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Rockefeller: E-rate will survive

One of the chief masterminds behind federal Net access subsidies says the embattled "e-rate" won't be caught in the political crossfire of the next Congress.

SANTA CLARA, California--One of the chief masterminds behind federal Net access subsidies for schools and libraries today said the embattled "e-rate" won't be caught in the political crossfire of the next Congress.

Sen. Jay Rockefeller (D-West Virginia) yesterday met with 3Com executives and local educators to discuss a range of programs designed not only to expose students to high tech, but also to train them to join the technology workforce. Among the programs discussed was the networking company's nationwide pilot program, NetPrep.

The senator didn't take long to turn the spotlight on the e-rate, which was attacked throughout the year by members of Congress who argued that the discount process was too bureaucratic or disputed the types of services that qualified for the subsidy.

Foes of the e-rate nicknamed the discount "the Gore tax," because the vice president has touted the program, which is supported by the access charges long distance companies pay to local phone carriers.

"I think we're over the hump on this," Rockefeller said. "Some our 'nonfriends' have switched their tune."

The first round of e-rate funding will go out in mid-November, and will cut schools' access and internal wiring costs by between 20 percent and 90 percent. Rockefeller and Sen. Olympia Snowe (R-Maine) authored an infamous amendment tacked on to the Telecommunications Act of 1996 that required the FCC to provide the subsidies under the nation's universal service fund. The Net access discount accounts for about 19 cents of every dollar that goes into universal service, which traditionally supports phone service in rural or low-income areas.

One critic who is expected to back away from the e-rate controversy is Sen. John McCain (R-Arizona), according to 3Com spokesman David Abramson. McCain had accused the FCC of overstepping its bounds by setting up the subsidy, which will provide $1.275 billion in discounts this year.

Since McCain and other lawmakers lodged their complaints, the FCC has been restructuring the Schools and Libraries Corporation, which processes e-rate applications.

"McCain is satisfied now," Abramson said. "The e-rate battle has been fought and won."

Despite Rockefeller's upbeat forecast, the fight over the e-rate may not be over.

If they are re-elected, Sen. Conrad Burns (R-Montana) and Rep. Billy Tauzin (R-Louisiana) might resurrect their plan to overhaul how the e-rate is funded, which would shake up the program.

Also, the FCC's restructuring of universal service is expected to be debated next year when the agency comes up for reauthorization.

During a meeting with reporters earlier this month, Tauzin, who chaired the House telecommunications subcommittee in the most recent session of Congress, said he wanted to see the FCC's actions scrutinized on every level.

"It is going to be a major warfare, and one in which the high-tech community is going to have a major stake," he said.

Indeed, the high-tech industry has as much to gain from a strong Net access subsidy program as schools do. Technology companies who aren't making money through their e-rate contracts stand to cash in regardless, while schools that save money through the e-rate likely will have more resources to spend on upgrades and computer peripherals that aren't covered by the program.