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Next Generation Internet, plus ISP's and universal service
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Date: Wed, 11 Jun 1997 10:21:33 -0400
From: Garret Sern
WASHINGTON UPDATE --- JUNE 10, 1997
IN THIS ISSUE:
SENATE COMMUNICATION SUBCOMMITTEE MEMBERS VOICE CONCERNS OVER NEXT GENERATION INTERNET INITIATIVE
FCC LEADERSHIP GRILLED ON UNIVERSAL SERVICE RULINGS
FARNET MEMBERS DISCUSS UNIVERSAL SERVICE FUND ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^^^^^^ SENATE COMMUNICATION SUBCOMMITTEE MEMBERS VOICE CONCERNS OVER NEXT GENERATION INTERNET
June 3 - The Senate Commerce Subcommittee on Communications spent a busy day hearing testimony on the Next Generation Internet (NGI) and Internet2 initiatives in the morning, while taking the afternoon to voice concerns and questions to the FCC leadership regarding their May 8 rulings on Universal Service.
Despite an overall agreement that the NGI project is needed, the senators present cited concerns that funding was not only underestimated, but being unfairly allocated as well. Committee Chairman Burns (R-Mt) and Senator Ron Wyden (R-Ore) were particularly fearful that rural communities were being left out; Senator Burns questioned why rural states were underrepresented on the Presidential Advisory Panel (out of 21 members, 11 are from California); while Senator Wyden expressed confusion over which universities will be allowed to participate in the federally funded program.
At stake is $300 million requested by the Clinton Administration to fund NGI over a three year period to be divided among several federal agencies. (An April 8 version of the draft proposal is available at: (http://www.hpcc.gov/ngi-concept-08Apr97) Under the current proposal, $100 million is to be divided anually between the Penatgon's Defense Advanced Research Projects Agency (DARPA)/$40 million; the National Science Foundation (NSF)/$10 million; the Department of Energy (DOE)/$35 million; the National Aeronautics and Space Administration (NASA)/$10 million; and the Commerce Department's National Institute of Standards and Technology (NIST)/$5 million. With the NSF's prominent role in creating the first Internet, many are surprised at the small portion of funding it received.
Some industry sources state that the current Clinton proposal seriously underestimates the true cost of the project which could run over $10 billion per year for the next five to ten years if it wishes to meet the technology expectations of increasing transmission speeds up to 1,000 times faster than the current Internet. Funding has not yet been authorized, neither by the House, nor the Senate for the NGI initiative. Currently, NGI is part of several agencies authorization legislation. What really counts though, is appropriations legislation and the various bills containing NGI
Contrary to what has been reported in the press, Internet2 is a separate, privately funded initiative than NGI. Because of the misconception by congressmen that they are the same, Internet2 might find it difficult to receive any federal assistance if the concerns surrounding NGI are not resolved. Internet2 members are responsible for contributing to the initiative and seek government grant programs whenever possible. For example, the NSF Connections Program, a competitive grant program that awards funding for individual universities to connect campus systems to the NSF's vBNS, has awarded 53 out of 66 grants to universities belonging to the Internet2 consortium. Although promoting cooperation between the two projects, such a program still left committee members wondering what requirements are necessary in order to obtain such a grant, and whether smaller and rural universities are being left out due to lack of funding and available telecommunications infrastructure. Senator Ted Stevens (R-AK) compared it to a highway project, "where rural states need far more money than urban states because they drive five times as longer." As Chair of the Senate Appropriations Committee, Senator Stevens wields strong influence as to where funding is allocated, and has the power to hinder future funding for the NGI initiative.
Neal Lane, Director of the National Science Foundation said the new Internet is not akin to an established infrastructure like a highway, but is an "experimental work in progress", which is reliant on the "nation's researchers to help us move forward." Such a response raises concerns in the academic community, many of whom echo senators' fears that only the wealthy universities with existing telecommunications infrastructure will be able to receive such grants.
Even those universities receiving a grant are still in need of federal funding. Ms. Bonnie Neas, Director of Information Technologies at North Dakota State University, testified that despite the grant from the NSF-EPSCoR (Experimental Program To Stimulate Competitive Research) to the Great Plains Consortium of which North Dakota State University is a part, the university's financial obligations as an Internet2 member and NSF-EPSCoR will increase from $150,000 to $400,000 per year. She fears that the costs of universities will increase, especially those located in the rural areas, due to the subscriber line charges imposed by the Universal Service Fund from which they are ineligible to receive discounts. For more information on EPSCoR: http://www.qrc.com/nsf/ehr/epscor/states/start.htm
Dr. Cherie Pancake, Professor of Computer Science at Oregon State University, reiterated this need for federal funding and involvement if the Internet2 inititative is to meet its expectations. Being able to ensure that the new technology is useable, that participation of universities and federal agencies is balanced, and that interagency collaboration exists will be essential for both initiatives success. Whether NGI and Internet 2 proponents can convince congress that both initiatives have the leadership structure and fairly allocate their resources are essential if the Senate Appropriations Committee is to approve funding.
FCC LEADERSHIP GRILLED ON UNIVERSAL SERVICE RULINGS
JUNE 3 - Members of the Senate Communications Sub-Committee had their first opportunity to directly question the FCC leadership since the Commission handed down its May 8 ruling adopting most of the Federal-State Joint Board Recommendations. After praising the Commission for their dedication and hard work, the senators immediately took to asking pointed questions. Senators John McCain (R-AZ) and John Rockefeller IV (D-WV) both questioned the final cost of guaranteeing Universal Service. Citing a study by the RAND and McKinsey groups that estimated a cost of $20 billion to interconnect America's schools, Senator McCain fears that local telephone rates will rise if carriers are forced to increase their fund contributions.
Chairman Reed Hundt replied such studies are just estimates, that the system will take years to implement and the states will be carrying most of the financial burden in interconnecting our nation's schools. Committee Chairman Conrad Burns (R-MT) expressed concern that with the telecom industry being "forced" to contribute 2 billion annually to the fund, the computer and Internet industry could unfairly take advantage of not having to pay into a program which is encouraging use of their services. Hundt cited provisions within the order that ensure use of the fund is for non-commercial use only, while Commissioner Rachelle Chong noted that commission rules limit discounts, and the resale of such discounts can only be used for telecom services. Considering the somewhat vague and at times contradictory language within the Telecommunications Act as to what constitutes a telecom service, one may view Chong's remarks with some skepticism.
Senator Ted Stevens (R-AK) certainly let his doubts be known. Stating that the Universal Service Fund will be depleated by the year 2000, he questioned the logic of exempting Internet Service Providers from paying into the fund. Giving Chairman Hundt no time to formulate a coherent response, Stevens was relentless in questioning why the burden had been placed on the telecom industry to finance universal service? What Senator Stevens failed to note, and Chariman Hundt failed to articulate, is that Internet Service Providers are paying into the fund, albeit indirectly, through the leasing of telephone lines that are essential for their services. Unless this is made clear to Senator Stevens and others with similar concerns, pressure might be exerted to formulate a corrections bill that would force the FCC to redo the entire process. Any challenges to the FCC ruling will probably take place in the court system, with the Regional Bell Operating Companies leading the charge to the courtroom. It is more likely, however, that the Universal Service provisions within the Telecommunications Act will remain unchanged for the forseeable future.
The afternoon portion of the hearing provided the private sector with an opportunity to comment on the FCC ruling and morning session. Most of the panelists' testimony had been heard before. Arguments were made against the wireless service industry having to contribute to the fund. Mr. Bob Rowe of the National Association of Utility Commissioners stated that the FCC had failed to recognize the potential of the wireless industry in providing services to rural areas. Mr. Roy Neel, President of the United States Telephone Association criticized the FCC for cutting access charges before mandated universal service could be implemented in high cost and rural areas, while Mr. Jonathan Sallet, Chief Policy Counsel for MCI Communications, agreed that Internet Service Providers should not be required to pay into the fund, and did not constitute a threat to the telephony industry. Although citing a willingness to work together, it is doubtful that the various parties will ever reach an agreement on funding that they perceive as mutually beneficial.
FARNET MEMBERS DISCUSS UNIVERSAL SERVICE FUND
May 28 - FARNET members convened via conference call to discuss how the FCC Order on Universal Service will impact their business, who is eligible to recieve funding and join a corsortia and how the application process will work.
Currently, the FCC Common Carrier Bureau (CCB)is drafting an Universal Service Fund application that will be passed on to the Department of Education for approval. (For more information check the Merit web page at http://www.merit.edu/ and click under "What's New".) A representative of the CCB "hoped" that the application for schools and rural health care providers would be ready by early August. Applications for carriers are in the works, but don't count on them being available any time soon, considering we are just in the initial stages of this entire process. Although not eligible for receiving universal service funding, public universities are eligible to join a consortia and take part in the benefits of shared infrastructure costs. Applicants are processed on a "first-come, first-serve" basis, without regard to need. A "soft-cap" is in place, however, which provides that if funding is running low during the last months of the fiscal year, then applicants will be prioritized according to need. Although the applications probably will not be ready until late summer at the earliest, potential applicants would be wise to get their technology plans ready and to touch base with their state's public utility commission to determine whether such plans are required to meet certain criteria.
FARNET hopes to hold future conference calls on a regular monthly basis. If you have any comments or suggestions, please e-mail Garret Sern at garret@farnet.org.
For more information on universal service:
http://www.merit.edu/ http://www.ala.org/oitp/usr.html http://www.ctr.columbia.edu/vii.univsvce/ http://www.ctr.columbia.edu/vii.univsvce/papers.html http://www.fcc.gov/ccb/universal_service/welcome.html http://www.yampa.com/aerie/resource/section1/infrasta.htm http://www.yampa.com/aerie/resource/resource.html http://www.rurdev.usda.gov/nrdp/nrdp/nrdpsrdc.html http://www.benton.org/Policy/Uniserv/
Thanks to J. Keith Harmon for providing this list.
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Written from FARNET's Washington Office, "FARNET's Washington Update" is a service to FARNET members and other interested subscribers. We gratefully acknowledge EDUCOM's NTTF and the Coalition for Networked Information (CNI) for additional support. If you would like more information about the Update or would like to offer comments or suggestions, please contact Heather Boyles at heather@farnet.org. ```
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