Stay Connected

Congress expanded universal telephone service to schools and libraries in 1996 because it wanted them to have access to the Internet. Under a provision in the Telecommunications Act, it even outlined a way to help fund these connections. Ratepayers may not like the method – a charge on their bills – but the intent of Congress was clear: Get these centers of learning wired and operating so that students and others could use this powerful tool. This summer, the Federal Communications Commission, reportedly in consultation with the Office of Management and Budget, suspended grants for this program, leaving schools across the country picking up the bill.

The reasons for the suspension are complicated, but its abruptness has left schools not knowing whether they will ever see the funding. Starting with its own state program in the early 1990s, Maine has enthusiastically embraced the idea of connecting its schools and libraries. More than 95 percent of them participate in the federal program, and have used $27 million in grants over the last eight years. Nationwide, the E-Rate program, as it is known, spends $2.5 billion a year.

Under E-Rate, schools and libraries receive equipment through contractors at a discount with the difference made up by the federal program – states receive 20 to 90 percent discounts based on wealth; Maine is a 60-percent receiver. Under the program, local schools have gotten help with service, enabling them to provide a wider range of classes, to access teaching materials and to help teachers stay current in their fields. In a similar grant program rural health-care providers also receive connection support through the Telecom Act.

But, at least early on, there was also fraud – in San Francisco, NEC Business Network Solutions pleaded guilty to wire fraud and antitrust violations after it was accused in 2001 of defrauding the local schools and several others nationwide by rigging bids and bribing officials. An even larger scandal involved Puerto Rico’s former secretary of education who served three years in prison and paid $4 million in fines after being accused of mismanaging $10 million in E-rate funds between 1998 and 2000. Significantly, it appears that nothing like these has occurred for a couple of years.

A further complication involves what constitutes acceptable accounting procedures for the funds – do they have to be in federal hands before they can be pledged to schools or is the expectation that they will arrive sufficient? And if the FCC has decided on the former why, asks Sens. Olympia Snow and John Rockefeller, authors of the legislation, has the FCC decided to under-collect the necessary funds?

With the FCC decision coming so late in the year and with so little notice, Congress has few options. But later this fall it should ensure that current funding goes to the states, schools and libraries that have met the standards under which they applied for the grants. Congress promised that money and the locals are counting on it. Then, rather than getting into a fight about whether generally accepted accounting practices or the government’s version of them are preferred or whether the fund within the USAC constitutes public money, the FCC should go back to the intent of Congress in creating the legislation and describe to it what steps are necessary, in the future, to carry out those wishes. Congress could then write legislation to clear up any confusion on the issue and ensure the proper safeguards against fraud are in place.

Some members of Congress have spoken strongly against E-Rate, and might use the past troubles or the current accounting maneuvers as a means to diminish or cancel the program. They should balance their squeamishness about government helping people against the benefits the program provides and drop their arguments. The Snowe-Rockefeller legislation has enabled thousands of small schools, rural libraries and health-care facilities to connect to the world in a way that is crucial today. It is unlikely that these connections will grow less important in the future.