The Federal E-rate program was established in 1996 as part of a broad effort to bring high-speed Internet access to schools and libraries around the country, particularly in rural areas. Under the program, schools and libraries can receive grants which cover up to 90% of their Internet service and telecommunications costs. Funding for the program comes from “Universal Service Fees” assessed on telecommunications services. The program is regulated by the Federal Communications Commission (FCC), but is administered by the Universal Service Administrative Company (USAC), a federally chartered, non-profit corporation.The $2.5 billion program is considered a success. USAC processes over 35,000 applications per year for new and continuing E-rate support. Statistics from 2002 (the most recent year available) show that 99% of public schools and 92% of public school classrooms have Internet access, with much of that access being through broadband connections funded in part by the E-rate program. Until recently, the only significant glitch in the program was the Children's Internet Protection Act (see, Living in a Post-CIPA World, Information Today, September 2003), which added a requirement that all public school and library E-rate recipients must install and use filtering software on their Internet accessible computers.Recently, however, a more significant series of glitches has ground the program to a halt. In August, 2004, the FCC ordered a number of changes in the accounting, disbursement and audit practices of both the FCC and the USAC. Complications ensued.