The Telecommunications Act of 1996 constitutes a major overhaul of telecommunications law and will have a major impact on rural residents, communities, schools, libraries, and hospitals. This paper presents 68 key points from the Federal Communication Commission's Universal Service Report and Order, Section X: Schools and Libraries, which contains recommendations for implementation of the Telecommunications Act of 1996. Areas covered are how much of a discount schools and libraries will receive on telecommunications services; what telecommunications services and hardware are eligible for discounts; to what extent those services can be "bundled"; the role of the states in the discount program; whether individual schools, districts, consortia, or entire states can apply for discounts; requirements for competitive bidding; factors besides price to be considered in selecting a bid; requirements of telecommunications carriers to provide service at the lowest corresponding price; clarification of definitions of "lowest corresponding price" and "rural"; relationship of cost-of-service area to discount levels; mechanisms for determining the level of poverty for purposes of the universal service discount program; calculating a library's level of poverty; the relationship of the level of annual spending of the Universal Service Fund to the next year's funding availability; the eligibility of previously negotiated contracts for discounts; technology inventory-assessment requirements; and the date that funding for the discount program will start. A schools and libraries discount matrix is included that indicates urban and rural discounts at various poverty levels. (TD)