Regulators Probe Schools Internet Program

By DAVID HO

WASHINGTON (AP) — A $2.25 billion program that helps connect schools and libraries to the Internet needs stricter enforcement and simpler rules to prevent fraud and waste, educators and communications industry officials told regulators Thursday.

Lawmakers and Federal Communications Commission investigators have warned there is not enough oversight of the “e-rate” program, which is part of a government effort to underwrite communications services for rural areas and the poor.

The money comes from charges to phone companies, who usually recover the costs by billing customers a line-item for “universal service” on monthly phone bills.

The FCC approved changes last month to make the fund more efficient and prevent people who abused the program or have criminal records from being involved in its operation.

Participants at an FCC forum on the subject said more needs to be done.

“Neither Congress nor the FCC could have fully understood all the complexities of the program they created,” said Margaret Greene, president of regulatory affairs for BellSouth. “That is pretty clear by the lack of enforcement mechanisms.”

Greene said poorly crafted rules make waste and error more likely and policy decisions for the program need more public review. The level of discounts given also should be lowered to provide funds to more schools and libraries and motivate institutions to spend wisely, she said.

Charlie Parker, a library specialist with the State Library of Florida, said some institutions don’t participate in the e-rate program because it is too complex. He also said program participants should face penalties for using subsidized equipment for unintended uses.

The e-rate program was created following the passage of a 1996 telecommunications law. Up to $2.25 billion is available from the fund each year to provide schools and libraries with discounts for Internet and other communications connections.

FCC Commissioner Kathleen Abernathy said that while the government should look at improving the program, “there is no question the e-rate has been a tremendous success and has enabled millions of school children and library patrons to gain access to advanced telecom services.”

Between 1996 and 2001, the percentage of public school classrooms with Internet connections rose from 14 percent to 87 percent, according to the FCC.

Reps. Billy Tauzin, R-La., and James Greenwood, R-Pa., asked the FCC in March to turn over documents on the operation and oversight of the e-rate program. Tauzin is chairman of the House Energy and Commerce Committee and Greenwood heads that committee’s oversight and investigations subcommittee.

The lawmakers said last month that documents provided by the program were incomplete and they issued a subpoena for unredacted records.

Tauzin and Greenwood have said more than two dozen federal and state investigations involving e-rate funds “may be just the tip of the iceberg.”

In a September 2002 report from the FCC’s inspector general, investigators said that because of a lack of funding to watch over the program they were unable to give “any level of assurance that the program is protected from fraud, waste and abuse.”

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