This report provides preliminary findings and a summary of study activities for Stage I of a project that examined public library Internet services that could impact the Digital Divide. The first section discusses the E-rate program and the Digital Divide, including closing the gap in the Digital Divide and public library Internet connectivity and the Digital Divide. Stage I tasks and objectives are presented in the second section, including assessing various data sources that describe the public library's role and impacts on the Digital Divide and conducting preliminary site-based data collection at selected state libraries, public libraries, and consortia. The third section assesses databases as per their usefulness in describing public library Internet services and their impact on the Digital Divide. Data collection at selected state libraries and public libraries is described in the fourth section, including objectives, selecting the states, key findings, importance of leveraged funding, impacts and benefits, issues and barriers, and possible models. The final section considers the next steps for the project. Appendices include a report on available data from the Schools and Libraries Division and the Gates Technology Inventory, a chart of research questions and study areas, and preliminary impact models of public library Internet and technology infrastructure funding. (MES)