Feeds

Feds hold E-Rate funds hostage

Schools in limbo

  • alert
  • submit to reddit

Intelligent flash storage arrays

The Feds have clamped down on distributing funds intended to equip schools and libraries with Internet connections, as they scramble to correct a long corrupt program.

Word dropped this week that the US FCC (Federal Communications Commission) has applied tighter accounting policies to the E-Rate program. More than $1bn in funds have been held hostage as a result of this move. This means that schools and libraries already suffering from a series of government and private industry cock-ups will have to wait on Internet and telecommunications technology needed to bring them into the 21st century.

The E-Rate program started in the mid-1990s under the Clinton administration. It takes money raised from taxing consumer phone lines and puts it toward public communications upgrades. Cities apply for E-Rate grants and then have a specific window of time in which to spend the money.

The FCC is now asking Universal Service Administrative Co. - the nonprofit that oversees E-Rate - not to make any additional grants until it has free cash. This will require the firm to wait for monthly fees from telcos to roll in before new projects can be launched. Universal's cash pile of $3bn is already assigned to current projects.

Waiting on the monthly fees could seriously slow how cities plan for different technology rollouts.

The accounting changes come as the Feds try to pause the distribution of funds for what has been a grossly mismanaged fund. A string of no-bid contracts were discovered here in Chicago, along with failures in using E-Rate funds that could see the city forfeit $50m. In addition, IBM and other firms have been blamed for offering kickbacks to schools in exchange for E-Rate contracts.

The Senate Committee on Commerce, Science, and Transportation will be looking into E-Rate tomorrow during a hearing. ®

Related stories

IBM and others blamed in E-rate scandal hearing
Chicago schools hurt by web project gone wrong
US boffins charged with parity violations

Secure remote control for conventional and virtual desktops

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Seattle children’s accelerates Citrix login times by 500% with cross-tier insight
Seattle Children’s is a leading research hospital with a large and growing Citrix XenDesktop deployment. See how they used ExtraHop to accelerate launch times.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.