The E-Rate program, which has funded internet connectivity for schools and libraries around the United States, is under scrutiny by the Federal Communications Commission. On June 26 the FCC released a Notice of Proposed Rulemaking (NPRM) and Further Notice of Proposed Rulemaking (FNPRM), a single, 86-page document. The document’s introduction explains the NPRM “seek[s] comment not only on how to ensure E-Rate-funded services are advancing educational outcomes and protecting children online, but also on whether the program should be narrowed or otherwise reoriented to reflect the extent to which its connectivity objectives have been achieved.” The introduction also says the FNPRM “proposes actions to further strengthen E-Rate program integrity, including increasing oversight over consultants, streamlining program administration, and sunsetting rules for the Emergency Connectivity Fund (ECF) program.”

E-Rate Funds In-Building Networks for Schools and Libraries

The E-Rate program divides services into two categories. Category one services provide connectivity, including broadband connectivity, to eligible locations, while category two services provide connectivity within eligible locations. “Category one services generally include data transmission and internet access services, while category two services include internal connections (e.g., wireless access points, routers, switches), managed internal broadband services (e.g., managed WiFi), and basic maintenance of internal connections,” the FCC said in its NPRM/FNPRM.

Launched as part of the Telecommunications Act of 1996 and funded by revenue from the Universal Service Fund (USF), the E-Rate program has been the financial enabler through which schools and libraries across the United States have procured structured cabling systems that enable high-speed connectivity on their premises. Many professionals in the cabling and information and communications technology (ICT) industries reading this story are familiar with E-Rate, having carried out the projects that provided this “category-two” connectivity.

The FCC’s NPRM and FNPRM document is a request for comment on a number of E-Rate-related issues; it is not a declaration of any particular action. However, many who have read the document view it as a significant move toward the discontinuation of the E-Rate program as we have known it. Within days of the FCC’s vote that resulted in the document’s creation, education professionals voiced concerns about the program’s future. The Schools, Health and Libraries Broadband Coalition (SHLB) launched a web page titled “Save Our E-Rate.” The SHLB Coalition’s executive director Joey Wender said in a statement, “The FCC took the damaging step towards either ending E-Rate or shrinking it to only rural areas, despite lacking the authority to do so and despite a clear congressional mandate to bring universal service to every community.”

Sam Helmick, president of the American Library Association (ALA), added, “There is no justification for pulling the plug on E-Rate. E-Rate continues to fulfill the congressional mandate that established it 30 years ago: ‘providing affordable access to telecommunications services for all eligible schools and libraries, particularly those in rural and economically disadvantaged areas.’ As long as there are Americans who cannot afford or don’t have access to a high-speed broadband connection, E-Rate should continue. ALA is rallying the library community to speak clearly and collectively in defense of E-Rate and the access it provides.”

FCC: We're Asking The Tough Questions

Others involved in the SaveOurERate campaign voiced similar concerns and objections to the possibility that E-Rate either will be sunset or significantly altered. Perhaps in response to these and other immediate responses to the NPRM/FNPRM, the chief of the FCC’s Wireline Competition Bureau, Joseph Calascione, issued a statement on July 29. He said in part, “On June 25, the FCC adopted a NPRM and FNPRM seeking comment on a wide array of questions about how to update the E-Rate program to reflect how schools and students actually use the internet. This item is part of the FCC’s ‘top-to-bottom’ review of all USF programs to promote efficiency, transparency, and accountability … The NPRM asks some important questions about whether the goals established by Congress have been met, and whether the E-Rate program should remain unchanged, continue with some changes, and if Congress envisioned the program to operate indefinitely … The FCC did not vote to eliminate the E-Rate program, and no school or library will lose E-Rate support as a result of the vote the FCC took in June … the NPRM and FNPRM ask the tough questions necessary for protecting our kids online and ensuring the FCC continues to be a good steward of the E-rate program. Responsible governance sometimes means asking whether a program continues to serve its purpose, is still consistent with the statutory goals provided by Congress, and whether there is a need for large-scale changes.”

When Calascione says “protecting our kids online,” he refers to the NPRM/FNPRM’s lengthy exploration of the effects of screentime on students, and the potential for funding being tied to a school district limiting its students’ screentime. While that aspect of the FCC scrutinizing E-Rate is likely to gain widespread attention from the general public, other aspects of the commission’s scrutiny have the potential to significantly affect the cabling and ICT professionals who have carried out E-Rate-funded projects and plan to continue doing so. Specifically, paragraph 19 of the NPRM/FNPRM states, “As the E-Rate program has worked to expand connectivity rates across schools and libraries, we note that demand for program funds has consistently fallen under the cap in recent years, while the program’s annual funding cap has steadily increased to account for inflation each year … We seek comment on the reason for program demand consistently falling below the program cap. Do schools and libraries have other connectivity needs outside of the current scope of the program?” It adds that for the funding year 2025, applicants requested $1.418 billion in funding for category two services.

Elsewhere, the NPRM/FNPRM states “virtually all schools report having broadband connectivity and Wi-Fi. In establishing the program in 1996, Congress was addressing a specific problem: limited access to advanced telecommunications and internet services in schools and libraries. Given the substantial expansion of broadband access in schools and libraries over the past three decades, we seek comment on whether and to what extend the E-Rate program has fulfilled that mission and whether continued funding is consistent with Congress’s original objective. Has Congress’s directive in section 254(h) of the Communications Act been satisfied? Should the E-Rate program be limited or sunset to reflect today’s extensive connectivity rates? … Does the Commission have the authority to limit or sunset the E-Rate program? At what point should policymakers conclude that the program’s core objective has been achieved?”

Consultants in the Crosshairs

Calascione’s July 29 statement is factually correct: No action already taken by the FCC will either eliminate the E-Rate program or cause schools and libraries to lose E-Rate funding. But the language and tone of the FCC’s NPRM/FNPRM makes it clear that the commission is questioning whether the current beneficiaries of E-Rate are worthy of continued funding.

A separate section of the NPRM/FNPRM addresses the role consultants play in E-Rate projects, and expresses the FCC’s desire to define such a consultant, require certification, and create a registration database of these professionals. The FCC does not outright accuse consultants of operating under a conflict of interests, but it does “propose to bar applicants and service providers from entering into consultant fee arrangements based on a percentage of the E-Rate contract or funding application amount, and to amend section 54.516 of the Commission’s rules to clarify the type of consultant-related documents applicants and service providers must keep to show compliance with our rules.”

The FCC later says of percentage-based fees, “In general, these types of contracts are contrary to the efficient use of limited funding as they can both wrongly incentivize a consultant or consulting firm to encourage applicants to require more E-Rate funding than needed and raise questions about whether E-Rate dollars are being used to pay for ineligible services, i.e. consulting fees. We therefore seek comment on a strict prohibition on applicants and service providers from entering into any fee arrangement with their consultant that is based on a percentage of the consultant’s E-Rate contracts with and/or disbursements to the applicant and/or service provider they represent.”

Comment Period is Open

Anyone can submit comments to the FCC for a period of 60 days after the NPRM/FNPRM is recorded in the federal register. From our research, it appears the document was recorded in the register on June 25. The Save Our E-Rate campaign dedicates a page to recommendations and instructions for filing comments. You can submit a comment with the FCC here. You can use this page to search for comments filed with the FCC.

We at Cabling Installation & Maintenance will continue to follow developments with the E-Rate program, and report them to you as we learn them.