The Schools and Libraries Division of the Universal Service Administrative Company has allocated $1.9 billion in E-rate discounts to 32,574 schools and libraries so far in the fiscal year that began July 1, 2007. In the previous fiscal year, it allocated $2.0 billion in discounts to 32,468 entities.

By February 7, 4,543 rural schools and libraries received committment letters totaling $43.5 million, 14 percent of the total number and 8.7 percent of total dollars. That compares to the last fiscal year when rural schools and libraries received 14 percent of the total number and 2.6 percent of the total dollars. The total dollar and number figures at the end of each fiscal year on June 30 remain very close. The first year of program funding was 1998.

When Congress established the E-Rate program in 1996, it set an annual cap of about $2.25 billion in discounts. Detailed information about the E-Rate (education rate) discount program for telecommunications services is available from the the Schools and Library Division.

The E-Rate program is the fourth largest source of federally mandated funding for schools. The program provides telecommunications services and equipment that might not be available otherwise and it frees up local school budgets for staff, textbooks, and other school needs. It can provide discounts of up to 90 percent of telecommunications costs for schools and libraries serving low-income and sparsely populated areas.

The Schools and Libraries Division of the Universal Service Administrative Company, a private non-profit corporation, administers the program for the FCC. The E-Rate program allows schools and libraries in low-income and rural districts to connect to the Internet for distance learning.

Enacted in the 1996 Telecommunications Act, priority is given to schools or libraries serving areas with high poverty or low density populations. Organizations Concerned about Rural Education strongly supported creation of the E-Rate and continues to support it in its present form. The e-rate is funded through the Universal Service Fund by a tax on phone bills that is currently collected by the Federal Communications Commission and is not subject to the annual Congressional appropriations process.