eRate agency commits $1.66 billion: First-year funding capped for schools and libraries

The Schools and Libraries Division (SLD) of the Universal Service Administrative Co., the group that administers the eRate, issued its final wave of 1998 funding commitment letters Feb. 27. The tenth and final wave brings the total dollar amount committed to schools and libraries to $1.66 billion for the program’s inaugural year.

The SLD’s announcement, which was made March 1, came on the same day President Clinton released 1998 figures showing more than half of the nation’s public school classrooms wired to the internet. With help from the eRate, Clinton said he expects all classrooms to be wired by 2000 as promised.

“Vice President Gore and I have set a goal of connecting every classroom in America to the internet by the year 2000,” the president said in a White House statement. “And thanks to new eRate discounts that help schools and libraries connect to the internet, we will reach our goal by the year 2000.”

According to the Education Department’s National Center for Education Statistics, the percentage of public school classrooms connected to the internet nearly doubled last year, from 27 percent in 1997 to 51 percent in 1998.

SLD officials estimate that as a result of the eRate, nearly 650,000 additional public school classrooms will be wired for internet access this year. That figure would increase the total percentage of U.S. public school classrooms with internet access by another 25 percent, to more than 75 percent by the end of 1999, officials said.

Those figures assume that all applicants complete their wiring projects by the deadline, which now stands at June 30. But the SLD has filed an ex parte motion with the Federal Communications Commission (FCC) asking that the deadline be moved back to Sept. 30, which would give schools the entire summer to complete their projects.

“The future is now,” said SLD president Kate Moore. “This commitment of $1.66 billion will enable thousands of students and library patrons to leapfrog into the realm of internet connectivity, which would have otherwise taken years to reach. The result will be a more highly educated society and a more competitive workforce.”

First-year overview

According to the SLD, telecommunications services and internet access were funded for all eligible schools and libraries that successfully completed applications within the filing window. But only applicants who qualified for discounts of 70 percent and above received funding for internal connections, which were designated as a lower priority by the FCC last June.

Of the 30,121 eRate applications submitted within last year’s filing window, 25,785 (about 85 percent) were funded. Most of the unfunded applications requested only internal connections but fell below the 70 percent cutoff point, Moore said.

Internal connections accounted for 54 percent of the total funds committed, she said. Telecommunications services accounted for 40 percent, and 6 percent supported basic internet access. About 60 percent of the total funding went to the neediest applicants–those for whom at least half of the student population qualified for free or reduced-price lunches.

The $1.66 billion is about $265 million short of the $1.925 billion total collected by the FCC to fund the program’s first 18 months. Part of the $265 million difference was set aside in case the FCC decides to allow the extension of contracts that expired before Dec. 31, 1998, Moore said.

When the FCC extended the first year of the eRate by six months–to June 30, 1999–the agency initially ruled that contracts expiring before Dec. 31, 1998, could not be extended to cover the extra six-month period. The Council of Chief State School Officers recently asked the FCC to allow extensions for such contracts, and a final decision is expected from the agency soon.

Another $45 million was set aside to pay for administrative expenses, Moore said, including about $12 million in one-time start-up costs. The rest of the difference will be kept in a contingency fund to cover awards to schools and libraries that win more money by appealing SLD rulings, she added.

Highs–and lows

States that received the most funding were generally those with the largest populations. California, for example, received $206 million in funding, followed by New York with $165 million and Texas with $128 million.

One notable exception was Georgia, which received nearly $78 million–the fifth-highest total among the 50 states. More than $28 million was awarded to the Metropolitan Regional Educational Service Agency (MRESA) alone, a consortium of 14 Georgia school districts that includes the 11 metropolitan Atlanta school systems, three associate systems, and more than a half-million students.

MRESA received funding for an internet-based educational video distribution and multimedia network called MRESAnet 2000. The system will use the data communication lines currently being installed through the state Department of Education’s Peachnet initiative, along with the satellite broadcasting capabilities of the Atlanta Public Schools and Georgia Public Television, to bring video-on-demand to each school in the MRESA region.

“This is going to be a real shot in the arm for the school districts involved,” said Bernard Hatch, executive director of MRESA.

Not everyone was happy with the disbursement of funds, however. The SLD turned down a request for nearly $17 million in funding from the Tennessee Department of Education to upgrade the state’s education network, ConnecTEN.

Tennessee’s application proved controversial from the beginning. Because states are not eligible to receive eRate discounts for improving their wide area networks, Tennessee sold its network to a private company, Education Networks of America. In return, ENA offered to install a point of presence at each of the state’s 1,600 schools so it could charge the state for direct internet access to the schools, rather than the routers, hubs, and switches necessary to improve the network.

In rejecting Tennessee’s request, the SLD said the network hardware costs did not qualify as internet access expenses under the eRate. State education commissioner Jane Walters told The Tennessean she would appeal the agency’s decision to the FCC.

Still, the state’s schools and libraries netted more than $27 million from the program because many school districts chose to apply on their own. Memphis City School District, for example, was awarded $10.5 million to bring six cable drops per classroom and 100MB Ethernet connectivity to every desktop in 63 of the district’s 166 schools.

Schools and Libraries Division

National Center for Education Statistics

Federal Communications Commission

Metropolitan Regional Educational Service Agency

Tennessee Department of Education

Memphis City School District

Dennis Pierce

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