Schools Should Use Caution When Spending E-Rate Money

Experts last week warned school districts that are waiting on E-Rate money to think twice before moving forward on any technology purchasing decisions. Certain districts are considering purchasing network technology now because they fear losing matching funds provided for by E-Rate, an education technology subsidy.

"We are telling schools that they could be exposing themselves to risk if they go ahead and pay the full amount for technology efforts and then count on any direct or indirect refunds from the Schools and Libraries Corp.," said Keith Krueger, executive director of the Consortium for School Networking, a national nonprofit organization that promotes K-12 telecommunication efforts.

Kruegar made his comments in a telephone conference sponsored by Westcon Inc., a networking products distributor.

"The program is now under a lot of scrutiny, and there are a lot of false stories floating around out there about E-Rate money going toward paint and carpeting. All of those are, of course, complete inaccuracies since there has not yet been any E-Rate money spent at all," Krueger said.

"Still, we think schools should be very careful about understanding the risks that they might take. They should bear in mind the fact that they may not get their money back."

E-Rate delays and uncertainty over the program's future have slowed network spending by schools, according to the National School Boards Association. NSBA earlier this summer polled 12 states and 26 school districts and found that many would have to "curtail or scrap" wiring plans because of a lack of funds.

In June the Federal Communications Commission cut E-Rate funds in half — from almost $2 billion to just more than $1 billion — after the program was criticized in Congress. Lawmakers are still clashing over the program's details, and some now predict there will be no E-Rate checks mailed until at least fall.

But among federal agencies, resistance to handing off coordination responsibility for geographic information to a nonprofit group such as the NSDC likely will persist, said one federal observer.

"The resistance...is sort of a last gasp of the old 'I'm from the federal government; I'm here to help you' mission," the source said. "The feds are not going to be as big a player in [the collection of geographic information] as they used to be."