Ronda, > > I found the GAO opinion in the FCC Schools and Libraries Corporation > > issue and it seems to shed quite a bit of light on how in fact > > ICANN is a U.S. government created corporation and is in violation > > of laws forbidding the U.S. Executive to create such corporations > > as the U.S. Dept of Commerce has created ICANN. > > > > The GAO opinion is B-278820. > I see two implications in the docs I found: 1) E-Rate is alive and well and USG is not going to dismantle it (or, therefore ICANN) on some picayune legal grounds; 2) Sen Stevens might be worth bringing up to date on the DNS mess. kerry =========== http://www.house.gov/jct/x-59-98.htm SUBCOMMITTEE ON OVERSIGHT of the HOUSE COMMITTEE ON WAY AND MEANS JOINT COMMITTEE ON TAXATION July 31, 1998 JCX-59-98 BACKGROUND AND PRESENT LAW On May 7, 1997, the FCC adopted an order to implement the principles of section 254 of the Telecommunications Act. This order subsequently was modified on June 12, 1998. Under the order, charges are imposed on all telecommunications carriers that provide service between States, including long distance carriers, local service providers, cellular telephone companies, paging companies, and payphone companies. [...] The Telecommunications Act is structured to require the provision of these discount services and to provide for reimbursement to the telecommunications carriers of the costs of providing the discount services. The source of the funds for reimbursements is the "equitable and nondiscriminatory contributions" by telecommunications carriers provided for as a "principle" in the Act. The FCC created a fund, capped at $2.25 billion per year, to support universal service discounts for schools and libraries. On June 12, 1998, this maximum funding amount was reduced to $1.925 billion over an 18-month period (January 1, 1998 to June 30, 1999). Required "contributions" were allocated among covered telecommunications carriers based on the carriers' receipts during prescribed prior periods. In its initial order, the FCC provided that the expanded universal service program would be administered by two non-profit corporations: the Schools and Libraries Corporation and the Rural Health Care Corporation. In its June 12, 1998, revised order, the FCC proposed to merge these corporations into the Universal Service Administrative Company, which administers other portions of the universal service program.(10) In January 1998, the Congressional Budget Office issued a determination that the "contributions" required to support the universal service program are Federal revenues.(11) Telecommunications carriers have challenged the "contributions" required under the FCC orders, taking the position that the charges are in substance taxes, and that if they are authorized, the authorization represents an unconstitutional delegation of the taxing power by Congress.(12) | 10. In a February 10, 1998, letter, the General Accounting Office | (the "GAO") concluded that the FCC had exceeded its authority | when it directed that the Schools and Libraries Corporation and | the Rural Health Care Corporation be created. See, U.S. General | Accounting Office, Letter to Senator Ted Stevens, February 10, | 1998 (B-278820). [http://www.neca.org/usac.htm USAC was created in 1997 as a not-for-profit subsidiary of the National Exchange Carrier Association, Inc., and is governed by a Board of Directors that includes a broad representation of both industry and non-industry interests, including representatives of service providers, schools and libraries, health care providers, consumers, and state regulatory commissions... See also http://www.universalservice.org ] 11. See, Congressional Budget Office, Federal Subsidies of Advanced Telecommunications for Schools, Libraries, and Health Care Providers, January 1998. 12. See, Texas Office of Pub. Utility Counsel v. FCC, Civ. No. 97- 60421, currently pending in the United States Court of Appeals for the 5th Circuit. ============ http://www.arentfox.com/telemed/reports/gao_stevens.html Office of the General Counsel B-278820 February 10, 1998 The Honorable Ted Stevens United States Senate Dear Senator Stevens: [...] The Government Corporation Control Act specifies that �[a]n agency may establish or acquire a corporation to act as an agency only by or under a law of the United States specifically authorizing the action.� 31 U.S.C. � 9102. These entities act as the agents of the Commission and, therefore, could only be created pursuant to specific statutory authority. Because the Commission has not been provided such authority, creation of the two corporations violated the Government Corporation Control Act. Because the Commission has argued that it did not �establish or acquire� the corporations, we provide some background about the establishment of the corporations. More detail is contained in the attached Appendix. [...] It is the Commission�s view that it has authority to establish the Schools and Libraries Corporation and the Rural Health Care Corporation under sections 4(i) and 254 of the Communications Act of 1934, as amended. Section 4(i) of the Act provides that: �The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions.� 47 U.S.C. � 154(i). Although we recognize the breadth of section 4(i),(7) the provision is constrained by the later passage of the Government Corporation Control Act. Under the Control Act: �[a]n agency may establish or acquire a corporation to act as an agency only by or under a law of the United States specifically authorizing the action.� 31 U.S.C. � 9102. Section 4(i) does not provide the specific statutory authority needed by the Commission to meet the requirements of the Control Act. 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