The E-rate program, officially known as the Schools and Libraries Program of the Universal Service Fund, is a crucial initiative in the United States designed to help schools and libraries obtain affordable telecommunications and internet access. Administered by the Universal Service Administrative Company (USAC) under the direction of the Federal Communications Commission (FCC), the program was established in 1997, following the 1996 Telecommunications Act.

Key Aspects of the E-rate Program

1. Funding

E-rate provides discounts ranging from 20% to 90% on eligible service costs, depending on the economic need and location (urban or rural) of the institution applying. The level of poverty is typically measured by the percentage of students eligible for the National School Lunch Program. The program’s funding cap for Fiscal Year 2021 was approximately $4.2 billion, which adjusts annually based on inflation.

2. Eligible Services

E-rate funding is categorized into two types:

  • Category One: Services include data transmission and internet access. This can cover broadband and telecommunications services that enable schools and libraries to connect to the internet.
  • Category Two: Services include internal connections, managed internal broadband services, and basic maintenance of internal connections. This can cover things like network switches, routers, wireless access points, and the services necessary to manage and maintain them.

3. Application Process

Applicants must follow a specific process that involves filing forms and adhering to competitive bidding rules, designed to ensure that E-rate discounts are used for cost-effective purchasing decisions. Schools and libraries submit a Form 470 to open the competitive bidding process to potential service providers, followed by a Form 471 to request specific services and discounts.

4. Program Impact

The E-rate program has been instrumental in increasing internet access in schools and libraries, particularly in rural and economically disadvantaged areas. By lowering the cost barrier, it allows these institutions to allocate more resources towards improving educational tools and technology, thereby enhancing learning environments and access to information for students and library patrons.

5. Challenges and Considerations

While the program has been widely beneficial, it faces challenges such as the complexity of the application process and the need for continual updates to keep pace with technological advancements and shifts in educational requirements. There is ongoing discussion on how best to refine and expand the program to meet increasing demands for high-speed internet and network security improvements.


The E-rate program remains a vital component of the educational and library services landscape in the United States, enabling significant strides in digital literacy and connectivity. As technology and educational practices evolve, the E-rate program continues to adapt, aiming to provide the necessary support to equip students and library patrons with the skills needed in a digital world.