Magazine article American Libraries

Rethinking the E-Rate: The Pros and Cons of Why Libraries Should Be Tapping the Largest Available Pot of Federal Dollars

Magazine article American Libraries

Rethinking the E-Rate: The Pros and Cons of Why Libraries Should Be Tapping the Largest Available Pot of Federal Dollars

Article excerpt

What is the largest source of potential federal funding for public libraries? Your first thought may naturally be the Library Services and Technology Act, a program that provided around $220 million for libraries in FY 2008. But the correct answer is the Education-Rate Program, commonly known as the "e-rate," with at least $2.25 billion per year--one of the four programs that comprise the federal Universal Services Fund (USF) that was established in the Communications Act of 1934 to equalize the cost of telephone services to underserved areas of the country. The 1996 Telecommunications Act took it a step further by adding support for advanced telecommunications and information services, extending the USF's priorities to include K-12 schools and public libraries. Thus, the birth of the e-rate.


If you have ever examined your telephone bill and noticed a charge called universal service fee, you may already have a sense of how the e-rate works. Phone companies pay into the USF, creating a pool of money administered by the Universal Service Administrative Company (USAC), a not-for-profit entity established and overseen by the Federal Communications Commission (FCC). The money collected is then used to provide discounts based on need to schools and libraries. These discounts are for specific goods and services broken into two priorities--priority one includes telecommunications and internet access and priority two encompasses internal connections within a library building and basic maintenance on those connections..

It's been five years since the U.S. Supreme Court's decision against the American Library Association on filtering internet access on public library terminals. The fight over the Children's Internet Protection Act, which tied e-rate eligibility and other federal money for some services to a filtering mandate, had an negative impact on e-rate participation.

Four years ago, e-rate disbursements ground to a halt as the FCC was suddenly faced with a mandate forcing the program to comply with the Anti-Deficiency Act (ADA), which requires that the money related to any funding commitment, such as those made after applications are reviewed, must be in the agency's account at the time the commitment is made rather than at the point the funds are received and invoiced. Since e-rate money is received from service providers on a rolling basis, this law immediately placed a moratorium on disbursement of funds. The quick action of supporters compelled Congress to create an 11th hour temporary ADA exemption for the e-rate and for all of the universal service support mechanisms.

Is the e-rate worth it?

While there might be a great deal of money available to e-rate applicants, there are also a lot of challenges.

Libraries have historically faced a number of challenges when dealing with the program. One issue is the complicated application process. Filing for reimbursements of monthly telecommunications and internet services can involve over a dozen steps in the application and disbursement processes--all tied to a specific timeline that may not be consistent with local purchasing and decisionmaking timelines. Also, the necessary e-rate record keeping can overwhelm even the most meticulous librarian. Many of the forms associated with the application process are long and complicated, and once the application is filed other parts of the process start, which may demand more time and attention.

The discount that e-rate applicants receive is based on poverty levels determined by eligibility for the National School Lunch Program as well as the library's urban or rural location. The percentage of students at a given school who qualify to receive a free or reduced lunch establishes a school's poverty level and determines the e-rate discount received. However, libraries must use an average of the school lunch numbers from across the local school district. …

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