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Plan to use E-Rate funds for Katrina draws fire

/ Source: The Associated Press

Lawmakers expressed concern Thursday that a federal plan to help Katrina-devastated schools and libraries may shortchange poor kids at schools elsewhere.

The proposal by the Federal Communications Commission seeks to provide money to eligible schools and libraries in the Gulf Coast so they can reconnect to the Internet.

The estimated $132 million would come from the commission's E-Rate program. It provides discounted Internet access and connection equipment to help expand Internet availability, especially in rural and poor areas.

Democrats said schools in other states could lose out on much-needed federal aid.

"This plan is yet another example of the Bush administration shifting funds from one region of the country to pay for (the) Katrina relief effort, leaving some of our schools empty-handed," said Rep. Bart Stupak, D-Mich.

If the money for Katrina relief is drawn from E-Rate's $2.25 billion in annual funding, then other states could be directly affected, said Lisa Zaina, chief executive of the Universal Service Administrative Company, the nonprofit that handles day-to-day operations of E-Rate.

The impact may be lessened if the FCC uses a separate $365 million E-Rate rollover fund, she said.

Final details are being worked out, said Thomas Navin, head of the FCC's wireline bureau, who also testified at a House Energy and Commerce subcommittee hearing.

The E-Rate program has been riddled in recent years with fraud and other problems, and the subcommittee has investigated. A report could come out Friday.

Republican Rep. Marsha Blackburn of Tennessee said lawmakers do not want to see those same fraud and abuse problems with the commission's Katrina-relief proposal.

The FCC's inspector general, H. Walker Feaster III, testified that he would ask for follow-up audits by the Universal Service Administrative Company.

In his testimony, Navin said the FCC also would consider additional audit requirements. Navin said about 600 schools and libraries would be eligible for the federal aid.