Gore's Costly High-Wire Act

By KAREN TUMULTY; JOHN F. DICKERSON/Washington

What keeps Al Gore up at night? A few months ago, the Vice President was literally jolted awake at 3 a.m. by the idea of a continuous, live Internet image of this planet, an all-earth-all-the-time website. Within weeks, NASA was scrambling to put up the satellites to make his dream come true. Last July 4 he skipped the fireworks so he could stare for five hours into his office computer as it downloaded Pathfinder's first images from the surface of Mars. Another Gore brainchild--he calls it "digital earth"--would allow students with computers to zoom in on any spot of an onscreen planet to learn everything they possibly want to know about it.

It sometimes seems as if Gore views the world through his modem--and would like everyone else to do as well. His staff jokes that the quickest way to get his attention is by e-mail. But Gore is serious in his belief that technology educates and democratizes. It is both the hallmark of his vice presidency and the organizing principle of his presidential campaign.

But these days, not everyone is on the Vice President's bandwidth. His biggest high-tech achievement to date is a program to wire every classroom and library in the country. He has heralded it as "a turning point that [will] transform the shape of America." But right now, the program is under assault from Congress as an out-of-control entitlement engineered by an out-of-control bureaucracy. Which does not do much for Gore's reputation as the architect of reinventing government. Even more ominous is another threat: starting this summer, phone companies that were ordered to pay for the program are threatening to add a new charge to the long-distance bills of residential consumers. Critics are already calling it the Gore Tax.

What once seemed an unassailable idea is now ensnared in presidential politics, the byzantine workings of phone deregulation and the design flaws of a funding scheme that camouflages the costs of a huge new federal program by putting it on people's phone bills. Only 75 days into the first round of applications for the program's money, about 30,000 schools and libraries have rushed in to claim $2 billion, far outstripping the $625 million the Federal Communications Commission has collected from the phone companies. This has left the commission with the unpalatable option of scaling back its promises or collecting more from the phone companies and their customers. And it doesn't help the commission's political predicament that the quasi-private corporation set up to administer the program was deemed illegal by the General Accounting Office, or that it was paying $200,000 a year to its chief executive, former White House aide Ira Fishman.

Higher phone bills and overpaid bureaucrats are not easy things for lawmakers to defend in an election year. "We did not vote to have the FCC set up a giant bureaucracy headed by someone paid as much as the President," thunders Democrat John Dingell, ranking minority member of the House Commerce Committee. "The era of Kings in this country ended when we kicked out George III."

Dingell's criticism is particularly searing in view of his liberal credentials and the fact that he was chairman of the committee when a promising young member named Al Gore was selling the intriguing concept of an "information superhighway." But Dingell is far from alone. Commerce Senators who have reviewed the thousands of grant applications pouring in complain that schools are attempting to use the program to buy everything from carpeting and paint to computers that exceed the power of those at NASA. What's more, lawmakers grouse, why should the Federal Government pay for something many schools would do on their own?

The blame inevitably finds its way to Gore, whose hand many see in virtually everything the FCC does. Its past chairman, Reed Hundt, goes back so far with Gore that the two of them saw the Beatles' first U.S. concert together. And Gore hand-picked its current chairman, William Kennard. Gore is also closely linked to the inner workings of the industry, where several of his former aides have found lucrative and powerful positions. Complains Louisiana Republican Billy Tauzin, chairman of the House telecommunications subcommittee: "The FCC is an independent regulatory authority, yet we continue to see the Vice President exercising an extraordinary amount of influence over it."

It was Congress, of course, that passed the law authorizing the program, or at least authorizing something. A modest three sentences of the massive Telecommunications Act of 1996 told the FCC to expand an existing industry-funded program that provides low-cost telephone service in rural areas and inner cities into one that would hook up schools and libraries. "We gave them much more of an opening than we have in the past," says John McCain, chairman of the Senate Commerce Committee. "They did what bureaucrats do when you give them money and power."

But what Congress gives it can also take away. So the FCC is scrambling to answer the most pointed complaints. It promised earlier this month to revamp the bureaucracy it built around the program and to cut Fishman's salary by $50,000. It is considering scaling back its initial spending. And Kennard vows that schools will not be allowed to use the money to buy computers, software or other ineligible items, and that poorer schools will see their applications handled first.

That's the easy part. Appeasing the phone companies will be harder. "While we support the goal of wiring classrooms," says MCI spokesman Brad Burns, "we don't think we should be put in the position of playing fee collector for the Federal Government." The long-distance companies have already begun collecting the surcharge from their business customers, adding as much as 5% to their bills. In July, they warn, they'll place a line-item charge on residential users as well. Phone companies, which are trying to outdo one another by offering service for pennies a minute, claim the surcharge is the only way they can keep their rates competitive. But the FCC argues that in exchange for picking up the tab to wire these institutions, it has lowered other fees the long-distance companies pay. The commission also says carriers stand to gain part of the business generated from this new market.

The debate is likely to get lost on the consumer. "You can call it what you want," says Paul Harman, a Georgia accountant who complained to the FCC after his company noticed the charge. "It's just another form of taxation. The consumer pays in the end." Lawmakers have begun to hear similar complaints. At a hearing in February, Congressman Ed Bryant, a Tennessee Republican, waved a copy of a telephone bill sent him by a constituent who was confused and angry over the $4 surcharge his company was having to pay. "How shall I explain this tax to my constituent?" Bryant demanded. "Do I tell him I voted to place that tax on him to support schools and libraries on the other side of the continent?"

Gore and his allies, backed by considerable polling, say taxpayers are more than willing to pay a small amount each month to guarantee their children a place in the digital economy. "If they want this fight, bring it on," says a Gore aide with a taunting schoolyard wave. "Politicians who are against this are going to seem like they are against the library or the telephone."

For all their bravado in public, however, Administration officials were scrambling behind the scenes last week to head off anything that might be called a Gore Tax, and they hinted that a deal is in the offing. On Friday the Commerce Department called on the FCC to do what it could to assure that any charge the residential consumer sees would not be more than $1 a month per telephone line. "I am totally happy to have a debate over whether or not it's worth $1 a month to wire the schools," said Ron Klain, the Vice President's chief of staff.

And the program is not without its powerful supporters, both in and out of the classroom. Silicon Valley, whose executives Gore is ardently courting, is particularly enthusiastic about the idea of wiring the vast, untapped market that Andrew Blau of the Benton Foundation, a nonprofit group that studies the social impact of technology, describes as "like China within our borders." To enlarge this new customer base, companies have offered seminars, free software and help with the applications that schools must make to receive the funding. Industry sources have estimated that $2 billion spent on wiring schools produces as much as $6 billion in sales of computers and peripherals.

But Republicans see this as nothing less than a stealth campaign to enhance Gore's presidential prospects. "This was not to be a political cash-grant program so that Al Gore can run for President," Tauzin complains. Gore's allies insist it is the Republicans who are playing politics. "This is a Clinton and Gore signature item," says former FCC Chairman Hundt. "The divisive, partisan, do-nothing Congress would rather not see something succeed than see it succeed on terms that would be regarded as positive for the Democrats."

All of which leaves Gore with an important lesson as he approaches his 2000 campaign: cyberpolitics isn't the safe territory he might have thought it was. That's one more thing he can start to lose sleep over.