E-Rate is the name most often associated with the Schools and Libraries Universal Service Fund created by the Telecommunications Act of 1996. Also known as the USF, E-Rate offers discounted Internet connection and service rates to public and private K-12 schools and libraries.

One of the primary aims of E-Rate is the closure of what many call the Digital Divide and the improvement of education though technological literacy by affording equal opportunity availability of Internet resources.

Funding is dependent upon need. USF discounts have a wide range between 20% and 90% and available funding levels change with each funding round.

One of the current issues surrounding E-Rate is the perception that it is an unfair tax levied unconstitutionally on long-distance telephone consumers and the carriers themselves. As of this date, there has been no legal decision regarding these perceptions that has affected the USF as a whole.

Schools can make application for telecommunications/networking services and equipment based upon the allowed items posted by the Schools and Libraries Division of the Universal Service Administrative Company. To determine their funding level, they also include in their application information regarding their Free and Reduced School Lunch program, or some other equivalent measure of the poverty level.

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