WASHINGTON-The Federal Communications Commission may not be the best agency to oversee the E-rate program, according to a House Commerce subcommittee report critical of the government effort to connect schools and libraries to the Internet.
The 52-page report from the investigations and oversight subcommittee said E-rate is “a well-intentioned program that nonetheless is extremely vulnerable to waste, fraud and abuse, is poorly managed by the FCC and completely lacks tangible measures of either effectiveness or impact.”
The E-rate is part of the universal-service fund. The E-for educational-rate is administered, along with the rest of the USF, by the Universal Service Administrative Co., a quasi-governmental organization created by the FCC to administer universal-service subsidies.
USAC has collected and disbursed about $15 billion since E-rate was started in 1998. Approximately $10 billion of that has been paid to E-rate program service providers. The amount of funding available is year is capped at $2.5 billion, but can be rolled over if it is not used. An average of 40,000 applicants have submitted grant requests each year, far exceeding the available funds, so a prioritization scheme has been developed, first paying for telecommunications and Internet access and then for other items.
Wireless carriers generally haven’t received E-rate funds, although the House subcommittee report applauded the Philadelphia School District’s use of some of its funds to create a wireless network.
Sens. Olympia Snowe (R-Maine) and Jay Rockefeller (D-W.V.) developed the E-rate concept out of concern that rural students didn’t have access to the newest technologies. Both Snowe and Rockefeller are members of the Senate Commerce Committee. The Senate and its Commerce Committee specifically have enthusiastically supported the E-rate plan.
The House doesn’t think as highly of the program. Earlier this year, Rep. Joe Barton (R-Texas), a consistent critic, said he wanted to get rid of it altogether. Barton maintains it is not the federal government’s responsibility to maintain and upgrade school district services.
The FCC began to examine the overall universal-service program in June. As part of that process, the FCC is studying whether the E-rate should be distributed according to a formula rather than by entities applying for grants.
