White House Set to Put Libraries, Schools on ‘Net

WASHINGTON —  The Clinton administration, which vowed six years ago to wire the nation’s schools and libraries to the Internet, is poised to finally launch the ambitious program, but it is facing serious financial and political pitfalls.

The Federal Communications Commission, which oversees a large part of the program, is expected to act as early as Friday to authorize the first spending for equipment.

Even before the massive technology effort gets off the ground, however, some politicians and even a few regulators are warning that there may not be enough money to go around.

School districts and public libraries have formally requested $2 billion for computer and telecommunications equipment, but the funding for the program--collected through surcharges on residential and business telephone bills--is limited to just $625 million for the first six months of this year.

“We cannot bite off more than we can chew or spend more than we can afford,” said FCC Chairman William E. Kennard, who this week indicated he plans to restructure the program.

Kennard’s caution comes amid serious questions about the educational effectiveness of the program and the FCC’s missteps in administering it.

Since the school and library subsidy initiative was enacted as part of the Telecommunications Act of 1996, the program has proved to be one of the most controversial aspects of telecommunications reform.

Under the five-year, $10-billion program, a school or library can receive federal subsidies of 10% to 90% on Internet services, wiring and other equipment, though not on computers or software.

Proponents say the program could transform education in U.S. public schools, which are so lacking in technology that they have fewer telephone lines than the nation’s prisons.

“Our teachers and students are really excited about this program,” said George Beckwith, director of telecommunications and technology support for the Los Angeles Unified School District. “Technology like video conferencing and being able to access information over the Internet can transform” education.

But the educational effectiveness of computer technology has been oversold, particularly in classrooms where fundamental skills are still lacking, said James Glassman of the conservative think tank American Enterprise Institute.

Senate Commerce Committee Chairman Sen. John McCain (R-Ariz.) has also questioned whether spending is being allocated fairly among rich and poor school districts. “We have schools on Indian reservations that are way behind, while wealthy school districts are getting wired,” McCain said in an interview.

Apart from the debate on the program’s educational merit, the FCC has been strongly criticized for its administration of the effort, known as the E-Rate.

The agency created a quasi-private corporation, U.S. School and Libraries Corp., to execute the program. The General Accounting Office, the investigative arm of Congress, asserted in a legal memorandum issued in February that the FCC lacked the authority to even create the corporation.

Robert P. Murphy, general counsel of the GAO, testified to the House Telecommunications Subcommittee that the FCC “acted in violation of the Government Corporation Control Act.” Murphy recommended that the FCC seek authority to create the corporation or restructure the program.

Overhauling the Schools and Libraries Corp. will be a delicate proposition for the FCC, according to an official who supports the program and is close to key White House and FCC officials.

The corporation’s, $200,000-a-year chief executive, Ira Fishman, is close to Vice President Al Gore and has many friends at the White House, having once served as deputy assistant for legislative affairs to the president and vice president.

The FCC is expected to restructure the program Friday, though it disagrees with the GAO’s interpretation of the law, according to Ruth Milkman, the FCC’s deputy chief for telephone regulation.

Fishman, 40, was out of town and could not be reached for comment. Jody Buenning, deputy director of outreach for the corporation, said its high salaries have helped “attract highly qualified and multitalented individuals.”

“Congress did not authorize the FCC to pass a tax to do the inside wiring of schools,” said Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Telecommunications and Finance Subcommittee. “The FCC has created an entitlement program.”

Demand for funds to wire schools and libraries has greatly exceeded expectations. The Schools and Libraries Corp. said about 30,000 schools and libraries have requested subsidies. Only schools that apply are eligible.

Although the wiring program is capped at $2.25 billion a year, the FCC--responding to congressional concerns that the program is too costly--projected it would raise only $625 million to finance the program’s first six months.

The FCC could raise more than $625 million only by ordering telecommunications carriers to contribute more, which many experts consider unlikely.

The FCC program comes on top of $425 million--double the amount spent last year--that the Department of Education is providing to schools this year to purchase computers, software and teacher technology training. It would also supplement a $15 tax on registering Internet domain names that Congress recently enacted to raise at least $23 million to help some colleges pay for faster connections to the worldwide computer network.

The long delays in implementing the Clinton administration’s vision to wire schools and libraries have had a beneficial side effect: the technology has improved substantially and its cost has dropped.

The prospect of massive government spending is being cheered in the computer industry and in states like California, which is being given $46.5 million this year under the Department of Education’s program and is likewise expected to win about 10% of the federal money given out under the E-Rate program.

The programs would represent a boost for the computer industry, in which many firms have already set up elaborate marketing efforts to capitalize on the federal spending.

Santa Ana-based Ingram Micro Inc., the world’s leading wholesale distributor of computer technology products and services, announced last month it will offer sales leads, bid support and special financing for vendors who want to participate in the E-Rate program. Dell Computer, IBM Corp., Microsoft Corp. and Apple Computer Co. have launched similar efforts.

John Santoro, a spokesman for Apple, said $2 billion in spending on wiring schools for the Internet could spur an additional $5 billion to $6 billion on new computers and peripherals.

“The schools and libraries are a multibillion-dollar market that’s just beginning to be cracked at a time when other sectors in our country are saturated with computer technology,” said Andrew Blau, director of communications policy at the Benton Foundation. In terms of being considered virgin technology territory, he added, “the K through 12-grade schools are like China within our borders.”