Enacted as part of the Telecommunications Act of 1996, the E-rate provides discounts to public and private schools, libraries, and consortia on telecommunications services, Internet access, and internal networking. Discounts vary based on the poverty level of the community. The first section of this report presents findings from surveys returned by 500 public and private schools, school districts, libraries and library consortia, mixed consortia, and state education agencies. Survey results indicate that the E-rate program is increasing involvement in and opportunities for learning for all Americans; is fostering greater parental involvement in children's learning; is spurring demand for and deployment of the Internet; and is fostering partnerships among diverse community institutions. E-rate discounts are leveraging significant new investments in technology in schools and libraries. Respondents expressed frustration with the administration of the program and the application process in particular, which many found confusing and burdensome. Concerns were also expressed about whether the funding is adequate to meet demand and if not, whether some communities will be shut out of the program altogether. The second section presents in-depth profiles of seven schools and libraries in seven states, and describes the impact that the E-rate program is having in these communities. The last section presents the stories of 39 primarily rural schools and libraries in 29 states, which are representative of the respondents as a whole. (TD)