Good and bad comes with new E-rate program

Good and bad comes with new E-rate program

(Wash., D.C.) Districts nationwide stand to lose financial support for a host of telecommunications services under a new federal plan that shifts resources but provides faster, wireless Internet connectivity to more schools.

No new money is being offered under the proposal to bring greater broadband capacity to schools that need it – said to be three out of every five. Discounts now given to districts and libraries for cellular and landline telephone systems, as well as some other services, will instead be offered strictly for Internet and Wi-Fi installation under changes being made to the Federal Communications Commission’s E-Rate program.

“They’re really talking about a reallocation of money focusing on broadband and making sure that they can get it all the way to the students in the classroom,” said Winston Himsworth, founder of E-Rate Central, a New York-based consulting firm that helps school districts navigate the murky waters of the program’s complex application process.

“The focus is: ‘Let’s get the broadband there; let’s meet the goals of the president’s Connect Ed initiative and, at least from [FCC chairman Tom Wheeler’s] view, let’s see if we can do it within the existing budget,” he explained

That budget – between $2.25 billion and $3 billion annually – isn’t enough to meet the $5 billion-and-growing need of the nation’s schools, faced with transforming classrooms to support project-based digital learning aligned to new national standards and computer-aided assessments.

Work to modernize the E-Rate program, established in 1998, began more than a year ago following the launch of President Barack Obama’s Connect Ed initiative – a plan to bring a gigabit of bandwidth for every 1,000 students to 99 percent of schools within the next five years. But the proposal came without a specific funding allocation.

Currently, discounts for schools and libraries are supported by a fee, collected from all telephone users. But rather than lift a 16-year cap on the fee to create more revenue, Wheeler has proposed making some services ineligible under the program and transferring that credit to districts for broadband and Wi-Fi connectivity.  

“Three out of five schools in America lack sufficient Wi-Fi capability needed to provide students with 21st century educational tools,” Wheeler said in statement issued Friday. “As currently structured, E-Rate in past years has only been able to support Wi-Fi in 5 percent of schools and 1 percent of libraries. Last year, no money was available for Wi-Fi.”

The draft proposal, the chairman said, commits at least $1 billion in funds to support Wi-Fi networks that will connect over 10 million school students wirelessly in 2015. The plan also allocates another $1 billion for 2016.

Other proposed E-Rate changes in Wheeler’s draft modernization order set aside provisions to ensure rural schools receive adequate Wi-Fi funding along with phasing out funding for non-broadband services, such as pagers and dial-up phone systems.

According to Himsworth, other “legacy” services likely to be phased out of the program include voice, web hosting and cellular plan services as well as internal equipment – email servers and web servers.

“Just equipment to distribute high-speed data into the classroom would become eligible,” he said.

Up to now, said Himsworth, E-Rate funding has been distributed first to applicants needing Priority I services – the infrastructure needed to bring telecommunications and Internet to a site. Whatever was left over was awarded for Priority II projects – the wires, hubs and switches needed inside a school building to carry the signal to students’ and staff’s devices.

Wheeler’s proposal, said Himsworth, is set to be voted on July 11 by the FCC and isn’t likely to change from its current form, despite a huge outcry from school and industry officials who argue that the plan should include additional funding.

The National Education Association, for example, has criticized the plan for falling “drastically short of providing for the needs of students, educators and school districts.”

Some of the other changes to the E-Rate program, according to a blog by Hilary Goldmann, senior director of governmental relations for the International Society for Education in Technology, include:

  • Transforming the Priority II (internal connections) program, which receives support only after all Priority I applications are satisfied, into Category II, with its own permanent, protected funding stream. In each of the first two years after a final order, the FCC would provide $1 billion for Category II using the $2 billion reserved in E-Rate bank accounts that it believes it can now safely disseminate to applicants. Although Wheeler estimates that it would take a full five years to deploy robust wireless internal connections to all applicants, the plan identifies sufficient funding for only two of those five years.
  • Under the new Category II, the top tier discount rate would be 80 percent, meaning that the very poorest districts would face a doubling of their contributions to the costs of internal connections services.
  • Schools would no longer have their own discount rates but would use their districts’ average discount rates. This sets up some significant windfalls for the wealthiest schools in relatively poor districts by raising their discount rates and conversely hurts the poorest schools in wealthier districts by lowering their discount rates.
  • While all applicants would have to apply for Category II support in the same manner as before, they would do so under a per capita cap, which the commission would set at $150 per student. Low population schools and libraries, defined as those with 40 or fewer students, would receive at least $6,000 in Category II support. This formula may do significant damage to urban schools as it provides no boost to account for higher labor and installation costs. Moreover, the very low formula floor distribution may make it impossible for many rural schools to deploy high-speed wireless broadband to their classrooms.
  • Schools and libraries could receive their per capita allocation over a five-year period. This change would essentially reduce the current “two-in-five” rule, under which schools and libraries can only receive internal connections twice in a five year period, to “one-in-five.”
  • If demand for Category II support exceeds available funds, applications would be funded in rank priority order. Many schools and libraries may have to wait a full five years before gaining access to their allocations. For example, a 100,000-student district with an 80 percent average discount rate would be eligible for a base-level allocation of $15 million. Because of its 80 percent discount, that number would be reduced by 20 percent, leaving the district with a total of $12 million. This $12 million is all that the district would receive in Category II internal connections support over a five-year period.

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