E-Rate

The E-Rate program is the largest federal education technology program and has been helping schools and libraries around the country connect to the internet since 1997. E-Rate was authorized under the Telecommunications Act of 1996 and is overseen by the Federal Communications Commission (FCC).

Over the last year, the FCC has worked to modernize and update the E-Rate program. Prior to the modernization effort, the E-Rate program worked like this:

  • Schools and libraries submitted requests and received discounts ranging from 20-90 percent (based on poverty level) for telecommunications services and internet access (called Priority I services) and internal connections/wiring (called Priority II services).  
  • All Priority I requests were funded first and then any remaining funds were used to fund Priority II requests.
  • The E-Rate program was subject to an annual cap of $2.25 billion, which has remained unchanged since the program’s inception, save for an annual adjustment based on inflation that started in 2010.

Over the years, the E-Rate program has played a major role in increasing public school classroom internet connections, from 14 percent in 1998 to more than 95 percent today. The E-Rate program has also helped low-income, minority and rural students gain near equal access to the internet as their peers around the country. Despite these impressive results, E-Rate’s mission is incomplete. School bandwidth needs continue to increase as educators and students capitalize on cutting-edge, but bandwidth-intensive, digital applications and services. While nearly all classrooms are now connected, many have inadequate bandwidth to meet instructional needs.

One of the major challenges the E-Rate program faces now is the inadequacy of the $2.25 billion annual funding cap. For the last several years, demand for E-Rate funding has exceeded the level of available funds. For example, in funding year 2014, the inflation adjusted cap was $2.41 billion. Total requests equaled $4.83 billion, with Priority I requests alone coming in at $2.63 billion. That left no money to fulfill any of the requests for internal connections support (i.e., Priority II services).

Many parties realized the status quo was no longer acceptable. In June 2013, President Obama announced the goal of connecting 99 percent of students to high-speed broadband in the next five years. The Federal Communications Commission (FCC) then quickly issued a Notice of Proposed Rulemaking (NPRM) asking the public for advice on how to modernize the E-Rate program to help achieve this goal. ISTE took a clear stand and outlined its priorities on E-Rate modernization through its comments to the FCC. ISTE argued that E-Rate has been extremely successful and that the E-Rate cap must be raised from 1998 funding levels to support the 2014 broadband needs of schools and libraries.

More important, educators across the country made their voices heard at the FCC. Through ISTE’s website, nearly 600 educators — teachers, chief technology officers, principals, superintendents and more — from 45 states, D.C., Puerto Rico, and the Virgin Islands submitted comments in support of the E-Rate program. These comments highlighted the importance of E-Rate to schools big and small, urban and rural, and they underscored the need for additional funding to meet the high-speed broadband connectivity and internal connectivity needs of digital age classrooms in order for students to be college and career ready.

As the date for an FCC order on the E-Rate proceeding approached, ISTE kept up the pressure on the FCC to raise the E-Rate cap through letters to the FCC and a Twitter campaign to #RaiseTheErateCap. When FCC chairman Tom Wheeler first announced the outlines of his planned E-Rate order, ISTE was very concerned as the proposal included no increase to the cap, service eliminations, a plan to set aside $1 billion per year for five years for Wi-Fi internal connections without a clear way to pay for years 3-5 of the plan, the possibility of losing funding for internet connectivity to pay for the Wi-Fi plan, and lowering the top discount level for internal connections requests from 90 percent to 80 percent.

ISTE also heard from many educators —  in rural areas — who were worried that their voices were not being heard, that the low per-pupil based allocation they would receive for Wi-Fi connectivity would not be sufficient and would be less than the funding they would lose from the phaseout of support for voice services. They told us that internet connectivity was crucial and that Wi-FI — while important — should not receive funding at the potential cost of losing support for broadband to the school itself.

At ISTE 2014, educators voiced their support for the E-Rate program and made their concerns loud and clear. Attendees had the chance to hear directly from FCC staff at an informative session, and 1,500 educators signed a petition in support of raising the E-Rate cap, which was delivered to Commissioner Jessica Rosenworcel in person at the closing keynote.

When the FCC voted on July 11, 2013 to approve a path forward for the E-Rate program, it was clear that the voices of educators and the needs of schools and libraries were heard. The new E-Rate order improved on the initially floated proposal.

  • First, the order includes a further notice of proposed rulemaking (FNPRM) that will specifically seek comment on the long-term funding needs of the E-Rate program. This provision is a major victory for ISTE and its members as it mandates that the FCC will consider increasing the E-Rate cap.
  • Second, while the order still phases out support for voice services (reducing support by 20 percent per year over five years leading to complete elimination) and immediately eliminates support for other nonbroadband services, such as email and webhosting, the order also protects funding for internet access services. The FCC made it clear that requests for internet access services (now called Category 1) will be funded first and fully, and these funds will not be raided to pay for the Wi-Fi program.
  • Third, rather than permanently altering Priority 2 into a per-pupil, Wi-Fi-focused structure grounded in uncertain financial stability, the order creates a temporary two-year Wi-Fi program (now called Category 2). Although ISTE is still concerned about the effects of a per-pupil formula on small and rural schools, we are pleased that the chairman heard our concerns and raised the proposed minimum (floor) funding level for small schools.
  • Fourth, the order puts the top discount level for this temporary program at 85 percent, 5 percent higher than the initial proposal, lessening the blow to our poorest schools.
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