Funded by the Department of Education, this report offers the first comprehensive consideration of the effects of the Universal Service Fund for Schools and Libraries (known as the "E-Rate") created as part of the Telecommunications Act of 1996 "to provide discounts on the cost of telecommunications services and equipment to all public and private schools and libraries." The specific aim of the provision is to make Internet connections more affordable for schools, particularly for schools in lower income areas. Based on an analysis of E-Rate administrative records covering the first two years of program operation and detailed national data on all public and private schools and libraries in the US, this report presents an analysis of the E-Rate's impact upon what has come to be called the digital divide. The report is generally sanguine in its determinations. It finds that public schools have taken most advantage of the program and that the program has succeeded in targeting poorer communities in both urban and rural areas. Also, it finds that applications steadily rose over the two-year period from the most impoverished school districts. The report concludes with recommendations for future analyses scheduled to be conducted in the next few years.
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