Issue and Action Centers

Support the E-Rate Program

Read the latest news about E-Rate.

The E-Rate is a vital program that must be preserved as Congress overhauls current telecommunications law. Since 1998, E-Rate has been the driving force behind ensuring that nearly all students and teachers—regardless of their socioeconomic circumstances—gain access to online resources. For the E-Rate to continue, it is critical that: 1) E-Rate remain an application-based program and part of universal service; 2) E-Rate funds flow without interruption; and 3) E-Rate not be subject to unreasonable new laws or regulations.

Background: The E-Rate is a part of Universal Service, a support mechanism that was created in 1934 to ensure that rural consumers had affordable phone service. The E-Rate program, authorized under the Telecommunications Act of 1996, represents an extension of Universal Service. It provides public and private schools and libraries with discounts of 20%–90% for telecommunications services, Internet access and internal connections. Since its inception in 1998, it has played a major role in increasing public school classroom Internet connections from 14% in 1998 to 93% in 2003. The E-Rate has also helped low-income, minority, and rural students gain near equal access in their classrooms to their peers around the country. Demand for the program remains strong as discount requests frequently exceed E-Rate’s $2.25 billion annual cap.

Anti-Deficiency Act Legislation: Between August and December of 2004, the Universal Service Administrative Company (USAC) was forced to temporarily shut-down the program because it believed that it was about to run afoul of the federal Anti Deficiency Act (ADA). Under the ADA, federal agencies must have sufficient cash on hand to cover all program obligations. USAC collects E-Rate funds quarterly, and so not all E-Rate dollars are available when USAC sends out annual funding commitment letters to applicants. Thus, while the E-Rate account is never in the red, USAC and the FCC determined that such letters constituted obligations under the ADA. As a result, USAC stopped sending the letters, causing some districts to turn off their service and many others to endure major funding delays.

In the past two Congressional sessions, Congress has passed and the President has signed legislation to temporarily exempt E-Rate and all of Universal Service from the ADA. The last ADA exemption expires on December 31, 2006, and, without the enactment of an additional temporary exemption or a permanent exemption, the E-Rate could face another shut-down.

Senator Olympia Snowe (R-ME) has introduced legislation, S. 241, that would make permanent the ADA exemption for E-Rate and all of Universal Service. Senate Commerce Committee Chair Stevens (R-AK), Ranking Member Daniel Inouye (D-HI) and E-Rate author Senator John Rockefeller (D-WV) have signed on as original cosponsors, and 48 other senators have already agreed to sponsor it. Representatives Barbara Cubin (R-WY) and Charles Gonzalez (D-TX) have introduced a companion bill in the House (HR 2533), and 114 other representatives have cosponsored it. ISTE, CoSN, and SIIA support both bills.

Telecommunications Act Rewrite: The E-Rate also faces continuing challenges to its very existence as Congress begins to rewrite the Telecommunications Act of 1996, which legally established the E-Rate. Media and congressional attention to instances of waste, fraud, and abuse have overshadowed the program’s accomplishments and efforts by the FCC and USAC to remedy these problems. For example, the FCC has already implemented a major rule change that bars applicants from receiving internal connections funding more than twice every five years.

Despite new FCC rules and USAC procedures, some in Congress believe that the E-Rate should be eliminated and may use the rewrite of telecommunications laws as a vehicle to end or cripple it. House Commerce Committee Chairman Joe Barton (R-TX), an outspoken critic of the program, has thus far failed to introduce this year any legislation that takes aim at the E-Rate. In fact, his telecommunications overhaul legislation, which passed the full House in June, contains no E-Rate or Universal Service provisions.

The Senate Commerce Committee’s version of telecommunications overhaul legislation, which the Committee will vote on in late June, contains a number of salutary E-Rate provisions, including: 1) a permanent exemption of E-Rate and Universal Service from the ADA; 2) the establishment of sanctions for applicants and vendors who knowingly and repeatedly violate program rules; and 3) the creation of performance measures that measure the extent and substance of connectivity in schools and libraries. All three of these provisions are supported by ISTE and CoSN, and the sanctions and performance measures proposals have their basis in comments that ISTE and CoSN filed with the FCC. This bill does not attempt to remove E-Rate from universal service funding altogether and pay for it through federal taxes, as some carriers have advocated. ISTE and CoSN believe that E-Rate should remain a part of universal service.

Formula Grant Proposal: Last year, the FCC launched a major public rulemaking on universal service and the E-Rate program. In that rulemaking, the FCC proposed changing the program from an application-based program to a formula grant program and allowing E-Rate funds to be used for non-telecommunications services. ISTE and CoSN oppose this proposal because it would not only imperil the E-Rate’s stable funding stream but also could severely undermine the program’s mission to serve low-income and rural populations, the ability of local entities to make decisions on services, and the Commission’s own efforts to deter waste, fraud, and abuse.

Recommendations to Congress

1. Reauthorize the E-Rate and maintain its inclusion in the Universal Service fund.
2. Permanently exempt the E-Rate program from the Anti-Deficiency Act.
3. Oppose all efforts to transform the E-Rate into a formula grant program.

Support the Enhancing Education Through Technology Program
Restore Funding to $496 million FY05 Level

Read the latest news about EETT.

Technology is critical in our schools to both meet the goals of the No Child Left Behind Act and ensure students are prepared to compete in the 21st century. America cannot create a competitive workforce if its schools don’t have technology-proficient educators, well-equipped classrooms, sufficiently supported administrative structures, and a curriculum that recognizes the role technology plays in all disciplines. A robust and targeted federal investment is needed to address these needs and goals, and the Enhancing Education Through Technology (EETT) program (Title II part D of NCLB) is an integral component of this national support. Restoring funding for the EETT program to a minimum of $496 million, its FY 05 funding level, is necessary to meet educational goals and needs.

EETT and NCLB

Congress authorized EETT within NCLB to provide school districts, particularly those serving low income students, with the resources necessary to integrate technology into learning. Congress supported EETT because it recognized that technology has an important role to play in achieving key NCLB goals—raising student achievement, ensuring high-quality teaching, and increasing parental involvement—among others.

Specifically, EETT undergirds NCLB’s goals by supporting:

EETT allocates funds by formula to states. The states in turn reallocate 50% of the funds to local districts by Title I formula and 50% competitively. While districts must reserve a minimum of 25% of all EETT funds for professional development, recent studies indicate that most EETT recipients use far more than 25% of their EETT funds to train teachers to use technology and integrate it into their curricula. In fact, EETT recipients committed more than $159 million in EETT funds towards professional development during the 2004–05 school year alone. Moreover, even though EETT recipients are afforded broad discretion in their use of EETT funds, surveys show that they target EETT dollars toward improving student achievement in reading and math, engaging in data-driven decision making, and launching online assessment programs.

EETT and Competitiveness

Aside from its importance to achieving NCLB goals, EETT is critical to the nation’s future workforce competitiveness. EETT provides all students, especially those who lack access to technology at home, with opportunities to gain the critical technology skills and knowledge that are prerequisites for obtaining jobs in this global, information-technology rich marketplace. These skills include technology literacy, communication, problem solving, and the ability for self-directed learning as necessary to improve one’s abilities over time as employment needs evolve. A 2003 U.S. Department of Commerce report credits U.S. industry’s massive investments in information technology between 1989–2001 with “producing positive and probably lasting changes in the nation’s economic potential.” Unfortunately, the same study indicates that of the 55 industries surveyed, Education Services ranked dead last in the intensity of its use of IT equipment per worker. America’s students must not be short-changed in a global economy that is increasingly replete with and dependent upon information technology. Our nation’s future depends on it!

EETT Funding History

While authorized in NCLB at $1 billion per year, EETT has never received more than $700 million in annual funding. In the past two years, it has sustained major cuts, culminating in FY 06’s 45% reduction, which left the program with only $272 million. In its FY 07 Budget, the Administration proposes to eliminate all funding for the EETT program—the second year in a row that it has sought to eliminate EETT entirely. The House Appropriations Committee has followed the Administration’s lead and also provided no funding for EETT in its education funding bill. These cuts have already seriously eroded state and district efforts to both ensure our competitiveness and effectively implement NCLB. A complete elimination of EETT would be devastating.

Districts rely on EETT funds as a core means for providing a competitive 21st century learning environment. In 14 states (AZ, CA, DE, IL, LA, MD, MI, MN, MO, NH, OK, VT, WA, and WI), EETT is the sole source of education technology funding for local schools, and in the majority of states it is the primary source.

States and districts will be unable to replace EETT dollars with other federal funds. For example:

Recommendation to Congress

Restore funding for the EETT program to a minimum of its FY05 funding level of $496 million to meet the goals of NCLB and ensure students and teachers are prepared to compete in the 21st century.