Requests for 2003 eRate discounts will total about $1 billion less than last year, the Schools and Libraries Division (SLD) of the Universal Service Administrative Co. announced April 3. The group, which administers the program, attributes this decline to its increased vigilance and warnings concerning waste, fraud, and abuse. "Our enforcement actions are starting to pay off," SLD spokesman Mel Blackwell said.

Throughout the filing window for 2003, SLD warned applicants to make sure they adhered to the program's rules, because it had identified a pattern among 2002 applications that violated the eRate's competitive-bidding requirements. Many of these 2002 applications came from small schools and districts requesting internal connections at the 90-percent discount level.

Perhaps not coincidentally, the largest drop in 2003 applications occurred in requests for internal connections at the 90-percent discount level. Requests for these Priority Two services declined by $500 million (19 percent) compared with last year's requests. Demand for telecommunications services shrank by $100 million (7 percent). The rest of the decline—about $445 million—occurred in applications requesting internal connections at discount levels of 89 percent or below.

In contrast to the overall trend, demand for internet access increased by $27 million (6 percent).

"Maybe people are looking at what you can apply for and heeding some of our warnings," Blackwell said.

He added, "This is going into our sixth year, so applicants are getting smarter. They know better what will and won't get denied."

In total, applicants requested an estimated $4.718 billion, down 18 percent from the $5.736 billion requested in 2002. This estimate is based on the dollars requested in the 41,146 applications received or postmarked by Feb. 6, 2003, the close of the Form 471 filing window.

Despite the billion-dollar decrease, demand for eRate discounts is still high. For the third year in a row, applicants have requested more than double the $2.25 billion available. "It's still more than we have [to give]," Blackwell said.

Applicants requested an estimated $1.745 billion for telecommunications services and internet access. Demand for internal connections at the 90-percent level is an estimated $2.116 billion. The SLD expects these figures to decrease slightly once it has weeded out duplicate, incomplete, and ineligible applications.

Although the dollar amount requested for 2003 is less than last year, the SLD received 14 percent more applications. "There were more applications sent in than last year because we asked people to break up their applications," Blackwell said.

The SLD asked applicants to submit their funding requests for internal connections (Priority Two services) and telecommunications services and internet access (Priority One services) separately. The agency has not yet calculated how many unique entities applied. The number of applicants who filed online rose slightly. For funding year 2003, 92.2 percent of applicants filed online, compared with 85.7 percent in 2002.