GAO Questions FCC Management of E-Rate Program

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 revenues.

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. NOTE: For more telecom/internet/networking/computer news from the daily media, check out our feature 'Telecom Digest Extra' each day at

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