AT&T, feds neglect low-price mandate designed to help schools

As designed by Congress, telecom companies must contribute to a fund, administered by the federal government, that subsidizes the equipment and services provided under the program. Most of the companies raise this money by directly charging their customers.

Sift through that pile of papers at home and take a look at your monthly bill. Amidst all those charges you’ve never really understood you’ll probably find a small one labeled “Universal Service Fund.” Skimmed off every consumer’s payment each month, those dollars and nickels add up, creating a pot of money of about $2.25 billion to subsidize telecom and Internet services for America’s schoolchildren and library users.

Schools and libraries draw on this fund to help pay for the services provided by the telecom companies–virtually all schools are eligible, but the poorer the school, the more it can draw. Requests for help almost always exceed the available funding. So when phone companies charge inflated rates to schools and government regulators turn a blind eye, this fund is depleted faster; fewer schools and libraries benefit; and money taken from millions of telephone customers goes to boost corporate profits instead of to help as many schoolchildren as possible.

Indeed, a perverse bureaucratic process denies most schools the funding to carry broadband services all the way into actual classrooms. Here’s how it works: Schools are rarely if ever turned down for funding to bring broadband main lines to the exterior walls of the schoolhouse.

But the internal connections, from wiring to jacks, that complete the last leg and extend connectivity down to actual classrooms, computers and telephones are deemed a lower priority, so-called “Priority 2.” (Priority 2 also includes maintenance.) As a result, only the very poorest schools are eligible for this funding. The rest–including many poor-but-not-destitute schools–don’t get the subsidies to carry broadband that last crucial stretch from outside the schoolhouse to inside classrooms.

Last year, the eRate program received Priority 2 requests totaling more than twice as much money as it could fund. Worse, many schools don’t even bother to apply for “Priority 2” services because they know they’ll be turned down. Wisconsin estimated in 2005 that 98 percent of its schools and libraries do not qualify. In 2010 New York wrote to the FCC, “Many otherwise needy schools and libraries have received no Internal Connections funding–ever!” And the FCC itself declared in 2010 that “the vast majority” of schools and libraries “do not receive funds for the internal infrastructure necessary to utilize increased broadband capacity.”

From 2009 to 2011, Priority 1 services accounted for about two-thirds of the funds committed. This year, the estimated demand for Priority 1 services will essentially exhaust the entire fund.

How could Congress’s plan have gone so far awry?

An examination of the program by ProPublica shows that from the beginning, oversight of how the money was spent was turned over to private companies that employ numerous former telecom executives.

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