The Schools and Libraries Division (SLD) of the Universal Service Administrative Co., the agency that administers the eRate, denied nearly $590 million worth of 2002 applications in its March 10 wave of funding decision letters because they allegedly violated the program's competitive-bidding requirements. About $470 million of these applications reportedly listed IBM Corp. as the primary service provider.

The SLD had announced in early December that it had identified a "pattern" of competitive-bidding violations and had warned eRate applicants not to list vendors guilty of the same practices on their 2003 applications.

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