Mr. Chairman, thank you for initiating this investigation and holding this hearing. The waste, fraud, and abuse uncovered in the E-rate program is an outrage. And the Federal Communications Commission's (FCC) mishandling of this program is inexcusable.

We now know significant sums have been wasted, and that the allocation process is rife with abuse. Some of the corporate scofflaws are being called to account, but that process has not as yet effectively deterred the rampant fraud associated with this program. USAC, the private corporation that the FCC established to administer the E-rate program, has failed to protect the ratepayers' dollars, thereby shortchanging our children. Critical questions such as the true ability of schools to follow reasonable technology plans are simply ignored. Schools may apply for funds without any serious showing that the electrical systems in often very old buildings can support modern telecommunications equipment. Nor do schools need to assure that the vital hardware, the computers themselves that must be provided locally, is available for the students. There is not the slightest attempt to determine prior to the funding whether the school district has both the local funds and the ability to train teachers in the use of the technology.

Functionally, the FCC has turned this program over to the vendors by refusing to establish adequate oversight of the 28,000 proposals funded each year. Even worse, the FCC proposes to check compliance with only a handful of audits, some 128 to date. The FCC Inspector General is only permitted three positions to oversee the program and those individuals are largely assigned to grand juries around the country.

Gold-plated equipment paid for by the telephone ratepayers, often at prices that exceed any charged elsewhere, lies unused and growing obsolete in classrooms where no teachers have been trained in its potential applications. Worse we have found millions of dollars worth of these very expensive components aging in warehouses despite vendor and school district "certifications" that they have been installed and are operating as intended.

Today we will hear the tragic story of Puerto Rico, the school district with the largest number of campuses in the country. We will hear how $100 million was wasted without a single child benefitting from a single connection to the Internet. We will hear a story of vendor greed, phone company charges for access despite a lack of connections, misconduct by previous local officials, and bureaucratic incompetence.

Thanks to local money, each school now has two computers hooked up to the Internet by dial-up modems. But we have lost valuable time for the children of Puerto Rico. The administrators of the E-rate program and the administrators of the Puerto Rico Department of Education must work together to assure that another year does not go by while this generation of children waits for the opportunity that the E-rate program is supposed to provide.

We have shining examples of what the E-rate program can provide and I hope that some of the success stories from schools where it has worked will be exhibited at future hearings. In those places where local officials have a good plan and the wherewithal to carry it out, and where vendors do not have effective control of the fund procuring process, the E-rate funds have been a godsend, opening vistas of learning and opportunity to students that would not have ever been possible for most of their parents or even older siblings.