FCC Slashes E-rate Funding
Message Posted June 14, 1998
On Friday, June 12, the FCC made several substantive changes to revise the E-rate program -- changes due to pressure from Congress and several telecommunications providers over the past three weeks. The good news is that the E-rate program still exists. The bad news is that it's been cut by 43%. The FCC web site has not been operational since Friday night and thus we haven't seen the actual Order, we have pieced together a preliminary summary. As more details become available, we'll pass them along. -- Julie
Funding Year
The FCC changed the initial funding period from 12 to 18 months, so that the next funding cycle will coincide with the operation of school-year calendars and school budget planning. The next annual funding cycle will begin July 1, 1999 and will end June 30, 2000.
Funding Level
The FCC cut the program's annual funding from $2.25 billion to just under $1.275 billion, a reduction of 43%. Because the program's first year has been extended to June, 1999, the total amount available for the first 18-month funding year now will be $1.9 billion. The Commission recognized that this revised funding level will not fully satisfy the estimated demand of school and library applications filed during the 75-day window filing window ($2.02 billion) and therefore
revised its rules of priority to ensure that all schools and libraries that submitted an approved application during the 75-day window receive full support for telecommunications services and Internet access, and the neediest applicants will receive support for internal connections. It is expected that all applicants eligible for a 90% discount will receive full
funding for internal connections, as well as most applicants eligible for an 80% discount.
One report states that discounts should begin flowing "sometime this summer". However, it is important to realize that the FCC has collected just $650 million to fund the E-rate program this far and they have ordered that USAC can only collect $325 million per quarter for the third and fourth quarters of 1998 and the first and second quarters of 1999. This
means that even if discounts begin this summer, they can only pay-out as much as they've collected -- $650 million. Thus, many schools and libraries may not get paid until 1999.
Other Changes
Also in the Order, the Commission reiterated changes it is making to the administration of universal service, consistent with the will of Congress. The Order notes that SLC, RHCC, and USAC are directed to file with the Commission, for its approval, a joint plan of reorganization by July 1, 1998. The Commission also lowered the level of compensation for the officers and employees of SLC and RHCC, effective July 1, 1998.
Julie L. Tritt
Executive Policy Specialist
Office of Educational Technology
Pennsylvania Department of Education
333 Market Street
10th Floor
Harrisburg, PA 17126
Tel: (717) 787-5820
Fax: (717) 787-7222
00jtritt@psupen.psu.edu
www.state.pa.us
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