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SLC to Merge With Other Non-Profits

The Schools and Libraries Corporation will merge with the Universal Service Administrative Company(USAC) and the Rural Health Care Corporation (RHCC) to create a single non-profit corporation, if a plan submitted by the three organizations is approved by the Federal Communications Commission (FCC).

The three independent non-profits were established to implement the Universal Service provisions of the Telecommunications Act of 1996. In its May 8, 1998, Report to Congress, the FCC recommended restructuring the Universal Service support organizations to address concerns about overlapping responsibilities and inefficiencies.

The reorganization plan, submitted to the FCC on July 1, 1998, would create a single corporate entity, USAC, with three divisions: the High Cost & Low Income Division, the Schools & Libraries Division, and the Rural Health Care Division. Each division would be headed by a corporate officer reporting to the USAC CEO and be overseen by a committee of the USAC Board of Directors. The FCC will soon call for public comments on the plan, which is now available on the FCC web site, <>.

The merged organizations expect to gain cost savings and efficiencies through consolidation and streamlining of common functions, such as payment of service providers, management, and office administration and accounting. Each division will be responsible for conducting unique programmatic operations, including client service support and application processing. The merger is expected to have little immediate impact on 1998 school and library applicants to the E-rate program.

The proposed merger also calls for divestiture of USAC from the National Exchange Carriers Association (NECA).

If accepted by the FCC, the merger plan would take effect no later than the end of 1998

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