I. Eligibility for Universal Service Discounts
Q: Which schools are eligible to receive discounts?
- A: The Commission concluded that, to be eligible for universal service
discounts, a school must meet the statutory definition of an elementary
or secondary school found in the Elementary and Secondary Education Act
of 1965, must not operate as a for-profit business, and must not have an
endowment exceeding $50 million. Both public and non-public elementary
and secondary schools that meet these criteria will be eligible to receive
discounts on eligible services.
- Q: Which libraries are eligible to receive discounts?
A: The Commission concluded that, to be eligible for universal service
discounts, a library must operate as a not-for-profit business and must
be eligible for assistance from a state library administrative agency under
the Library Services and Technology Act (LSTA). In addition, while the definition
of library in the LSTA includes public libraries, public elementary or secondary
school libraries, academic libraries, research libraries that are not affiliated
with an institution of higher education, and private libraries subject to
state determination, the Commission concluded that a library's eligibility
for universal service discounts funding will depend on its funding as an
independent entity. "Independent" means that the budget of the
library must be completely separate from that of any institution of learning.
For example, because institutions of higher education are not eligible for
universal service discounts, an academic library will only be eligible if
its funding is completely separate from the funding of any institution of
higher education. On the other hand, a library within an eligible school
will be entitled to receive discounted services as part of the school.
- Q: Will eligible schools and libraries applying for
discount funding be allowed to aggregate their demand for telecommunications
service with others?
- A: Yes. The Commission encourages eligible schools and libraries to
aggregate their demand with others to create a consortium with sufficient
demand to attract competitors and negotiate lower rates. It is important
to note that entities not eligible for universal service discounts will
benefit from lower pre-discount prices from such aggregation, but they
will not be permitted to gain eligibility for discounts by participating
in consortia with those who are eligible. Clearly, this will place responsibility
on consortia to keep careful records of their expenses so that only the
eligible entities receive the discounts.
- Q: With whom will eligible schools and libraries be
permitted to aggregate demand?
- A: Eligible schools and libraries may aggregate demand with other eligible
schools and libraries, rural health care providers, public sector (governmental)
entities, and/or private sector entities. Schools and libraries that join
consortia composed only of other schools and libraries, rural health care
providers, and public sector (governmental) entities may, under the Communications
Act, receive below tariff rates on any eligible tariffed services they
order. Eligible schools and libraries participating in consortia that include
private sector entities may receive a universal service discount only if
any interstate services that such consortia receive from incumbent local
exchange carriers are provided at generally tariffed rates.
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