WASHINGTON -- Schools and libraries across the United States are likely to begin receiving cheap Internet access by early fall, the head of the subsidy program told Congress today.
But before US$1.3 billion in discounts are doled out, the federal program will undergo further auditing to ensure that no waste, fraud, or abuse will occur, Ira Fishman, chairman of the nonprofit Schools and Libraries Corp., pledged at a Senate Commerce Committee hearing.
The corporation -- established by the Federal Communications Commission last year to hand out subsidies mandated by the 1996 Telecommunications Act -- has been criticized for poor management and high cost by some lawmakers, including Commerce Committee chairman John McCain.
Today, McCain said he supported the program's goals but reiterated his criticism of its implementation.
"I give everybody an 'A' for effort, but I cannot give you a very high grade for what you've accomplished," the Arizona Republican told Fishman.
The corporation has received more than 30,000 requests from schools and libraries for the money, raised mainly from long-distance phone fees that are largely passed along to consumers.
The funds can be used to pay for portions of Internet and telecommunications services and for some internal connections within buildings, but not for computers, renovations, teacher training, or other items or services. Schools and libraries in low-income areas receive higher subsidies than schools in wealthy districts.
Critics have charged that schools were requesting money for ineligible items, like new carpeting or asbestos removal. Fishman reported that a review of 7,000 applications found some problems spots, but no requests for carpeting or asbestos removal.
While the corporation has a system for rooting out requests for ineligible items, a General Accounting Office report released at the hearing recommended further review.
The report also instructed the corporation to check compliance before informing schools and libraries that their checks are in the mail. The corporation had planned to complete its reviews before money was disbursed, but after commitment letters were sent.
Fishman said the corporation would follow the GAO recommendations.
Sen. Jay Rockefeller, one of the authors of the program, sparred with McCain repeatedly during the hearing over the possibility of abuses occurring. The West Virginia Democrat said criticism was politically motivated, and he maintained the program was fundamentally strong and sound.
The FCC last month curtailed the program, asking phone companies to collect $1.3 billion instead of the $2 billion requested by schools and libraries.
The move came in the face of threats by long-distance carriers to impose surcharges of up to 6 percent on their customers to pay for the subsidies that keep the cost of local phone service affordable in rural and low income areas.
