P. O. BOX 2120
June 20, 1997


TO: Division Superintendents
FROM: Richard T. La Pointe
Superintendent of Public Instruction
SUBJECT: Universal Service Telecommunications Discounts

  The Report and Order of the Telecommunications Act of 1996
  began a process to provide schools, libraries, and rural
  health care providers with discounts on telecommunications
  services.  The Federal Communications Commission (FCC)
  issued the Report and Order detailing the regulations that
  will be put in place governing these discounts on May 7,

  According to the Report and Order, schools will be eligible
  for discounts of 20-90 percent off the lowest competitively
  available rate for all commercially available
  telecommunications services, Internet access, and
  installation and maintenance of internal connections
  providing telecommunications services to classrooms. 
  Discounts will apply to telephone service (local and long
  distance); advanced telecommunications services such as
  video-on-demand, distance learning, etc.; a  basic conduit"
  from the classroom to the Internet including Internet
  service provider (ISP) charges and inside wiring including
  routers, hubs, servers, wires, and installation of those
  items.  Computers, software, and teacher training are not
  eligible for discounts.  Additionally, schools and libraries
  will have the flexibility to purchase whatever package of
  telecommunications services they believe will meet their
  needs most effectively and efficiently.

  Discount percentage rates will be based on the number of
  students eligible (not just participating) in the national
  school lunch program.  The FCC has provided a matrix of six
  levels of discounts based on the percentage of national
  school lunch eligibility.  Additional discounts may apply to 
  rural schools.  Discounts can apply either to individual
  schools or can be averaged for the school division, if the
  division chooses to purchase telecommunications services for
  all schools.  The FCC encourages schools and libraries to
  seek partnerships or join consortia to utilize services more

  To qualify for discounts, schools must apply to the National
  Exchange Carriers Association (NECA) which has been named
  interim administrator of the Universal Service program.  FCC
  requirements for schools' application are as follows:

  Schools must prepare a technology plan for using the
  discounted telecommunications services.  The technology plan
  must be approved by a designated state agency.  The
  Committee on State Discount Rates is recommending to the
  Governor that the Department of Education be approved to
  review plans of school divisions which are already on file
  in the agency.

  In addition to the approved technology plan, schools must
  provide the following information to the Universal Service
  administrator (NECA) as specified in the Report and Order

     (1)    the computer equipment currently available or
            budgeted for purchase for the current, next, or
            other future academic years, and whether the
            computers have modems and, if so, what speed

     (2)    the internal connections, if any, that the school
            or library already has in place or has budgeted to
            install in the current, next, or future academic
            years, or any specific plans relating to voluntary
            installation of internal connections;

     (3)     the computer software necessary to communicate
            with other computers over an internal network and
            over the public telecommunications network
            currently available or budgeted for purchase for
            the current, next, or future academic years;

     (4)    the experience and training the staff has received
            in the use of the equipment to be connected to the
            telecommunications network and training programs
            for which funds are committed for the current,
            next, and future academic years;

     (5)    existing or budgeted maintenance contracts to maintain
            computers and;

     (6)    the capacity of the school's or library's electrical
            system to handle simultaneous uses.

  The FCC will also require the applicant to describe the
  services that schools seek to purchase in sufficient detail
  to enable potential providers to formulate bids.  The FCC's
  intent is to have the administrator post this information on
  the Internet for service providers to have an opportunity to
  bid on the requested services.

  Finally, the FCC, as specified in the Report and Order #577,
  will require the person authorized to order
  telecommunications services to sign the application and
  certify that:

     (1)    the school or library is an eligible entity under
            sections 254(h)(4) and 254(h)(5) and the rules
            adopted herein;

     (2)    the services requested will be used solely for
            educational purposes;

     (3)    the services will not be sold, resold, or
            transferred for money or any other thing of value;

     (4)    if the services are being purchased with other
            entities, all co-purchasers must be identified
            along with the services or portion of the services
            being purchased by the school or library;

     (5)    all of the necessary funding in the current
            funding year has been budgeted and will have been
            approved to pay for the  non-discount" portion of
            requested connections and services as well as
            necessary hardware, software, and that the
            necessary staff training will be provided in time
            to use the services effectively; and;

     (6)    the applicant has complied and will continue to
            comply with all applicable state and local
            procurement procedures.

  Some of these provisions may change by the time the
  applications are filed.  However, schools interested in 
  receiving support may wish to begin compiling the
  information the FCC is requesting.  School divisions may
  also wish to revise the technology plans submitted to the
  Department of Education to reflect requirements for
  participation in this program.

  A state requirement of the FCC is to adopt discounts for
  intrastate telecommunications services that are at least
  equal to the interstate discounts.  The Department and the
  Council on Information Management are now working with the
  State Corporation Commission to establish intrastate
  discounts for schools.

  The Universal Service discount program is an opportunity for
  schools and libraries to significantly increase technology
  availability for students, teachers, and the public for
  years to come.  It should be noted, however, that it will
  take some time for NECA to interpret the regulations,
  produce the discount applications, set up the administrative
  process, and account for funding.

  Regulations in the FCC Report and Order take effect 30 days
  after publication in the Federal Register.  The Report and
  Order has not been published.  Also, once the Report and
  Order has been published in the Federal Register, legal
  challenges to provisions of Universal Service may be filed. 
  It is our understanding, at this time, that funds are to be
  collected from telecommunications carriers to fund discounts
  to schools.

  The enclosed State Corporation Commission (SCC) New Release
  was issued June 9, 1997.  More information on Universal
  Service is available on the internet at:

     - for US DOE
     - for Federal
            Communications Commission
     -    http/ for Edtech-ALERT
     - for
            the VDOE Telecommunications Discounts page

  Additionally, new information will be provided on the DOE
  Homepage as it is received.

  For questions on current department activities related to
  the Telecommunications Act contact Dr. Ida J. Hill,
  Assistant Superintendent for Technology at (804) 225-2757. 
  Greg Weisiger, VSEN Administrator, should be contacted at
  (804) 692-0335 for information about future department
  activities and the content of the Report and Order.


  Attachment:  A hard copy of this memo and its attachment
                 will be sent to the superintendent's office.