FCC Oversteps Authority on Schools Hookup

FCC Oversteps Authority on Schools Hookup
April 1, 1998



A General Accounting Office study concluded in February that the Federal Communications Commission did not have the legal authority to establish a quasi-private, nonprofit corporation to partially reimburse local telephone companies for the cost of establishing Internet links to schools, libraries, and rural hospitals.

The Schools & Libraries Corp., run by longtime Washington lawyer and lobbyist Ira Fishman, determines how much of a discount, or subsidy, local telephone companies would receive for those links.

The subsidized Internet hookups are a provision of the 1996 federal telecommunications law, which requires telephone companies to bill users "universal charge" fees of $2.65 billion a year to help pay for the new Internet links. But in implementing the 1996 law, the FCC ran afoul of an earlier 1945 law that prohibits it from creating a corporation without congressional approval.