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Bush Budget Calls for Some Changes in E-rate Program

The fiscal 2002 budget that President Bush unveiled April 9 calls for Congress to require the Federal Communications Commission to make changes in the way it administers the E-rate program.

The fiscal 2002 budget that President Bush unveiled April 9 calls for Congress to require the Federal Communications Commission to make changes in the way it administers the E-rate program.

Bush has abandoned his initial proposal to fold the E-rate program into the U.S. Department of Education. Instead, he has proposed new E-rate rules "to promote efficiency and flexibility in the use of telecommunications and information services, to boost educational outcomes, and to reduce the administrative burden on and uncertainty of funding for applicants." If the proposal is approved by Congress, the FCC would be required to issue regulations by Sept. 30, 2002 that would revise the E-rate program:

  • to allocate funds using a need-based formula;
  • to expand the definition of eligible services to include additional services that "promote effective use of technology," including such things as teacher training and software;
  • to assess how to institute performance measures, such as those used by the Department of Education and others, to gauge the effectiveness of education technology in promoting student achievement;
  • to determine how to apply need-based formulas to private schools and libraries; and
  • to determine how to ensure coordination of the E-rate program with other federal education technology programs supported by the Elementary and Secondary Education Act.

The Bush proposal appears to be born of a concern, shared by many educators, that schools will not be able to use their investment in computers and infrastructure unless they have adequate funding for other resources, particularly staff development. However, the E-rate program is supported by the revenues of telecommunications companies, not traditional federal appropriations. In the past, the telecommunications companies have strongly opposed expanding the kinds of services that the program could support. Because the E-rate program has already survived one legal challenge to its use of universal service funds to support internal connections, supporters have been reluctant to expand the original outlines of the program out of fear of stirring up opponents.

The E-rate program currently allocates support for telecommunications services and Internet access to all eligible applicants regardless of need, and then makes internal connections support available to the neediest applicants first, as long as funds remain. It appears that the Bush proposal would try to change those formulas, possibly in line with the way federal educational grants, such as the Title I program, are allocated to states based on the levels of need in public schools.

So far, the FCC, and hence the Schools and Libraries Division, have been reluctant to evaluate the technology choices of individual E-rate applicants, other than to ensure that those choices are backed by an approved technology plan and that the applicants can demonstrate that they have adequate resources in place, including teacher training and software, to make effective use of their discounts. Some applicants have been required to detail to SLD auditors how they have budgeted for those other non-eligible areas of their technology budgets, but not all applicants have been required to provide that documentation.

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