FCC Votes to Scale Back School Net Wiring Program

Under fire from congressional leaders, the Federal Communications Commission voted Friday to scale back an ambitious program to wire the nation’s schools and libraries for Internet access.

The agency voted to cap this year’s spending on the wiring program at $1.257 billion--a little more than half the $2.25 billion the agency had previously authorized.

The technology program, mandated by the 1996 Telecommunications Act, has drawn criticism as it has ballooned in cost. The outcry grew more intense in recent weeks as some telephone companies--which are required to pay subsidies to the FCC--vowed to pass along the cost to residential phone customers.

The school and library program--together with another new federal initiative to wire rural health-care facilities for Internet access--were strongly championed by Vice President Al Gore. They are extensions of existing federal subsidies that underwrite phone service for the poor and others in costly to serve rural and urban areas.

However, a group of congressional leaders that includes Senate Commerce Committee Chairman John McCain (R-Ariz.) and Rep. John D. Dingell (D-Mich.), ranking member of the House Commerce Committee, say the FCC has created a bloated program that is at odds with Congress’ original intent.

“Thanks to that agency and Vice President Gore, the American people . . . are stuck with higher phone rates,” said Rep. Thomas J. Bliley, (R-Va.), chairman of the House Commerce Committee.

But Gore and FCC Chairman William E. Kennard say the program is needed to improve education.

“How can we lead in the Information Age with an approach to education that’s stuck in the Stone Age?” said Gore in a statement issued just before Friday afternoon’s vote. “It’s time to put more of our children online, and that means taking politics offline.”

AT&T; Corp. and MCI Communications Corp. recently announced plans to add new charges on residential customers’ bills next month to pay for the subsidies.

MCI said it will impose a 5.9% charge on residential customers’ monthly interstate and international toll calls. AT&T; will bill customers an additional 5% of their interstate and international calls, plus 1.8% of in-state long-distance calls.

AT&T;, MCI and Sprint Corp. have been charging their business customers extra since the beginning of the year.

The companies say they must add the charges because they can’t afford to absorb the cost of the program. Some consumers groups and FCC officials say, however, that the increases are not justified, because long-distance costs are falling.

AT&T; and MCI said they would reevaluate their rate increase in light of the FCC’s actions.

Industry experts said the FCC program reductions are unlikely to result in significant rate rollbacks. They say less than half of MCI and AT&T;’s proposed rate hikes are attributable to the school wiring program. The lion’s share of the increase stems from other universal service subsidies for the poor and phone customers living in costly to serve areas.