Feeds

Feds hold E-Rate funds hostage

Schools in limbo

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

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
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
10 Top Tips For PRs Considering Whether To Phone The Register
You'll Read These And LOL Even Though They're Serious
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.