ORDER NO. 97-202

ENTERED JUN 09 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 837

DISPOSITION: TEMPORARY RULE ADOPTED

At its public meeting on February 18, 1997, the Commission opened an investigation concerning universal service requirements for education providers (K-12 schools and libraries). The Commission issued Order No. 97-101 memorializing its decision. On May 22, 1997, Administrative Law Judge Lowell Bergen presided over a conference on procedural matters. A tentative schedule was adopted at the conference.

On May 30, 1997, the Commission’s Staff filed a motion requesting that the Commission adopt a temporary rule establishing a matrix of discounts available to education providers. Commission Rule OAR 860-013-0050 allows participants to file responses to a motion within 15 days of service of the motion. Under that rule, participants would have until June 16, 1997, to respond to the motion. For the reasons stated below, the Commission waives the 15-day response period, pursuant to OAR 860-011-0000.

Section 254(h)(1)(B) of the Telecommunications Act of 1996 (Act) provides that telecommunications carriers are to provide services to elementary schools, secondary schools, and libraries for educational purposes at discounted rates. The discounts are to be established by the Federal Communications Commission (FCC) for interstate services and state commissions for intrastate services (See 47 U.S.C. Section 254). On May 7, 1997, the FCC adopted a matrix of discounts ranging from 20 percent to 90 percent. The discounts will be funded by a contribution assessment on interstate, intrastate, and international end-user telecommunications revenues. The annual cap on the support for schools and libraries is $2.25 billion per year. The funds will be committed on a first-come-first-served basis. Requests of schools and libraries for funding will be accepted beginning July 1, 1997, with use of the funds scheduled to begin on January 1, 1998.

The FCC rule provides that federal universal support for eligible schools and libraries is contingent on the intrastate discount being established at no less than the interstate discount. If the federal discount level is adopted by Oregon, no separate Oregon funding for intrastate discounts will be required. To meet the requirements of the FCC rule and facilitate the eligibility of Oregon schools and libraries for federal universal service support, the Commission uses this order to adopt a temporary rule that establishes the same discount matrix as the federal rule. This action is taken pursuant to ORS 183.335. If the Commission does not adopt the federal discount, it could have the effect of delaying the eligibility of Oregon schools and libraries for discounts for telecommunications services. A delay may result in denial of some or all Oregon schools’ and libraries’ requests for discounts because the total funding for the program is limited and requests for discounts from schools and libraries throughout the nation will be committed on a first-come-first-served basis. The Commission finds that failure to act promptly will result in serious prejudice to the schools, libraries, and general public in Oregon.

Adopting the attached temporary rule, rather than following the permanent rulemaking process, will allow the Commission to comply with the FCC's requirement and avoid the possible consequences stated above.

By issuing this order, the Commission does not waive any of its rights to appeal the FCC order, or to respond to court action relating to the Act or the FCC order.

ORDER

IT IS ORDERED that:

1. Staff’s motion to adopt the attached temporary rule is granted;

2. Temporary rule OAR 860-032-0250, as shown on Appendix A, is adopted;

3. The rule shall become effective on filing with the Secretary of State.

Made, entered, and effective ____________________________.

A person may petition the Commission for the amendment or repeal of a rule pursuant to ORS 183.390. A person may petition the Court of Appeals to determine the validity of a rule pursuant to ORS 183.400.

Telecommunications Services Discounts for Schools and Libraries

860-032-0250 The administrator shall use the following matrix to set a discount rate to be applied to eligible intrastate services and facilities purchased by eligible schools, school districts, libraries, or library consortia based on the institution’s level of poverty and location in an "urban" or "rural" area.