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Raising the Cap: F.C.C. to Increase Broadband Funding in Schools

While the two may have clashed last week, President Obama and Federal Communications (F.C.C.) Chairman Tom Wheeler have found common ground on E-rate reform. On Monday, Chairman Wheeler announced a proposal that would substantially increase annual funding for the E-rate program, providing much needed resources to help fund high-speed connectivity for schools and libraries across the nation. If adopted, the proposal will raise the E-rate spending cap from $2.4 billion to $3.9 billion—a $1.5 billion annual increase to program funding.

“While the impact on consumers will be small, the impact on children, teachers, local communities and American competitiveness will be great.”

Secretary of Education Arne Duncan praised the announcement, emphasizing “Chairman Wheeler's proposal to boost E-rate funding will put the nation well on the path toward realizing President Obama’s ConnectED Initiative” which, in part, laid out ambitious broadband speed targets for schools to meet in just five years—one gigabit per second speeds for every 1,000 students. To put this goal in perspective, according to the F.C.C. 63 percent of public schools do not currently have broadband connections capable of supporting that kind of high-speed Internet service. Today, the more than 40 million students attending those schools are effectively cut off from modern digital learning resources and tools.

As the F.C.C. began the E-rate modernization process last summer, commenters—including New America’s Education Policy Program and Open Technology Institute—have called for increased program funding. If passed, this would be the first real increase to funding since the program’s inception. The original $2.25 billion cap was not even adjusted for inflation until 2010. While funding has stagnated, demand has continued to grow; the program has not been able to fully meet demand for years.

For those not well acquainted with the ways of the F.C.C., the independent agency’s leadership has the authority to raise the funding cap without Congressional approval. The program is funded through the “Universal Service Fee” which is charged to telecommunications companies (and typically passed on to consumers), rather than the annual appropriations process. Though program funding rests outside the control of Congress, though, raising the cap is not completely free from politics.

Despite broad support among the applicant community and public interest advocates that the Fund needs more money to meet its goals, some telecommunications companies have come out against an expansion of the fund. The F.C.C.’s two Republican Commissioners, Pai and O’Rielly, have also voiced their opposition to what Commissioner Pai has referred to as a 17.2 percent tax increase. As Pai first emphasized last summer and reiterated yesterday: “instead of imposing a greater burden on families struggling to make ends meet in this lackluster economy, the Commission should pursue fiscally responsible reforms.”

A 17.2 percent tax increase sounds daunting, but the actual cost per consumer is insignificant. The increase, in absolute terms, only amounts to $1.90 per year for each payer. That’s less than a penny per day. As the F.C.C. noted, “While the impact on consumers will be small, the impact on children, teachers, local communities and American competitiveness will be great.”