P.O. BOX 2120




October 29, 2004




Division Superintendents



Jo Lynne DeMary

Superintendent of Public Instruction



Federal E-Rate Discount Program Suspension


Funding commitments for the federal E-Rate discount program have been suspended while the Federal Communications Commission (FCC) and the program administrator implement new accounting standards for the program, according to a statement issued by the administrator on October 12. The last funding commitment was issued on August 3.


Federal Communications Commission Chairman Michael Powell stated that the Commission is working with the program administrator and Congress to resolve accounting issues and resume program funding as soon as possible. On October 5 the United States Senate Committee on Commerce, Science and Transportation held a hearing on the E-Rate program. Questions regarding the program suspension dominated the hearing.


The E-Rate program was created under provisions of the Telecommunications Act of 1996 and provides discounts on telecommunications service, Internet access, and network wiring for schools and libraries. Virginia applicants, including public and private schools and libraries, receive approximately $35 million in E-Rate funding commitments annually. The vast majority of school divisions receive some benefit from the E-Rate program.


Virginia applicants had received approximately $7.7 million in current year funding commitments when the program was suspended. These funding commitments are not affected by the suspension and will be honored by the administrator in accordance with program rules.


Approximately 70 percent of Virginia applicants, representing more than $27 million in funding requests, have not received funding commitments this year. Funding commitments will not be issued by the program administrator until the accounting problems are resolved.


Because of the tenuous nature of the E-Rate program and high percentage of application denials and rejections, do not anticipate that you will get revenues from this fiscal year until you get a commitment letter.


Additional information on the E-Rate program is available on the Department of Education website at

Regional training sessions detailing the 2005 E-Rate application process will be offered by the department during November and at the Technology Leadership Conference in Roanoke December 1-3. Regional training dates and locations are listed on the Departments E-Rate website. The Department of Education E-Rate contact is Greg Weisiger associate director, Teleproduction Services at (804) 692-0335 or