E-Rate and Universal Service

Last Updated: March 5, 2007

What is Universal Service?

The term Universal Service stems from the Telecommunications Act of 1934, where it was borne out of a drive to make telephone service available to everyone. As of the Telecommunications Act of 1996, Universal Service now applies to information services as well, including the Internet, and telecommunications companies are required to contribute to the Universal Service Fund, which is administrated by the Universal Service Administrative Company .

According to the FCC :

The goals of Universal Service, as mandated by the 1996 Act, are to promote the availability of quality services at just, reasonable, and affordable rates; increase access to advanced telecommunications services throughout the Nation; advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas. In addition, the 1996 Act states that all providers of telecommunications services should contribute to Federal universal service in some equitable and nondiscriminatory manner; there should be specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service; all schools, classrooms, health care providers, and libraries should, generally, have access to advanced telecommunications services; and finally, that the Federal-State Joint Board and the Commission should determine those other principles that, consistent with the 1996 Act, are necessary to protect the public interest.

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What is the E-Rate?

E-rate is the popular name for a far-sighted extension of Universal Service, as authorized by Congress in the Telecommunications Act of 1996. This federal initiative provides discounts to public libraries and to public and private K-12 schools on telecommunications services, Internet access, and some closely related costs, such as inside wiring. The discounts range from 20% to 90% with the deepest discounts going to those communities with the greatest need based upon the local eligibility levels for participation in the National School Lunch Program (NSLP).

The E-rate has played a pivotal role in helping libraries connect their users to the Internet. Today, more than 95% of our nation's libraries offer Internet access to the public. This is compared to 1996, when 28% of library systems that offered public access to the Internet in at least one branch. With more than $350 million in discounts since 1998, the E-rate has helped change the public library's information technology landscape.

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Recent News

March 5, 2007

This week, Capitol Hill celebrated the E-rate's 10th anniversary! A number of policymakers expressed their support for the program, which has helped libraries achieve nearly 100% connectivity.

"The success of the E-Rate Program has undoubtedly touched the lives of many Americans and helped bridge the technological gap in classrooms and libraries throughout the country,” said Senator Olympia Snowe. "In libraries throughout my home state of Maine, the E-Rate program has opened many doors for residents who enjoy exploring the vast possibilities of the Internet in a community setting. I am proud to be involved with such a worthwhile project that not only improves the resources of our students, but helps to strengthen the bonds of our communities."

Linda Lord, Deputy State Librarian of Maine and current Chairperson of the ALA E-rate Task Force, was a featured speaker at a panel on Capitol Hill. Linda spoke eloquently about the role E-rate has played in her state and across the country.

"The E-rate saved us. Every major initiative we have rides on us being connected and our connectivity rides on the E-rate," she said, speaking of the Maine Schools and Libraries Network.

The Education and Libraries Networks Coalition (EdLiNC) and the National Coalition for Technology in Education and Training (NCTET) also released a report containing profiles of E-rate recipients across the country. The report, entitled "E-rate: 10 Years of Connecting Kids and Community" is available for download here:

June 5, 2006

A Schools and Libraries News Brief dated May 5, 2006, said that if a library provided patron laptops with Internet access, that such laptops must comply with the Children's Internet Protection Act (CIPA) and thus they must have a filter.

ALA has always believed that the language in CIPA clearly refers to computers owned by the library and that the law does not include patron PCs. For example, the very first substantive section (1702) of CIPA states that, "Nothing in this title or the amendments made by this title shall be construed to prohibit a local educational agency, elementary or secondary school, or library from blocking access on the Internet on computers owned or operated by that agency, school, or library [emphasis added] to any content other than content covered by this title." Other sections of CIPA also support ALA's position on this issue.

Shortly after the May 5 News Brief appeared, ALA informed the Schools and Libraries Division (SLD) that the information on patron laptops was not supported by the language of the law. On May 19, 2006, the SLD published a News Brief retracting the May 5 newsletter's statement that patron laptops were covered by CIPA.

April 19, 2006

The bulk of Universal Service Fund (USF) and the 2005 E-rate activities have been before the FCC. There are still very troubling legislative and political actions that threaten both E-rate and USF as a whole.

Universal Service and E-rate Legislation
There are several telecommunications proposals either introduced or circulating for discussion. Senators DeMint (R-SC) and Ensign (R-NV) introduced a troubling E-rate bill, S. 2113, that would eliminate the E-rate, cut USF drastically and make it a state block grant. ALA opposes this bill and others that would eliminate the E-rate, an important component of the Universal Service mechanism.This is a major grassroots initiative for ALA.

Anti-Deficiency Act (ADA)
For the second year in a row, Congress passed an exemption from accounting requirements of the Anti-Deficiency Act . Unfortunately it was only another one-year exemption. ADA requirements forced a freeze on the distribution of E-rate funds for several months in 2004. Grassroots library supporters are thanked once again, for their successful efforts in sparing another freeze by getting key members of Congress to support this exemption. ALA supports S 241 & HR 2533 exempting libraries from the ADA.

"Waste, Fraud and Abuse"
Rep. Joe Barton (TX-R), chair of the House Energy and Commerce Committee, stated at least two times in public, that the E-rate has major problems and if he had a choice, he would kill the program. These allegations have circulated for some time and a hand full of prosecutions are proceeding. Any such abuse or fraud must be vigorously investigated and prosecuted, even though the amount of "fraud" is a very small part of the $2.25 billion per year program. ALA is not aware of any libraries that have been swept into the allegations of "W, F & A." Library supporters have to be prepared to fight exaggerated accusations, often from those who want to dissemble universal service as a whole.

E-rate NPRM and the FCC
ALA's E-rate Task Force (ERTF) members and state E-rate coordinators remain in contact with FCC and USAC officials with bi-weekly conference calls. In August 2005, the E-rate Task Force met to discuss ALA's priorities for the open FCC Notice of Proposed Rulemaking (NPRM). Simplification of the application and disbursement process was identified as the #1 priority. In October, ALA submitted comments to the FCC that proposed a simplification of the E-rate program.

In December, ALA reiterated the importance of simplification in the NPRM reply comment period. The Chief Officers of State Library Agencies (COSLA), the Alliance for Public Technology, and Office of Communication of the United Church of Christ, Inc. also endorsed these comments. Additionally, ALA also saw a great deal of support for the simplification proposal among others' reply comments though there are stakeholders that remain skeptical of any major change, even as Congressional critics call for an end to the program. ALA is monitoring this NPRM process closely and will follow through on the library filing in coming weeks.

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Important E-Rate Resources

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Other Information

Universal Service Administrative Company's (USAC) Reference Area

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Related Files

E-Rate: 10 Years of Connecting Kids and Community (PDF File)
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