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Published in Print: August 29, 2008, as Tech. Advances Prompt Proposed Changes for E-Rate Rules
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Tech. Advances Prompt Proposed Changes for E-Rate Rules

FCC Asking for Public Comment on Federal Telecommunications Aid

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The federal E-rate program, which provides financial support for telecommunications in schools and libraries, faces a new round of tweaks by its congressionally appointed overseer, the Federal Communications Commission, to bring the program up to date with technological advances.

In a “notice of proposed rulemaking,” or NPRM, published Aug. 19 in the Federal Register, the FCC has invited comment on a slate of topics that could lead to changes to the 11-year-old program, which was launched in 1997. Close observers of the “education-rate,” the largest federal program to help schools pay for technology, say the FCC is trying to update the program to address technological advances such as text messaging, advanced network firewalls, anti-virus or anti-spam software, telephone broadcast messaging, and wireless Internet-access applications.

Classifying and reclassifying some telecommunications products and services is likely to redirect some portion of the $2.25 billion in discounts awarded annually by the Universal Services Administrative Corp., which manages the E-rate, to new types of technology. As it is, discounts paid to vendors that do work for schools and are funded by telecommunications rate payers, run from 20 percent to 90 percent, depending on the school applicant’s poverty rate.

Major Items Under Review

“The NPRM is saying the FCC is acknowledging that the state of technology has changed in the past 11 years,” said John D. Harrington, the chief executive officer of Funds for Learning LLC, an Edmund, Okla., firm that advises school districts on the E-rate’s rules.

Observers said the FCC wants to help schools tap new technologies without exhausting the money available or giving some technologies an unfair advantage over others. They said the commission also aims to make its rules clearer and more streamlined to help participants and regulators do a better job guarding against waste, fraud, and abuse.

Decisions the FCC makes this fall about the E-rate program most likely will not take effect until the 2010 program year.

In one of the more significant items under review, the FCC is revisiting its decision two years ago to make eligible the fees schools pay for “interconnected VoIP service,” provided by companies such as Vonage, based in Holmdel, N.J., and Skype, based in Luxembourg, that use the Internet for local and long-distance phone calls. ("E-Rate to Support Wireless E-Mail, Internet Calling," Nov. 15, 2006.)

The commission also wants feedback on its interpretation of a federal law requiring E-rate applicants to filter the Internet access provided in schools. The FCC’s reading of the law is that filters or filtering services are not themselves E-rate-eligible.

“There’s a lot of pressure from people, who say, ‘You make [filtering] mandatory, but you don’t let the E-rate fund it,’” said Winston E. Himsworth, the founder and executive director of E-rate Central, a Westbury, N.Y., firm that provides administrative services and consulting advice to about 175 E-rate applicants across the country. The firm also serves, under state contracts, as an E-rate coordinator, helping districts or librarians apply for E-rate assistance, in New York, North Carolina, and Virginia.

Mr. Himsworth suggested that, if the FCC made filtering eligible, “you will probably find people putting in more robust filtering systems,” much like the improved highways that states have built with federal subsidies. He noted, though, that supporting advanced filtering would increase the costs to the program.

A decision on whether to expand the definition of basic telephone service to include T-1 lines and other relatively new technologies, another issue on the table, would be significant partly because the FCC does not require applicants for basic phone service to develop technology plans for how it would support the education of students. Such comprehensive planning, while valuable, is onerous for small districts that are not applying for Internet access, wiring, and other equipment, Mr. Himsworth said.

Also, dark fiber, or the extra, “unlit” strands of fiber-optic cable and associated equipment that are often installed for future expansion of computer networks, could potentially be reclassified as an eligible telecommunications service. If so, Mr. Harrington of Funds for Learning said, a district might save money by purchasing the use of dark fiber outright for its networks rather than buying more bandwidth from a telecommunications provider.

Initial comments about the proposed changes are due by Sept. 18; reply comments are due by Oct. 3.

Vol. 28, Issue 02, Page 21

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