Questions Over New Construction Projects Raise More Worries About E-Rate's Future
There's a new worry for schools and libraries already jittery about possible changes to the popular federal E-rate program.
But what's not clear is whether the issue signals a larger shift in priorities at the Federal Communications Commission, an ongoing problem with the E-rate's cumbersome application process, or both.
In recent weeks, according to school broadband advocates, more than 100 districts have received letters questioning their plans to use federal E-rate funds to support construction of fiber-optic networks. The plans in some cases had already been approved.
The new inquiries, however, have prompted more uncertainty on top of delays that have already lasted months. In some cases, concern has arisen over what the confusion might mean for the viability of hard-fought efforts to bring high-speed internet to some of the country's hardest-to-reach students.
Take, for example, the situation of Kimball Sekaquaptewa, a manager with AMERIND Critical Infrastructure, a tribally owned LLC that works with tribal governments, schools, and libraries to expand broadband access in American Indian communities. Sekaquaptewa spent 18 months organizing a consortium of tribal libraries serving four sovereign pueblo communities in New Mexico. Last spring, the group submitted an E-rate application that proposed to take advantage of both federal dollars and state matching funds to cover the costs of a new, $4.2 million fiber network that would serve the libraries.
The E-rate is a federal program that helps subsidize the cost of telecommunications services for public schools and libraries. The Universal Service Administrative Co., which sent out the letters received by Sekaquaptewa and others, administers the program.
In March, Sekaquaptewa said, she was notified the project had been approved, and the consortium received a funding commitment from USAC. The consortium immediately began moving forward on the project—a complicated endeavor that involves developing an engineering plan, gaining approval for rights-of-way to cross four tribal lands, and more.
What is it? A federal program to help subsidize the cost of telecommunications services for schools and libraries, the E-rate is one of four universal-service programs overseen by the Federal Communications Commission.
Why was it created? The U.S. government believes that all Americans should have access to basic telecommunications technology.
How has it changed? In 1996, Congress passed the Telecommunications Act to (among other goals) broaden the definition of universal service to include the internet and to expand the recipients of universal-service funds to include schools and libraries. In 2014, the FCC modernized the E-rate, raising the program’s annual spending cap and prioritizing broadband and Wi-Fi over older technologies.
How much does it spend? The E-rate’s current spending cap is $3.9 billion per year. Funds for the program are provided by telecommunications carriers, who pass the cost on to consumers in the form of universal-service fees on telephone bills.
What’s next? New FCC Chairman Ajit Pai says the E-rate is “worth fighting for,” but he could seek to make changes in the program’s spending cap, funding mechanism, application process, and rules.
Then, last month, the consortium received from USAC a six-page letter full of questions seeking additional information.
The inquiry has caused considerable uncertainly, including worries that USAC's funding commitment could be in doubt.
"I'm confused as to why these questions are being asked at this time," Sekaquaptewa said.
The stakes are high: The four tribal libraries could not afford the fiber construction project withoutthe reimbursement that the E-rate would provide. And if the project were to fall through, among those affected would be the people of Cochiti Pueblo (where Sekaquaptewa resides on reservation land about 22 miles southwest of Santa Fe), which would remain stuck with a single old copper T1 line for its library and other public services.
In 2014, under previous Chairman Tom Wheeler, a Democrat, the FCC overhauled the E-rate. The commission increased the program's annual spending cap from $2.4 billion to $3.9 billion, prioritized broadband and Wi-Fi over older technologies, and enacted new rules intended to make it easier for rural schools and libraries to access affordable high-speed internet.
Some of those rules have to do with what's known as "special fiber construction." Essentially, they were supposed to allow schools and libraries—mostly rural—to use E-rate funds to help pay for new fiber-optic networks to be built; to lease fiber networks themselves, rather than just paying for the information that flows across them; and to use federal funds to build their own fiber networks if they can't find a viable company to do it for them.
Evan Marwell was one of those who pushed for the new special-construction rules.
Now, the CEO of broadband-advocacy group EducationSuperHighway says he's worried that the new leadership of the FCC might be seeking to roll those rules back.
"This is the most immediate thing we're concerned about," Marwell said. "This year, we're going to see over 7,500 schools serving nearly 5 million kids take advantage of these provisions. When we have something that's working, why would we take it off course?"
Similar concerns about the future of the E-rate program have popped up repeatedly since President Donald Trump appointed Ajit Pai, a Republican, to be FCC chairman in January.
As a commissioner, Pai voted against the 2014 E-rate modernization orders. He wrote at the time that he supported the overall goals of the program, but worried that the changes would encourage wasteful spending and do little to help rural districts or improve the widely disliked E-rate application process.
One of Pai's first moves as chairman was to rescind an FCC staff report outlining the success of the E-rate modernization order. The move prompted an outcry from some K-12 and ed-tech groups, as well as key Democratic lawmakers. It also heightened concerns that Pai might be looking to move the E-rate program in a different direction.
Then, last month, Pai sent a scathing letter to USAC CEO Chris Henderson, demanding improvements in the E-rate application process. Henderson resigned two weeks later. While many in the ed-tech community worried about the timing, there is general agreement that the E-rate application process needs to be improved.
So, are the special-fiber-construction letters sent by USAC to districts a sign of changes at the new Republican-led FCC? Or are they more evidence of an E-rate application and approval process that Pai already knows is in need of dramatic upgrades?
Through a spokesman, the FCC declined to comment.
Tracy Weeks, the executive director of the State Educational Technology Directors Association, thinks it's mostly the latter.
In a letter SETDA sent to the FCC on April 28, Weeks raised "serious concerns" about USAC's approach on the special-fiber-construction projects, noting that the new inquiries are coming incredibly late in the approval process. As a result, she wrote, that could mean schools are denied funds for applications that have already been greenlighted and meet all rules currently on the books.
Like Marwell of EducationSuperHighway, Weeks said that any potential changes to the FCC's rules should at minimum not be applied to applications made in 2016, which would wreak havoc on plans that have been months or years in the making.
However, Weeks said she's not sure the problem signals any larger policy shift."We're focused on the concerns with the application process," she said. "We want to make sure the chairman is aware this is a challenge."
Uncertainty Fuels Anxiety
The continued uncertainty is causing considerable anxiety for districts like the 1,800-student Socorro consolidated schools, in southern New Mexico.
The district has relatively robust and affordable internet access for the five schools in town. But it's a different story for Socorro's two outlying schools, which serve about 100 students each. The district pays as much to bring those two buildings slow wireless-relay connections (they become unreliable when it's windy) as it pays for the connections in the rest of the district, said district IT director Jeffrey Tull.
Last year, Socorro put out a request for proposals for companies that could provide fiber to the schools. The best option by far, said Tull, is for Socorro to work with its existing university partner and a private vendor to run new fiber lines, which the school system would then own. That's the plan that Socorro submitted last year to USAC, under the new E-rate special-fiber-construction rules.
It's been nothing but delays since.
"The  E-rate cycle just closed, and I still don't have an answer from last cycle," Tull said.
"Unfortunately, we're still in limbo."
Vol. 36, Issue 33, Page 8Published in Print: May 31, 2017, as Letters to Districts Prompt Worries About E-Rate's Future