The Federal Communications Commission (FCC) has decided not to change the priority for eRate discounts in Program Year Four, which began July 1. But the agency did extend the deadline for using funds for internal connections and other “nonrecurring services” from June 30 to September 30 for this year’s applicants, as well as all future program years.

The FCC’s June 29 ruling means that only applicants who qualify for 90-percent eRate discounts will receive funding for their internal connections this year—the wiring, routers, hubs, switches, and file servers necessary to bring internet access into classrooms.

But even these 90-percenters won’t get everything they asked for. Because of the extraordinarily high demand for eRate discounts this year, the Schools and Libraries Division (SLD) of the Universal Service Administrative Co., the group that administers the eRate, estimates there will be enough money to fund only 73 percent of each such applicants’ requests.

Schools and libraries submitted 37,188 Year Four eRate applications requesting a total of $5.195 billion—more than twice the amount available, which is capped at $2.25 billion. In light of this huge demand, the FCC on April 30 proposed changing the priority for discounts so that schools and libraries not receiving funds for internal connections last year would have priority this year.

The existing rules for administering the eRate say requests for telecommunications services and internet access have first priority. After these requests have been met, any leftover funds are distributed for internal connections—on a prorated basis—to the neediest applicants first. That means each school or library in the highest discount band would receive only a portion of the funds it requested if there is not enough money to fund all such requests.

“If applicants were to receive only a pro rata portion of the support they requested, schools and libraries might not receive sufficient funding to permit completion of a useful system of internal connections. As a result, schools and libraries would be in a position of hiring contractors to perform only a portion of an internal connection project,” the FCC said in its April 30 Notice of Proposed Rule-Making.

As a solution, the FCC proposed giving priority to requests for internal connections made by schools and libraries that did not receive funding commitments for internal connections during the previous funding year.

In its notice, the FCC said it was concerned that some applicants eligible for 90-percent discounts might receive funding for multiple years, while others that are also economically disadvantaged—but to a lesser degree—might not receive any discounts at all.

While most applicants and education groups filing comments about the proposed changes agreed with this point, they expressed concern that revising the rules of priority after the application process had closed wouldn’t be fair.

“eRate funding is closely tied into our annual budgeting process,” wrote officials from the St. Louis Public Schools. “Had we known of the change in rules prior to the application deadline, other arrangements could have been made to cover ongoing internal connections costs.”

Another consequence of the proposed change would be that “schools and districts that received only minor funding for internal connections in Year Three would be disallowed any access to funds in Year Four,” St. Louis officials wrote. “This does not ‘fix’ the problem.”

“We’re pleased that the FCC didn’t make any changes concerning Year Four funding,” said Mary Conk, legislative specialist for the American Association of School Administrators. “It’s not fair to change the rules mid-game.”

If school districts had known about the changes ahead of time, they could have applied for eRate discounts specifically for the buildings that hadn’t received funding before, Conk said.

While declining to make a change in Year Four, the FCC said it would consider making changes to the eRate’s rules of priority for future years. The agency cited comments from some school districts—including Evergreen School District #50 in Vancouver, Wash.—arguing that a change to the rules would ensure that all needy schools receive eRate discounts, not just those in the 90-percent discount band.

Extra time for wiring projects

The FCC also decided to permanently change the deadline by which nonrecurring services, such as wiring projects, must be implemented from June 30 to September 30. In making this change, the agency noted that it had extended the deadline each year since the beginning of the program anyway, giving applicants more time to install equipment during the summer months when school is not in session.

The FCC also established four scenarios in which districts could extend the deadline beyond September 30 for the implementation of nonrecurring services:

    1. Applicants who receive their funding commitment letter after March 1 of the funding year;

    2. Applicants who are authorized to make changes to their services or providers on or after March 1 of the funding year;

    3. Applicants whose service providers are not able to complete implementation for reasons beyond their control; and

    4. Applicants whose funding is delayed because of an investigation into program compliance.

If one of these criteria is met before March 1, the applicant would have until September 30 of that year to complete implementation. If one of the criteria is satisfied after March 1, the applicant would have until September of the following year to complete implementation.

Conk said the decision to extend the deadline for using funds for internal connections and other nonrecurring services was a “natural one,” because school districts have needed more time to complete these projects since the eRate began.


Report and Order, FCC 01-195

Further Notice of Proposed Rule-Making, FCC 01-143

Schools and Libraries Division

American Association of School Administrators