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SLD Says Threshold for 2004 Will Stay at 81 Percent

The Schools and Libraries Division announced April 29 that the approved threshold for internal connections for the 2004 funding year will drop no lower, and that applicants eligible for a discount rate of 80 percent or lower will begin to get rejection letters with the next funding wave for the year, which the SLD said it would issue soon.

The development was somewhat surprising in that demand for the 2004 funding year was less than in 2003, when the SLD was able to support internal connections requests from applicants eligible for a discount rate of 70 percent or above.

To date the SLD has approved funding commitments totaling more than $2.63 billion for the 2003 funding year, in part because the SLD was able to take advantage of a large roll-over of undisbursed funding from previous years. In recent years, the Federal Communications Commission had also permitted the SLD to approve more commitments than it was authorized to disburse, recognizing that E-rate applicants historically did not use all of their available funding. In the wake of concerns last fall about whether the Universal Service Fund was subject to government accounting rules, the pursestrings were understood to have been pulled more tightly this year.

So far, the SLD has approved funding commitments totaling more than $1.9 billion for the 2004 funding year. About $900 million of that is for internal connections. The 2004 year is the last before a new restriction takes effect, limiting approved internal connections to sites in only two out of every five years.

Applicants whose 2003 funding requests for internal connections were not approved until on or after March 1, 2004 will have until September 30, 2005 to use their commitments for non-recurring services.



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