An E-Rate Proposal

The E-Rate is a 2.5 billion pound pig drowning in paperwork, rules and oversight. It's time for real change!

In November, 1997 I was one of nine people selected to testify before the House Education Committee in Washington, DC on the Universal Service Fund program. Linda Roberts, Director of the Office of Educational Technology with President Clinton and representatives from national telecommunication companies also participated. It was a very interesting experience and I would like to do it again. On the same topic that is. The E-Rate program had yet to begin in 1997 and I basically shared my support for the program and the positive impact it would have on school districts. While I still see the need for the program and support it I now think a significant "retooling" is in order.

I have worked at an Educational Service District (regional educational support agency) in Washington State for the past fifteen years. During this time I've seen many programs come and go with a wide variety in degrees of effectiveness within the twenty-five school districts I support. The E-Rate has had a significantly positive impact on most school districts in my region, without question. But there is a "dark side" to the program that we can fix.

To be blunt the rules, the paperwork and the "E-Rate Industry" that have blossomed exponentially in the last ten years are almost entirely unnecessary, wasteful and often place the existence of the program in jeopardy. There are many districts that don't participate directly in this program due to the overwhelming workload. That's right, this program is so complicated, time consuming and exposes districts to unnecessary risk that they turn down what is basically free money.

How bad does a program have to be for cash strapped school districts to say "no thanks?" In many ways the design of the program is counter-intuitive and actually promotes abuses. There are districts that have state of the art networks but limited and antiquated technology and educational programs otherwise.

We can conduct the E-Rate program in an easy and efficient manner. The workload placed upon school district staff can be drastically reduced. The people involved in the E-Rate "industry" can go back to doing more productive pursuits. The program can still provide a fair opportunity with appropriate oversight.

Here is my proposal for the "New E-rate Procedure" in a nutshell:

1) Schools and Libraries develop a technology plan according to the existing expectations and review. 2) Schools and Libraries would apply for the program annually including verification of CIPA compliance and the information for determining their discount rate.

3) The USAC determines the total amount of funding available nationally and the eligible services list.

4) Schools and Libraries are allocated a specific portion of the funds by the USAC based on their size and discount rate. The discount rate would be determined in the same fashion as currently used. Yes, this step means that this is now a "Grant" program rather than a "Reimbursement" program.

5) Schools and Libraries must spend at least 50% of their funds for any Priority One services they receive and then for any items on the eligible services list as needed. They may not replace any equipment in less than three years.

6) Schools and Libraries report to the USAC on how they spent the funds at the end of the year.

What this means:

1. Schools and Libraries will continue to use the funds in the best manner possible. They will follow state bid laws and obtain the best deals. This is because they will have a fixed amount of funds and they will, as they always do, get the best deal (the biggest bang for the buck). Schools and Libraries know how to deal with limited funds....believe me, they know! It is in the school's best interest to get the best deal. (Right now, it is in the school's best interest to apply for as much funding as possible – "The more you play, the more they pay!" This is the aspect that has primarily lead to the abuses in the program. A "Grant" program invokes an entirely different mindset and the potential for fraud is greatly reduced.)

1. Forms 470 and 471 are eliminated. The months and months of endless "Program Integrity Reviews", "Quality Assurance", "Selective Review Audit", etc., etc. would not occur. Millions of hours of effort, some by USAC staff but mostly by school district staff could be redirected to more effective pursuits.

2. Form 486 would be eliminated.

3. Schools and Libraries would only have to complete two forms: The initial application form and the end of year spending report.

4. The USAC would review the annual spending reports for program compliance. Audits can be conducted in a similar fashion as currently practiced. Schools and Libraries found to have used the funds inappropriately would be penalized the following year. Specifically, the amount of funds used inappropriately and a penalty would be removed from the following year(s) allocations.

5. The E-Rate "industry" of firms assisting school districts with completing the forms, navigating the process, etc. would disappear. If any point I present here justifies this proposal this is it. Any program that is so complicated and odious that an entire industry is created to deal with it - this is a program that that needs to be changed!

What do you think?