[Prepared for: U.S. Department of Education] The Internet is transforming global society as technology becomes increasingly important for daily life. However, our technologically advanced country has a growing income and racial "digital divide." To bridge this gap, Congress created the E-Rate providing all schools and libraries access to affordable telecommunications and advanced digital technologies. After a 2-year expenditure of nearly $4 billion, little is known about the program's impact. This report, the first analysis of administrative data, shows that public schools are the major beneficiaries, funding has targeted high-poverty areas, and that application rates and funding levels vary by organizational characteristics, funding year, and among states.