The Federal Communications Commission (FCC) has initiated a review process of the rules and regulations that govern the eRate, the $2.25 billion program that provides discounts on telecommunications services and internet access to the nation’s schools and libraries.

The 46-page Notice of Proposed Rule Making and Order, released Jan. 25, asks members of the public for their opinions on several detailed proposals, as well as their own ideas for how to make the program more effective and efficient.

“I think there are some positive changes that we would support. There are also some that haven’t been though up yet,” said Claudette Tennant, internet policy specialist for the American Library Association.

The four-year-old eRate has committed a total of $5.958 billion in discounts so far to help the nation’s poorest and most isolated communities get advanced telecommunications services and internet access. Many school leaders, while grateful for the program’s existence, have chafed under its strict rules and complicated paperwork.

The FCC said it is considering changes to the eRate rules to streamline and improve the program, to ensure that the program remains fair and equitable, and to make sure there is no waste, fraud, or abuse.

The agency has requested comment on various aspects of five major program areas: the application process, the disbursement of funds, the appeals process, program integrity assurance, and what to do with unused or unclaimed funds.

Application process

The FCC wants educators to submit proposals for changes that will improve the efficiency, predictability, flexibility, and administrative costs of determining eligible products and services.

As an example, the agency suggested that perhaps, when applying, applicants would only select products and services from a pre-approved online list, thereby simplifying the application review process. This would also avoid accidental funding of ineligible services.

The FCC would like to know whether educators think this is feasible, or even desirable. Who would be responsible for putting together such a list, and how would it be updated?

Other questions the FCC has concerning the application process include:

  • Should the FCC change eligibility requirements concerning voice mail, wide area networks (WANs), and wireless services? “Certain state government representatives have suggested that we reconsider whether our policies regarding WANs, for example, have resulted in an efficient use of program funds,” the FCC said.

  • Should internet access that is bundled with content be eligible for eRate discounts?

  • Should schools have to certify whether they comply with the Americans with Disabilities Act and other related laws?

Disbursement of funds

The FCC has asked whether the public thinks schools and libraries should have the flexibility either to pay for services in full up front and then be reimbursed via the Billed Entity Applicant Reimbursement (BEAR) form, or whether they should have to pay in advance for only those portions of the charges not eligible for eRate discounts.

Also, should the Schools and Libraries Division of the Universal Service Administrative Co.—the group that administers the eRate—be required to reimburse applicants within 20 days after they submit a BEAR Form? Should there be limits on the extent to which schools and libraries can substitute comparable equipment (newer models, for example) for specific equipment already approved for purchase with eRate funds?

Finally, should rural communities be allowed to tap into the excess internet capacity obtained through the eRate? The discounted services “are used for educational purposes during hours when the schools and libraries are open, but remain unused during off hours when the entities are closed,” the FCC stated in its Notice. (An earlier ruling by the agency gave permission for rural Alaskan residents without access to dial-up internet service to tap into the excess capacity of satellite-based school internet access purchased with eRate funds—but only outside of school hours.)

Appeals process

Should the FCC increase the time allotted to file an appeal to 60 days, instead of the current 30? Should appeals be considered as filed the day they are postmarked, rather than the date they are filed?

Program integrity assurance

The FCC has taken a number of steps to reduce waste, fraud, and abuse, such as by increasing the number of audits and by withholding suspect payments. But should the agency require independent audits at the recipients’ expense when there is strong reason to believe that problems exist? Should certain service providers who have repeatedly failed to comply with the programs rules be banned from participating for a number of years?

Unused program funds

Each funding year, a large portion of the available money—capped at $2.25 billion—has gone unused or unclaimed.

“As of June 30, 2001, approximately $940 million of the $3.7 billion in program funds committed to applicants during the first and second funding years was not disbursed because of the failure of applicants and providers to submit the required documentation,” the FCC said.

How can the FCC reduce the underutilization of committed funds? How should the agency treat unused funds?

The FCC also would like comments on any of its rules that have become “outmoded” since the program started four years ago.

You have until 45 days after the Notice is published in the Federal Register to submit your ideas and comments. Comments can be submitted online or by mail; for details, see the link below.


FCC’s Notice of Proposed Rule Making