Lawmakers seek to overhaul e-Rate

The new bill would provide student vouchers for internet access.
The new bill would provide student vouchers for internet access.

A new House bill seeks to overhaul the e-Rate, which provides telecommunications discounts to eligible schools and libraries, to make it a more useful tool in the federal government’s National Broadband Plan.

Introduced Feb. 9 by Rep. Edward Markey, D-Mass., and co-sponsored by Reps. Lois Capps and Doris Matsui, both California Democrats, the “e-Rate 2.0 Act of 2010” (H.R. 4619) would allow the e-Rate to help bridge the digital divide in students’ homes, fund electronic books in schools, and adjust its coverage for inflation. Under Markey’s proposal, Head Start programs and even community colleges would be eligible for some funding.

“This critical bill will help narrow the digital divide by increasing the range of the latest telecommunication services and devices accessible to low-income students, including residential broadband services and eBooks incorporated into students’ classroom lessons,” said Markey in a statement. “The original e-Rate bill that I [co-] authored has largely fulfilled its mission of linking up schools to the web. The fact that only 14 percent of K-12 classrooms had internet access at the time the 1996 bill was enacted, compared to more than 95 percent today, is a testament to that success. Now, with the expansion of the scope of technology, students need more than just web access at school, and our e-Rate 2.0 bill is intended to reflect those expanded needs.”

Bridging the divide

The bill would create a pilot program that would allow funding in the form of vouchers to eligible students from low-income families. The vouchers would be used to offset monthly service fees for home broadband service.

To be eligible, students would need to qualify for free or reduced-price lunches, attend secondary schools that receive support under the e-Rate program, and already have a computer at home.

The program calls for up to $500 million per year in funding for this pilot program, which would be in effect for five years.

The bill also calls for another five-year pilot program that would make Head Start programs and community colleges eligible for up to $150 million a year in e-Rate funding. Community colleges and Head Start programs would be selected based on their need, their “maximization potential of broadband use consistent with their educational mission,” and their “innovation with respect to use of broadband, web-based information and applications.”

Funding eBooks

The most innovative part of the new bill calls for up to $50 million per year in e-Rate funding to be used for secondary schools to adopt electronic textbooks.

Schools must show how eBooks would be incorporated into the curriculum, and implementation must be on a “technology-neutral basis.”

This pilot program would last four years. At the end of the third year, the Federal Communications Commission would produce a report to Congress assessing the value of the eBook pilot, based on metrics that would gauge electronic books’ affect on digital literacy and overall student learning.

Streamlining the e-Rate and accounting for inflation

If the bill becomes law, within six months the FCC would have to implement policies to simplify the e-Rate application process to improve program administration and minimize the burdens on applicants. These would include allowing applicants to apply for telecommunications discounts once every three years, instead of annually, and ensuring that schools “receive clear and current information regarding their application and the e-Rate program.”

Finally, the bill would provide for an inflation adjustment to the current $2.25 billion annual funding cap, so funding would increase with inflation.

Mixed reaction to the bill

Markey’s bill seeks to address several FCC proposals for leveraging the e-Rate to deliver broadband to more Americans. But reaction to the bill has been somewhat mixed.

“We appreciate Congressman Markey identifying ways to streamline the application process and to increase the $2.25 billion funding cap,” said Peter Kaplan, director of regulatory affairs for e-Rate consulting firm Funds For Learning, in an interview with eSchool News. “Most stakeholders certainly support increasing the cap, at a minimum, to keep up with inflation and continue to want to see more reform to help administrators have success in navigating the regulatory hurdles.”

Not everyone thinks the new bill will work.

“While I think the ideas brought up in this bill are worthwhile, I’m completely dumbfounded at the assumption Markey and others are making that e-Rate 1.0 actually worked,” said Geoff Daily, contributing editor for and editor of, a daily blog on the intersection of broadband networks, applications, and policy. “Do schools have enough bandwidth to meet their needs today? What about tomorrow? Can we declare mission accomplished? I’m here to say today that the answer to all of these questions is a resounding ‘no.’”

For Daily, measuring the e-Rate’s success based on how many classrooms are connected to the internet is the wrong way to look at things.

“The real question is, have we provided enough bandwidth for classrooms to be able to actually use the internet? … For any school in America to have nothing more than a T-1 line to serve its entire student body should be considered a national embarrassment.”

Daily says the other failure of the e-Rate is that it doesn’t do anything to bring down the cost of bandwidth. “Instead, e-Rate is designed to subsidize access to whatever infrastructure is currently available on whatever terms are currently offered,” he wrote on his blog. “That means you’ve got some schools paying more for a T-1 than others are paying to get 100Mbps over fiber. The biggest reason for this is that e-Rate as it’s currently set up can only be used to reimburse for the cost of service, not the cost of deploying new infrastructure. And yet, nothing in Markey’s e-Rate 2.0 proposal does anything to address these two fundamental flaws with e-Rate 1.0.”

Daily is referring to the fact that, under the program’s current setup, too few schools receive funding for internal connections—the wiring, routers, switches, and file servers necessary to bring internet access into buildings and classrooms. Internal connections are classified as “Priority 2” services under the e-Rate, while telecommunications services and monthly internet access fees are considered “Priority 1” services. But there is so little money left after funding has been committed for Priority 1 services that discounts on Priority 2 services don’t reach very far, leaving many schools unable to use the e-Rate to subsidize the cost of installing new network infrastructure.

Daily concludes that “before we worry about expanding e-Rate into new areas, we need to readdress what isn’t working at the core of the program; because without access to sufficient bandwidth at reasonable prices, nothing that we want to see with regards to broadband-enabled education will ever come to pass.”

Yet, others say Markey’s bill takes steps in the right direction.

“We applaud Representatives Markey, Capps, and Matsui for their introduction of the e-Rate 2.0 Act in support of bolstering federal support of broadband for educational purposes,” said Doug Levin, executive director of the State Educational Technology Directors Association, in a statement to eSchool News. “Since schools and libraries first began to receive telecommunications discounts in 1998, the e-Rate has been instrumental in increasing educational opportunities for all students, especially those from low-income and underserved communities. The move by Congress to reassess the program and strengthen it is most welcome. We look forward to the dialogue” that the bill will start.


H.R. 4619: e-Rate 2.0 Act of 2010

Funds for Learning

Geoff Daily’s blog post


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