FCC Press Release.
Re: Chairman Kennard's intent to increase funding for the e-rate.
Date: May 5, 1999.
Source: Federal Communications Commission.

Chairman Kennard's Announcement on E-Rate Funding

Washington, DC -- Noting the receipt of 32,000 applications seeking over $2.4 billion in e-rate discounts for the coming year, William E. Kennard, chairman of the Federal Communications Commission (FCC), announced his recommendation to the Commission to fund the second year of the e-rate to the established $2.25 billion cap. In his remarks, Chairman Kennard made three points. Funding to the recommended level:

• Will allow the FCC to fund all eligible applicants at some level, while keeping the prioritization of e-rate funding on the poorest and most rural schools;
• Will protect rural schools and libraries requesting funding for internal connections;
• Will not raise consumers' bills, if balanced against access charge reductions which go into effect July 1.

"With the increase in demand, funding to the cap will enable us to continue the work of this past year," Chairman Kennard said. "Just as in Year One, all schools and libraries that apply this year will receive funding for Internet access and telecommunications services. And just as in Year One, we are keeping the focus on funding for internal connections on the poorest and most rural schools. By following this course, we will be able to wire over 528,000 classrooms to the Internet. If we meet this high demand, we will be able to help schools that teach 40 million American children."

"The only way to make sure rural schools are not left on the other side of the digital divide is to fund the e-rate to the cap," Chairman Kennard added. Sixty-five percent of rural schools and libraries that applied for e-rate funding for Year Two are in the 70 percent discount level and would not receive discounts without funding at the $2.25 billion level.

"It is also important to note," he said, "that this effort is one that we can afford. As we have done over the past two years, we are both restructuring and reducing costs borne by America's long-distance carriers. So, even with funding the e-rate to its cap, they will have almost a half-billion dollars which can be - and should be - used to further reduce long-distance rates. I would expect that companies will flow these reductions through to their customers."

Chairman Kennard announced his recommendation to the Commission at an event sponsored by EdLiNC, a coalition of education and library organizations, and attended by telecommunications and computer industry representatives. At the event EdLiNC presented Chairman Kennard with a report which documented the e-rate's success in connecting both urban and rural schools and libraries to the Internet. Last year, $1.7 billion in e-rate discounts went to over 80,000 schools and libraries.

The e-rate, also known as the education rate, provides a 20 to 90 percent discount on telecommunications services, Internet access and internal connections to public and private schools and libraries.