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Frequently Asked Questions

The E-Rate: An Overview
Over the past 20 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.

INCOME

Measured by % of students eligible for the National School Lunch Program

URBAN LOCATION

Discount

RURAL LOCATION

Discount

If the % of students in your school that qualify for the National School Lunch Program is...

...and you are in an URBAN area, your discount will be...

...and you are in a RURAL area, your discount will be...

Less than 1%

20%

25%

1% to 19%

40%

50%

20% to 34%

50%

60%

35% to 49%

60%

70%

50% to 74%

80%

80%

75% to 100%

90%

90%

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. 

E-Rate first year:

59 percent of discounts went to the neediest applicants.

E-Rate second year:

54 percent of discounts went to the neediest applicants.

E-Rate third year:

69 percent of discounts went to the neediest applicants.

E-Rate fourth year:

70 percent of discounts went to the neediest applicants.

E-Rate fifth year

64 percent of discounts went to the neediest applicants

 How much money has each state received through the E-Rate program? 
(
Funding Year data as of 12/31/2008.  Funding Year 2008: July 1, 2008-June 30, 2009. Numbers may not add due to rounding.  Figures are in thousands of dollars.)

State Calendar Year 2008
Commitments
Total Program
Commitments
Alabama                          45,253                346,470
Alaska                          22,037                164,865
American Samoa                             4,550                  19,619
Arizona                          67,177                563,123
Arkansas                          40,461                213,796
California                        291,106            3,303,597
Colorado                          20,124                205,001
Connecticut                          41,913                279,309
Delaware                                876                  13,796
District of Columbia                          14,146                141,904
Florida                        100,102                777,544
Georgia                          78,778                733,557
Guam                                   37                  20,932
Hawaii                             3,502                  41,321
Idaho                             5,639                  48,932
Illinois                          90,285            1,044,456
Indiana                          32,216                270,091
Iowa                          17,445                114,984
Kansas                          19,470                153,743
Kentucky                          35,629                364,127
Louisiana                          48,699                457,050
Maine                             5,608                  67,336
Maryland                          15,436                197,143
Massachusetts                          26,424                356,913
Michigan                          49,087                637,386
Minnesota                          22,123                257,855
Mississippi                          35,074                379,195
Missouri                          31,365                415,377
Montana                             4,160                  42,490
Nebraska                          10,224                  82,161
Nevada                          11,793                  55,780
New Hampshire                             3,245                  21,457
New Jersey                          47,359                539,366
New Mexico                          33,134                443,267
New York                        508,701            3,321,129
North Carolina                          61,883                494,088
North Dakota                             4,345                  38,839
Northern Mariana Islands                                785                  11,492
Ohio                          75,111                769,955
Oklahoma                          45,507                446,242
Oregon                          17,288                144,998
Pennsylvania                          92,579                780,532
Puerto Rico                          16,346                275,380
Rhode Island                             6,523                  71,244
South Carolina                          21,303                458,803
South Dakota                             4,622                  53,914
Tennessee                          89,934                565,146
Texas                        256,353            2,365,440
Utah                          19,640                128,566
Vermont                             2,045                  19,712
Virgin Islands                             5,296                  38,257
Virginia                          32,310                304,774
Washington                          24,625                252,214
West Virginia                          15,850                105,474
Wisconsin                          14,994                279,797
Wyoming                             2,136                  31,535

TOTALS:

2,592,653 23,731,474

 

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.

 

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