Press Release of Sen. Conrad Burns (R-MT). Re: Opposition to increasing funding of the FCC's Schools and Libraries Program (aka "e-rate" and "Gore tax"). Date: May 26, 1999. Source: Office of Sen. Conrad Burns. This document was created by scanning a fax copy, and converting to HTML.

FCC Raises 'Gore Tax' $900 Million
Burns Pushes for Reform To Stabilize Program, End Unlawful Tax

WASHINGTON, D.C. - Montana Senator Conrad Burns today expressed his disappointment with the Federal Communications Commission's (FCC) 3-2 vote that potentially increases a hidden tax on long distance telephone calls by roughly $900 million.

The FCC levied the tax in order to fund the Schools and Libraries Program, or e-rate program, which is intended to help connect schools and libraries to the Internet. Burns has long called for reform of the program, saying that the current system is inefficient and imposes an unconstitutional tax on the American people that was not authorized by Congress.

"I believe that the goals of the Schools and Libraries Program are laudable, although Congress did not authorize the construction subsidies it now entails," Burns said. "Contrary to a popular myth about 'full funding' of this program, the Telecommunications Act did not give a specific dollar amount for the e-rate, nor did it authorize the kind of construction the program now entails. The law simply provides for reduced Internet access rates for schools and libraries.

"With their latest action, the FCC has singlehandedly imposed a tax on consumers without the consent of Congress, in effect circumventing the will of the American people. This is a transparent political move to bolster the vice president's faltering presidential campaign."

Burns has introduced legislation that separates the Schools and Libraries Program from the Universal Service Fund, which was originally intended to ensure affordable telephone services for people in rural and under-served areas. The bill would cut the 3 percent federal excise tax on telephone calls to 1 percent, and the funds generated from the remaining tax would be redirected to the Schools and Libraries Program through grants to the states. Such a program would have generated nearly $2 billion for schools in 1998. Under Burns' bill, the program would be administered by the National Telecommunications and Information Administration (NTIA), which administers a number of technology grant programs for the federal government.

"The approach we have devised for the program has a number of advantages," Burns said "It takes the Schools and Libraries program out of the realm of politics by tying it to a legitimate and stable funding source; it brings the program into compliance with the intent of Congress; it puts universal service back on firm ground; and it puts money into classrooms rather than the pockets of bureaucrats.

"I would like to congratulate Commissioners Furchtgott-Roth and Powell, who again stood up for what is right and against levying a hidden tax on American consumers."

Burns is chairman of the Senate Communications Subcommittee, which oversees many Internet issues.