Feeds

Feds hold E-Rate funds hostage

Schools in limbo

  • alert
  • submit to reddit

Website security in corporate America

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

Internet Security Threat Report 2014

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
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?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.