Frequently Asked Questions

The E-Rate: An Overview
Over the past 15 years, the information revolution has transformed nearly every aspect of American life.  Millions of Americans use modern technologies to work, gather news and information, access training and education, conduct business, participate in the civic life of their communities, and communicate with friends. However, until Congress enacted the E-Rate as part of the Telecommunications Act of 1996, few schools and libraries had sufficient resources to help students and adults keep up with these rapid changes. The E-Rate is significantly changing this situation. It is helping to bridge the digital divide by bringing new technologies and the power of the Internet to urban, rural and low-income schools and communities nationwide.

What is the E-Rate

What is the E-Rate designed to do?

What does the E-Rate provide?

What types of institutions may apply for discounts?

How do schools, libraries, and consortia receive E-Rate discounts?

How large are the discounts?

How are discounts determined?

Which schools and libraries and what services are being funded by the E-Rate?

How much money has each state received through the E-Rate program?

Is the E-Rate program working?

What work remains for E-Rate?

Are there success stories from states and districts about the benefits of E-Rate?

What is the E-Rate?
The E-Rate provides $2.25 billion in discounts annually for advanced, affordable telecommunications services, Internet access and internal connections to public libraries and public and private schools. In the first seven years (1998-2004), $14.6 billion in discounts have brought the Internet and new information technologies to tens of thousands of public and private schools and libraries, and to over a million classrooms.

What is the E-Rate designed to do?
The promise of the E-Rate is straightforward: to assure that all Americans, regardless of income or geography, can participate in and benefit from new information technologies, including distance learning, online assessment, web-based homework, enriched curriculum, increased communication between parents, students and their educators, and increased access to government services and information.

What does the E-Rate provide?
The E-Rate provides discounts to public and private schools, public libraries and consortia of those entities on telecommunications services, Internet access and internal networking. E-Rate discounts are provided through the Federal Communications Commission by assessing telecommunication carriers for a total of up to $2.25 billion dollars annually. This methodology follows a long-established Universal Service Fund model, used to ensure affordable access to telephone services for residents in all areas of the nation for over 65 years.

What types of institutions may apply for the discount?
Non-profit elementary and secondary schools (public or private), and non-profit libraries may apply for E-Rate discounts. Applications may cover individual schools, entire school districts and consortia. Schools, libraries, local government agencies and health care providers may participate in consortia. Applications are made to the Schools and Libraries Division, a part of the Universal Service Administrative Company.

How do schools, libraries and consortia receive E-Rate discounts?
Applicants do not receive funds directly. They receive a discounted price. Once an application is approved, the school, library or consortium accepts a bid from the telecommunications service provider of its choice. The provider receives funds from the federal government to make up the difference between the discounted price and bid price. If no local telecommunications providers bids on the work, the local telephone company is required to provide the requested telecommunications service as the carrier of last resort.  For more information about the E-Rate program, visit the FAQ page at the Universal Service Administrative Company (USAC) where general questions about the Universal Service Fund are posted.

How large are the discounts?
Discounts range from 20 to 90 percent based on local poverty levels. Schools and libraries must pay the undiscounted portion of their telecommunications bill themselves.

How are discounts determined?
Discounts are determined by the percentage of students eligible for the national school lunch program and by the school's (or consortium's) urban/rural designation. The matrix chart here outlines the E-Rate formula.

Which schools and libraries and what services are being funded by the E-rate?
The E-Rate reaches a majority of the nation's schools and libraries. According to the Universal Service Administrative Company, 82 percent of public schools, 46 percent of private schools, and 61 percent of the nation's libraries received funding in year three of the program.

The E-Rate was deliberately structured to ensure that America's neediest schools and libraries receive priority in E-Rate discounts. The program's rules require that those entities with the highest discounts receive limited internal connections funding first. 

 How much money has each state received through the E-Rate program? 
(Funding totals from 1998 through February 15, 2005)

Is the E-Rate program working?
The E-Rate has helped to improve access quickly for libraries and public and private schools.  In 1996, only 28 percent of public library systems offered public Internet access. Today, thanks to increased resources and the E-Rate, nearly all library buildings offer public access computing, and 14 million Americans regularly use these computers at no fee.  Further, only three percent of instructional classrooms were wired in 1994.  As of 2003, 93% of instructional classrooms are wired.  Between 1998 (when the E-Rate launched) and 2003, statistics show that classroom Internet access disparities between rural, urban, and suburban schools and high and low-poverty districts have been dramatically reduced.

Demand for the E-Rate remains strong. For the 2005 funding year alone, almost 39,000 applications were submitted by schools, libraries, or consortia for discounts. Discounts requested totaled an estimated $3.65 billion, far more than available funds.  Under the E-Rate rules, a maximum of $2.25 billion in discounts will be distributed according to the following priorities: All telecommunications services and Internet services are discounted first, then internal connections are covered starting with the neediest schools until the $2.25 billion cap is reached.

What work remains for E-Rate?
There are still instructional rooms and libraries that remain unconnected.  And for those that are connected, most rely on E-Rate discounts to maintain connectivity.  Furthermore, much more needs to be done to determine the quality and speed of connectivity.  All students, educators, and library patrons should have high-speed Internet connectivity to fully participate and learn in an information-dominated economy and world.

Are there success stories from states and districts about the benefits of E-Rate?
Yes.  EdLiNC issued "E-Rate: A Vision of Opportunity and Innovation" in July 2003 (Full Report) that contains wonderful examples of how the E-Rate has enriched the lives and learning of students and brought government resources closer to library patrons who otherwise would not have access to web-based information and services.  Go to http://www.EdLiNC.org/pdf/ERateReport070803lores.pdf for more.