Reforming the e-rate

Over the past five years, the e-rate program has been instrumental in reducing the digital divide in America's schools. However, right from its inception, a number of controversies have surrounded the program including the right of the FCC to impose a "tax" on the telecommunications industry, the status of the Universal Service Administration Company, allegations of fraud in the allocation of funds to schools and libraries, and questions whether Internet access to schools was furthering the cause of educational equity. A number of these questions have been settled through court cases and administrative reform, but doubts about the future of the program still persist so much so that the US Congress is currently considering proposals to terminate or reform the e-rate program. Keeping in mind these controversies and the achievements to date of the program, this paper compares a number of policy proposals that have been put forward recently. It recommends among other things that the future effectiveness of the e-rate program may be best served by enabling a shift of funding from telecommunications access to software and content development.