30 Years of E-Rate

The 30th anniversary of the E-Rate program is a time to both celebrate what it has achieved for libraries and focus our work to preserve its future.

The Telecommunications Act of 1996, signed into law on February 8, expanded the definition of essential communications services to include telecommunications and high-speed internet. It established the E-Rate program, which provides schools and libraries with discounts on internet and other telecommunications services and the equipment they need to use them. Today, virtually all public libraries in the United States offer internet access. About 73% of all public libraries and more than 96% of public schools in the United States receive E-Rate discounts, totaling more than $2 billion per year, to enable this access.

While library services made possible by E-Rate provide important benefits everywhere, people in rural and tribal areas often have the greatest need for improved connectivity. In Nenana, Alaska, for example, library internet is a critical link to employment opportunities, according to a 2018 ALA report. Most jobs are in Fairbanks, 55 miles away, so the ability to apply for work online via the library helps save residents unnecessary travel time and expense.

But the Federal Communications Commission’s (FCC) Universal Service Fund (USF), which includes E-Rate and three other communications programs, is facing challenges, in part because of how it is funded. The USF is supported by mandatory contributions from telecommunications providers currently totaling about $8 billion, calculated using a formula based on interstate and international telephone revenue.

But telecommunications services have evolved significantly since 1996 when that formula was created. Telecommunications providers now generate most of their revenue from services like broadband and cable or satellite TV, which don’t contribute to the USF. Revenues from telephone services that do contribute to the USF have dropped from $75 billion in 2007 to $35 billion in 2022. An increasing percentage of these telephone revenues have funded the USF, growing from 5.5% in 2000 to 34.4% in 2024.

This has led to calls from many industry groups and advocates to reform how the USF is funded, as well as challenges to the funding mechanism itself.

Most significantly, in 2023 the nonprofit Consumers’ Research sued the FCC, arguing that the way the USF is funded is unconstitutional, as only Congress has the authority to levy fees. While the US Supreme Court ruled against Consumer’s Research in June 2025, it is clear that the USF’s outdated contribution model is not sustainable. Consequently, several proposals for USF funding reform are on the table, all of which have implications for E-Rate, and libraries.

Advocating for library interests

For three decades, the American Library Association (ALA) has worked closely with the FCC to strengthen E-Rate, remove obstacles for library applicants, and ensure the program continues to support the changing technology and access needs of library users. In the past two years alone, ALA’s Public Policy and Advocacy Office has successfully advocated for the inclusion of tribal libraries in E-Rate, encouraged the Supreme Court to support the USF, and fought for E-Rate hotspot funding. Given the high stakes for libraries in the current debate about funding, ALA has been following USF reform closely.

In September 2025, the bipartisan, bicameral USF Working Group sought stakeholder input on USF reforms. ALA provided the following key recommendations:

1. Funding must be sustainable and predictable.
   • The USF should be funded by a long‐term, reliable mechanism that is not subject to annual congressional appropriations.
   • The contribution base from which USF fees are drawn should be broadened to lower the contribution factor (the percentage burden on payers) and make funding less volatile.
2. E-Rate works but needs targeted improvements.
   • The E-Rate program is highly successful in maintaining and expanding broadband access for schools and libraries. It provides essential support for libraries to upgrade their broadband service to adapt to the changing needs of the technology marketplace and their communities.
   • However, gaps remain, particularly for small, rural, and tribal libraries, both in terms of E-Rate application rate and in access to broadband speeds that are adequate to meet community needs.
3. Avoid overhaul that burdens underserved entities.
   • Reforms must ensure that efforts to improve efficiency and safeguard program integrity do not impose excessive administrative burdens on small, under‐resourced libraries.
   • Simplifying the application, procurement, and compliance processes is particularly important for these libraries.
4. Provide timely, relevant data.
   • Open data, clear metrics, and public maps all help ensure programs are doing what they’re supposed to, and that funding is reaching those most in need.
   • To make USF data more relevant and useful, we must improve disaggregation in E-Rate data (to distinguish between library and consortia data), improve the interface and usability of publicly available data, and include libraries (not just households) in broadband mapping.
5. Modernization must be built in.
   • As technology advances (artificial intelligence, the internet of things, and increasing cyber threats), E-Rate and the USF should be forward-looking in statutory authority and eligible services, so libraries aren’t left behind.
   • Today, Congress should ensure that Wi-Fi hotspot lending is supported by the E-Rate program (as was established in 2024 but overturned in 2025), and should make careful investments in cybersecurity tools so that libraries and schools can protect their sensitive data.

Looking to the future

As technology evolves and the demand for faster, more secure connectivity grows, a sustainable and responsive E-Rate program will be vital to maintaining universal telecommunications access. Continued investment in E-Rate will empower libraries to maintain, upgrade, and secure their broadband networks, expand access to emerging technologies, and continue serving as trusted centers for digital inclusion and lifelong learning—ensuring that every community, regardless of geography or income, can fully participate in society.

The 2026 application window for E-Rate funding is open through April 1.