How to improve the e-Rate

Rather than separate priorities for telecomm services and internal connections, the updated eRate program should have just one priority: connecting students.

The United States is credited with bringing forth some of the greatest technologies of our time—technologies that are being used today to raise the standard of education for people of all ages, in all circumstances, all around the globe. As a nation, we must take steps to ensure that students and teachers in the United States can benefit from these same resources.

Last month, President Obama announced the ConnectED initiative, a vision to bring high-speed internet access to 99 percent of our nation’s students within five years. This is a worthy and attainable goal.

A crucial component of the president’s vision is the need to update and reform the federal eRate funding program, which is overseen by the Federal Communications Commission (FCC). eRate funding reform is desperately needed. The program was created to help our schools and libraries get online. And it has been a success: Today, 16 years after the inception of the eRate, most schools and libraries are online; but their computer networks—and their budgets—are straining to meet the demands placed on them.

Students are bringing electronic devices onto campuses like never before. Personalized learning systems that support and augment the work of classroom teachers are no longer ideas for the future. These tools, and others like them, are here now—and eRate funding is positioned to help provide the bandwidth and wireless LAN infrastructure necessary to leverage these tools to revolutionize the work taking place in every single classroom and library nationwide.

Yet, the eRate’s current framework bears the marks of the 1997 era in which it was launched. Back then, dial-up internet access was the norm, and the Wi-Fi Alliance was still two years from being born. (Yes, there was a day when we did not have Wi-Fi internet access.) In 1998, schools reported spending $15 per student in annual telecommunications and internet expenses. Today, that number is $50 per student and rising—an increase of 300 percent. Meanwhile, available eRate funding has increased a meager 6 percent.

Further compounding matters, a small percentage of “big spender” applicants want to consume the entire fund.

For example, in 2013, one 29,000-student suburban California school district requested as much funding for telecomm and internet as all of the schools and libraries in Nevada combined. Or consider the case of the country’s largest school district, New York City. In 2013, it requested one-quarter of the entire eRate fund for itself, even though its students comprised less than 2 percent of the country’s total student population. Of course, 21^st-century tools and connectivity can be pricey, but the mission of the eRate program is to support all schools and libraries, not just a select few.

The FCC is aware of these challenges and has been considering new rules to update the eRate. The president’s announcement has accelerated the process. Fortunately, the FCC does not need to reinvent the program to rejuvenate it, and—what’s more—it can do so without Congressional involvement. All the FCC has to do is (1) use its existing authority to add more money to the eRate fund, and (2) protect and stretch those funds by placing a reasonable limit on the amount of eRate discounts that it will give to an applicant in a single funding year.

Additional funding

There is no question that more money is needed. In both 2012 and 2013, eRate applications totaled about $5 billion per year. This figure does not represent all of the demand for technology in schools, nor is this figure likely to remain the same as the demand curve continues to climb. (In our current environment, I estimate that at least $6.8 billion is needed each year.)

At the same time, I see opportunities to bend the curve downward through cost savings and reduced expenses. There are plenty of good examples to emulate, like the School District of Philadelphia, for example, which spends two-thirds less than the average school to connect its schools because of a forward-thinking fiber-optic network; or schools in Nebraska that benefit from a competitively-bid statewide contract, with negotiated rates reduced on average 98 percent for internet access and 39 percent for wide-area networks. Clearly, there are lessons to be learned from frugal applicants like these who are delivering speedy connections to their students without breaking the bank.

Combining these curves—the growth in demand, tempered by savings from new technologies, competition, and economies of scale—I have proposed that the FCC permanently increase the eRate program from $2.38 billion per year to $4.50 billion per year, with an ongoing inflation index. This change would be a significant step in the right direction.

Funding limits (and more choices) for individual applicants

But more money, alone, is not enough to connect 99 percent of our nation’s students. Applicants must be given the opportunity to choose cost-effective solutions that meet their specific needs and priorities, and the big spenders, who can be found in every part of the country, must be reined in. For this reason, I have proposed that the FCC eliminate its current funding “priority” system, which was not part of the program originally, and replace it with common-sense limits on the per-student amount of funding a single applicant can request in a given year.

Here’s how this would work:

Every applicant would receive a flexible, per-student budget they could spend however they like. This budget would be higher for schools located in rural areas, where telecomm service is more expensive to provide. Under this proposal, all schools and libraries would be empowered to choose for themselves how best to connect their users to the internet. The neediest applicants still would receive the highest discounts, but no longer would anyone be allowed to request a disproportionate amount of funding.

By eliminating the priority system, and without making any changes at all to the eRate application process, eligible services list, or existing paperwork requirements, the FCC can accomplish all of the following, and I sincerely hope that it does.

Resume eRate discounts for Wi-Fi and other on-campus infrastructure at all school sites.
Allow schools, as the eRate envisioned originally, to choose for themselves the services on which they will receive eRate discounts.
Give schools better funding predictability, and reward those that use the funds most effectively.
Keep the current 90 percent to 20 percent eRate discount rate matrix, and not reduce the highest rate.
Ensure that all schools and libraries can participate fully in the program every year, not just a select few, and not just once every five years.
Help to ensure an equitable distribution of eRate funds, with more funding going to communities with greater need.

I support President Obama’s vision. Join me in letting the FCC know that there is support for eRate reform and that the updated eRate program should have just one priority: connecting students.

John D. Harrington is the CEO of Funds For Learning LLC, a consulting firm specializing in the eRate program. For more information on how you can take action, contact reform@fundsforlearning.com.