Schools and Libraries Support (E-rate): What Is It
The E-rate program, also known as the Schools and Libraries Program, provides discounts to assist eligible schools and libraries in the United States to obtain affordable internet access and telecommunications services. The program is part of the Universal Service Fund and is administered by the Universal Service Administrative Company (USAC) under the direction of the Federal Communications Commission (FCC). The E-rate program was established in 1997 to help ensure that schools and libraries have access to affordable telecommunications and information services.
History
The E-rate program was established in 1996 as part of the Telecommunications Act of 1996, which was signed into law by President Clinton on February 8, 1996. This comprehensive legislation aimed to increase competition in the telecommunications industry and expand access to advanced telecommunications services to schools, libraries, rural health care providers and low-income consumers (FCC).
Specifically, the E-rate program was created under section 254 of the Telecommunications Act, known as the Universal Service provision. This provision authorized the FCC to implement policies and programs to help deliver affordable telecommunications services to all Americans, especially those in high-cost, rural and low-income areas (Wikipedia).
On May 7, 1997, the FCC officially launched the E-rate program through the adoption of the Universal Service Order (FCC 97-157). This established long-term, sustainable funding to enable schools and libraries across the country to obtain affordable internet access and telecommunications services (FCC). At the time, only 14 percent of American classrooms had access to the internet. The E-rate program aimed to bridge this digital divide.
Eligibility
The E-rate program provides discounts on approved telecommunications, Internet access, and internal connections services to eligible schools and libraries. According to the Universal Service Administrative Company (USAC), to be eligible, an entity must meet the statutory definition of an elementary or secondary school, library, or consortium that includes an eligible school or library.
Specifically, schools must meet the definition of an elementary or secondary school found in the Elementary and Secondary Education Act of 1965, as amended. This includes public and most private schools, as well as charter and magnet schools. Libraries must meet the statutory definition of library found in the Library Services and Technology Act and must not operate as a for-profit business.
In addition, eligible schools and libraries may not have already received services at a discount from a service provider under the E-rate program for the service for which it is seeking support. The FCC provides full eligibility requirements and criteria that schools and libraries must meet to participate in the E-rate program.
Services Covered
The E-rate program provides discounts on eligible services that fall into two categories: Category One services and Category Two services. Category One services include broadband internet access and telecommunications services like phone service. Category Two services include internal connections like wireless access points, routers, switches, wiring, and basic maintenance of these devices. Managed internal broadband services, like managed Wi-Fi, are also eligible under Category Two.
According to the FCC, eligible schools and libraries may receive E-rate discounts on telecommunications services, telecommunications, and internet access, as well as internal connections, basic maintenance of internal connections, and managed internal broadband services. The program aims to provide affordable access to modern broadband and telecommunications services for all eligible schools and libraries.
Each year, the Eligible Services List provides guidance on the eligibility of products and services under the E-rate program. Applicants can check this list to determine if the services and equipment they are seeking bids for are eligible for E-rate discounts in that funding year.
Discount Levels
The level of discount that schools and libraries receive through E-rate is based on the percentage of students eligible for the National School Lunch Program (NSLP). The NSLP provides free and reduced-price lunches to students based on their family income levels. Students from lower-income families qualify for free or reduced-price lunches.
The E-rate discount matrix categorizes schools and libraries into urban and rural designations. It then assigns discount percentages based on the NSLP eligibility. Urban schools and libraries can receive discounts from 20% up to 90%, while rural ones can receive discounts from 25% up to 90% [1].
In general, schools and libraries with higher percentages of students eligible for the NSLP receive higher E-rate discounts. The minimum discount is 20% for urban and 25% for rural applicants. The maximum discount is 90% for the poorest urban and rural schools and libraries [2].
Application Process
The E-rate application process typically takes place on an annual cycle from around July – June each year. Here is an overview of the key steps in the E-rate application timeline (cite: https://www.usac.org/e-rate/applicant-process/):
July-December: The E-rate application window opens, allowing applicants to submit Form 470 to open competitive bidding for desired E-rate eligible services and equipment. Service providers can submit proposals in response.
January-March: Applicants review service provider proposals and select a vendor by filing the Form 471 application before the close of the application window. USAC reviews and approves applications.
April-June: Funding commitment decisions are announced. Applicants and service providers sign contracts and file Form 486 to confirm start of services. Equipment can be purchased and installed.
Ongoing: Applicants file Form 472 (BEAR) to request E-rate discounts on received services and file Form 474 (SPI) to report services were delivered. USAC issues payments to service providers.
The application process has specific requirements and deadlines at each stage that applicants and service providers must follow (cite: https://erateadvantage.com/how-to-apply-for-e-rate-the-e-rate-application-process/). USAC provides resources and training to assist with navigating the E-rate program.
Program Administration
The E-rate program is administered by the Universal Service Administrative Company (USAC) under the direction of the FCC. Specifically, USAC is responsible for handling the funding applications and administering the disbursement of funds to program participants. They also provide customer support to applicants throughout the process. USAC ensures all applicants and service providers follow program rules and monitors compliance. They conduct outreach to provide program information as well. Overall, USAC plays an integral role in managing the E-rate program under FCC oversight.
Program Funding
The E-rate program receives annual funding of approximately $4 billion from the federal Universal Service Fund (USF). The USF is supported by fees charged to telecommunications companies that provide interstate and international telecommunications services. Companies are required to contribute a percentage of their interstate and international end-user revenues to the USF to support programs like E-rate.
The FCC sets an annual cap on E-rate funding, which was $4.15 billion for funding year 2020 and increased to $4.277 billion for funding year 2021. Demand for E-rate funding routinely exceeds the cap, so schools and libraries must compete for funds based on poverty levels and urban/rural status. Requests from the poorest schools and libraries are prioritized.
Cite: https://www.fcc.gov/consumers/guides/universal-service-program-schools-and-libraries-e-rate
Impact
The E-rate program has had a significant impact on connecting schools and libraries across the United States. According to the FCC, since the program’s inception in 1998, the E-rate program has helped connect nearly every public school and library to the internet. As of 2021, over 99% of public schools and nearly 97% of public libraries receive discounts for broadband service through the E-rate program.
The E-rate program has helped bridge the digital divide by providing affordable access to telecommunications and broadband services. In 2021 alone, the E-rate program provided over $3.2 billion in funding commitments to schools and libraries, enabling discounts on 17 million broadband connections. The program has been particularly impactful in rural areas, helping provide connectivity to schools and libraries that may not otherwise have affordable access.
According to an impact study from Funds For Learning, E-rate has cumulatively provided over $50 billion in funding since 1998. Their research found that for every $1 spent on E-rate funding, schools realized $3.75 in direct economic benefits. The significant investments from E-rate have helped equip students and communities with vital connectivity and educational resources.
While work still remains to fully close the digital divide, the E-rate program has been enormously successful in connecting public schools and libraries over the past 25+ years. Its funding and discounts have allowed generations of students to get online and access invaluable learning opportunities.
Criticisms
The E-rate program has faced criticism and controversy since its inception. Some common complaints include:
Funding inequities – There have been concerns that the program disproportionately funds wealthy school districts over poorer ones. A 2008 ALA report found that urban and rural schools received less funding compared to suburban schools with more resources (Rethinking the E-Rate).
Waste and abuse – Due to oversight issues, some E-rate funds have been spent on unapproved services or equipment unrelated to education. An AEI report pointed out cases of outright fraud and abuse (Reconsidering the E-rate Program).
Lack of program evaluation – There is a lack of rigorous evaluation and data analyzing the impact of E-rate spending on educational outcomes. It is unclear if the program is effectively targeting communities most in need (Telecommunications Discounts for Schools and Libraries).
Complex application process – Many schools and libraries, especially smaller ones, find the E-rate application cumbersome. The extensive paperwork deters some from applying.
