The Federal Communications Commission has adopted new eRate rules to address many of the waste, fraud, and abuse issues unearthed during audits by the agency’s Office of Inspector General. The rules changes were approved unanimously at an Aug. 4 hearing, though Commissioner Kevin Martin dissented in part with the agency’s decisions.

Specific details were not yet available at press time, but Mark Stevens, senior auditor in the FCC’s Wireline Competition Bureau, highlighted for commissioners the most significant changes in the agency’s Fifth Report and Order, including:

  • A framework for heightened scrutiny for applicants and service providers that have violated eRate rules in the past;
  • An extension of the rule that bars fund recipients from receiving additional program benefits if they have yet to repay the fund for past erroneous disbursements;
  • New certifications that applicants will have to make as a prerequisite to funding;
  • Clarification and tightened guidelines for technology plans that applicants must develop before applying for funds; and
  • A lengthening of the time applicants must retain all eRate documentation to five years, so that any misdeeds can be more easily detected.

“Taken together, the order is a major step toward fortifying the eRate program against the opportunities of waste, fraud, and abuse,” Stevens said. “Where malfeasance does occur, this order strengthens the commission’s ability to detect it, investigate it, and–where necessary–prosecute it.”

Commissioners each praised the eRate program–which gives discounts of up to 90 percent of the cost of telecommunications services and internet access to eligible schools and libraries–for successfully connecting 99 percent of the nation’s schools and 92 percent of its classrooms to the internet. Though they all pledged their continued support for the program, they also acknowledged that the eRate’s survival depends on their ability to rid the program of wrongdoing.

“Our continued oversight is critical. I think that if we don’t prove that this is being used properly and appropriately, then the program’s survival is at stake,” said FCC Commissioner Kathleen Q. Abernathy. “I’m committed to working with all the schools and the libraries across the country, with all of you, and with [the Universal Service Administrative Co., the agency that administers the eRate] to ensure that this program is run efficiently and effectively.”

Abernathy said she was pleased with the new requirements for document retention as well as the clarified rules governing technology plans, but she added that commissioners still need to look at additional ways to improve the program–including possibly changing the discount levels that dictate how much money schools and libraries are required to contribute.

Many eRate experts had anticipated that the FCC would lower the maximum discount level for internal connections–the wiring, routers, switches, and file servers necessary to deliver internet access to classrooms–to 70 percent, forcing schools to contribute at least 30 percent of the cost of these services themselves.

Despite the more limited scope of the new rules changes, commissioners’ accolades for the eRate program and their dedication to addressing its problems were clear.

“By any measure, it is the most successful federal program that I am aware of, and we now talk proudly of the fact that nearly 90 percent or so of American classrooms are wired as a consequence of the funds made available from this program,” said FCC Chairman Michael K. Powell.

“But we’ve learned from past experience that any program, no matter how well intentioned, can be dangerously jeopardized by others who would prey on opportunities–and there are such people and such institutions.”

FCC Commissioner Jonathon Aldelstein called the eRate program “one of the most important federal education initiatives in American history.” He said, “Given the importance of the program, we can’t let it be undermined by attempts to take advantage of it, to inappropriately gain funds. We need to be on top of this. We need to ensure the continued success of this program by continually monitoring, auditing, and reviewing [participants and] reinforcing the successes of the program.”

Commissioner Kevin Martin dissented in part with the Fifth Report and Order, saying, “I don’t join in the decision to delegate some of the commission’s oversight and policymaking to the bureau.”

Powell also announced that Jeff Carlisle, senior deputy chief of the Wireline Competition Bureau, will take over as chief starting Aug. 9. Bill Maher, the exiting chief, made his last appearance before the commissioners at the open meeting.

“I must regretfully announce Bill Maher has decided to move on,” Powell said. “During his tenure, the bureau tackled a myriad of issues that will forever impact the telecommunications landscape, including voice over IP, access-charge reform, eRate, and unbundled network elements. Bill is widely respected for his fairness in addressing these issues, and we will miss him greatly.”

Carlisle, who is an expert on internet- and competition-policy issues, practiced law before joining the bureau in 2001.

Other FCC business

At the meeting, the FCC also adopted new rules that prohibit spam, or unsolicited commercial eMail messages, from being sent to wireless phones and pagers.

In addition, the agency issued a Notice of Proposed Rulemaking (NPRM) concerning the Emergency Alert System (EAS). The NPRM seeks comment on how the system can be improved to warn Americans of emergencies, including taking advantage cell phones, the internet, and other technologies that have gained widespread use since the law was last updated.

Commissioners also adopted new rules requiring wireless, wireline, cable, and satellite telecommunications providers to report information electronically to the FCC about significant disruptions or outages to their communications systems. Any sensitive information collected as a result of these new rules would be protected from public disclosure, but the FCC hopes to collect “prompt information about significant disruptions” to benefit consumers and aid in national defense.

The FCC also took action promote broadband deployment to multiple-dwelling units; approved numerous technologies for protecting digital content from being copied and retransmitted; and took steps to hasten the conversion of TV broadcasts from analog to digital signals.


Federal Communications Commission