E-rate bill seeks to avoid funding disruption
08/23/05 -- To ensure the steady flow of E-rate funds to the nation’s public schools, NSBA is encouraging Congress to pass legislation to permanently exempt the federal program from the Anti-Deficiency Act, a budget law that bars federal agencies from obligating funds without cash on-hand to cover those obligations.
Last year, the Federal Communications Commission (FCC) changed its accounting practices and ruled that the Act applies to the E-rate program, which provides schools and libraries with discounts of up to 90 percent for telecommunications equipment and Internet services. The ruling prevented the program from disbursing funds until it had the money in hand.
As a result, federal officials effectively shut down the program for nearly four months last fall, leaving thousands of schools and districts unable to purchase equipment and slowed Internet connectivity for millions of students.
To get funds moving again, Congress granted the E-rate program a one-year exemption to the Act. The exemption ends in December, and two bills -- H.R.2533 and S.241 -- have been introduced to make the exemption permanent.
The immediate effort is to get the bills through committees and onto the House and Senate floors for a vote -- and thus avoid another disruption in funding next year, says Deborah Rigsby, NSBA’s director of federal legislation.
In the meantime, NSBA is encouraging members of Congress to sign on as cosponsors of the bills, and in coming weeks, NSBA with other organizations will host a briefing on the E-rate for House and Senate staff members on Capitol Hill.
It’s important to convince Congress to pass the exemption legislation, says NSBA Executive Director Anne L. Bryant, who serves as vice chair of the Schools and Libraries Committee of the nonprofit Universal Service Administrative Company, created by the FCC to oversee the program.
“With its passage, we can continue to promise schools and libraries the actual amount of savings they will get in the future,” she says. “Without this exemption, we basically endanger the system with a complete shutdown, which is what happened last year.”
On the horizon, however, is a larger policy debate over the future of the E-rate, which has distributed nearly $14.6 billion in telecommunications discounts to more than 91,000 schools since the program’s inception as part of the Telecommunications Act of 1996.
An argument voiced in some circles is that the E-rate has fulfilled its purpose -- and is no longer necessary. When the program began, only 3 percent of the nation’s classrooms were connected to the Internet. Today, that figure is quickly approaching 100 percent.
The idea that the E-rate is no longer needed is sharply disputed by supporters of the program. Speaking at a symposium sponsored by The New Republic magazine, Kim Anderson, co-chair of EdLiNC, an advocacy group for the E-rate program, noted that many schools still have dial-up connections and need to upgrade to broadband.
Other supporters point out that poorer schools also need E-rate discounts to continue to pay for Internet connections.
“We still need the E-rate,” Anderson says. “We view it as part of the essential infrastructure of this country.”
Fortunately, the E-rate still enjoys significant support in Congress, Rigsby says. But changes to the program are possible in response to allegations of fraud and mismanagement in the program.
Several technology firms have admitted guilt to charges of fraud for their work helping schools with E-rate funds, and Puerto Rico officials reportedly wasted millions of dollars on substandard Internet connections and equipment forgotten in warehouses.
In response to criticism, the FCC increased oversight of the program and hired outside auditors to audit 350 schools and libraries and conduct site visits to another 1,000 schools nationwide.
But what recent audits reveal are largely honest mistakes by school personnel working with a “fairly complex” set of program rules, Bryant says.
“What these audits have found is a lack of understanding, a lack of conformity, or a lack of capacity to closely follow the rules,” she says. “In the vast majority of audits, we simply did not find fraud or abuse of the system.”
Still, policy makers are discussing various changes to the program, such as a new management structure, simplified application process, and new rules to deter waste and abuse. The FCC currently is seeking public feedback on its management of the program -- an initiative announced in June.
“To ensure continued success, we must remain committed to monitoring, auditing, reviewing, and reinforcing this program,” said FCC Commissioner Jonathan S. Adelstein in a statement following the announcement. “Part of that process is being responsive to criticisms of the commission’s management, and this [effort] seeks comment on a wide-ranging set of proposals.”
School boards also can expect to hear about other proposals, such as adopting a funding formula that would dole out money to schools based on enrollment or to allow schools to apply for multiyear funding.
Over the next couple of years, we need to look at simplifying the application process, says Bryant, who calls the public examination of the program a positive step.
But she emphasizes the need to keep the program on course. “Schools have been tremendously helped by the E-rate program,” she says. “Money that would have gone into high-priced, business-rate services has been saved and invested in computers, teacher training, and necessary equipment.”
| Reproduced with permission from School Board News. Copyright © 2005, National School Boards Association. Opinions expressed in this newspaper do not necessarily reflect positions of NSBA. This article may be printed out and photocopied for individual or educational use, provided this copyright notice appears on each copy. This article may not be otherwise transmitted or reproduced in print or electronic form without the consent of the Publisher. For more information, call (703) 838-6789. |