E-rate is a federal reimbursement program with approximately $3.9 billion for connectivity in schools and libraries. The money is generated from the bills for voice services. The FCC Fee or Federal Universal Service Fee that you find on your phone bill goes to this program.
The program is managed by the Schools and Libraries Division (SLD). This non-profit organization was appointed by the FCC.
What does it fund?
Reduced funding is available for:
The list of eligible items and services can be found here.
How much funding can you receive?
Funding is based on poverty and your rural or urban status. http://www.usac.org/_res/documents/sl/pdf/samples/Discount-Matrix.pdf