Modern E-Rate Puts Telephones On Hold in K-12

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Even in the internet age, the lowly telephone remains an indispensable tool in the day-to-day operations of nearly every school.

But thanks to the double whammy of declining state aid and disappearing federal subsidies for such "legacy" technology services, districts nationwide are scrambling to fill a roughly $359 million hole in their collective budgets, according to a new analysis by the Edmond, Okla.-based consulting firm Funds for Learning.

The problem will likely get worse before it gets better, said John Harrington, the group's CEO.

"Schools are nowhere near being in a position to just cut their phone lines," Harrington said. "If they need to get a hold of a parent, they're not going to message them on Facebook."

The challenge stems from a 2014 decision by the Federal Communications Commission to modernize the federal E-rate program, which helps schools and libraries cover the cost of telecommunications services. Like other "universal service" programs, the E-rate has transitioned to focus on support for high-speed internet connections and internal wireless networks. The changes have been a boon for many districts making digital upgrades, especially because the FCC raised the E-rate's annual spending cap more than 60 percent, to $3.9 billion.

But the added support for broadband has come with a cost: diminishing support for older telecommunications technologies upon which the K-12 sector still relies heavily.

The combined cost of the voice services required by the nation' schools and libraries has held fairly steady over the past five years, at roughly $1 billion per year, according to the Funds for Learning analysis. But the portion of that need covered by the E-rate program has declined from $799 million in 2014 to $326 million this year, the group found.

Declining E-Rate Support

As the Federal Communications Commission has increased support for high-speed internet and wireless connections, schools and libraries have had to pay more out of pocket for voice service and equipment.

How It Hurts

Jon Wilkins, the chief of the FCC's wireless-telecommunications bureau, acknowledged the budget challenge facing schools.

But he described the switch in support from phones to broadband as an intentional policy decision by the FCC.

"This is a feature, not a bug," Wilkins said.

The 19,000-student Putnam City district, located in and around Oklahoma City, offers a prime example of the bind many schools face.

Back in 2010, the district began reinvesting in both classroom technology and upgrades to its broadband infrastructure. More than 16,000 iPads are now available to Putnam City students and staff members. The district has a high-speed, 3 Gigabit-per-second connection to the internet at an extremely affordable rate. A fiber-optic cable network links all of Putnam City's buildings, and there is now high-speed Wi-Fi access available across the district.

The E-rate played a huge role in that digital transformation: $2.3 million in federal subsidies through the program covered about half those infrastructure upgrades, said Cory Boggs, the district's executive director of information-technology services.

Putnam City schools still need phones, though. Until recently, the E-rate helped Boggs pay for them.

From 2012 to 2014, he said, the program covered between 82 percent and 85 percent of the district's local, long-distance, and cellular service—a total of more than $90,000 per year.

During the 2015-16 school year, however, that support dropped to $46,000, the result of the FCC's planned phase down—by 20 percent per year—of federal subsidies for legacy services.

This school year, the support will decline even further. By 2019-20, E-rate subsidies for phone service will go away altogether.

The money to cover the gap, Boggs said, "all comes out of my budget."

That's especially challenging, he said, because Oklahoma lawmakers have slashed per-pupil state spending on public education by 24 percent since 2008. During that time, Putnam City's enrollment has grown significantly, but state aid to the district has dropped by more than $400 per child, and the percentage of the district's overall operating budget covered by state revenue has declined from 50 percent to 43 percent.

Such austerity has trickled down to individual departments, including technology, where discretionary spending has been slashed in half in recent years.

For Boggs, that meant not refilling two staff positions that went vacant, asking maintenance and IT staff to pay for or provide their own cellphones to use at work, and planning for the possibility that some technology problems will have to go unrepaired by the end of the school year.

Not paying for local and long-distance phone service was not an option, Boggs said.

"We still have tons of parents calling in every day," he said. "The phone has not become antiquated."

Continued Budget Pain

Schools and libraries across the country feel the same way, said Harrington of Funds for Learning.

Back in 2014, the E-rate modernization order called on the FCC to evaluate the impact of decreasing voice support for schools and libraries after the second year of its planned phase down in support. Hoping to spur that process, Funds for Learning in June conducted a national survey of more than 1,000 E-rate applicants. Nearly half said they hoped to see support for phone and voice service reinstated.

But Wilkins of the FCC said no such plans are under consideration.

Instead, he said, the commission expects to see a shift toward more data-based services that rely on computer networks instead of phone lines.

"We're confident that the market is going to sort this out over the next cycle or two," Wilkins said. "More and more vendors will adjust, and new solutions will be offered."

Harrington isn't so sure. Many schools have for years been transitioning to such "voice-over IP" systems, but such technology can typically only be applied to internal district communications, he maintained. Furthermore, Harrington said, the E-rate program no longer provides subsidies for the physical equipment that such systems require.

Related Blog

For their part, Boggs and other school technology leaders say they understand and support the FCC's overall focus on high-speed broadband.

But that doesn't make their short-term crunch any easier.

"We've got a limited budget," Boggs said, "but the phone is just one of those things you can't live without."

Vol. 36, Issue 08, Pages 1, 11

Published in Print: October 12, 2016, as Modern E-Rate Puts Telephones On Hold in K-12
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