Federal

Cash Freeze for E-Rate Hits Schools

By Rhea R. Borja — October 08, 2004 5 min read
  • Save to favorites
  • Print

A freeze on $3.28 billion in requests for aid under the federal E-rate program has left hundreds of school districts scrambling to pay for their technology needs—and, in some cases, crippled classroom instruction.

The Universal Service Administrative Co., which oversees the “education rate” program for the Federal Communications Commission, halted funding in August, pending adoption of new accounting procedures. The FCC told USAC to change its procedures by Oct. 1 in response to E-rate audits and congressional charges of waste, fraud, and abuse.

USAC officials may decide as soon as this week to resume funding, but they have not set an exact date. Some of the accounting changes still need to be figured out, Mel Blackwell, the vice president for external communications for USAC, said last week.

See Also

Read the accompanying story,

Atlanta Responds to E-Rate Scrutiny

“It’s not as simple as a flip of a switch,” he said.

The E-rate program, which has disbursed more than $8 billion since its inception in 1997, helps link public and private schools as well as public libraries to the Internet by paying up to 90 percent of technology costs such as wiring and connection fees. Consumers pay for the program through a “universal service” fee on their monthly telephone bills.

To complicate matters, the funding suspension came on top of another delay. Earlier this year, USAC’s schools and libraries division, which directly operates the $2.25 billion-a-year E-rate program, reviewed funding applications from the largest school districts before reviewing those from the many smaller and mid-sized districts. For some smaller districts, that step has resulted in a slowdown or reduction in student access to the Internet, continued aging of technology networks, and, in some rural districts, no Internet access at all.

‘Tired and Frustrated’

Consequently, many state E-rate coordinators are steaming, and district officials are sounding alarms. For instance, 75 percent of New Jersey’s schools that were approved for fiscal 2004 E-rate funding haven’t received their money. In Virginia, 70 percent of schools were still waiting as of last week; in Pennsylvania, the figure was 40 percent.

On Sept. 23, the State E-Rate Coordinators Alliance sent a strongly worded letter to USAC’s schools and libraries division to urge a lifting of the funding freeze.

The letter said the situation “has reached a boiling point in the applicant community as schools and libraries are suffering cash flow issues, losing valuable services, and having needed projects delayed as a result of these massive delays and suspension of funding.”

One case in point is the remote 416-student Kuspuk school district in the Alaskan bush, which is waiting to hear about the fate of at least $700,000 in approved E-rate funds. It is one of more than half of Alaska’s districts that were approved for fiscal 2004 funding, but haven’t received it, said Della Mathis, the E-rate coordinator for the state education department.

Kuspuk is “a typical bush school district that’s totally dependent on communications to stay anywhere close to the world,” she said.

Kuspuk’s nine schools are spread out over 1,200 miles, accessible only by plane or, in the summer months, by boat on the Kuskokwim River. Because of a tight budget, the district has only a meager number of old textbooks. There is no library in the district, nor in the villages served by the schools.

Thus, Kuspuk teachers have relied on the Internet to conduct research and gather classroom materials. About 300 computers were connected to the Internet via broadband until Aug. 15. That’s when the Internet connection was turned off, because E-rate money the district plann ed to use to pay the broadband fees was unavailable. Now, some teachers are calling the district office, which has slow Internet access, to look up and download materials for them.

“As much as half of our classroom instruction is tied to the Internet,” said Marge Randlett, a teacher and the technology director for the Kuspuk schools. “Now, with that being cut off and not having enough textbooks, we’re in a pretty bad way.”

District Superintendent Kim Langton added that if the Kuspuk schools don’t get the E-rate money soon, bad weather will force his district to further delay mounting equipment for Internet connections until next spring.

“I am so tired and frustrated,” he said over a staticky phone line. “We were looking to enhance our broadband and distance learning. We’re extremely grateful for E-rate, but everybody’s being punished for the waste and fraud going on.”

Safeguarding the Program

Examples of alleged or proven abuses in the E-rate program abound.

Nec Business Network Solutions Inc., an Irving, Texas-based subsidiary of nec America Inc., for instance, pleaded guilty in May to abusing the federal program, and agreed to pay the federal government $20.6 million in criminal and civil penalties. (“Company Pleads Guilty To E-Rate Abuses,” June 9, 2004.)

Last year, two executives of New York City-based Connect2 Internet Networks Inc. were convicted of fraud and have been prohibited from participating in the program for three years.

In addition, the 51,000-student Atlanta public school system is being audited for allegedly violating the program’s rules and procedures. The district has issued a detailed report defending its use of E-rate money.

In response to charges about E-rate problems, the FCC passed measures in August designed to safeguard the program. It made schools, libraries, and service providers more accountable and set a framework for how USAC can recover E-rate money that has been used improperly.

The “Fifth Order and Report” requires schools and libraries to keep E-rate documents for five years; states that USAC and the FCC will conduct audits or investigations of beneficiaries within five years of receipt of funding; bars schools, libraries, and service providers from receiving funds from the program if they owe any debts to it; and directs applicants to devise technology plans that follow U.S. Department of Education and USAC guidelines.

“The FCC has had requirements since the start of this program that, for whatever reason, people did not take seriously,” said Sara Fitzgerald, the vice president of communications for Funds for Learning, an educational technology consulting firm based in Arlington, Va., that specializes in E-rate issues. “So the FCC is getting frustrated. If you’re receiving money from ratepayers, and if you want to get this benefit, there’s responsibility that goes along with it.”

Coverage of technology is supported in part by the William and Flora Hewlett Foundation.

Events

School & District Management Live Online Discussion A Seat at the Table: How Can We ‘Disagree Better’? A Roadmap for Educators
Experts in conflict resolution, psychology, and leadership skills offer K-12 leaders skills to avoid conflict in challenging circumstances.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Assessment Webinar
Unlocking the Full Power of Fall MAP Growth Data
Maximize NWEA MAP Growth data this fall! Join our webinar to discover strategies for driving student growth and improving instruction.
Content provided by Otus
Classroom Technology K-12 Essentials Forum How to Teach Digital & Media Literacy in the Age of AI
Join this free event to dig into crucial questions about how to help students build a foundation of digital literacy.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal Days After Georgia Shooting, No Mention of Safety or Schools in Trump-Harris Debate
The debate came less than a week after two students and two teachers were killed at Apalachee High School in Winder, Ga.
3 min read
Ball State University students watch a presidential debate between Republican presidential nominee former President Donald Trump, left, and Democratic presidential nominee Vice President Kamala Harris, Tuesday, Sept. 10, 2024, in Muncie, Ind.
Ball State University students watch a presidential debate between Republican presidential nominee former President Donald Trump, left, and Democratic presidential nominee Vice President Kamala Harris, Tuesday, Sept. 10, 2024, in Muncie, Ind.
Darron Cummings/AP
Federal Photos PHOTOS: Behind the Scenes at the Moms for Liberty National Summit
Former President Trump was a keynote the final night—and said little about schools.
1 min read
Moms for Liberty member Aura Moody dances with others at the annual Moms For Liberty Summit in Washington, D.C., on Aug. 30, 2024.
Moms for Liberty member Aura Moody dances with others at the conservative parents' rights organization's annual summit in Washington, on Friday, August 30, 2024.
Lawren Simmons for Education Week
Federal At Moms for Liberty National Summit, Trump Hardly Mentions Education
In a "fireside chat" with a co-founder of the parents' rights group, the former president didn't discuss his education policy priorities.
5 min read
Republican presidential nominee former President Donald Trump speaks with Moms for Liberty co-founder Tiffany Justice during an event at the group's annual convention in Washington, Friday, Aug. 30, 2024.
Former President Donald Trump, the Republican presidential nominee, speaks with Tiffany Justice, a Moms for Liberty co-founder, during the group's national summit on Friday Aug. 30, 2024, in Washington. The former president spoke only briefly about issues directly related to education.
Mark Schiefelbein/AP
Federal Then & Now Why It's So Hard to Kill the Education Department—and Why Some Keep Trying
Project 2025 popularized plans to end the U.S. Department of Education, but the idea has been around since the agency's inception.
9 min read
President Ronald Reagan is flanked by Education Secretary Terrel Bell, left, during a meeting Feb. 23, 1984 meeting  in the Cabinet Room at the White House.
President Ronald Reagan is flanked by Education Secretary Terrel Bell, left, during a meeting Feb. 23, 1984 meeting in the Cabinet Room at the White House. Bell, who once testified in favor of creating the U.S. Department of Education, wrote the first plan to dismantle the agency.
Education Week with AP