# 27 May 1999

**PRESS STATEMENT OF COMMISSIONER MICHAEL K. POWELL**

**CONCURRING IN PART AND DISSENTING IN PART**

Re: *Twelfth Order on Reconsideration and Fifth Report and Order,
Federal-State Joint Board on Universal Service*, CC Docket No. 96-45

Giving all our children access to the world of information is
unassailably a worthy and noble objective. Few, and certainly not I,
dispute its value or its importance. I sincerely respect the depth of my
colleagues' support and commitment to this program as well as that of
other proponents and supporters. As the father of two children, I have
seen first hand the advantages of access and computer literacy.

Regrettably, however, I remain uncomfortable with much of the program's
structure and parameters. And, today, I am uncomfortable with the
funding increase that the majority will adopt. I am unsure that the
funding increase is actually needed as opposed to just wanted.

We are told that the demand for the program is extraordinarily high and
we should continue to provide support to the neediest schools. But what
information, data, or even mechanisms do I, or we, have as regulators to
distinguish between need and want in picking the "right" amount? It is
unremarkable that demand is high. Like in the movie "Field of Dreams,"
if you build it, they will come. And, as one would expect, we built a
large federal program and they have come. Indeed, shame on any school
that has not acted aggressively to take advantage of this federal
generosity. But, how do we know or distinguish, within that infinite
demand, real need from want, even for the poorest schools?

Part of the problem is that the distinction or choice involves questions
of educational policy and priorities, as well as social judgments about
worthiness among school demographics. For the Schools and Libraries
program, these judgments uncomfortably rest with telecom policy experts
at a federal agency. In fact, perhaps recognizing that we are fish out
of water, we do not really attempt in our decision today to make these
judgments and instead leave much of it in the hands of local officials
who have the expertise, but who likely also have insatiable appetites.

Passionate support of the objectives and commitment to the program alone
should not and cannot determine the appropriate amount of funding. Nor
can a lack of support or more modest commitment determine this amount.
Yet, if there is going to be such a large and significant federal
program as this, it must have some basis for fiscal discipline and
restraint, some basis for picking the "right" funding level.

But, as structured, I have no real idea how to determine the "right"
level without simply checking the political winds and aligning myself
with one current or the other.

Passionate support in implementation of federal programs is admirable.
But, it can lead to over-aggressive driving. In fact, this program often
feels like we are driving fast along a dark road without headlights and
we keep pushing harder on the accelerator. But, this road has twists and
turns. Our aggressiveness may have consequences:

• I worry that our aggressive interpretation of the statute will be
arrested by the courts. Indeed, a decision is expected any day out of
the Fifth Circuit with respect to some of our maneuvers with respect to
statutory interpretation, yet we stay resolutely on the accelerator.

• I worry that we cannot actually handle the speed of our aggressive
funding---today, an increase of 80%, on average, on a monthly, quarterly
and annual basis. We insist we can handle it, by covering the cost of
the program through savings we hope to engineer. Yet, we really do not
have complete control over such savings. Carriers in their business
judgment will allocate savings in different ways, depending on how they
choose to serve their customers. At present, we can't ultimately make
carriers do it as we might like, and should be careful how far we go in
trying to pressure them to do so. Thus, the "savings" we tout may or may
not be fully realized, and bill paying consumer may pay the price for
the increase.

Similarly, we bet on the off-sets of access reductions. Yet, the price
cap formula which we have been counting on for off-setting this increase
has been overturned by the D.C. Circuit. We may get that decision
stayed, but it places a long shadow of doubt over our ability to balance
the costs of the program. Moreover, we still have before us in the road,
not behind us, the access charge reform proceeding. And, we still are
unsure what the ultimate price tag for universal service will be\--what
it will cost consumers\--yet we push ahead with this increase. I fear
all of this could lead to a collapse of political will perhaps to
continue this program. But just as importantly, it could lead to a
collapse of political will to support funding or reallocating other
costs which are equally as important exercises for the good of consumers
and the general public. I hope we can handle it, but I have my doubts.

As the cop in the movies always says, "what is your hurry?" I cannot say
that I understand the urgency. The rhetoric is powerful: "A digital
divide," "information haves and have nots," affluent suburbs versus poor
urban children. They certainly are clever sound bites that give the
sense of urgency and crisis.

But, is this rhetoric warranted if we are not talking about eliminating,
but rather limiting, the program, at least while we attend to other,
languishing aspects of universal service? More modest funding would not
stop the program, it would not jeopardize the well-being of our
children. It would not condemn us to a world of haves and have nots.
Modest funding would merely mean that all of the benefits of the program
will not arrive immediately. It means all will still get wired over the
next couple of years, but perhaps not by year 2000. Why would that be so
tragic?

We are told only 51% of classrooms are wired---a bare majority. But is
our global competitiveness somehow irreversibly lost if it is not
everyone immediately? How many classrooms in countries around the world
actually have anything approaching this level of connectivity.

Moreover, nearly 90% of schools are already wired. Those students still
have access. Surely not as much direct and instantaneous access as they
may want, but they are not shut out. Plus, we really do not know where
else they may get access: home, church, boys and girls clubs, and other
public and private initiatives. Yet, we speed ahead as if racing a dying
child to the emergency room.

This all troubles me precisely because I care about the program and
support it. The program must not get to the point where its rhetoric
exceeds its fundamentals.

I would have supported pegging funding levels at the current \$1.9
billion, a more moderate increase given this funding year is six months
shorter than the last. No, I don't know if that is the right number
either. But if we are going to travel a fairly dim lit road, its seems
driving a little slower is more likely to ensure a safe arrival at our
destination.