PENNSYLVANIA PUBLIC UTILITY COMMISSION

Harrisburg, PA 17105-3265

Public Meeting held July 31, 1997

COMMISSIONERS PRESENT:

John M. Quain, Chairman
Robert K. Bloom, Vice-Chairman
John Hanger
David W. Rolka
Nora Mead Brownell

Docket No. I-00940035

In re: Formal Investigation to Examine
and Establish Updated Universal Service
Principles and Policies for Telecommunications
Services in the Commonwealth

ORDER

I. Introduction

We adopt the July 11, 1997 Interim Report of the Universal Telephone Service Task Force which recommends that Intermediate Units be eligible to participate in the federal universal service discount program for schools and libraries. As the attached Interim Report and Recommendation of the Task Force indicate, compelling public policy reasons require that Intermediate Units be included as an eligible entity for purposes of the federal E-Rate Program.

II. Background

As part of our January 28, 1997, Opinion and Order, we convened a Task Force comprised of 35 interested stakeholders, representing all facets of telecommunications interests, to collaboratively discuss universal service issues on an ongoing basis in Pennsylvania. The Task Force provides a forum for all arms of government to join with other interests to continue forging a public-private partnership on policy issues relating to universal telephone service.

One of the key areas of responsibility assigned to the Task Force was to develop recommendations to the Commission on the provision of universal telephone service to schools and libraries. This responsibility was assigned to the Task Force in recognition of the Telecommunications Act of 1996 ("Federal Act") enacted into law on February 8, 1996 which contained provisions to ensure the availability of advanced telecommunications services to K-12 schools and libraries.

By Order entered June 16, 1997, this Commission adopted the discount matrix for eligible schools and libraries set forth in the Federal Communications Commission's ("FCC") May 8, 1997 Report and Order on Universal Service.

III. Discussion

In order for a school or library to qualify for the Education-Rate ("E-Rate") under the federal universal telephone service discount program, the school must fit within the definition of an elementary or secondary school as defined in the Elementary and Secondary Act of 1965, 20 U.S.C. Section 8801. The FCC's May 8, 1997 Report and Order defines an "Elementary School" and a "Secondary School" for purposes of the federal discount program. See 47 C.F.R. Section 54.500(a)(1) and (8). The FCC's Report and Order goes on to provide that a state must determine which elementary schools and secondary schools qualify for the program.

As noted in the attached Interim Report of the Task Force's Subcommittee on Schools and Libraries, the issue has arisen whether Intermediate Units, or regionally based providers of educational services, may qualify for E-Rate discounts. We adopt the July 11, 1997 Interim Report and Recommendation of the Task Force to include Intermediate Units within the definition of eligible entities based upon the compelling public policy reasons contained therein.

We note in particular that Pennsylvania's 29 Intermediate Units have provided technology to school districts since their inception in 1971. As pointed out by the Task Force Report, 25 of these Intermediate Units provide some or all of the telecommunications and additional services which fall within the E-Rate discount program. Interim Report at p. 2. Further, while the Pennsylvania School Code does not expressly define "school," the Code states that Intermediate Units are part of the public school system. 25 P.S. Section 9-951. Interim Report at p. 3.

Additionally, several provisions in the Pennsylvania School Code define the term "school entity" as encompassing Intermediate Units. Interim Report at p. 3. The Interim Report also notes that in other circumstances, the inclusion of Intermediate Units within the public school system was sufficient to include them within the scope of authorized activities available to schools. Interim Report at p. 3.

For these reasons and others listed in the attached Interim Report and Recommendation, we adopt the Universal Telephone Service Task Force's recommendation that the Commission approve Intermediate Units as eligible entities for purposes of the federal E-Rate Program; THEREFORE,

IT IS ORDERED:

1. That the Interim Report of the Universal Telephone Service Task Force dated July 11, 1997 and the recommendations contained therein are adopted.

2. That the Acting Secretary shall serve a copy of this Order on all members of the Universal Service Task Force and all parties to this Docket.

BY THE COMMISSION

James J. McNulty
Acting Secretary

(SEAL)

ORDER ADOPTED: July 31, 1997.

ORDER ENTERED: JUL 3 1 1997