Book excerpt: Under language enacted in the Telecommunications Act of 1996, a discount on telecommunications services is being implemented for schools and libraries as part of universal service. In general, universal service seeks to ensure the availability of telecommunications services for all consumers, including low-income consumers as well as those in rural and high cost areas. The universal service discount for schools and libraries, known as the E-rate, is now in its third award cycle. The E-rate has an annual limit of $2.25 billion in discounts. The Federal Communications Commission (FCC) committed a total of $2.25 billion for the second year; it has also set the third year funding level at $2.25 billion. Applicants for the third year have requested discounts of $4.72 billion. Given concerns about various aspects of the program by some Members of Congress, telecommunications companies, and others, the future of the program remains in flux. This report provides background information on the E-rate, focusing specifically on schools and educational issues involving the E-rate. It will be revised to reflect any substantive changes in the program. For legislative activity on the E-rate, see CRS Issue Brief IB98040, Telecommunications Discounts for Schools and Libraries: The “E-Rateâ€ŗ Program and Controversies. For background on technology in precollege education, see CRS Report 96-178, Information Technology and Elementary and Secondary Education: Current Status and Federal Support.