Stay on the Line

Just before heading out the door, Congress thankfully passed a measure to delay, and perhaps avert altogether, the gutting of a successful program that has connected rural schools and libraries to the Internet and, hence, the rest of the world. Funding for and administration of the E-Rate program needs to re-examined, but with this fix, that review can be done in a timely fashion by the next Congress without penalizing schools and libraries that were counting on grant money for needed connections.

In their final minutes in the capitol last week, senators passed a bill that exempted the E-Rate program from accounting changes that would have required it to spend only the money it had in hand. The Anti-Deficiency Act, which limits government spending to the amount appropriated, makes sense for government agencies that rely on funds approved by Congress for their operation. The E-Rate program, however, is funded by a surcharge on long-distance phone bills and makes grants to local communities based on anticipated revenues.

To comply with the act, the Federal Communications Commission this summer suspended the program, delaying $400 million in funds headed to 4,000 schools. The number of schools that lacking funding would only have grown if the rule had remained in place. Alternately, the surcharge on phone bills could have been significantly increased to raise more money for the program. Both were bad options.

The E-Rate program was started in 1996 by Sens. Olympia Snowe and Jay Rockefeller, a West Virginia Democrat. Then only 3 percent of America’s schools and libraries had Internet access. As of 2002, 92 percent were wired. More than 95 percent of Maine’s schools have participated in the federal program, receiving a total of $27 million in grants over the last eight years. Nationwide, the E- Rate program spends $2.5 billion a year.

Schools and libraries receive equipment 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. A recent Government Accountability Office report showed that rural school systems have used their new technology capabilities to meet No Child Left Behind requirements.

There has been fraud in the program. 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.

Given breathing room by Congress, the FCC can now work to ensure that such misdeeds are not repeated without punishing schools and communities that were counting on federal funds. Looking forward, the commission must find a way to maintain the intent of the E-Rate program while adhering to sound accounting practices.

Both are possible.