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FCC Tightens Financial Rules for E-Rate ProgramThe Federal Communications Commission voted December 17 to tighten the financial rules for its e-rate program, which subsidizes telecommunications costs for libraries and schools. The new rules, enacted to address concerns over fraud and abuse, prohibit the transfer of equipment purchased with e-rate funds to other locations for three years and limit upgrades or replacement of internal connections to no more than twice every five years. The FCC states that the new rules also create a more “formal and transparent process for updating annually the list of services eligible for support.” The agency also announced that some $420 million in unused funds from prior years would be carried forward for disbursement in funding year 2003. The House Committee on Energy and Finance has been investigating abuse in the program. Ken Johnson, a spokesman for committee chair Rep. Billy Tauzin (R-La.), said in the December 18 Washington Post that the investigation “continues to uncover more and more examples of fraud, waste and abuse in the e-rate program.” Although he declined to provide any specific cases, he promised they would be revealed at a “blockbuster hearing early next year.” Posted December 19, 2003. |
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