Published Online: August 6, 2013
Published in Print: August 7, 2013, as FCC Releases Blueprint for Restructuring E-Rate Program

FCC Blueprint Would Restructure E-Rate

The Federal Communications Commission has officially launched an effort to refashion the E-rate program with the release of an ambitious notice of proposed rulemakingRequires Adobe Acrobat Reader, a document that seeks public input on such issues as schools’ use of fiber-optic cable and standards for Web connectivity in schools.

The E-rate, established by Congress in 1996 and overseen by the FCC, provides schools and libraries with funding for discounts on telecommunications services. The aid is derived from fees on telecommunications providers and is designed to improve program applicants’ technological access.

Advocates for improving technology in schools have been clamoring for years for changes to the program, which they say is underfunded and badly antiquated, in terms of the types of Web connections and technology it supports.

Among those calling for change is President Barack Obama, who recently argued in favor of setting the goal of giving 99 percent of the nation’s schools access to high-speed broadband and wireless Internet access within five years. Administration officials have said those changes would be supported through a temporary, “one-time capital” expense that would cost phone users no more than $5 per year.

Specifics Lacking

The far-reaching, 175-page notice, released late last month, offers few specific proposals on how E-rate policy should change. Instead, it presents what the FCC commissioners see as shortcomings in the program and poses a series of pointed questions to the public and the nation’s school and technology communities, asking them to weigh in by Sept. 16.

Commissioners have said they have three overriding goals for the program: increasing broadband capacity for schools and libraries; improving purchasing practices to reduce costs and increase the program’s effectiveness; and streamlining the program’s administration.

The FCC currently has three members and two vacant seats. Both the Democrats on the commission, Jessica Rosenworcel and acting Chairwoman Mignon Clyburn, have called for a major reworking of the program and have praised Mr. Obama’s blueprint.

“Without adequate capacity, our students are going to fall short,” Ms. Rosenworcel argued at a recent public meeting, when the notice was announced. “We fail our children if we expect digital-age learning to take place at dial-up speeds.”

The lone Republican on the commission, Ajit Pai, also describes the program as behind the times and notes the amount of money that flows to phone services and other areas. But he has also emphasized a need to reduce waste and increase transparency in the program.

During a speech last month at the American Enterprise Institute, a think tank in Washington, Mr. Pai suggested that schools would be more accountable for spending E-rate money wisely if they were required to chip in $1 for every $3 in federal E-rate money they receive.

And Mr. Pai questioned the premise that “funding, or rather an alleged lack of funding, is the main problem with today’s E-rate program.”

“By reducing waste, eliminating misguided incentives, and distributing funds more fairly, we can accomplish more—probably a lot more—with the same amount of money,” he said.

Financial Infusion?

Some of the questions posed in the FCC’S notice appear to echo Mr. Pai’s concerns. For instance, it asks whether the agency should reduce the discount rate, a provision the FCC says created incentives to control costs and improved efficiency within a federal program that supports telecommunications services in rural health care.

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The July 23 notice also asks what steps the FCC should take to measure overall program performance, or that of individual school applicants. Ideas include setting target Internet speeds for schools or within schools, or even, more controversially, trying to gauge whether access to E-rate money improves academic outcomes.

Despite what had been championed by the Obama administration, the FCC does not recommend specific dollar amounts and timelines for boosting E-rate funding. Instead, the commission asks for comments on how much funding is necessary and how strictly it should be tied to certain types of technology or applicants.

The notice asks, though, whether the FCC should consider lifting the overall program cap, even temporarily, on E-rate funds, which now stands at about $2.4 billion—far short of the $4.9 billion that schools and libraries requested in fiscal 2013. It also asks how the FCC could boost schools’ buying power by encouraging more consortia of schools to apply for aid.

The document raises the question of how flexible or prescriptive the agency should be when it agrees to finance school projects aimed at increasing broadband access. Some technology advocates, for instance, say fiber-optic cable is the best option for boosting the speed of schools’ Web connectivity, while also giving them the greatest ability to handle increases in demand. Others say less ambitious, lower-priced upgrades are more realistic options for schools.

The notice “indicates to me that they’re serious about a sweeping modernization of the program, and not just an incremental approach,” said Evan Marwell, the CEO of Education Superhighway, a San Francisco-based organization that promotes improved Web access for schools. “There’s an openness to outside-the-box ideas.”

Vol. 32, Issue 37, Pages 14-15

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