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Tech Law Journal
News, records, and analysis of legislation, litigation, and
regulation affecting the computer and Internet industry
GAO Report: FCC Illegally Formed
Schools and Libraries Corporation
(March 31, 1998) The General Accounting Office issued a lengthy legal opinion
today in which it stated the the Federal
Communications Commission's formation of two corporations was without legal
authority. The report was welcomed by
many Representatives and Senators who have long complained about the FCC's handling
of universal service subsidies
for school and library internet hookup.
Section 254 of the Telecommunications Act of 1996 covers universal access.
Subsection h authorizes the FCC to
provide subsidies for schools and libraries and rural health care providers.
Related
Pages
Complete Text of § 254.
Schools and Libraries Corporation Summary Page.
The report was written by GAO Chief Counsel, Robert P. Murphy. He testified
today at an oversight hearing of the
House Subcommittee on Telecommunications, Trade, and Consumer Protection. All
five FCC Commissioners also
testified at the same hearing. The GAO is the investigatory arm of the U.S.
Congress.
Murphy testified that "we have concluded that the Commission did not have
the authority to create the corporations to
carry out government functions and operate under the Commission's rules. Under
the Government Corporation Control
Act, the Commission needs explicit statutory authority to "establish or
acquire" such entities, which the agency did not
have."
The GAO report also stated that the corporations, as presently established
by the FCC, are beyond the oversight of the
Congress, and need not provide budgetary information to Congress. In addition,
the Federal Advisory Committee Act
does not apply to these corporations, thus enabling them to exclude the public
from gaining access to their meetings.
Related Website: FCC's Schools and Libraries Corporation.
Ira Fishman, CEO of the Schools and Libraries Corporation (SLC), testified at
the hearing that "we are fully accountable
to the FCC." The problem with some members of Congress is that they are
not accountable to Congress. The Congress
has no oversight authority over these corporations, as it does over the FCC.
By setting up these corporations under its control, the FCC is attempting to
circumvent congressional oversight of, and
public access to, administration of this $2.5 Billion program.
Related Page: Congressmen Decry 'Federal Computer Commission'
The report was prepared in response to a request from Sen. Ted Stevens (R-AK),
who is also a critic of the FCC's
handling of this matter.
Other Resources:
Federal Communications Commission.
General Accounting Office.
House Commerce Committee.
House Commerce Committee (Democrats' Website).
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