The E-Rate Program: Universal Service Fund Telecommunications Discounts for Schools

Publication Date: March 2004

Publisher: Library of Congress. Congressional Research Service

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Research Area: Media, telecommunications, and information

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Abstract:

Under language enacted in the Telecommunications Act of 1996 (P.L. 104-104), a discount on telecommunications services was implemented for schools and libraries as part of the universal service framework. Universal service seeks to ensure the availability of telecommunications services for all consumers, including low-income consumers as well as those in rural and high-cost areas.

The universal service discount for schools and libraries, known as the E-rate program, is now in its sixth award cycle. The E-rate program has an annual budget cap of $2.25 billion - although the FCC has recently ruled that unused funds can be carried over for usage in subsequent years. Although the future of E-rate is not as questionable as in its earlier years, some Members of Congress continue to question the utility of the program, and instances of fraud and abuse in the program have been reported.

This report provides background information on the E-rate program, focusing specifically on its support of schools. It will be revised to reflect any substantive changes in the program. For legislative activity see CRS Issue Brief IB98040, Telecommunications Discounts for Schools and Libraries: The "E-Rate" Program and Controversies.