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Federal Court Upholds E-rateIn what Federal Communication Commission Chair William Kennard called “a victory for America’s children,” a federal appeals court has upheld the e-rate program of telecommunications discounts for libraries and schools. The U.S. Court of Appeals for the Fifth Circuit ruled July 30 that the program’s funding mechanism, in which funds are collected from phone companies, who pass the charges along to customers, does not amount to an unconstitutional tax, as opponents have charged. The court also ruled that the FCC could subsidize Internet access and internal connections as well as telecommunications services, and that non-telecommunications carriers (such as manufacturers of networking equipment) could receive payments. However, the ruling said the FCC could only assess the charges for the program on interstate telecommunications services, not intrastate services. The lawsuit, Texas Office of Public Utility Counsel v. the FCC, was a consolidation of various challenges to the e-rate program brought by telecommunications companies and states. The program still faces challenges from bills introduced in Congress to revamp its funding mechanism and to eliminate it altogether. Posted August 9, 1999. |
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