Suit Threatens Library Telecom Discounts

Article excerpt

Alleging that federally mandated discounted telecommunications services for libraries and schools are a new tax, SBC Communications filed suit in the Eighth Circuit Court of Appeals in St. Louis June 18 to overturn parts of the FCC's order on universal service.

SBC, the nation's largest Bell telephone company, followed this move with a separate suit claiming the Telecommunications Act of 1996 discriminates against SBC and the other five remaining Bell Operating Companies by imposing restrictions that prevent the firms from competing for long-distance services and other lines of business that other companies are free to provide. The second suit was filed in the U.S. District Court for the Northern District of Texas July 2, and the following day SBC asked the FCC to stay implementation of its universal service order.

The FCC's May 7 ruling mandated discounts ranging from 20% to 90%, with deeper discounts for libraries and schools in rural, high-cost, and low-income communities (AL, June/July, p. 12). The program is scheduled to begin January 1, 1998, and many public library and school administrators have already begun readying local institutions for the discounts.

Maintaining that the FCC ruling called for programs, training, equipment, and services that were not intended by Congress, SBC issued a statement following the June 18 filing that said, "While we strongly support the provision of telecommunications technology to schools throughout the country, SBC opposes the FCC's proposal of a new tax, hidden in the telephone bills of each of our customers, to provide goods and services that were not contemplated by the law."

"It is extremely disappointing to see a company such as SBC, which owns Southwestern Bell and Pacific Telesis and has huge profits, oppose these library and school rates that could benefit so many children and adults through libraries and schools," said then-ALA President Mary Somerville. "Rather than fight over what amounts to pennies for a company like SBC, we would welcome the opportunity to work with SBC to ensure that every American has access to electronic information. …