The Facts About The E-Rate Program



Over the past 25 years, the information revolution has transformed nearly every aspect of American life. Millions of Americans use modern technologies to work, gather news and information, access training and education, conduct business, participate in the civic life of their communities, and communicate with friends. However, until Congress enacted the E-Rate as part of the Telecommunications Act of 1996, few schools and libraries had sufficient resources to help students and adults keep up with these rapid changes. The E-Rate is significantly changing this situation. It is helping to bridge the digital divide by bringing new technologies and the power of the Internet to urban, rural and low-income schools and communities nationwide.

The E-Rate provides $2.25 billion in discounts annually for advanced, affordable telecommunications services, Internet access and internal connections to public libraries and public and private schools. In the first seven years (1998-2004), $14.6 billion in discounts have brought the Internet and new information technologies to tens of thousands of public and private schools and libraries, and to over a million classrooms.

What is the E-Rate designed to do?
The promise of the E-Rate is straightforward: to assure that all Americans, regardless of income or geography, can participate in and benefit from new information technologies, including distance learning, online assessment, web-based homework, enriched curriculum, increased communication between parents, students and their educators, and increased access to government services and information.

What does the E-Rate provide?
The E-Rate provides discounts to public and private schools, public libraries and consortia of those entities on telecommunications services, Internet access and internal networking. E-Rate discounts are provided through the Federal Communications Commission by assessing telecommunication carriers for a total of up to $2.25 billion dollars annually. This methodology follows a long-established Universal Service Fund model, used to ensure affordable access to telephone services for residents in all areas of the nation for over 65 years.

How do schools, libraries and consortia receive E-Rate discounts?
Applicants do not receive funds directly. They receive a discounted price. Once an application is approved, the school, library or consortium accepts a bid from the telecommunications service provider of its choice. The provider receives funds from the federal government to make up the difference between the discounted price and bid price. If no local telecommunications providers bids on the work, the local telephone company is required to provide the requested telecommunications service as the carrier of last resort. For more information about the E-Rate program, visit the FAQ page at the Universal Service Administrative Company (USAC) where general questions about the Universal Service Fund are posted.

How large are the discounts?
Discounts range from 20 to 90 percent based on local poverty levels. Schools and libraries must pay the undiscounted portion of their telecommunications bill themselves.

How are discounts determined?
Discounts are determined by the percentage of students eligible for the national school lunch program and by the school’s (or consortium’s) urban/rural designation.

Is the E-Rate program working?
The E-Rate has helped to improve access quickly for libraries and public and private schools. In 1996, only 28 percent of public library systems offered public Internet access. Today, thanks to increased resources and the E-Rate, nearly all library buildings offer public access computing, and 14 million Americans regularly use these computers at no fee. Further, only three percent of instructional classrooms were wired in 1994. As of 2003, 93% of instructional classrooms are wired. Between 1998 (when the E-Rate launched) and 2003, statistics show that classroom Internet access disparities between rural, urban, and suburban schools and high and low-poverty districts have been dramatically reduced.

Demand for the E-Rate remains strong. For the 2005 funding year alone, almost 39,000 applications were submitted by schools, libraries, or consortia for discounts. Discounts requested totaled an estimated $3.65 billion, far more than available funds. Under the E-Rate rules, a maximum of $2.25 billion in discounts will be distributed according to the following priorities: All telecommunications services and Internet services are discounted first, then internal connections are covered starting with the neediest schools until the $2.25 billion cap is reached.

What work remains for E-Rate?
There are still instructional rooms and libraries that remain unconnected. And for those that are connected, most rely on E-Rate discounts to maintain connectivity. Furthermore, much more needs to be done to determine the quality and speed of connectivity. All students, educators, and library patrons should have high-speed Internet connectivity to fully participate and learn in an information-dominated economy and world.

Article written by

For the past 30+ years, computers, advanced technology and solving problems with this new technology have been his business. In 1978, he graduated from Appalachian State University in Boone, NC with the first graduating class in the 16 North Carolina Universities with an Information Systems degree from the College of Business. For the last 14 years Nicky has served as the visionary leader and CEO of CAROLINANET.COM, a web hosting and server colocation data center and since 2004 the CEO of Carolina Digital Phone offering hosted telephone services and SIP Trunking. Read more at his LinkedIN page http://www.linkedin.com/in/nickysmith

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