The Telecommunications Act of 1996, signed into law on Feb. 8, has been described as “the most significant piece of legislation that the 104th Congress has ... enacted.”
While ranking it as “the most significant piece of legislation” enacted by the current Congress might be questioned, the universal service provision in the new law does appear to open the door to giving the citizens of rural counties equal access to the “information highway.”
The information highway, is the term popularly used to describe the network of telecommunications services that enable people to connect with others around the world via telephones and computers.
Using these systems, people can talk with other people, send messages, search all kinds of computerized information sources, and view all kinds of visual information as well.
With such resources as close as their telephone and computer keyboard and monitor, geographic location no longer matters in terms of accessing the latest information on practically any topic.
This capability will ultimately enable teachers and students in rural schools to have access to experts and information in libraries and other sources all over the world, allow business people to buy and sell in the world marketplace, and offer doctors and other medical specialists the opportunity to connect with medical information and experts on all kinds of diseases and medical procedures.
The universal service provision in the new telecommunications law requires that low-cost telephone service be made available to everyone in the United States.
Since telephone lines are used for computer network connections, as well as long distance conversations, this provision is the key to ensuring that rural citizens will have equal opportunity to fully access the rapidly emerging information highway system.
The Federal Communications Commission (FCC) is overseeing the development of rules and regulations to make the universal service policy a reality. The FCC is ordered to convene a joint board of federal and state regulators who are charged with recommending rules for universal service by Nov. 8, 1996. The FCC must implement these rules no later than May 8, 1997.
The joint board held their first meeting April 12 and heard testimony from five panels of people representing 1) competition and universal service, 2) low-income consumers, 3) schools and libraries, 4) rural, insular and high-cost areas, and 5) health care providers.
The law also specified certain basic universal service principles that the joint board and the FCC must use to protect the public interest. These principles include:
provision of quality services at just, reasonable and affordable rates
equitable contributions by all telecommunications providers to the cost of providing universal service
specific and predictable financing mechanisms for universal service
access to advanced telecommunications and information services for all regions
reasonably comparable services and pricing in all regions compared with urban areas
access to advanced educational services for elementary and secondary schools, and local libraries and advanced medical services for health care providers.
The new law also directed the FCC to periodically decide which telecommunications services to include in the universal service definition and thus which ones are eligible for government subsidies to ensure access.
In doing this, the commission will consider the role that the service plays in education, health care or public safety, its prevalence and commercial availability, and the public interest.
The FCC can establish a separate definition for what constitutes universal service for schools, libraries and health care providers.
All companies providing interstate telecommunications services are directed by the new law to contribute to the financing arrangement that the FCC establishes to pay for universal service subsidies. These subsidies will enable rural citizens to access telecommunications services at rates comparable to urban areas.
To be eligible to receive subsidies, telecommunications companies must be making their services available to every customer in their markets when the FCC regulations take effect (no later than May 8, 1997). In addition, their services must be widely advertised and provided at least partially via their own facilities.
In areas where no companies are willing to provide universal telecommunications services, the law orders that services be provided by the best qualified carriers. The FCC is to pick companies to provide interstate services and state regulators are to pick companies to provide intrastate services.
In addition, long-distance companies are forbidden to charge rates in rural and high-cost areas that are higher than they charge in urban areas. They are also barred from charging higher rates in some states than others. And they can’t subsidize services in competitive markets, such as long-distance services, with revenues from monopoly operations.
To promote telemedicine in rural areas, the new law requires telecommunications carriers to provide whatever services are needed for public or nonprofit providers to provide rural health care. Rates have to be reasonably comparable to those charged in urban areas.
The law defines health care providers as not-for-profit hospitals, college and university medical schools, community and migrant health centers, local health agencies, community mental health centers and rural health clinics.
The law also requires carriers to provide discounted services to elementary and secondary schools and libraries. The FCC is to promote advanced telecommunications and information services to school classrooms, health care providers and libraries, to the extent they are technically feasible and economically reasonable.
Schools with endowments of more than $50 million, libraries ineligible for federal assistance, for-profit schools, libraries and health care providers are barred from preferential rates or treatment.
Schools, libraries and health care providers cannot sell or transfer any telecommunications services they receive on a preferential or discounted basis.