Court Challenges to FCC's Universal Service Order and Federal Support for Telecommunications for Schools and Libraries

RCED/OGC-98-172R: Published: May 7, 1998. Publicly Released: May 7, 1998.

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Pursuant to a congressional request, GAO provided information on the: (1) arguments raised in pending litigation challenging the Federal Communications Commission's (FCC) Universal Service Order, and (2) federal programs that provide assistance to schools (grades kindergarten through 12th) and libraries for telecommunications technologies and related services, including the amount and type of funding provided.

GAO noted that: (1) several parties, including several states and telephone companies, have challenged FCC's Universal Service Order; (2) among arguments raised are whether: (a) the universal service regime is an unlawful tax; (b) FCC's decision to support only 25 percent of the universal service costs in high-cost areas is contrary to the plain terms and express intent of the legislation and is arbitrary and capricious; (c) FCC has jurisdiction over intrastate rates; and (d) FCC erred by radically expanding the program for discounted telecommunications services for schools and libraries and rural health care providers; (3) 40 programs provide funding assistance for uses that could include telecommunications technologies and related services for schools and libraries, however, the extent to which the funds were used for telecommunications purposes is unknown; and (4) while half of the programs are targeted for telecommunications technologies, computers, and related purposes, the other half are primarily intended for other purposes but include telecommunications users.

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