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Justice: Guilty Plea in E-RateBribe Scheme

The former head of a pair of
Illinois-based tech companies has pleaded guilty to bribing school officials to
steer E-rate funding their way, the Justice Department's Antitrust Division
said Thursday.

Gloria Harper was initially
charged in a New Orleans U.S. District Court last November with conspiracy to
defraud the program. She pled guilty to providing bribes and kickbacks to
schools in Arkansas, Illinois and Louisiana.

The E-rate program is
overseen by the FCC and provides subsidies--up to 90% of the cost--for Internet
access and service to schools and libraries. It is near and dear to FCC
Chairman Julius Genachowski, who helped first implement the program.

The FCC has pledged reforms to the
Universal Service Fund, of which the E-rate program is a part. Those include
cutting down on waste, fraud and abuse.

Hewlett-Packard agreed last fall
to pay $16.25 million to settle an investigation by the FCC and DOJ into E-rate
fraud and violations of FCC competitive bidding rules.

The investigation was into
allegations that HP and others had provided Dallas and Houston school personnel
Super Bowl tickets, yacht excursions, meals and other entertainment to get
inside info and secure contracts, which included $17 million in HP equipment,
that were supposed to be competitive bids.

Justice says that seven companies
and 24 individuals have now pled guilty to defrauding the program, with $40
million in fines and restitution and 15 jail sentences resulting.

The e-rate program, which provides
more than $2.25 billion in support annually, was "upgraded" lastSeptember in a vote to, among other things, promote the use of handheld devices
and e-books and to boost speeds by making so-called "dark
fiber"--unused but already-laid infrastructure--eligible for that funding.