The Federal Communications Commission June 12 announced that it would scale back the E-rate program for 1998 from $2.25 billion to $1.3 billion. In addition, the commission said it would extend the 1998 funding cycle to June 30, 1999.
The FCC said it would continue to collect $325 million a quarter from telecommunications carriers to support the E-rate portion of the Universal Service Fund. Last month, the FCC had proposed setting the fund at $1.67 billion for the current funding year, which previously would have ended Dec. 31, 1998.
The E-rate program has come under attack from congressional critics in recent months, particularly after long distance companies said they would have to raise their rates to cover their contributions and would spell out the charge on their residential customers' bills, beginning July 1.
The FCC indicated it will first fund requests for support for telecommunications services and Internet access, and then fund requests for internal connections, beginning with the neediest schools, or those that qualify for discount rates of between 80 and 90 percent.
On April 30, 1998, the Schools and Libraries Corporation projected that it had received requests totaling $2.02 billion through April 28, two weeks after the initial funding window expired. With the FCC announcement, it seems unlikely that any requests received after the filing window would be honored.