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E-rate wins praise for 1998

The federal Net access subsidy for schools and libraries received $1.66 billion in its first year--helping to wire more than half the nation's classrooms, the Clinton administration says.

A White House-backed federal Net access subsidy for schools and libraries received $1.66 billion in its first year--helping to wire more than half the nation's classrooms, the administration said today.

An Education Department survey states that the number of schools connected to the Net has jumped from 27 percent for 1997 and 3 percent in 1994 to more than 50 percent in 1998.

"Because of our efforts, children in the most isolated inner city or rural town will have access to the same universe of knowledge as a child in the most affluent suburb," President Bill Clinton said in a statement. "Our children will be 'technologically literate'--and better prepared for the high-tech, high-wage jobs of the future."

The Education Department found that smaller and economically disadvantaged schools were now just as likely to have Internet connections as larger, wealthier schools. The survey also found 80 percent of the poorest schools have Net connections as of 1998, compared to 87 percent of the wealthiest schools. But at the classroom level, the poorer schools still lagged in connectivity, with only 39 percent online.

The e-rate is being credited in large part for the boost in Net access at schools. Fifty four percent of the 1998-99 e-rate funds--$897 million--went to internal wiring costs for the nation's poorest schools. For telecommunications and dedicated access, $661.2 million went to schools and libraries. The remaining $101.8 million supported basic Net service costs for recipients.

By the end of April, the Schools and Libraries Division (SLD) of the Universal Service Administrative Company, which administers the e-rate, will recommend a funding level for 1999-2000 to the Federal Communications Commission.

Depsite today's praise of the e-rate, the program got off to a bumpy start.

Due to a highly contentious political battle over the FCC's plans to fund the subsidy, the fight is expected to continue this year. Ultimately, the FCC cut the fund by 43 percent from the $2.25 billion it intended to collect for the program.

The SLD (formerly Schools and Libraries Corporation) said 25,785 out of the first year's 30,121 applicants received funding for 1998-99. The 4,336 that were rejected either didn't meet application standards or were casualties of the FCC's funding cuts, the SLD said.

But schools also criticized the administration of the e-rate. The rules for applying kept changing during through the process, and many learned after applying that they could only get subsidies for their Net access costs, not internal wiring.

The SLD hopes the process is easier for schools this year.

Schools and libraries have until April 6 to turn in final applications for the e-rate's second round, and only until March 9 to file Form 470, which details the services the institutions plan on purchasing with the e-rate.

"We're not the only ones who have anything to say about that--there may be changes ordered. But we are fairly sure we won't see the major changes we saw midstream as we did the first year," said Chris Garlock, SLD's spokesman.

California garnered the most e-rate dollars with $206.4 million in subsidies. New York came in second with $164.5 million. And Texas was third with $128.7 million. Delaware, a much smaller state, was at the bottom of the list with about $1 million total.

The e-rate--which was tacked on to the Telecommunications Act of 1996 requiring the FCC to provide the subsidies under the nation's universal service fund--will cut schools' access and internal wiring costs by between 20 percent and 90 percent. The FCC says the discount accounts for about 19 cents of every dollar that goes into universal service, which traditionally supports phone service in rural or low-income areas.