E-Rate to Support Wireless E-Mail, Internet Calling

Twitchy-thumbed school leaders have a new reason to like the federal E-rate program: It will now help support their BlackBerry habit.

The Federal Communications Commission has cleared the way to allow money from the $2.25 billion program of subsidies for school technology to apply to e-mail service for mobile, wireless devices, such as the BlackBerry, which are increasingly popular among administrators for keeping tabs on their schools while on the go.

School users of wireless e-mail services on Palm TREOs and other mobile devices, including some cellphones, will also benefit from the FCC’s recent changes to its “eligible-services list” for the E-rate, which the commission approved and posted in October.

In another significant change, the FCC for the first time made Internet-based voice services that use school broadband networks and connect to regular telephone networks eligible for funding under the E-rate.

Those services, known as interconnected Voice over Internet Protocol, or VoIP, and offered by providers such as Vonage and Skype, are cheaper and offer more features than regular phone service, school officials say. Just last month, the 437,000-student Chicago school system announced that it was switching its entire phone system—24,000 phones in all—to VoIP.

E-rate discounts will make the wireless e-mail and interconnected VoIP services even cheaper. The decade-old federal program collects fees paid by telephone customers into a universal-service fund that covers from 20 percent to 90 percent of the cost of eligible school telecommunications services, depending on the poverty level of the district’s students.

The discounts are available to all school districts that make valid applications. Other services financed by the E-rate program, such as the wiring of classrooms, are generally available only for the poorest districts.

Hands-on Benefit

The E-rate—short for education rate—generally supports direct classroom learning, such as by providing access to the Web for classroom computers. It also supports certain expenditures designed to benefit districts as a whole, such as telephone service. But by funding the e-mail service that underlies the BlackBerry—or, say, the Palm TREO—the E-rate is now helping pay for something administrators can get their own hands, or thumbs, on.

“All our administrators use BlackBerrys,” said Frank R. Buck, the curriculum and special education supervisor for the Talladega, Ala., city school district.

He said that last year the 2,700-student district bought BlackBerry devices for principals and assistant principals at each of its seven schools, as well as for five district administrators. Their model, he said, has a built-in cellphone, a walkie-talkie feature, “push e-mail,” and capabilities that include an electronic calendar and storage of “all kinds of reference material.”

Mr. Buck said he keeps on his own BlackBerry the codes and account numbers to control district equipment, driving directions to places in the district, and even “a couple of prayers, in case you’re at a luncheon and they say, ‘Dr. Buck could you offer a little devotional before our meal,’—a nice prayer for education.”

The district has received E-rate discounts covering about 80 percent of the devices’ cellphone service, according to Doug Campbell, the district’s administrator of federal programs.

For the E-rate’s 2008 program year, the district will be able to apply for the discount for the BlackBerry devices’ e-mail service as well, said Mr. Campbell. The application window for the 2008 program year was to begin next week and run through Feb. 7.

Contacted away from his office, Mr. Campbell could not confirm what portion of the district’s fees, at $50 monthly per BlackBerry device, is for e-mail service.

Because the E-rate does not pay for end-user equipment, such as computers and cellphones, the cost of the BlackBerry itself is not eligible under the E-rate discounts. The Talladega district paid $250 for each of its BlackBerry devices.

Sorting out eligible from ineligible services and equipment is part of the complicated process of applying for E-rate discounts.

Originally, the discounts under the program were supposed to go only for educational purposes. Yet as telecommunications services have become more mobile, the distinction between educational and other uses has been harder to make. And the FCC has recognized that school administrative functions have an educational impact.

Mobile wireless e-mail—the service that underlies BlackBerrys—has technically been eligible for E-rate funding the past few years, but the E-rate program never granted such funding. And the old rules would not have made it easy. The FCC required school districts to have audit systems to differentiate eligible from noneligible uses of the service.

The FCC dropped the requirement with its unanimous Oct. 19 action, making it much easier for districts to seek E-rate subsidies for BlackBerry-type service.

Interested Parties

Education groups and technology providers lobbied the FCC to make the wireless e-mail service eligible. Among the organizations urging the change were the State E-rate Coordinators’ Alliance, the Council of the Great City Schools, Sprint Nextel Corp., and the E-rate Service Provider Forum, a group of several technology concerns.

Sprint Nextel, a large telecommunications company that offers BlackBerry service through some of its devices and service plans, told the commission in a filing that “the classroom and principal’s office, like workplaces generally, are becoming increasingly mobile.”

“It is precisely when they are off site (at meetings, conferences, even waiting at a doctor’s office) that teachers, school administrators, and librarians will rely upon portable devices to conduct, via voice or e-mail, school- or library-related business.”

Interconnected Voice over Internet Protocol, the other newly eligible service, allows an Internet user to call, or receive calls from, another party—whether that party is on the Internet or using regular telephone service.

The VoIP category includes services offered by Skype, Vonage, and other national companies, as well as regional companies focused on education clients, such as the Nashville, Tenn.-based Education Networks of America.

Rex Miller, the chief financial officer at ENA, which provides Internet and voice services to about 450 school districts in Tennessee and Indiana, said the FCC decision will save districts money. He said, however, it was “somewhat of a surprise” that the FCC made interconnected VoIP eligible for E-rate funding.

But other observers said the FCC tipped its hand in June, when it ordered the providers of such services to start paying fees into the federal universal-service fund, which supplies the money for the E-rate.

Russell A. Selken, an E-rate adviser with the California Department of Education, said that in California districts, VoIP service is catching on because of cost savings.

“From the taxpayers’ perspective, you already have data connections for Internet; now you don’t have to have a separate connection for VoIP,” he said.

As a sign of growing interest in the technology, the Mitel Networks Corp. announced an agreement early this month with the Chicago school system to deploy an interconnected VoIP system throughout the district’s 700 schools and administrative buildings over the next four years. The $28 million cost will be funded in part by the E-rate program’s support for internal wiring. Under the eligible services list, the district will be able to apply for discounts on the service costs as well.

Robert W. Runcie, the chief information officer of the 437,000-student school system, said in a statement that the VoIP system would allow the district “to reduce our operating costs and improve safety.”

It is unclear whether such claims will defuse the critics of the E-rate program, who for years have argued that the subsidies encourage school districts to purchase telecommunications services that they don’t need and to be heedless of waste and fraud that have afflicted the program.