How to improve the e-Rate

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:

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