FCC Adds $2 Billion in Funds for High-speed Internet in Schools and Libraries

By Peter Bernstein February 04, 2014

It could be called a ramping up of a “Future is Now!” approach. Coming hard on the heels of President Obama’s ConnectED initiative which set a target of bringing high-speed Internet access to virtually every school in the U.S. in the next five years, and the inclusion of the need to increase efforts to give school children the tools they need to be competitive in a connected world in the president’s State of the Union speech, the Federal Communications Commission (FCC) announced it will invest an additional $2 billion over the next two years to support broadband networks in U.S. schools and libraries.

As noted by the FCC, this represents a doubling of investment in broadband and will connect 20 million students in at least 15,000 schools to high-speed Internet access.

FCC Chairman Tom Wheeler said, “This investment is a down-payment on the goal of 99 percent of America’s students having high-speed Internet connections within five years. As we consider long-term improvements to the program, we will take immediate steps to make existing funds go farther, significantly increasing our investment in high-speed Internet to help connect millions of students to the digital age.”

Where is the money coming from?

Given tight budgets, a logical question to ask is where is the funding for this coming from?  The good news is that despite current congressional inquisitiveness about FCC expenditures to increase staff in areas that regulate what are seen as old technologies and a request for an accounting of the use of outside contractors, increasing broadband access to schools and libraries has strong bi-partisan support—a rarity these days. 

The answer to the question above is that the funding for new investments will come from reprioritizing existing E-Rate funds to focus on high-capacity Internet connectivity, increasing efficiency, and modernizing management of the E-Rate program. “We will take a business-like approach to the management of the program, identifying opportunities to improve the ways funds are deployed and streamlining the process for schools and libraries,” Chairman Wheeler said.

For those not familiar with E-Rate, it was established in 1996 to get educational institutions on what was then lovingly called, “The Information Superhighway.”  The program currently provides $2.4 billion to schools and libraries annually for communications services, and has helped connect virtually all U.S. schools and libraries to basic Internet.

The E-Rate program is administered by the Universal Service Administrative Company under the
direction of the FCC. Specifically, USAC is responsible for processing the applications for support,  confirming eligibility, and reimbursing service providers and eligible schools and libraries for the
discounted services. USAC also ensures that the applicants and service providers comply with the E-Rate
rules and procedures established by the Commission.

The challenge be addressed is the it has become clear that basic connectivity is not enough. There is a consensus among educators, economists and politicians that to be competitive going forward two digital divides.

The first is the one that has made headlines for decades about the gap between those who can afford broadband and those who either can’t or don’t have access because they live in “high cost” areas.  The second is the one that has grabbed recent headlines regarding the fact that the average U.S. connection speeds rank well below that of other developed countries.    

Interestingly, the reason for the “re-positioning” of funds is that today only about half of E-Rate funds go to true high-speed Internet connections. Last summer, the Commission began a proceeding to explore ways to modernize the E-Rate program.  And, in one of his very first actions, Chairman Wheeler launched a “top to bottom review of the program” to assure E-Rate funds were being spent where they could provide maximum value, i.e., upgrading connectivity for schools and libraries.

In its discussion of the additional investment, the Commission noted that this new initiative is just one element of a comprehensive approach to modernizing E-Rate. They say the goal is to also streamline the application process, increase transparency, and provide more assistance to schools and libraries to help them lower the prices they pay.

Mindful of the watchful eyes in Congress, the Commission was also careful to explain that it intends to “ramp up oversight and enforcement within the program to ensure every dollar that is intended to reach a school or library gets there.”

This is an opening salvo in a process. Details still remain as to what part of network infrastructure will get the new funding and when. This is going to be really interesting based on what the definition of “basic” broadband in the 21st century gets defined as, and which areas of the country as behind (and how far) in terms of meeting whatever basic E-Rate speeds are proscribed.

If nothing else this is a good start. In addition, the tech industry is embracing ConnectED with pledges of millions of dollars from the likes of Apple, AT&T and Sprint already having been pledged with a lot more undoubtedly on the way.

Edited by Cassandra Tucker
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