Network Bulletin No. 97-66

Date:  November 28, 1997

Subject:  Universal Service Fund

Index term:  How network libraries might become included
in state plans

On February 8, 1996, the Telecommunications Act of 1996 was
enacted.  Section 254 of the act mandates that the Universal
Service Fund, heretofore used to offset the higher costs of
rural telephone service, be increased.  The increased fund
is to be available to rural health-care providers, schools,
and libraries, with the goal of making information exchange
through telecommunications available throughout the United

The Federal Communications Commission set in motion a
rulemaking process.  At present, the Universal Service Fund
is capped at $2.5 billion annually.  A designated portion,
$400 million, is set aside for rural health-care providers.
The remaining amount is available to all eligible
applicants.  In its May 7, 1997, Report and Order (FCC 97-
157) on determinations made by a federal-state Joint Board
on Universal Service, the FCC wrote:

[indented text begins]
"We adopt the Joint Board's recommendation that all eligible
schools and libraries should receive discounts of between 20
percent and 90 percent on all telecommunications services,
Internet access, and internal connections provided by
telecommunications carriers, subject to a $2.25 billion
annual cap."  [X.A.425, page 222]
[indented text ends]

Federal, state, and local government bodies have been
working steadily toward setting up the process for fund
spending.  At present, the process is taking the following

--Library (or consortium) makes a statement of its
telecommunications needs in the form of a technology plan.

--State library reviews and approves the plans.

--Library (or consortium) prepares a statement of
telecommunications needs based on the approved plan,
including a self-certification of eligibility, and submits
it to an entity called the Schools and Libraries Corporation
(SLC).  Library posts formal request for proposal (RFP) for
telecommunications services on a website.

--SLC posts the statement of requirements, including a link
to the library's RFP, on the SLC website.  The SLC's website
is the source telecommunications companies will turn to in
looking for business. Telecommunications companies review
and bid on package.

--Library (or consortium) reviews bids and accepts bid it
determines is the best value.

--Based on the library's (or consortium's) self-assessment
of the percentage of children eligible for the Federal school
lunch program in the school district where the library (or
consortium) is located, a discount in the 20 percent to 90
percent range is determined.  During the contract period,
the library (or consortium) pays the percentage of cost not
covered by the discount.  The Universal Service Fund pays
the covered percentage.

_What Libraries for the Blind and Physically Handicapped can

Most network regional libraries are connected to their state
library, either as a designated unit of the state library or
as a program funded by the state library.  Regional
librarians should work through their contacts at the state
library to determine how the telecommunications costs of the
regional library are now included in technology plans being
developed by the state library, or how they might become
included in such plans.

Regional libraries that administer subregional library
networks should work with the subregional library directors
and directors of libraries hosting the subregional library
to achieve inclusion of the subregional library's
telecommunication costs in the technology plans and bid for
discounted telecommunications costs of either the hosting
library or the regional library.

_Where you can find more information_

There are multiple entities that provide information on the
discounts available to libraries through the
Universal Service Program.  The primary vehicle for
disseminating information is the Internet, and the following
sites will prove helpful and provide further links:

Contains official documents and frequently asked questions
(FAQ's); provides links to other sites.

Maintained by ALA's Office for Information Technology
Policy, this site gives access to various ALA filings with
FCC and other documents related to the Universal Service
Program; provides links to various state plans and documents
prepared and posted on the Web.

Maintained by the Education and Library Network Coalition
(EdLINC), a group sanctioned by the Federal Communications
Commission to reach out to the school and library community,
this site provides answers to frequently asked questions
(FAQs), general information on the discount rate (e-rate),
and links to other sources.

For further information please contact:

Stephen Prine
Head, Network Services Section