Press Conference to Announce Introduction
of Schools and Libraries Internet Access Act.

Participants: Rep. Billy Tauzin (R-LA), Rep. Jerry Weller (R-IL), and Sen. Conrad Burns (R-MT).
Date: July 23, 1998, 10:30 AM ET.
Location: House Radio and TV Gallery, Washington DC.
This page contains the entire transcript of Rep. Tauzin's opening remarks, Rep. Weller's opening remarks, and excerpts from Sen. Burns' opening remarks and answers to questions. Transcribed by TLJ.

Rep. Tauzin:  ... Senator Burns will be hear just shortly to announce filing on the Senate side.  A bill to reform, revise and refinance the schools and libraries program currently being conducted at the FCC.   It will abolish clearly any claimed authority by the FCC to tax American telephone users.  It will abolish the Schools and Libraries Corporations that have been set up by the FCC that have been in a letter, as you know, to the Senate, declared illegal.  And it will transfer the money and the authority to run the program to the appropriate authorities.  And fund them out of existing tax revenues from telephone service.  

To put that all in perspective, let me refer you to the fact that in 1914 America adopted a telephone tax, a three percent tax on all telephones, that is still being collected today.  The tax originally was passed as a war tax to fund World War I.  And if my history serves me right, that war is somewhat behind us now.  But the tax is not.

That 3% tax now generates five Billion dollars per year, and it literally goes to the general treasury, has been discussed from time to time since 1914 for possible repeal but has never been repealed for the American telephone users.

In that regard let me also tell you that in some jurisdictions telephones are taxed more than tobacco.   The practice of talking in a free society gets taxed heavier than some of the so called sin products in our society, and that we think is atrocious.

In the context of what we propose today let me make several points.  One, we save the schools and libraries program from all claims of illegality.  We abolish the Gore Tax and the corporations which we think were illegally created to conduct the program at the FCC.  We make it clear that the FCC has no authority to do a legislative thing, and that is, pass taxes on the American public.  And we make it clear that the schools and libraries program will continue, that it will be properly funded, but that that funding will be conducted through the state education authorities administered through the NTIA, our agency in Washington to determine the scientific efficacies of programs like Internet wiring of schools and libraries and rural hospitals.

The second point that I want to make is that our plan includes some major tax cuts for Americans.  The plan involves about 28.5 Billion dollars of current revenues that would require offsets in the budget process.  Our suggestion is that while we have a surplus, and that surplus is growing in our accounts here in Washington, that it is time to end this tax on talking.  And so our bill proposes a complete repeal of two percent of that three percent, leaving one percent in place for a period of about five years to complete the schools and libraries fund, and capping that fund at about 1.7 Billion, which is as much or more than the FCC has proposed in the schools and libraries program, completely fulfilling and completing the promises made to schools, libraries, and rural hospitals that over this period of time they be properly connected to the Internet with the equipment and the inside wiring to completely service the needs of their constituent groups, students, and library patrons, and hospital users with Internet services.

And secondly, we repeal as I said completely the FCC tax which is currently being being taxed on telephone users and billed to telephone users of America.

This represents a major tax cut for all Americans -- all of us who have telephones.   And while we are discussing in Washington today tax cuts that will be targeted to specific Americans, married couples, couples with capital gain income, or people who are paying currently social security taxes, taxes on their social security benefits.  While we are talking about those targeted tax relief, this is the one effort that will be made to give every American  broad based tax relief on the charges that are currently assessed on their telephones, legally since the 1914 tax, and we think illegally, in the FCC Gore Tax.

It is important to note that the Gore Tax is under attack.  The Fifth Circuit Court of Appeals is currently hearing arguments on the legality of that tax.  The legality of the entire schools and libraries   program is therefore being threatened by this lawsuit, and the questions of illegality in the entire structure of the Gore Tax mechanism.

The structure by which it is being implemented through corporations which have been declared illegal by our own government agency here, is equally challenging for those who want to see schools and libraries properly wired up.

And finally let me point out the even the FCC is struggling with the notion of what it can do it terms of providing some of these monies to schools and libraries, when the law itself seems to suggest that if anyone makes a bona fide request they are entitled to their money.   The problem with the language of the 96 Act in this regard creates huge problems for the program.  We cure up all of those problems, and we create a sound a stable funding for the schools and libraries program, administered through the state education authorities under the guidance and direction of NTIA.  We think that this is a much sounder program for schools and libraries.   We think it properly funds them under legal authority, and simultaneously gives Americans a huge advantage in tax cuts on both the 1914 excise taxes, and this illegal Gore Tax, which we repeal today.

Let me introduce Jerry Weller, who is the principal co-sponsor of the measure in the House, and I believe is going to be a major force in helping us get Ways and Means Committee approval of this measure.

Rep. Weller:  Thankyou.  Well good morning.   I'm Jerry Weller.  I represent Chicago and the south suburbs in Illinois.   And first let me just begin by commending Telecommunications Subcommittee Chairman Billy Tauzin for his leadership, and also his partnership, as we work to achieve a goal that we all share, and that is giving every child in Illinois and Louisiana  and America the opportunity to have access to computers and the Internet.

Let me just put this in perspective, when I think of my own state of Illinois.  In Illinois there is eighteen hundred Illinois schools that have applied and requested funds for upgrading their access to the Internet.

Illinois ranks third in the number of applications that have been filed requesting this type of help.  And I am one who belieives that there is a federal role in achieving this national goal of giving every child in American and Illinois the opportunity to have access to the Internet.  And I think, of course, in the south suburbs, and the south side of Chicago, I think of LaSalle Peru Oglesby (?) High School, in LaSalle County at the western end of my district, a century old building, it's a fortress.  But because of the way it was designed, and the time it was built, school officials tell me that it will cost one million dollars for them to upgrade, to put in the wire and the fiber so that so that every child who attends LaSalle Peru Oglesby High School has access to the Internet and computers in every classroom.

And other schools throughout the district that I represent, Calumet City Grade School, in south Cook County, seventy-two classrooms need to be wired, Frankfurt Grade School, one hundred and forty three new computers in classrooms, LaSalle Catholic Grade School, fourteen classrooms, thirty-six computers.  They have requested help.  And every one these school districts has limited resources, and the need our help.  And we believe today that there is a role for the federal government to help here.

Now, we have a problem with the way the FCC has gone about setting up the program to achieve the goal that we all share, and that is giving children access to the Internet, and every child access to computers.  Clearly there is a problems with the administration, and clearly there is problems with the Gore Tax, which we bleive frankly has legal problems, and the Constitutionality of the way it was created.

When I was talking with Rich Duran, the Will County School Superintendent, which is the largest county that I represent in the south suburbs, he said, "you know, we have got a problem here, we need this help, but we know the program is in jeopardy."    And of course 1,800 achools are waiting for this help.  They have applied, and because of the problems with the FCC, that they are wondering if they are going to get this kind of help.

Today we are offering this solution.  When I was elected in 1994, I was given a mission of changing how Washinton works.  You know, we all said that if we don't like a program, we don't like the way someone is going about trying to solve a challenge, we should come up with a better idea.

And clearly, the School and Library Internet Access Act is a better idea.  And if you think about it, I have a penny here today, one cent.  Keep in mind, one cent.   Because, when this legislation is passed into law, as a result of that, for every dollar on your phone bill one cent will be earmarked for the School and Library Internet Access program, as a result of this legislation, just one cent.  And as a result of that legislation, not only have we cut taxes for consumers, senior citizens, low income families, who suffer the regressive Gore Tax, as well as the existing 1914 telephone tax.   But this program in the first year will make available 1.7 billion dollars, not only to help the eighteen hundred schools in Illinois that have requested help, but to help thousands of schools, and millions of school children, have access to the Internet

I also want to point out that this program will generate 500 million dollars more than the current Gore Tax generates, as the FCC is administering it.  We provide a tax cut.  We help give children the opportunity to access to the Internet, which is our goal.  And we do it with less bureaucracy.  This is a win win win for tax payers.  It is a win win win for school kids.  It is a win win win for everyone who shares our goal to give every child access to the Internet.  Thankyou.

Rep. Tauzin:  Thanks, Jerry.  I want to also point out that Kenny Hulsof is one of the prime co-sponsors.  I want to acknowledge his contributions and help.  He will be assisting us in moving this bill forward.

Rep. Tauzin (on Prospects for Passage):  You should also know that we have had extensive discussions with the leadership here in the House over this bill, with Chairman Bliley, with Speaker Gingrich, with Chairman Archer, and with other Chairmen, such as Education Chairman Bill Goodling and Hal Rogers and others from the Appropriations Committee.  And there is a growing, at least, consensus that something like this needs to be done.  Chairman Bliley indicates that he would like to see action on the Gore Tax sometime in September, when we get back from the August break.  And so, there is a strong likelihood that before we leave session in October, we will see some action.  Hopefully, it will be what we propose, but it will be something to deal with what we consider to be the illegalities of the Gore Tax, some way of supplementing the program by making sure that it is properly funded, and legally funded, and properly administered.  I want to emphasize that nothing in our plan ends nor threatens the expectation of schools and libraries and rural hospitals for the assistance of the federal government intends to give them in making access to the Internet to all of their students, patients, and library patrons.    On the contrary what we do today is to make sure that there is a legal funding, a stable funding, and an efficient and proper execution of the grant program, so that in effect, that we eliminate all of the illegality claims and all of the problems that the FCC is currently experiencing."

Rep. Tauzin (on FCC Misinterpretation of the 1996 Act):  What the FCC did was take that language and interpret it as giving it the authority to provide to these institutions money to do construction grants to actually buy equipment ... The FCC decided that it want to construct a program to do this.  As worth while as it is, they wanted to take over the legislative roll of taxing, and spending this money.  In fact, doing it in a corporation that had no legislative oversight, that was not responsible to any committee of Congress, that was not subject to the appropriations process here in Washington.  They were going to become a taxing agency, levying a tax on telephone users.  They were going to then collect that tax here in Washington and spend it through government corporations that were not subject to government oversight or supervision by any agency or committee of this Congress, and appropriate it to the various schools and institutions without any process of appropriation through this Congress.  They literally were assuming to themselves in this in this interpretation the right to tax and spend without any Congressional authority.

Sen. Burns:  ...  I first want to premise this on the --  you know, universal service, we, everybody says want to wire schools for the Internet, and all this.  And basically that is not the real thrust of this thing.  We would like to have broadband technology into these schools for your distance learning, and your two way interact.   This is where the real thrust is.  If it takes another service to kind of pay for the highway, then that is what we want to do.

We know that the FCC set up a corporation down there.  Even its legality is being questioned.  We want to put our schools on the information highway, but we also want to take along some other services.  And with that will come some funding, and the three percent excise tax seems viable to me, because that is paid by telephone users.