The Universal Service Administrative Company holds its annual compliance meeting this coming weekend for telecommunications companies who supply services to schools and libraries that participate in E-rate. That gathering will likely include an important discussion of the program's Lowest Corresponding Price, or LCP rule.
The rule stipulates that companies supplying services to participants must give a price comparable to that offered for private customers receiving similar services, and was the subject of an investigative Pro Publica earlier this month. The report found that companies had long ignored the rule, and that the Federal Communications Commission, which oversees E-rate, had done little to enforce it.
Now, at a meeting in Atlanta beginning tomorrow, The Universal Service Administrative Company—a private company that oversees the program for the FCC—is expected to present a PowerPoint presentation that includes twelve pages elaborating upon the LCP rule. A follow-up story from Pro Publica suggests the move is in direct response to initial story, despite a statement released by an FCC spokesperson insisting it was the result of discussions dating back to last August.
E-rate is a federal program, funded at about $2.3 billion annually, that helps subsidize school and library purchases of Internet connections and related services. It is funded through the Universal Service Fund, which in turn is funded through a tax fee charged to telecommunications providers that is typically passed on to individual customers. Generally, schools and libraries have all funding requests for projects establishing a connection to an outside service provider approved. Projects enhancing internal connections and infrastructure are typically only approved for E-rate funding in schools with high-need student populations.
The 69-page presentation includes a 12-page section on the LCP rule that explains its definition and purpose, along with an elaboration on a provider's responsibility to offer the lowest corresponding price to any institution it knows to be participating in E-rate. The presentation also describes methods of recourse both for schools and companies who feel the law is being ignored or abused, respectively.