Tardy Bell Rings for Erates

Program designed to get disadvantaged schools online is a success–sort of

Since its inception in the late 1990s, the Erate program that supplies rural and poor American schools with funding for Internet access has had its share of successes and setbacks. Dubbed the Gore Tax after the former vice president who championed the cause, the Erate program continues to get disadvantaged schools online. But despite its successes, lingering concerns surround the program and even its supporters are looking for improvement.

The program stems from the Telecommunications Act of 1996. The goal of the initiative is to afford schools and libraries Internet access aided in part by funding supplied via telecommunications companies. Discounts for Internet connectivity ranging from 20 to 90 percent, depending on financial need, are allocated to schools each year. Essentially, the government taxes or simply asks–depending on your political persuasion–telecommunications companies to garner the funding to support the Erate initiative. In turn, the companies pass the charges on to their customers in the form of the relatively small Universal Connectivity Charge that appears inconspicuously on phone bills every month.

The program appears harmless enough–getting financially strapped schools hooked up to the Web for a minimal monthly cost. But some continue to say the Erate program is illegal, because it allows the Federal Communications Commission to tax Americans, when the Constitution only allows for taxation by Congress. Others say the money isn’t being delivered to schools where it’s needed most. And some people just love hating Al Gore.

Despite the Gore bashing and taxation concerns at the peripheral edge of the issue, the Erate program is nonetheless accomplishing its goals, according to the U.S. Department of Education. In 2000, 98 percent of U.S. public schools had Internet access, up from a paltry 35 percent in 1994, a recent study by the department shows. Of course 1994 was eons ago in Internet-time, and it’s easily argued the increase in connectivity at schools was inevitable.

But the program has won wars on other fronts of the digital divide as well.

Rural and poverty-stricken schools are going online nearly as often as more wealthy ones, the report says. Schools where 75 percent or more of the students are eligible to receive free lunches had a 94 percent connectivity rate. That’s not far behind the schools with less than 35 percent of children receiving free lunches and a 99 percent rate of Internet access. Despite the positive access numbers, no study has been done to discover if Internet access indeed enhances a child’s learning experience.

Further supporting the Department of Education’s case for Erates is a report issued in September 2000 by the Urban Institute, a nonpartisan research group. The report found that schools needing the most assistance and funding were indeed receiving it, says Michael Puma, principal research associate at the Urban Institute.

“The big conclusion that we have drawn from analysis of the program is that it was targeted at the most disadvantaged schools and that’s where the money has been going–to those in need of the most help,” he says.

So–aside from the taxation concerns–schoolchildren of all economic backgrounds are getting online, phone users are paying roughly $2 a month to keep the program going, and all else is right with the universe. Not quite. The Erate program is now mired in a bureaucracy that’s leaving funds unused and requests unfulfilled.

Indeed, there were $3 billion in unfulfilled subsidy requests from schools this year, according to a report by the General Accounting Office.

At the same time, the report says, about $800 million in funds set aside for applicants who requested money as long as two years ago will go unused. This year, schools have requested about $5 billion in funds, nearly $2 billion of which goes toward Internet connectivity.

The process of a school requesting money and actually receiving it can take considerable time. First, the school must apply for funding and be judged eligible according to need. Then, the school selects a telecommunications company to do the actual installation of wires and cables. The company works for the school at the appropriate discounted rate and is finally reimbursed by the Erate program. But this year, the GAO is less than optimistic about the chances of the money being delivered to the applying schools.

“At this rate, it appears unlikely that there will be sufficient funds to cover the $1.6 billion in internal connections support requested by applicants in the highest priority level,” the GAO report says.

Puma says the shortfall of funds and unused money is more likely a sign of red tape than mismanagement by the FCC.

“The government doesn’t just give the money away and tell schools to go out and spend it,” Puma says. “The schools must first find a vendor who gets the money and then works for the schools at a discounted cost. To find the vendor and work around all the bureaucracy takes time.”

Mike Balmoris, an FCC spokesman, agrees with Puma’s assessment. Balmoris says the slow process of schools receiving Erate funding is the more likely culprit for the floating $800 million than money mismanagement. However, without having thoroughly reviewed the GAO report, Balmoris says he doesn’t know exactly what happened to the $800 million or the projected shortfall of funds present in the GAO’s findings.

“The report identified areas where things can be improved,” Balmoris says. “Any program that is less than 3 years old can be improved on and that’s our plan.”

President George W. Bush presented his plans for the Erate program during his campaign for office.

Bush said he would restructure the program giving states block grants to use at their discretion. But after receiving phone calls from legislators at both ends of the political spectrum–namely Republican Sen. Olympia Snowe of Maine–asking him to leave the Erate program alone, Bush backed away from his previous state-control proposal. Education Secretary Roderick Paige has said in interviews that the program will remain as it is, for now, while debate and new ideas about the Erate program continue to be heard. Puma says leaving the program alone was a good idea.

“I like the idea of making school districts and states be thoughtful about how they plan to use the money and go about applying for it,” Puma says. “Block grants are probably not a good idea. In a block grant scenario I’d say the money might not be used as well as it could be.”

Before any changes are made to the Erate initiative, more research into its effectiveness is a must, Puma says. A report the Urban Institute is finishing this month should shed more light on how well the program has been working. Feedback from teachers and school officials will be very important, he adds.

“They [teachers and administrators] really, sincerely are looking for feedback and really want to do their job better,” Puma says. “There is a definite interest in improving the program and it clearly has broad support in the community.”

Posted by on June 15, 2001