E-Rate Safe for Now

The Bush administration last month backed away from a controversial proposal to change the funding mechanism for the federal e-rate program, which provides telecommunications discounts to schools and libraries. In January, the president suggested merging the program into state block grants. But critics said that making the e-rate part of a block grant would make the successful program susceptible to the ups and downs of the congressional budget process. On March 7, Secretary of Education Roderick Paige told the House Committee on Education and the Workforce that President Bush would not urge the Department of Education to change the way the e-rate is funded.

E-rate supporters are still concerned, however, about statements made by Federal Communications Commission chairman Michael Powell, who has called the e-rate a tax that burdens the American people. "Like in the movie Field of Dreams," Powell said in 1999, "if you build it, they will come. And, as one would expect, we built a large federal program and they have come."

Powell was scheduled to testify before the Subcommittee on Telecommunications and the Internet at the end of last month, and he was expected to give some indication of how the FCC would deal with the tremendous response from schools and libraries to the fourth year of e-rate funding. Year Four applications have exceeded the $2.25 billion cap by $3.5 billion.