Discounted Telecommunications Services for Schools and Libraries
E-Rate Fact Sheet

---

"Until every child has a computer in the classroom and the skills to use it....until every student can tap the enormous resources of the Internet....until every high-tech company can find skilled workers to fill its high-wage jobs....America will miss the full promise of the Information Age."

President Clinton, MIT Commencement
June 5, 1998

---

Don't Leave Any Children Behind - Ending the Digital Divide -- We are still a long way from closing the gap between the "haves" and "have-nots" opportunity to getting new technology. The most recent data from the National Center for Education Statistics shows that wealthy schools were more than 2 ? times more likely to have Internet access in classrooms than poor schools -- 36% vs. 14%. Similarly, schools with high-minority enrollment were almost three times less likely to have Internet access in classrooms than predominantly white schools -- 13% vs. 37%. The E-Rate will help to ensure the end of the digital divide between rich and poor schools and among urban, rural, and suburban schools.

A Long-Serving Tradition of Universal Service -- For more than 60 years, Americans have benefited from universal phone service.

A History of Public Support -- Americans want technology in their children's schools -- now. 74% of Americans agree that computers improve the quality of education. The decision to provide discounted telecommunications services to schools and libraries was the culmination of a lengthy, inclusive, and bipartisan process, that involved many significant public meetings, hearing and rulings. The following is a brief chronology of these events:

• March 1995 -- A bipartisan amendment on universal service is offered to the Telecommunications Act, which calls for providing all K-12 public and private non-profits schools, as well as libraries, with discounts for telecommunications services.

• February 1, 1996 -- The Telecommunications Act is signed into law by President Clinton. Among its key objectives are: 1) encourage competition in the telecommunications and broadcasting industry; 2) reduce regulatory burdens; 3) provide consumers with greater choice and lower rates; and 4) expand and maintain an existing system of universal service that provides high-cost areas, low income families, and schools, libraries, and rural health care providers with affordable access to advanced telecommunications. The Act mandates the creation of a bipartisan Federal-State Joint Board on Universal Service.

• November 7, 1996 -- Following several public hearings and meetings, the FCC Joint Board issues recommendations to implement universal service for Schools and Libraries.

• May 7, 1997 -- The FCC rules unanimously to provide all K-12 schools and public libraries up to $2.25 billion a year in discounts for telecommunication services ranging from 20%-to-90% on a sliding-scale formula. The average discount will be about 60% and the poorest schools will receive discounts of 80%-to-90%. Internet access and internal connections necessary for connecting classrooms and libraries are subject to discounts. The E-Rate does not cover computers, software, or other unrelated services.

• January 30, 1998 -- The 75 day open application process for schools and libraries to receive discounted telecommunication services begins.

• April 15, 1998 -- The first round of the E-Rate application process ends. More than 30,000 applications are submitted, requesting total discounts worth $2.02 billion.

Providing Equity -- The applications for the E-Rate funds demonstrate that the program is serving primarily small and medium size schools and poorer schools. Seventy percent of the schools and libraries are seeking discounts totaling less than $25,000 and fifty-three percent are seeking less than $10,000. Fifty-three percent of the total funds are being requested by the nation's poorest schools and libraries -- those that would receive the greatest discounts. The wealthier schools that have applied for the smaller discounts make up only .3% of the total funds requested.

Certification Required -- The Schools and Libraries Corporation (SLC) is conducting a careful examination of requests to ensure that only applications that adhere to all requirements are eligible to receive funding. Schools and libraries must certify that they have a technology assessment and plan for how they will use the discounted services. The plan must be approved by their state agency, and the state or local authority must provide a description of the services sought and how those services will be used to enhance education.

Already Paid For -- The Telecommunications Act of 1996 was designed to create regulatory reform including reductions in access charges to the telecommunications industry. Over the last 11 months, the long distance companies have already saved nearly $2.4 billion from access charge reductions. This windfall more than offsets the estimated E-Rate demand of $2.02 billion. By passing the cost onto the customer and adding a surcharge to phone bills, these long distance phone companies are trying to keep that $2.4 billion in savings for themselves.

• Long distance companies are not wanting for profits -- The March 2, 1998 edition of Business Week indicates that the profit margin of the telecommunications industry stood at 8.7% in the 4th quarter of 1997, significantly greater than the composite profit margin for all industry of 5.5%.

Streamlined Administration -- The FCC is taking positive steps to streamline the administration of universal service. On January 1, 1999 the SLC and the Rural Health Care Corporation will be merged and their boards will be consolidated.

Strong Future -- Currently, only 27% of classrooms are linked to the Internet. With the implementation of the E-Rate, more than half of our nation's classrooms will be connected, including almost every classroom in the nation's fifty largest urban school districts. This is an enormous step towards closing the technology gap that exists among our communities and creating full and fair opportunities for all students. Our children will be better prepared to compete for the high-tech, high-wage jobs that our economy is producing in record numbers.

-###-

Last update June 20, 2000 (jer).