TELECOM Digest OnLine - Sorted: GAO Questions FCC Management of E-Rate Program

GAO Questions FCC Management of E-Rate Program

Lisa Minter (
17 Mar 2005 16:26:48 -0800

WASHINGTON (Reuters) - U.S. communications regulators are not
effectively managing a $2.25 billion program to link schools and
libraries to the Internet, congressional investigators said on
Wednesday said in a new report.

The Government Accountability Office said the Federal Communications
Commission has been slow to respond to problems uncovered by auditors,
has not tracked the effectiveness of the program, and a backlog of
cases has been growing.

"We remain concerned that FCC has not done enough to proactively
manage and provide a framework of government accountability for the
multi-billion-dollar E-rate program," the new report said.

The FCC, Congress and prosecutors have been investigating waste, fraud
and abuse in the E-rate program, which subsidizes telecommunications
equipment and services for schools and libraries. Telephone carriers
fund the program by paying a percentage of their long-distance service

The findings by the GAO prompted U.S. House Energy and Commerce
Committee Chairman Rep. Joe Barton to say he plans to push legislation
to overhaul the program.

"This committee has no choice but to develop legislation to scrap the
status quo and apply some common sense to the E-rate program," the
Texas Republican said in a statement. He did not elaborate on what the
legislation would include.

Barton pointed to $101.2 million in funds that were disbursed between
1998 and 2001 to provide schools in Puerto Rico with high-speed
Internet access, but a warehouse full of unopened boxes of equipment
was discovered and few schools connected.

"We look forward to continuing to work with GAO to improve our
processes," Jeffrey Carlisle, head of the FCC's wireline bureau, said
in testimony to Barton's committee. "We are continuing existing and
have initiated new measures to address issues identified by the GAO."

The GAO urged the FCC to establish performance goals and measures,
take steps to reduce the backlog of appeals and determine all of the
federal accounting requirements that apply to the program.

Last year the FCC froze new commitments for a few months while it
determined how to account for funds it obligated to schools and
libraries on the government's balance sheets.

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