Sec. 54.501  Eligibility for services provide by telecommunications 
          carriers.

    (a) Telecommunications carriers shall be eligible for universal 
service support under this subpart for providing supported services to 
eligible

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schools, libraries, and consortia including those entities.
    (b) Schools.
    (1) Only schools meeting the statutory definitions of ``elementary 
school,'' as defined in 20 U.S.C. 8801(14), or ``secondary school,'' as 
defined in 20 U.S.C. 8801(25), and not excluded under paragraphs (a)(2) 
or (a)(3) of this section shall be eligible for discounts on 
telecommunications and other supported services under this subpart.
    (2) Schools operating as for-profit businesses shall not be eligible 
for discounts under this subpart.
    (3) Schools with endowments exceeding $50,000,000 shall not be 
eligible for discounts under this subpart.
    (c) Libraries:
    (1) Only libraries eligible for assistance from a State library 
administrative agency under the Library Services and Technology Act 
(Pub. L. 104-208) and not excluded under paragraphs (b)(2) or (b)(3) of 
this section shall be eligible for discounts under this subpart.
    (2) A library's eligibility for universal service funding shall 
depend on its funding as an independent entity. Only libraries whose 
budgets are completely separate from any schools (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities) shall be eligible for discounts as libraries under this 
subpart.
    (3) Libraries operating as for-profit businesses shall not be 
eligible for discounts under this subpart.
    (d) Consortia:
    (1) For purposes of seeking competitive bids for telecommunications 
services, schools and libraries eligible for support under this subpart 
may form consortia with other eligible schools and libraries, with 
health care providers eligible under subpart G of this part, and with 
public sector (governmental) entities, including, but not limited to, 
state colleges and state universities, state educational broadcasters, 
counties, and municipalities, when ordering telecommunications and other 
supported services under this subpart. With one exception, eligible 
schools and libraries participating in consortia with ineligible private 
sector members shall not be eligible for discounts for interstate 
services under this subpart. A consortium may include ineligible private 
sector entities if the pre-discount prices of any services that such 
consortium receives from ILECs are generally tariffed rates.
    (2) For consortia, discounts under this subpart shall apply only to 
the portion of eligible telecommunications and other supported services 
used by eligible schools and libraries.
    (3) State agencies may receive discounts on the purchase of 
telecommunications and information services that they make on behalf of 
and for the direct use of eligible schools and libraries, as through 
state networks.
    (4) Service providers shall keep and retain records of rates charged 
to and discounts allowed for eligible schools and libraries--on their 
own or as part of a consortium. Such records shall be available for 
public inspection.