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Published in Print: November 25, 1998, as First Wave of 'E-Rate' Awards Finally Delivered

First Wave of 'E-Rate' Awards Finally Delivered

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Three thousand and sixty letters were on the way to school and library mailboxes last week, bearing news their recipients have waited a long time to hear: You are getting your "E-rate" discount.

Linda G. Roberts

"I love saying it: The check's in the mail," said Linda G. Roberts, the special adviser on technology to Secretary of Education Richard W. Riley.

The letters represent the first wave of commitments by the federal Schools and Libraries Corp. to pay for "education rate" discounts for telephone service, Internet access, and classroom wiring to promote student learning.

More waves will follow, ending in January, as the SLC decides on over 30,000 requests submitted between Jan. 30 and April 15 of this year.

Funding in the first wave, which totaled $73 million, provides Internet and telecommunications services to a wide range of schools and libraries, and wiring projects for applicants with the largest proportions of low-income students. The discount ranges from 90 percent for the neediest applicants to 20 percent for schools and libraries in well-to-do communities.

"It really feels like it's the birth of this program," said Michelle Richards, a lobbyist for the National School Boards Association. "It will be around for a long time."

Advocates for the E-rate discounts were less confident about the programs prospects earlier this year, when critics in Congress threatened to stall, modify, or scrap the initiative.

Those criticisms gained momentum from the SLC's delays in awarding the discounts, which had been expected during the summer. SLC Acting Chief Executive Officer Kate L. Moore said the process was bogged down by the rush of last-minute applicants, by the many faulty applications, by the Federal Communications Commission's June decision to change the priority for awarding discounts, and by procedural changes and a computer overhaul stemming from two audits, including one by the General Accounting Office.

Now that those problems are behind it, the E-rate has gained a strategic advantage, Ms. Richards said.

"Now that the money is flowing, it's going to be very dicey politically to attack this program," she said. "A reduction in the program at this point would mean pulling computers out of the classroom."

Some Rejections

To receive a discount, schools and libraries had to submit detailed plans--approved by state authorities--of how they would use the funding to improve instruction and how they would pay for related computer purchases and teacher training. The prospect of the E-rate has spurred many applicants to seek other funds for technology.

The waves of letters will total $1.9 billion in discounts for eligible services and projects undertaken in 1998 and, due to a one-time extension by the FCC, the first six months of 1999.

Some applicants will be disappointed. The SLC said it rejected about 3 percent of the applications it considered in the first wave.

Most denials were due to funding requests filled with items that the agency deemed ineligible under the FCC rules. Many of the rejections were in projects to install wiring in classrooms; projects serving ineligible users, such as preschool children, were also turned down.

Where possible, SLC officials said, they crossed out ineligible items and funded valid requests, instead of rejecting flawed applications. An SLC problem-resolution process helped many applicants correct filing errors last summer.

Some Criticism Continues

While education and library lobbyists celebrated the launch of the funding commitments, critics of the E-rate also fired off volleys last week.

Consumer groups complain that the program's costs, which are underwritten by the telecommunications industry, are being passed on to consumers in higher telephone bills. Other critics called for evidence that telecommunications services provide educational benefits.

On Capitol Hill, Rep. Bill Goodling, R-Pa., the chairman of the House Education and the Workforce Committee, issued a letter saying the FCC's funding mechanism was an unconstitutional tax that has "needlessly raised consumers' telephone bills" and put the program at risk.

And Sen. Conrad Burns, R-Mont., the chairman of the Senate Commerce Committee's subcommittee on communications, said the universal-service fee created to pay for the E-rate program should be eliminated. Instead, funding should come from the existing federal excise tax on phone calls, he said.

But another influential senator who was a vocal critic of the program, Commerce Committee Chairman John McCain, R-Ariz., is now satisfied with it, according to his deputy press secretary, Mark Buse. "There's a new management team; the SLC has instituted the reforms he recommended," Mr. Buse said. "They have been taking very substantial steps. He's happy."

The Schools and Libraries Corp. and the FCC have implemented changes that were recommended by a GAO study initiated by Sen. McCain to reduce the potential for fraud, waste, and abuse in the program. "It was crucial to maintaining long-term viability and sustainability of the program," Mr. Buse said.

School districts now will turn their sights to the second year of the E-rate program. The 80-day filing window to apply for discounts for the 12 months beginning next July opened Dec. 1.

Vol. 18, Issue 14, Pages 23,28

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