Requests snowball for E-Rate

USAC: Schools and Libraries program

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As schools and libraries that have applied for federal funds to subsidize

telecommunications services and Internet access receive their approval letters,

many more applicants are hearing "no" because of increased competition.

E-Rate, created as part of the Telecommunications Act of 1996, provides

schools and libraries with discounts of 20 percent to 90 percent for Internet

access and telecommunications infrastructure and for internal connections.

The program, which earmarks up to $2.25 billion annually the maximum set

by the Federal Communications Commission is funded by the telecommunications

industry through taxes on individual telephone bills.

The Universal Service Administrative Co. (www.sl. universalservice.org),

a private, nonprofit organization established by the FCC to administer E-Rate,

is releasing an initial wave of $395 million for the 2001-2002 program.

As in the past, E-Rate funds will be released in several waves throughout

the year.

More than 17,800 letters announcing funding commitments were to be mailed

at the end of July, along with another 6,000 letters denying requests because

of insufficient funds. More than 70 percent of the applications have been

processed in this wave.

More than 30,000 applications, requesting $5.19 billion, were submitted

this year. That's more than the first two years combined.

Of $5.19 billion requested, $1.7 billion was for telecommunications

services and Internet access, while $3.49 billion was for internal connections.

USAC spokesman Mel Blackwell said the group will consider only requests

from the neediest schools for internal connections. "Neediest" is defined

as schools where 50 percent or more of the students receive school lunch

subsidies.

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