We have recently fielded several questions regarding the “fiscal cliff” and what, if any, impact it will have on the E-rate program if sequestration goes into effect.
Simply put, no - E-rate will not be directly impacted by sequestration. A unique feature of the E-rate program is the fact that the dollars collected and disbursed are not tax dollars. Instead, E-rate is funded by the Universal Service Fund, which consists of regular assessments on the revenues of telecommunications providers. Because the program is separate and apart from the U.S. federal budget, if the government closes or if sequestration takes place, the E-rate program keeps on going as-is with no reduction in funding.
So, regardless of what does, or does not, take place in our nation’s capitol before January 1, the E-rate program will continue on.