FCC aims to simplify e-Rate, expand funding

New rules may impact schools' e-Rate funding.
New rules may impact schools' e-Rate funding.

The Federal Communications Commission (FCC) has proposed new e-Rate rules designed to simplify the program and bring discounts on networking services to more schools and libraries.

Among other actions, the FCC wants to index the e-Rate to inflation. That would result in the first increase in funding to the $2.25 billion-a-year program since it began more than a decade ago.

But executives attending the Software and Information Industry Association’s annual Education Technology Industry Summit in San Francisco expressed disappointment in the FCC’s proposal, saying it doesn’t go far enough in meeting schools’ needs.

Speaking off the record, one industry insider noted that a 3-percent increase in funding would yield only $67 million more in discounts next year, hardly enough to make up for years without an inflation adjustment–and especially when you consider that school budget cuts are expected to be even worse this fall.

The FCC also aims to make the e-Rate more user friendly by streamlining the application and competitive-bidding processes for telecommunications and internet services, as well as making it easier for schools to calculate their discount percentage.

For instance, schools would not have to submit a technology plan if they’re applying only for Priority One discounts on telecommunications services and internet access, as long as they are subject to technology plan requirements at the state or local level.

Also, schools that are bound by local procurements laws would not have to file a Form 470 request for Priority One services.

Under the FCC’s proposal, schools also would calculate their e-Rate discount by using the average discount rate for the entire school district rather than the weighted average for each building. This would make it easier for program administrators to calculate their discount rate: They’d simply take the total number of students in the district who are eligible for free or reduced lunches and divide it by the total number of students in the district. This rate would apply to all schools in a district.

Although this change would streamline the application process, it could penalize high-poverty schools within large districts whose overall discount rate is lower.

The FCC also seeks to change the definition of a “rural” school by using the Education Department’s National Center for Education Statistics’ (NCES) urban-centric locale codes.

“We propose that any school or library that is within a territory that is classified as ‘town-distant,’ ‘town-remote,’ ‘rural-distant,’ or ‘rural-remote’ by an NCES urban-centric locale code will be considered rural for purposes of calculating its e-Rate discount level,” the agency said, noting that rural schools receive 5 to 10 percent more funding in some discount bands.

In addition, the FCC proposal seeks to give schools more flexibility in deploying broadband services. It would provide full e-Rate support of wireless internet service delivered to portable learning devices that are used off premises, for instance, and it would provide greater flexibility to use low-cost fiber for broadband connectivity.

“We emphasize that this proposal only relates to support for internet access monthly service, and not the purchase of devices or equipment, such as mobile broadband cards, smart phones, or eBooks,” the FCC said. “This proposal, therefore, would allow e-Rate funding for internet access services, which are already eligible, to be used to facilitate learning both on and off premises.”

The FCC also seeks comment on whether it should let applicants receive support for the lease of fiber, even if unlit, from third parties that are not telecommunications carriers, such as municipalities and other community or anchor institutions–which would give schools more flexibility to choose the most cost-effective broadband solutions.

To ensure that more eligible schools and libraries receive e-Rate discounts on Priority Two services (the wiring, routers, switches, file servers, and other equipment necessary to bring internet access into classrooms), the FCC seeks comment on whether to establish a flat cap on funding per student, per district, for each funding year.

For example, if the cap were set at $15 per student, a school district that has 100,000 students would have a cap of $1.5 million in yearly funding for internal connections.

The agency also seeks comment on eliminating the 2-in-5 rule, which allows schools to receive funding for internal connections no more than twice in a five-year period.

Schools and libraries will have 30 days to comment on the FCC’s proposal once it appears in the Federal Register, and they’ll have 45 days from this date to submit replies to the comments of others.


FCC Notice of Proposed Rule Making (PDF)

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