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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 FOR  IMMEDIATE  RELEASE:  NEWS  MEDIA  CONTACT:  December  17,  2003  Michael  Balmoris  202-  418-  0253 
 Email:  michael.  balmoris@  fcc.  gov 


 FCC  TAKES  ADDITIONAL  STEPS  TO  IMPROVE  THE  UNIVERSAL  SERVICE  SCHOOLS  AND  LIBRARIES  PROGRAM 
 Washington,  D.  C.  –  The  Federal  Communications  Commission  (FCC)  today  adopted  new  rules  to  further  improve  the  administration  of  the  schools  and  libraries  program,  often 
 referred  to  as  the  e-  rate  program.  Additionally,  the  FCC  has  concluded  that  approximately  $420  million  in  unused  schools  and  libraries  funds  from  prior  years  (1999,  2000,  and  2001)  will  be 
 carried  forward  for  disbursement  in  Funding  Year  2003,  making  more  benefits  available  to  more  recipients.  Over  the  past  year  and  a  half,  the  FCC  has  moved  to  simplify  program 
 administration,  ensure  equitable  distribution  of  funds,  and  prevent  waste,  fraud,  and  abuse,  and  today’s  action  builds  upon  and  extends  those  efforts. 


 The  schools  and  libraries  program,  a  part  of  the  universal  service  fund  (USF),  enables  qualified  applicants  to  receive  discounts  for  eligible  telecommunications  services,  Internet 
 access,  and  internal  connections.  Since  the  inception  of  the  schools  and  libraries  support  mechanism  in  1997,  the  Nation’s  schools  and  libraries  have  received  over  $9.8  billion  in  funding 
 commitments.  This  support  has  provided  millions  of  school  children  and  library  patrons  access  to  modern  telecommunications. 


 In  adopting  the  Third  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking  today,  the  FCC  is  seeking  to  make  the  administration  of  the  schools  and  libraries 
 program  as  straightforward  as  possible  for  participants,  while  also  ensuring  the  continued  integrity  of  the  program  by  strengthening  the  procedural  safeguards.  The  measures  adopted 
 today  include: 
 1.  Preventing  Waste,  Fraud  and  Abuse  –  Prohibits  the  transfer  of  equipment  that  has  been  purchased  with  universal  service  discounts  to  other  locations  for  three  years 
 after  purchase,  with  limited  exceptions. 
 2.  Simplifying  Program  Administration  –  Creates  a  more  formal  and  transparent  process  for  updating  annually  the  list  of  services  eligible  for  support. 


 3.  Ensuring  Equitable  Distribution  of  Funds  –  Limits  support  for  upgrading  or  replacing  internal  connections  to  no  more  than  twice  every  five  years,  but  exempts 
 basic  maintenance  services  from  this  restriction. 
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 In  the  Second  Further  Notice  adopted  today,  the  FCC  will  be  seeking  comment  on  changing  the  current  discount  matrix  used  to  determine  the  level  of  discounts  for  which 
 applicants  are  eligible,  and  additional  measures  to  further  prevent  waste,  fraud  and  abuse,  including  whether  to  adopt  1)  a  ceiling  on  the  total  funding  an  applicant  can  request  on  an  annual 
 basis;  2)  strengthened  requirements  for  technology  plans;  and,  3)  additional  record  keeping  requirements. 


 -FCC- 
 Docket  No.:  02-  6 
 Action  by  the  Commission  December  17,  2003,  by  Third  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking  (FCC  03-  323).  Chairman  Powell,  Commissioners  Abernathy, 
 Copps,  Martin,  and  Adelstein,  with  separate  statements  issued  by  Chairman  Powell,  Commissioners  Abernathy,  Copps,  and  Adelstein. 


 Wireline  Competition  Bureau  Staff  Contact:  Karen  Franklin  at  (202)  418-  7400 
 News  about  the  Federal  Communications  Commission  can  also  be  found  on  the  Commission’s  web  site  www.  fcc.  gov. 
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