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E-Rate Reform: What’s On the Menu?

For many schools around the country, Internet connectivity has not yet reached the place where the greatest benefits would be realized: in classrooms. While the Federal Communications Commission (FCC) has made progress over the past decade in helping to connect schools, its E-Rate Program has fallen short on connecting classrooms with high-speed broadband. To address this shortcoming, the FCC will discuss modernization of the E-Rate Program at its monthly open meeting this Friday.

  1. Delay: For schools, the filing process can take months, the administration of funds years, and the appeals process decades to complete.
  2. Paperwork: The application process is arduous and is often a strong deterrent for schools that would benefit from the program.
  3. Complexity: For schools that undertake the application process, the regulations are so complex that it often requires hiring “E-Rate Consultants” to manage the process.
  4. Outdated prioritization: The tiered priority levels for the program prioritize services such as voice telephone service over classroom connectivity.
  5. Poor incentive structure: The range of discount rates encourages those with the highest discount rates to overspend on services, rather than efficiently spend funds.
To address these issues, Commissioner Pai proposed a five-point reform agenda that focuses largely on structural changes to the program:
  1. Simplify the program: Create a single “menu” of options, rather than tiered priority levels for funding, with a more streamlined application process.
  2. Fairer distribution of funding: Fund the program on a per-student basis, providing an additional “bump” in resources to rural and poor students.
  3. Focus on ‘next generation’ technology for kids: Focus on provision of broadband services for instructional facilities, as opposed to telecommunications and non-instructional facility services.
  4. More transparency and accountability: Require matching funds – $1 from schools for every $3 provided through E-Rate – as opposed to providing discount rates between 20 and 90 percent.
  5. Fiscal responsibility: On the back-end, require reporting on services provided to students.
Commissioner Pai is right to emphasize a “student-centered approach” to reform. But while his remarks highlight a number of inefficiencies in the program structure that do not create the best outcomes for students, his proposed solutions could also create further complications. For example, his proposed move to per-pupil basis – with an additional “bump” for rural and low-income students – may sound like a reasonable way to achieve equitable funding, that structure may prove ineffective in achieving equitable service.

The E-Rate Program, formally known as the Schools and Libraries Program, is one of four initiatives financed through the FCC’s Universal Service Fund. The program was enacted through the 1996 Telecommunications Act, which tasked the FCC with providing affordable telecommunications, Internet access, and internal connections to schools and libraries, with an emphasis on connecting rural and low-income communities.

On Tuesday, FCC Commissioner Ajit Pai presented his vision for E-Rate reform during an event hosted by the American Enterprise Institute (AEI). His remarks underscored several key differences between his and President Obama’s priorities for program reform. Going into this Friday’s meeting, the White House’s ConnectED initiative – which bears a strong resemblance to the E-Rate 2.0 proposal put forward by FCC Commissioner Jessica Rosenworcel in April – will provide a counterpoint to Commissioner Pai’s recommendations.

During Tuesday’s event, Commissioner Pai’s remarks focused on ”structural problems” with the E-Rate program that must be first addressed in order to better serve schools and students:

He also left out some critical details, like what’s on the menu?Commissioner Pai proposed a single “menu” of options and said they should be student-centered, focusing almost exclusively on broadband services. Alternatively, both times he mentioned fiber his comments were disparaging and negative. Moving forward with 21st century service, will the E-Rate program support 21st century infrastructure?

The event raised a number of important issues with the E-Rate Program as it stands, but the current array of proposed solutions are far from perfect. Hopefully the FCC will take a positive step on Friday toward bringing this program into the 21st century."