What You Need to Know: New Discounts Cut the Toll for Driving the Information Superhighway

In a brilliant insight born out of frustration with struggling writers, a middle school teacher paired each person in her class with a nearby college student email pen pal. Meager sentences haltingly pecked out on a keyboard were eventually nurtured into healthy paragraphs. As communication progressed between the students and their college Web pals, paragraphs sometimes blossomed into whole pages of comment. Personal attention through the Web turned struggling writers into real communicators. The subsequent language-skill grade improvements of these students became proof that they enhanced their writing skills via the human interaction fostered by telecommunication.

Stories like this are about to happen everywhere in America -- but only where schools are wired for this kind of human communication. And help has arrived. The Federal Communications Commission has created a fund to discount the cost of wiring schools and supplying educational programming. This is no small fund. It's a purse of $2.25 billion dollars. Nor is it a one-time windfall. It's an annual amount.

What Took So Long to Hear About It?

If this is the first time you are hearing about the Universal Service Fund created by the Telecommunications Act of 1996, you have some catching up to do. Beginning this July, schools are invited to apply for their share of the $2.25 billion dollar fund. Moneys will be distributed on a first-come, first-served basis beginning in January 1998.

Why might you be hearing about the Universal Service Fund only now, halfway through 1997? Because in May of this year, the Federal Communications Commission released its regulations governing the Universal Service Fund. Now the money can begin to flow.

Even while money flows into the fund, from telecommunications and cable providers who will pass along this cost to monthly charges to homes and businesses with more than one telephone line, you can apply for money to come out of the fund. Contributions into the fund are expected to begin as early as this September. The FCC will begin distributing money from it on a first-come, first-served basis beginning in January 1998.

How Much Money Can Be Yours?

Both schools and districts can apply for telecommunications discounts from the FCC's Universal Service Fund. The amount of discount you qualify for depends upon the percentage of students in schools (or districts) who are on the national school lunch program. (See Table 1: How to Determine a School's Telecommunications Discount Rate.)

The whole purpose of the FCC Fund is to equalize the opportunities for all students to have access to communication without regard to the wealth of the school district. This will offset some of the costs of connecting to the Information Super Highway, especially in low-income areas.

How to Determine a School's Telecommunications Discount Rate


If a school has this percentage of students in the national school lunch program...

And it's an urban school, the discount percentage is...

Or, if it's a rural school, the discount percentage is...

Less than 1 



















What Can You Buy?

Disbursements from the Fund will support a school's purchase of telecommunications services but not computer hardware. Some examples of what the discounts will and will not cover include: phone service but not telephones; Internet service but not computers; the wires that bring distance learning to your classroom monitor, but not the satellite dish to capture the signal. (See Table 2: Eligible and Not Eligible for details.)

Eligible for Discount Fund

Not Eligible for Discount Fund

Routers & Hubs 


Internet Access 

Cable Delivery Courses 

Satellite Transmissions 

The Line to distribute downlinked programming within a building 

Inside Wiring 

Devices facilitating telecommunications within a building, like network file servers & wireless LANs


Satellite Dishes 

TV Monitors 

Satellite uplinking equipment 

Satellite downlinking equipment 

Outside Wiring



How Much Can You Save?

Telecommunications services are the great hidden cost for getting on the Information Super Highway. The inside wiring for an educational communications system is often the most expensive cost for the system. Unfortunately, it is also often one of the least "glamorous" items in a school's budget.

Therefore, for many schools, wiring and telecommunications services costs are an almost insurmountable barrier. While many parents and others in the community measure a school's technology capability by the number of computers it has, those computers need to be wired together into networks, and those networks need to be linked to the Internet before the benefits of advanced technology can fully be delivered to students in that school.

How Do You Apply for the Discount?
While the discount is simple to calculate, it's not a simple process to collect it. First, a school must apply for the discount on the appropriate application form (which is still under development at this writing). But we know the application must include several things.

First, the Universal Service application must contain the results of a technology inventory/assessment. This assessment must review what telecommunications-related facilities already exist or are planned. Depending upon which telecommunications services a school wants the discounts to cover, the assessment must include information such as:

  • Computer equipment currently available or budgeted for purchase;
  • Internal connections, if any, that a school already has or anticipates installing;
  • Software for LAN and telecommunications connections currently available or budgeted;
  • Experience and training of staff in the use of the equipment;
  • Existing or budgeted maintenance contracts to maintain computers; and
  • Capacity of the school's electrical system to handle simultaneous uses.

Use a Team Approach for Assessment

It's clear that such an assessment requires a team approach. The assessment team needs to include representatives from administrative and instructional staffs as well as one or more telecommunications services providers, even an electrician from the district office.

The discounts are valuable, so the telecommunications assessment team will need to cover a great deal of material in a short while. See the accompanying Telecommunications Planning Checklist to help you get started.

And there's more that needs to go with the application. A school must prepare a technology plan outlining the use of technologies in the near term and future. This plan must show how a school plans to integrate the use of technology into your curricula.

And the FCC requires independent approval of the technology plan. This could be by your state education department. If you've already created a plan for another purpose, such as Goals 2000 or the Technology Literacy Challenge, these plans will be accepted without your needing to gain further approval.

School staff will need to certify that the school is eligible for a discount, that it will use the services only for educational purposes, and that the applicable state and local procurement processes are being followed. Further, you must certify that a school has already budgeted funds for the related essential items and services not covered by the discounts.

Finally, your application will need to describe the services you want to purchase with enough detail to enable telecommunications services providers to develop a bid.

It will be quite a cumbersome process the first year you apply for discounts. But this first year's efforts will pay off significantly for as long as the Universal Service fund continues. Based on the first year's assessment and technology plans, the following years' applications by a school will build on the prior work.

Approvals and Bids

When the FCC receives your discount application, it will be reviewed. If your application is approved, it will be posted to a Web site for competitive bidding by service providers. Your bid will be open for one month before any contract can be signed with a provider. This will allow enough time for providers to review a school's bid and prepare their response.

You won't have to accept a bid from one provider for all the services listed on your bids. You might want to work with several providers to handle all your requirements. For example, you might use one provider for telecommunications services, another for Internet services, and another for internal wiring and connections. The goal is to select the most cost-effective providers.

Fund Pays the Provider

Once you reach an agreement with a provider, you can submit your agreement, either in writing or electronically, to the Universal Service fund administrator, along with an estimate of the funds you will need for the current and the following year.

If there are sufficient moneys in the fund when your agreement with a provider is approved by the fund, the administrator of the fund will notify a school that the purchase as been approved for the discount.

Then, after the provider actually begins the service, you must again notify the fund administrator to begin disbursing Universal Service funds to the service provider. A school will not receive the funds directly.

First-Come, First-Served

The FCC points out that the Universal Service funds are available on a first-come, first-served basis. Your request will be placed in the funding queue, based on the date and time the fund administrator receives your request.

If your application is not approved, you can re-apply the next year. If it is approved the first year and you want to do more work the next year, you must apply again, this time for the additional work. There is no guarantee that because you were approved for a discount one year, you will also be approved for a discount the next year.

As a safety measure, when the Universal Service fund of $2.5 billion spends itself down to only $250 million, the fund administrator will approve funds only for schools that are the most economically disadvantaged and have not yet received Universal Service funding.


Distance learning first requires cable either for delivery to the school or from the satellite to the monitor. And then it requires the programming to pass through the cable. The Fund, therefore, will discount the cost of the programming schools acquire for their students and teachers.

Your Next Step Is
Contact the technology information office of your school district, your State Education Department, your state's Public Utilities Commission, or the Federal Communications Commission itself.

The process must be tied to the application mentioned above. No matter what percentage your school or district qualifies to earn from the fund, your application needs to be well planned, thoroughly professional, and capable of serving as the basis for service providers bidding to serve you. And the very first step in writing your application is to assemble an assessment and planning team.

As our middle school teacher used the "application" of e-mail to open the doors of opportunity for her students, your Universal Service telecommunications discount application will create opportunity for your students and others as well.

David Brittain completed 30 years of service with Florida's Department of Education in late 1994, the last 16 years as its head of educational technology. He was instrumental in the creation and/or implementation of many of Florida's innovative ed-tech projects. Some of those include: FIRN, Florida's state educational network; Florida Educational Technology Conference (FETC); Florida's Model Technology School Program; and Florida's Retrofit for Technology Project. At MGT of America, a management consulting firm, Brittain is a Senior Associate and responsible for that firm's educational technology practice.
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This article originally appeared in the 09/01/1997 issue of THE Journal.