to all Americans. This system, referred to as "universal
service," is codified in section 254 of the Communications Act of
1934, as amended by the 1996 Act. See 47 U.S.C. Sec. 254. Congress
specified several groups as beneficiaries of the universal
service support mechanism, including consumers in high-cost
areas, low-income consumers, schools and libraries, and rural
health care providers. See 47 U.S.C. Sec. 254(h)(1). The extension
of universal service to schools and libraries in section 254(h)
is commonly referred to as the Schools and Libraries Program, or
"E-rate" Program.


Under the E-rate Program, "[a]ll telecommunications carriers
serving a geographic area shall, upon a bona fide request for any
of its services that are within the definition of universal
service . . ., provide such services to elementary schools,
secondary schools, and libraries for educational purposes at
rates less than the amounts charged for similar services to other
parties." 47 U.S.C. Sec. 254(h)(1)(B). Under FCC regulations,
providers of "interstate telecommunications" (with certain
exceptions, see 47 C.F.R. Sec. 54.706(d)), must contribute a portion
of their revenue for disbursement among eligible carriers that
are providing services to those groups or areas specified by
Congress in section 254. To be eligible for the discounts, a
library must: (1) be eligible for assistance from a State library
administrative agency under the Library Services and Technology
Act, see infra; (2) be funded as an independent entity,
completely separate from any schools; and (3) not be operating as
a for-profit business. See 47 C.F.R. Sec. 54.501(c). Discounts on
services for eligible libraries are set as a percentage of the