Equity & Diversity

FCC Approves Major E-Rate Funding Increase on Party-Line Vote

By Sean Cavanagh — December 11, 2014 6 min read
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The Federal Communications Commission today approved a major increase in funding for the E-rate program, a decision that supporters predict will greatly expand schools’ and libraries’ access to high-speed Web connectivity after years of neglect.

The commission approved the change in a 3-2 vote that broke down along partisan lines and was at times sown with discord.

The plan, overseen by FCC Chairman Tom Wheeler, will lift the overall spending cap for the E-rate program from $2.4 billion to $3.9 billion a year, after years of stagnant funding.

Many school and library officials have noted that the applications for the program in recent years have far exceeded the amount of available funding. Bringing new money into the program, when combined with recent changes made that refocus the E-rate on supporting the use of modern technologies, should help close the gap, digital education advocates contend.

The E-rate program, created by Congress in 1996, pays for improvements in school and library telecommunications services, particularly for disadvantaged communities. The FCC describes the E-rate as the nation’s largest program supporting education technology. Its funding comes from fees on telecommunications providers—charges that get passed on to consumers on phone bills.

The funding cap for the E-rate hasn’t been changed since it was set at $2.25 billion in 1997, federal officials say. And the program’s funding wasn’t adjusted for inflation until 2010.

The FCC has estimated that the funding boost, which will include adjustments for inflation, will result in consumers paying a maximum of an additional $1.90 a year per phone line, or less than $6 per household.

The FCC estimates that the average total fees currently paid by a household with three phone lines are a little more than $34 a year.

The FCC’s two Republican members, Ajit Pai and Michael O’Rielly, were both critical of the plan in the period leading up to the vote, questioning the need for more spending and saying it would add to the financial burdens of American families.

During Thursday’s discussions, the Republicans sharply reiterated their opposition. O’Rielly said the program will become more complex and inefficient, and place new, unnecessary charges on American households.

“It still amazes me how some people find it so easy to give away others’ hard-earned income,” O’Rielly said.

Pai argued that the changes would be felt by American consumers, contrary to the arguments of supporters of the plan, who say the increases in phone charges are negligible.

While the fee increases might not matter much to residents of affluent communities—Pai mentioned Malibu and Washington’s Georgetown community as examples—"the rest of Americans are sick of being nickel-and-dimed.”

Despite policy changes approved this year to the E-rate that are meant to improve the program’s efficiency, Pai said the funding increase “pours money into a broken system.”

Those critiques drew a strongly worded response from Wheeler, who cast the need for more financial support for the E-rate in stark terms.

“We are talking about a moral issue,” Wheeler said, one that focuses on the “greatest responsibility” policymakers face, in helping the next generation obtain the resources they need to succeed—at a cost an additional 16 cents a month on phone bills.

“I can understand that there is opposition to some of the approaches taken,” said Wheeler, who said he was nonetheless “aghast at the hostility” directed toward the FCC plan for improving students’ access to critical technology.

Wheeler was joined in voting in favor of the measure by fellow Democratic commissioners Mignon Clyburn and Jessica Rosenworcel.

Clyburn said the changes were needed to help students routinely “stuck in the digital dock"—not having access to reliable Web access to meet their academic needs.

“Broadband is the greatest equalizer of our time, but this only holds true if everyone has access,” Clyburn said.

Rosenworcel said the FCC would have to take additional steps to ensure that families have greater access to broadband at home. Right now, while students and families are buying mobile phones that allow Web access, those purchases aren’t helping students who need need connectivity for in-depth academic research and other schoolwork, she said. Rosenworcel described those shortcomings “the homework gap.”

(For a look at the broader reaction to the FCC’s action, see this related post by Education Week’s Ben Herold.)

Part Two of Policy Shift

The funding increase comes five months after the FCC approved an initial policy overhaul of the E-rate designed to streamline the applications process and direct money toward up-to-date technologies, rather than systems such as voice-mail and paging.

Those changes boosted Wi-Fi funding for schools and libraries by $1 billion a year over the next two years, and took other steps that supporters argue will refashion the program’s focus on today’s digital tools, increase transparency, and drive down prices for funding applicants.

Many school and technology advocates had urged Wheeler to push for an increase in the funding cap sooner than he did. But the chairman had said that he was determined to make sure the E-rate was managed efficiently, and spending money wisely, before the FCC considered adjusting the overall size of the program, the step that was taken this week.

In addition to the $1.5 billion annual funding increase, the FCC approved other changes to the program, which include:

  • Giving schools and libraries the right to build high-speed broadband facilities themselves, when there are advantages in cost;
  • Providing incentives for states to support certain “last mile” construction of broadband, including for tribal schools;
  • Suspending a rule that applicants need to seek money for big construction costs over several years;
  • Easing the process through which schools and libraries can obtain E-rate money to use “dark fiber,” cable that is currently not in use. FCC officials believe this step will help small and rural school districts; and
  • Demanding that telecommunications carriers that receive subsidies through a federal program designed to help rural areas offer high-speed broadband to schools and libraries in those areas at “rates reasonably comparable” to those offered in urban communities.

With Congress having been consumed by political infighting over much of the last year, the FCC’s power to shape telecommunications policy has drawn major attention and controversy. In addition to its policy changes for the E-rate, the FCC is considering regulations that could affect “net neutrality,” the idea that Internet content should flow across the Internet in an equitable and unrestricted way.

The net neutrality issue has drawn the interest of many school and library officials, who worry that schools could see the flow of online educational materials restricted if Internet service providers are able to slow the delivery of certain content, and speed up delivery for monied providers. (Wheeler has vowed that he will not allow schools’ access to be restricted.)

The volatility of that policy was evident during Thursday’s hearing, when the initial comments on the E-rate by FCC staff were interrupted by protesters on the net neutrality issue.

A short time later, a protester managed to get behind the stage where Wheeler and the other FCC commissioners sit, before being removed from the room.

Wheeler told the students in the audience for the E-rate discussion that the disruptions offered a sort of civics lesson.

“You’ve just seen the First Amendment at work,” the FCC chairman said.

This post has been updated with more details of the FCC’s plan.

A version of this news article first appeared in the Digital Education blog.