, please understand that I'm not trying to keep anyone from contributing to the broader discussion but simply trying to keep that discussion focused, even though we are a very large and very diverse group of people.
The 100 messages posted in the seminar's first week are too broad to summarize very briefly, but a few threads stood out (at least in my mind):
There were two assignments given in the first week. One dealt with suggestions for topics to discuss in the upcoming weeks. Some of these topics are covered in the list just given; others will be summarized below.
The second assignment called for contributions to the seminar's on-line library of participants' contributions. These could be summaries of Comments, Reply Comments or Further Comments filed with the FCC, or brief position papers relevant to topics being covered in the seminar. These submissions are being processed now and will be placed on-line in the next few days.
To facilitate reading of the original FCC material referenced during the seminar, we have placed excerpts of that material relevant to schools and libraries in the "Useful Documents" section of the Universal Service/Network Democracy Web site. These excerpts can be downloaded much more rapidly than the full text of the corresponding documented. Our goal is to boil things down to the point where everyone in the seminar can comfortably absorb the major issues at hand. Although the full proceedings contains a lot of paper, much of what appears on this paper is outside the scope of Universal Service for schools and libraries, and an enormous amount of the available material is very repetitous.
In order to make it easier to find things on the Web site and inside the On-line Repository or the Archive of On-line Discussions, we have added a simple search engine to the Universal Service/Network Democracy Web site. You can access the search engine from the site's home page,
http://www.info-ren.org/projects/universal-serviceIt supports Boolean searches (using AND, NOT or OR) but not fielded searches (such as looking for items FROM a particular person) or phrases (such as "Universal Service"). A drawback to this search engine is that most of the Comments filed with the FCC talk about the same issues, so a search on something like the Telecommunications Act won't distinguish any of the filings. On the other hand, you can look up something like "New York" to find companies and organizations with a focus on that state. And you can do a search on "jazz" to find Ferdi Serim's initial posting. (Ferdi requested the search engine, and fortunately it was ready to go just about the time he requested it.)
I have gone through all of these sources in an effort to come up with a list that is short enough for us to go through it in the remaining four weeks of the seminar. Fortunately, there is a lot of overlap in the various lists cited above, so it should be possible for us to cover all the necessary material. What I hope to do is to focus each week's discussion of one or more issues which will be broad enough to encompass the various narrower topics that have come up either in our discussions or those of the FCC. Here's my current list:
Although this list is shorter than the one I gave last week, I think it covers the same range of topics, and I hope it encompassed the topics that have come up in the sources listed above. Please feel free to suggest additions or modifications. This week we'll concentrate on the first item, as described in more detail below.
This week's major topic will be the question of the scope of Universal Service subsidies under the Telecommunications Act of 1996. The FCC's Request for Further Comments refers to this topic in their questions 6 and 7:
6. Should the services or functionalities eligible for discounts be specifically limited and identified, or should the discount apply to all available services?In our on-line discussions we have taken this question much further:7. Does Section 254(h) contemplate that inside wiring or other internal connections to classrooms may be eligible for universal service support of telecommunications services provided to schools and libraries? If so, what is the estimated cost of the inside wiring and other internal connections?
It is very clear that the successful application of telecommunications service in a school or library setting depends upon a number of components:
While all of these components are necessary, it is not at all clear that the funding for all of these components should come from the same source. With the Telecommunications Act of 1996 the opportunity exists for schools and libraries to receive subsidies which pay for the bulk of their external connectivity. Estimates of the value of this subsidy are in the billion dollar a year range and translate into a relatively small tax on residential and business telephone service or other telecommunications services that have a broad enough subscribership to be able to raise significant funds for this need.
The issue of how broad to make the applicability of Universal Service subsidies is, in part, a question of how large a percentage of any service these subsidies will cover. If the range of applicability is narrow, then the magnitude of the discount can be large. Conversely, if the range of applicability is very broad, then either the available discounts will be small or the size of the Universal Service Fund will necessarily be much larger.
One can ask how large a fund would be tolerated by the customers of other telecommunications services who will ultimately bear the cost of this fund. One indication is the size of the current Universal Service, which is on the order of $700 million a year. It is this figure which emboldens one to propose a billion dollar a year subsidy for schools and libraries, but the same figure might caution us not to go much, much higher in our requests.
There is a second issue which might make one want to narrow the scope of Universal Service subsidies. This is the question of who puts into the Universal Service Fund, and who takes out of it. Traditionally, the Universal Service Fund has been circular, with the same companies putting into the fund, typically in proportion to the number of urban customers they serve, and taking out of the fund, typically in proportion to the number of rural customers they serve.
If one were to extend coverage of the Universal Service subsidies for schools and libraries to areas beyond the typical reach of traditional telecommunications suppliers, it opens up a whole new set of concerns about fairness. If, for example, the fund were to cover the purchase of computers, should computer vendors be required to make payments into the fund? You will find much discussion of this issue in the Comments presented to the FCC. Typically, those businesses which have not previously had to pay into the fund are arguing against having new regulatory requirements imposed upon them through this sort of arrangement.
One way of looking at this issue - and many related issues in the Telecommunications Act - is in terms of competition. There are portions of the telecommunications infrastructure which have traditionally been monopolistic and regulated. Local telephone service, up until this year, has been a good example of this phenomenon. Other portions of the infrastructure, if we can call it that, are very competitive and unregulated. The computers which schools and libraries purchase as user access devices are an example of this phenomenon.
Many commenters have urged the FCC to maintain this distinction. Ideally, a truly competitive marketplace for telecommunications would result in lower prices for all consumers, with schools and libraries benefiting in the bargain.
Unfortunately, the reality of today's marketplace is one in which true competition is rare, except when one looks to the most lucrative sectors of the commercial market. Hence some of the arguments which sound good in principle may not work so well in practice, particularly when one applies them to sectors of the market with very low margins, which is precisely where schools, libraries and other public sector entities reside.
I don't want to bias the discussion too much in one direction or the other. Our task for this week will be to explore the range of options which seem plausible for the scope of the Universal Service subsidies. We should keep in mind our primary educational goals, which you will find reinforced in the FCC's Notice of Proposed Rule Making, paragraphs 71-74. Please read this material and the other excerpts of FCC documents supplied through the Universal Service/Network Democracy Web site. And please make regular contributions to the on-line discussion.