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.