October 9, 2017(2)

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E-Rate Call to Action: FCC Considering Cut to Category 2 Funding

Quick Summary: The FCC is considering a policy change which would deeply cut--if not eliminate--it support for Category 2 (internal connections) within the E-Rate program. Adopted as part of the 2014 modernization, this is a premature policy consider that would undermine the intent of the 2014 vote and threaten the ability of schools and libraries to access and afford high speed connectivity in their classrooms. We need to create a groundswell of feedback from schools and libraries; please take the time to file comments.

Background: E-Rate provides $3.9 billion in discounts annually to ensure that all public libraries and K-12 public and private schools gain access to broadband connectivity and robust internal Wi-Fi. As of December 31, 2015, schools and libraries have received over $31 billion in E-Rate funds. In fact, E-Rate is the third largest stream of federal resources in the country, after Title I and IDEA. Check out E-Rate funding in your state! The promise of the E-Rate program is straightforward: to assure that all Americans, regardless of income or geography, can participate in and benefit from new information technologies, including distance learning, online assessment, web-based homework, enriched curriculum, increased communication between parents, students and their educators, and increased access to government services and information. The E-Rate program provides discounts to public and private schools, public libraries and consortia of those entities on Internet access and internal networking. (E-Rate’s previous support for voice services terminates after Program Year 2018.) E-Rate discounts are provided through the Federal Communications Commission by assessing telecommunication carriers for a total of up to $3.9 billion dollars annually. This methodology follows a long-established Universal Service Fund model, used to ensure affordable access to telephone services for residents in all areas of the nation since 1934. (Source: EdLiNC)

Policy Context: While Congress is not poised to make any changes to E-Rate, the Federal Communications Commission (FCC) is, and we want to make sure Congress knows what E-Rate, how schools and libraries use it, why the program matters, that it is working and is important, and what would happen to schools if the program were reduced or cut. Congress needs to understand that the changes of the 2014 modernization are just starting to meaningfully reach schools and libraries, and that any substantive changes would be premature and poor policy. 

Specific to what the FCC, under the leadership of Chairman Ajit Pai, are considering: When the FCC modernized the E-Rate program in 2014, it focused funding on broadband Internet service (Category 1) and Wi-Fi and internal connections (Category 2). For Category 2, E-Rate provides schools with a formula distribution of $150 per pupil, which is supposed to last schools for 5 years. Since the modernized E-Rate with a higher spending cap rolled out in 2015, schools have made active use of their Category 2 allotments. Evidence suggests that, as of today, 94% of schools meet the FCC’s interim broadband goal of 100 Mbps/1000 students, a considerable jump from 2013 when that number stood at only 30%.

Recently, the FCC’s Wireline Bureau launched a Public Notice seeking comment on Category 2 budgets. Specifically, this public notice asks how schools have used their allotments and whether schools made Wi-Fi purchases without E-Rate support. The public notice also asks why some schools have not used their allotments yet and whether they planned to do so before the end of the 5-year formula cycle. This last question may arise from data gathered by Funds for Learning that shows that “more than a third (37%) of participating sites have not touched their Category Two (“C2”) budgets, and another quarter (23%) have used less than half of their budgets. Only a relatively small percentage of sites (18%) have maxed out their C2 discounts.” In total, $2.35 billion in Category 2 funds remain unclaimed and unspent by schools.

What’s at stake? There is a growing concern that the FCC is not asking these questions merely for data-gathering purposes but for another end in entirely. The Connect America Fund (CAF), a universal service program (like E-Rate is) that provides subsidies for rural telecommunications carriers, remains underfunded and could use a funding increase. The apparent surplus in Category 2 dollars may look tempting to the FCC and CAF supporters, leading to calls to transfer unused E-Rate dollars to CAF. The data collected in this rulemaking may stand as evidence that schools are not using or do not need some or all of their Category 2 funds, providing the FCC pretext to transfer E-Rate dollars to CAF. Once those dollars are transferred out of E-Rate, they may be gone forever and stand as a precedent for lower overall funding for E-Rate for years to come.

Call to Action: The FCC has asked for the public to submit initial Comments on this Public Notice by October 23rd and Reply Comments by November 7th. Schools, districts, educators and parents should file comments in the next month that tell the FCC: Hands-off E-Rate Category 2 funds. A strong response from the education community might prevent the FCC from taking action to transfer E-Rate funds.

How to File Comments with the FCC

  • COMMENTS ARE DUE October 23
  • Draft your response comments. You can create your own comments or work from AASA’s template. Format your response as a Word/PDF document (include district letter head!).
  • Go to https://www.fcc.gov/ecfs/filings 
  • For the Proceeding Number, enter the following proceeding numbers: 13-184
  • Complete the rest of the information on the form.
  • Upload your comments at the bottom of the form.

If you are pressed for time or need help submitting the comments, I can submit them on your behalf. Please email me (nellerson at aasa.org) your final comments no later than Friday October 20, with the subject line ‘Please file E-Rate comments.’


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