March 10, 1998 
 

Federal "E-Rate" Telecom Discounts 
Will Help Schools and Libraries 

In our information age, almost everyone agrees that the future belongs to those who can use telecommunications and information technology. Minnesota recognized the need to "wire" schools and libraries onto the "information superhighway" in 1993 (higher education) and 1995 (K-12) with telecommunications access grants (TAG). The TAG program now awards $10 million annually. With the passage of the Telecommunications Act of 1996, the federal government boosted the process by authorizing the FCC to set up a $2.25 billion annual fund to provide K-12 schools and libraries with discounts on telecom services and equipment. The result, officially called the Schools and Libraries Universal Service Program, is almost universally referred to as "E-rate" (for "educational") discounts. Beginning this year, E-rates will help people around the country compete in today's information economy by giving public and private K-12 schools and libraries the modern telecom tools they need.  

Big Opportunity 

"I'm very excited about the E-rate program," says Peg Werner, director of Viking Library Systems in west central Minnesota and chair of the Minnesota Education Telecommunications Council (METC), the board which oversees TAG. "Schools and libraries will be able to do many things they can't do now." Dean Swanson, executive director of Southeast Service Cooperative, which represents 46 public school districts and 12 private schools in southeastern Minnesota, says E-rate "will have a major impact. It will often mean the difference between having something and not having something." 

Kerry Jacobson, superintendent of Little Falls Community Schools and METC vice-chair, says, "We recognize we have to invest in technology infrastructure to properly educate students for the future, but schools are very labor-intensive and we haven't been able to keep up. E-rate will allow us to become more technologically literate. It's especially significant in rural areas because we don't have large private institutions providing services. Schools have a real obligation to lead rural communities and E-rate will help us push technology for the whole community, not just for students." 

E-rate will help make possible things like ISDN connections between classroom and library computers, or paging services that enable school security officials to respond quickly to problems, but uses are only limited by people's imaginations. "When there's a great program like the International Wolf Center in Ely, why not make it available in a classroom in Worthington?" asks Jacobson, who adds, "We need to hook people and resources to classrooms."  

Program Details 

While E-rate discounts start at 20 percent, schools and libraries in rural areas or which have many students qualifying for federal school lunch programs (or both), could receive discounts of up to 90 percent on eligible services and equipment. All non-profit K-12 schools are eligible for E-rates if they don't have an endowment exceeding $50 million. Higher education, home schools and private vocational skills institutions are ineligible. Most non-profit libraries are eligible. The program encourages consortia, which can include government and ineligible entities, because larger groups can often negotiate lower rates for services before E-rate discounts are applied. 

Basically, E-rate discounts apply to three areas: (1) all commercially available telecom services, including paging, cellular and long distance; (2) Internet access; and (3) the internal connections necessary to get services to classrooms, including network servers, wireless local area networks (LANs), installation and maintenance, etc. Among the things not covered are computers, most software, training, fax machines, voice mail and satellite dishes.  

Applying for discounts involves serious planning, including detailed technology plans that must be approved by the Department of Children, Families and Learning or the federal Schools and Libraries Corporation (SLC) set up by the FCC to administer the program. Applicants' forms must be posted on SLC's website for 28 days so service providers can prepare bids. "It's good to get used to using websites," says Werner. "It's the wave of the future." 

Minnesota's Situation 

Of the state's 370 public school districts and approximately 40 library systems and 560 private schools, about 350 filed technology plans with CFL by early March, with some 250 approved. Federal representatives say there is sufficient money to fund all program requests this year, so Mary Mehsikomer of CFL says submitting correct forms is important. But she says it's also important to make the SLC's one-time 75-day application window that ends April 15, if possible. That's because, if federal projections prove optimistic, remaining funds are only available on a first-come, first-served basis. 

METC hopes to get $4-$5 million in discounts and Werner says the savings will be invested on more bandwidth, infrastructure and higher-capacity T1 lines (28 times the capacity of 56K lines). "The technology and its acceptance has been so fast," she says. "We are maxing out the current 56K network." E-rate recipients can use their savings for any purpose, but Jacobson thinks the majority "will plow them back into telecommunications and technology applications. Most schools recognize the need to bring classrooms into the technological conversation." 

Local Phone Companies' Role 

Swanson says the more than two dozen local phone companies his co-op has worked with have been very helpful identifying eligible services and designing systems so schools can maximize their E-rate benefits. Tom Burns of the accounting firm Olsen Thielen & Co., Ltd., says the E-rate program "provides local telcos a chance to be good corporate citizens and to strengthen their bonds with local customers. It's an opportunity to help schools and libraries shine." He points out that the program "is not a windfall" for local phone companies. "Any increase in services will be more than offset by administrative charges." 

The Halstad Telephone Company, whose northwestern Minnesota service area has lost about half its population, is an example of a local telco in action. Company manager Ron Laqua says his company had to "get proactive" about E-rate discounts because "we still have youth to educate and people who need services." He sent two of the company's eight employees to Chicago to learn about the program so they could help the three schools in their service area determine their technology needs and complete the necessary forms. "What's good for our schools is good for us," Laqua explains. "When schools produce kids who are better prepared for today's job market, we have stronger communities." 
 
  

PROFILE: 
Frontier Communications of Minnesota 

Last spring, thousands of Minnesota flood victims called their loved ones thanks to $50,000 in pre-paid calling cards donated by Frontier Communications of Minnesota. It was just another example of a community service tradition Frontier began in the 1920s as Central Telephone. That tradition can be seen today at the company's Burnsville videoconferencing center, where busloads of students take free "tours" of the Johnson Space Center in Houston, and with the free computers and Internet services Frontier has supplied to schools in the communities the company serves. 

Part of a Rochester, N.Y.-based corporation that provides long distance and other telecom services and that owns local phone companies in many states, Frontier is Minnesota's fourth-largest local phone company. Its 300 employees provide services to customers in metro and southern Minnesota cities that include Apple Valley, Rosemount, Burnsville, Farmington, Worthington, Lakeville, Fairmont, Belle Plaine, and Canby. 

Frontier currently operates under a state alternative form of regulation (AFOR) plan that Jack Phillips of Frontier calls "win-win" for everyone. Beginning in 1996, customers received a reduction in basic local service rates and an increase in service standards. There's also a guarantee there will be no basic service rate increase until 2000. In exchange, the company can introduce new services more easily and has greater price flexibility for its competitive services. 

Phillips, who says "the market is growing and Frontier intends to grow with it," says the company "will compete by delivering integrated voice and data services that meet our customers' needs."