Background on Education Technology and E-Rate

Young girl working on a computer with assistance from another student

Houston ISD/Dave Einsel:

Education Technology and E-Rate

The Schools and Libraries Program of the Universal Service Fund, commonly known as E-Rate, provides discounted telecommunications services and Internet access to eligible U.S. schools and libraries in low-income and rural areas.

The E-Rate program helps high-need schools and libraries obtain services including:

  • Telecommunications and Internet access (called Priority 1 services); and
  • Internal connections and basic maintenance (called Priority 2 services).

Discounts range from 20 to 90 percent, and the specific amount of the discount depends on:

  • Poverty level (based on the percentage of students eligible for free and reduced-price lunch)
  • Location of the school or library receiving service (rural or urban)

Funding for E-Rate discounts comes from telecommunications carriers, including:

  • Landline and wireless companies
  • Paging service companies
  • Interconnected Voice over Internet Protocol (VoIP) providers

Contributions are based on a percentage of the providers’ interstate and international end-user telecommunications revenues. Some providers pass this cost on to their customers as a charge that may be labeled as a “Universal Service Fee.”

E-Rate has been very successful in bringing the Internet to high-need public schools and libraries:

  • Since 1998, the first year E-Rate discounts became available, the percentage of public school instructional classrooms with Internet access has risen from 51 to 94 percent.
  • E-Rate is the fourth largest source of non-state or local funding to schools.
  • More than eight out of ten public schools rely on E-Rate discounts.

The need for E-Rate discounts has grown in recent years, and demand is more than twice the amount of the available funding:

  • Universal Service Administrative Company (USAC), which manages E-Rate, received nearly 45,000 applications requesting $5.2 billion for schools, libraries, and consortia for FY 2013.
  • E-Rate is currently funded at approximately $2.4 billion per year.
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