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"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 $3.2 billion requested for internal connections unfunded. Projections point to more troubles ahead. As of mid-April 2001, e-rate applicants had requested $5.2 billion in program funds. A large portion of the nearly $3.5 billion in internal connection requests may go unfunded. The GAO also reviewed SLD reforms aimed at reducing the amount of uncommitted funds that go unspent. Data from January 2001 shows that more than $880 million (24 percent) of the $3.7 billion committed for the first two years has not been used. Reforms include canceling funding commitments of second-year applicants that have not confirmed receipt of services associated with these funds. GAO reports may be viewed for free at, ordered by mail: U.S. General Accounting Of fice, P.O. Box 37050, Washington, DC 20013 or by phone (202/512-6000). The first hard copy is free; each additional copy is $2.
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Copyright 2001 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:government funding of school telecommunication equipment
Publication:Government Finance Review
Article Type:Brief Article
Geographic Code:1USA
Date:Aug 1, 2001
Previous Article:THE ECONOMY.

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