Magazine article Government Finance Review

Education Finance

Magazine article Government Finance Review

Education Finance

Article excerpt

"Schools and Libraries Program: Update on E-Rate Funding"

Washington, DC: U.S. General Accounting Office, May 2001

Among primary schools and libraries nationwide, demand for telecommunications subsidies has surpassed available federal funding. In May 2001, the U.S. General Accounting Office (GAO) released a report on the status of the Federal Communication Commission's (FCC) "e-rate" program, which assists eligible schools and libraries to purchase advanced telecommunications service. At e-rates' inception in 1998, the FCC gave administrative responsibility for the program to the School and Libraries Division (SLD) of the Universal Service Administrative Company. SLD provides discount funding for telecommunications services, Internet access, and internal telecommunications connections. Discounts range from 20 to 90 percent. The GAO found that requests for e-rate support increased at a constant rate from 1998 to 2001. For the years 2000 and 2001, requests were made that exceeded the program's current annual funding cap of $2.25 billion. For the third year (2000), requests exceeded $4.2 billion. Although SLD had sufficient e-rate funds to support all valid requests for telecommunications services and Internet access for the third year, it could not support requests for internal connections from applicants with discount levels of 81 percent or lower, leaving nearly $2 billion of the $3. …

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