Congressional Report Slams E-Rate

[SOURCE: Technology Daily, AUTHOR: David Hatch]
A new report released Tuesday, approved by an 11-0 vote by the House Energy and Commerce Oversight and Investigations Subcommittee, concludes that the E-rate program is "extremely vulnerable" to waste and criminal activity and is "poorly managed by the FCC." "The government mismanagement of the E-rate program seems to know few bounds," House Commerce Committee Chairman Joe Barton (R-TX) said. "Unscrupulous vendors fleeced the program while underserved communities and telephone customers pay the price. The Federal Communications Commission, these merchants and certain schools all must share in the blame for its disgrace." In a statement, Bart Stupak (D-MI) said the report underscores the need for E-rate reform. He said the subsidy is hampered by "mismanagement, vendor greed [and] little or no basic financial controls." He also complained of "gold plating" that "rewards vendors with massive funds but benefits students little, if at all." The report concludes that the FCC's oversight is insufficient. "Some school districts have acquired goods and services through the E-rate program without using a formal bidding process," the report said. The FCC also is criticized for failing to develop "performance goals" to measure the subsidy's effectiveness and make improvements. Technology planning is identified as a "fundamental weakness." In some instances, school districts received goods and services through the e-rate without adequate plans on how to use them, according to the report. The subcommittee endorsed recommendations for improving universal service previously made by the Government Accountability Office. "They are reasonable and necessary steps that the FCC must take to begin resolving the problems," the report said. The ideas include conducting a detailed assessment of universal service, establishing performance goals and creating a strategy for reducing the E-rate's application backlog. Chairman Barton and Telecommunications and the Internet Subcommittee Chairman Fred Upton (R-MI) announced they plan to introduce reform legislation.
http://www.njtelecomupdate.com/lenya/telco/live/tb-WLPO1129667265939.html

* Report Documents Millions Wasted by E-Rate, Offers Reform Recommendations
Barton, Upton to Pursue Fundamental Changes to the Program
[SOURCE: House Commerce Committee press release]
http://energycommerce.house.gov/108/News/10182005_1685.htm

* E-Rate poorly run, vulnerable to waste: report
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID=2005-10-18T170743Z_01_BAU861614_RTRUKOC_0_US-CONGRESS-ERATE.xml

* School E-Rate Net program blasted
http://www.usatoday.com/printedition/money/20051019/erate19.art.htm