Section 254 of the Telecommunications Act of 1996 establishes a Federal-State Joint Board and charges it with the responsibility of recommending changes to the FCC's regulations in order to implement the Universal Service Provisions of the Act. The Board is required to make its recommendations within nine months after the enactment of the Telecommunications Act of 1996. The FCC then is required to initiate a proceeding to implement the recommendations of the Board and is required to complete the implementation within fifteen months after enactment of the Telecommunications Act of 1996.
On March 8, 1996, the FCC issued a Notice of Proposed Rulemaking and an order establishing the Joint Board. The Notice of Proposed Rulemaking requested comments from the public as to how the FCC might best go about complying with the Universal Service Provisions of the Act.
The term "Universal Service" refers to those telecommunications services which are financially supported by various support mechanisms available to the FCC. These include requiring telecommunications carriers to provide services falling within the definition of Universal Services at reduced or affordable cost to those entitled to receive such service.
One of the "Universal Service Principles" which Congress adopted in Section 254(b)(h) of the Telecommunications Act of 1996 provides that all telecommunications carriers, "upon a bona fide request for any of its services that are within the definition of Universal Service, provide such services to elementary schools, secondary schools, and libraries for educational purposes at rates less than the amounts charged for similar services to other parties." This provision goes on to state that the discount shall be an amount that the FCC and the States determine is appropriate and necessary to insure affordable access to and use of such services by elementary schools, secondary schools and libraries.
Both the Federal-State Joint Board and the FCC are empowered by the Act to take into account advances in telecommunications and information technologies and services. In defining the term "Universal Service" the Joint Board and the FCC are required to consider the extent to which advanced telecommunications services are essential to education, among other things. Finally, under Section 254(b)(6) of the Act, the FCC is required to establish "competitively neutral" rules to enhance access to advanced telecommunications and information services "for all public and non-profit elementary and secondary school classrooms, health care providers and libraries" and to define the circumstances under which a telecommunications carrier may be required to connect its network to such public institutional telecommunications users.