From the February, 2015 Issue of Cabling Installation & Maintenance Magazine
A December, 2014 decision by the Federal Communications Commission raises the program's spending cap to $3.9 billion.
By Patrick McLaughlin
In December 2014 the Federal Communications Commission (FCC; www.fcc.gov) revamped its E-rate program. Mandated by Congress in 1996 and administered by the FCC since 1997, E-rate is officially called the Universal Service Program for Schools and Libraries and "provides discounted telecommunications, Internet access, and internal connections to eligible schools and libraries, funded by the Universal Service Fund," the FCC explains. On December 11 the FCC adopted an order that makes "more funding available for libraries and schools to purchase broadband connectivity capable of delivering gigabit service over the next five years," the commission said that day when announcing its order. From a bottom-line perspective (to the extent it is possible for such a perspective to come out of Washington, D.C.) the order raises E-rate's spending cap from $2.4 billion to $3.9 billion.
The December order was the FCC's second E-rate modernization step of 2014. In July it took action aimed specifically at bolstering WiFi within schools and libraries. At that time it explained, "While E-rate over its 18-year life has succeeded in connecting virtually all schools and libraries to the Internet, it is not currently geared for today's world of interactive, individualized digital learning. By continuing to support broadband connectivity to the building while significantly expanding support for robust WiFi networks within classrooms and libraries, the FCC's reforms can deliver the benefits of customized learning to students over tablets and laptops and enable library patrons to fully participate in today's digital world."
WiFi focus
The July order called for an additional $2 billion in E-rate funding to support WiFi over two years, with a target of $1 billion per year for the three years that will follow. The FCC said this effort to enhance WiFi through E-rate would not come at the expense of broadband connectivity, as the initial two-year, $2-billion allotment would come "through improved financial management practices that free up excess reserves," as well as "by phasing out support for non-broadband services, such as pagers and phones."
On the day of the WiFi order, July 11, the FCC said, "Today's action represents the next step in an ongoing E-rate modernization process." Five months later, on December 11, it issued its more-comprehensive order. "The July order freed up funds for WiFi through improved fiscal management and by ending or phasing out legacy services like paging and phone service," the commission reminded everyone in December. "The July order also increased program fairness by ensuring that all schools and libraries have equitable access to funding for WiFi … While schools and libraries are now on a path to providing robust WiFi for students, teachers and patrons over the next five years, data the FCC has been gathering over the past six months has revealed the depth of the connectivity gap. For example, 63 percent of public schools--with over 40 million students--don't have broadband connections to the building capable of taking advantage of modern digital learning. That gap will only grow as digital learning applications increase their requirements for bandwidth."
The commission cited a number of statistics emphasizing the percentages of school districts that do not meet current connectivity targets, and/or do not foresee the ability to meet future connectivity targets. It said its most recent action "closes the connectivity gap through continued efforts to lower prices schools and libraries pay for connectivity, and by increasing the amount of support available for connection to the Internet."
Categories 1 and 2
Modernized E-rate distinguishes between a school or library's internal connections and its connections to service provider networks, using the word "category." In the FCC's summary of its modernization order, it explains it designates internal connections--specifically including WiFi--as "category two services." On the other hand, "services needed to support connectivity to schools and libraries" are "category one services." Applicants to the program will have a 15-percent minimum contribution rate for category two services "to encourage applicants to pursue the most cost-effective options," as well as to more-widely distribute available funds, the commission noted. Furthermore, "In setting the $1 billion annual target for category two support, the order makes clear that if demand for category one services exceeds the FCC's expectations, USAC [Universal Service Administrative Company] is required to shift funds targeted for category two services to meet category one demand. This will ensure that funding continues to be available for category one support for broadband connectivity … Alternatively, if requests for category one services fall below expectations in a particular funding year, the FCC may redirect excess category one funding to support category two requests in that funding year. Funds not committed for category one or category two services may be carried forward to be used in a subsequent funding year."
Political positioning
FCC chairman Tom Wheeler was a driving force behind the July and December E-rate modernization actions. His statement following the most-recent order emphasized both the program's advantages and cost-effectiveness. "The result of increased E-rate investment will be an America with students, teachers, and library patrons able to take advantage of the unlimited opportunities enabled by high-speed broadband," he said. "The increase in support is significant. It is justified. And it is smart--including not just more funding, but also important program changes that will ensure more competition for E-rate dollars and will ensure cost-effective spending."
Referencing the July order, Wheeler pointed out that through it, "for the first time, the Commission set specific, ambitious speed targets for the broadband capacity delivered to schools and libraries--a minimum throughput of 100 Mbits/sec per 1,000 students and a pathway to 1 Gbit/sec per 1,000 students."
These two FCC orders did come from the political caldron of Washington, D.C., and commissioner Ajit Pai wrote a scathing dissent of the December order. In his statement, he bemoaned that what he characterized as bureaucracy remains core to the application process. "Students and teachers, parents and school boards, librarians and library patrons … They deserve a student-centered E-rate program," Pai insisted. "They need real reform. And what does the FCC give them? The status quo … Real reform would have meaningfully simplified the application process."
He also took issue with the program's regulations for category-two, internal connections. In addition to scoffing at the July order as a fiscal disaster waiting to happen--"would have blown a $2.7 billion hole in E-rate's budget," as originally conceived, he said--Pai said the December order's budgets for internal connections will serve to widen the connectivity gap between urban and rural areas. "The poorest rural and remote schools and libraries will have the same per-student budgets as their urban brethren," he pointed out, "even though their broadband prices are higher, their tax bases are lower, qualified labor is harder for them to find, and competition is less prevalent in rural areas. And anyone who has been to the Alaska bush can tell you that WiFi routers don't cost the same everywhere in the country."
Flawed as it may turn out to be, E-rate has been the impetus for many structured cabling installation projects throughout the United States since the late 1990s. And based on the FCC's recent actions, it looks like it will be such an impetus for years to come.
Patrick McLaughlin is our chief editor.
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