Rural Schools May Be Losing Out in Battle for E-Rate Dollars

Federal Communications Commissioner Harold Furchtgott-Roth has circulated a letter criticizing the way E-Rate, or Education Rate, dollars are doled out to the nation's schools and libraries.

Furchtgott-Roth, one of five FCC commissioners, said in the letter to fellow commissioners and key lawmakers that he objects to the formula now used to distribute millions in federal funding to schools and libraries under the E-Rate program. Managed by the Schools and Libraries Division (SLD) of the Universal Service Co., E-Rate funding is used to subsidize internal wiring costs for facilities that serve disadvantaged populations.

E-Rate funds are distributed according to a complex discount matrix that SLD uses to calculate an applicant's need. After the FCC last summer scaled back the E-Rate program, it became clear that only the poorest schools -- those qualifying for a 90 percent discount -- would receive funding.

But using a formula that funnels money strictly to schools and libraries with the most need shuts out rural schools, which qualify for 70 percent discounts, according to Furchtgott-Roth. The commissioner favors distribution among discount "bands," where at least a portion of E-Rate money is distributed among those schools and libraries that fall into a lower bracket of need.

"Who are the big winners in the upper brackets? Schools in urban areas such as New York (almost $8.5 million) and Washington, D.C. (almost $2.7 million)," said Furchtgott-Roth's Feb. 9 letter. "Rural areas should always be the primary beneficiary of Universal Service programs. But under these revised rules, the rural applicants are the most likely to be disadvantaged."

According to Furchtgott-Roth, under the current plan, which excludes the 70 percent discount category, schools in Alaska, Kansas, Montana and North Dakota would receive no funding. Furchtgott-Roth circulated the letter to other FCC commissioners and several powerful lawmakers, including Sen. John McCain (R-Ariz.) and Rep. W.J. Tauzin (R-La.), both staunch critics of the E-Rate program.

-- Jennifer Jones

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