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Wave 12 of Funding Year 2002 will be released on Tuesday, September 24. Total funding in this Wave is approximately $22 million for 185 applications. The cumulative total for FY 2002 is now $800 million for 25,585 applications.
Funding is still being provided only for Priority One (Telecommunications and Internet Access) services. Applicants with discount rates below 80% are being told that their requests for Priority Two (Internal Connection) services will be denied due to insufficient funds. A decision on the exact level of Priority Two funding is not expected until at least October.
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The E-rate (or, more precisely, the "Schools and Libraries Universal Service Support Mechanism") is but one of four programs supported by the Federal Universal Service Fund. The other three components are:
Low-Income: A program to provide discounted telephone service to low-income consumers.
High-Cost: An internal industry subsidy program to help underwrite the cost of providing telephone service in certain high-cost areas of the United States.
Rural Health Care: A program providing financial support to help link rural health care providers with urban medical centers. This program was introduced at the same time as the E-rate program.
A brief summary of all four programs, including FAQs, can be found on the FCC Web site at Universal Service Consumer Facts.
Knowledge of these other programs may be useful to those involved in E-rate for at least two reasons:
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Because Universal Service Fund surcharges began appearing on telephone bills shortly after the introduction of the Schools and Libraries program, many people mistakenly blame these surcharges solely on the E-rate program. This is an incorrect, and politically unsettling, notion. In reality, Universal Service funding has long been an implicit cost of telephone service. The largest component of today's explicit Universal Service surcharge is the High-Cost program. To be precise, the surcharges for the next calendar quarter are comprised of the following: High-Cost - 53%, E-rate - 35%, Low-Income - 12%, and Rural Health - 1%. |
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School officials, charged with administering the National School Lunch Program, may be able to provide a service to their low-income parents by publicizing the availability of discounts on consumer telephone services. Eligible families are those that are participating in one of the following programs: Medicaid, food stamps, Supplemental Social Security, LIHEAP, or federal public housing assistance. As a side benefit for E-rate purposes, the identification of additional low-income families (whose students are therefore also eligible for free and reduced-priced lunches) may help document higher E-rate discounts. |
The Low-Income program involves two types of discounts. The federal "Lifeline" component provides monthly discounts on phone bills ranging from $6.75 to $9.50 (plus, in some cases, matching state discounts). The federal "Link-Up America" component pays up to half of telephone or cellular installation or activation charges. Individuals can sign up for the Lifeline and/or Link-Up programs directly through their local telephone companies.
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