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FCC Trims E-Rate Fund Collections for First Six Months

In its Third Order on Reconsideration, the Federal Communications Commission decided Dec. 16 to trim the funds collected from telecommunications carriers on behalf of schools and libraries to $625 million in the first six months of 1998. The Third Order on Reconsideration is available on-line at

The FCC action came after long-distance carriers said they would make consumers' contributions to the universal service fund more explicit on their phone bills, potentially undermining political support for the program. The new FCC commissioners have recently been called on to respond to tough questions about the program from key members of Congress.

An FCC staff member said the commission's action does not affect the $2.25 billion cap on the program's first year, but rather the speed at which money would be collected. She said the collection rate could be adjusted upward if the demand for funds exceeded the pool of available monies. She said the FCC did not want to collect money "just to have it sit in a bank."

A spokeswoman for the SLC said the corporation would have no official statement on the FCC action. She said the program was moving forward as planned. 'We're delighted that the applications have gone out and that our client services hotline is in place."

Asked what would happen if the initial funding requests exceeded $625 million, she said that the program's rules of priority would be applied. Under those rules, only those schools and libraries that are most economically disadvantaged and have not received any funding yet would be eligible until more funding becomes available.

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