On November 3rd, the FCC issued Public Notice NBP #15, Comment Sought on Broadband Needs in Education, Including Changes to E-Rate Program to Improve Broadband Deployment. Funds For Learning has reviewed 37 documents filed with the FCC in response to the Public Notice and provide this analysis of the comments.

While this request for comment covered multiple areas in terms of broadband deployment, the majority of the respondents commented on the same question: How can the E-rate program be leveraged to improve broadband development?

The overwhelming majority of recommendations made by commenters addressed one of two categories: 1. Increasing Program Funding and 2. Reevaluating eligibility for sites and users.

Increasing Program Funding

Simply put, the funding cap isn't large enough and cost is the greatest deterrent for an applicant. There is evidence that at the current growth rate of the E-rate program, the $2.25 billion cap will be inadequate to cover all of the P1 demands, let alone any P2 requests in the near future. In order for there to be improvement in broadband development, adjustments for inflation and more consistency in the funded discount thresholds of P2 requests will be needed.

Inflation

The most frequently quoted fact in the comments sited that the funding pool for E rate reimbursements has remained stagnant at $2.25 billion since the program's inception. The Wisconsin Department of Public Instruction points out, "The original $2.25 billion was based on estimates that are now at least fourteen years old.(1)  The fact that the program consistently receives funding requests far more than $2.25 billion indicates the erroneous nature of the original estimate. The funding demand for 2009 for Priority One services was $2.04 billion, close to the $2.25 billion cap."

According to the CPI inflation calculator on the Bureau of Labor Statistics website estimates that it would take $3.03 billion today to provide the same amount of buying power as $2.25 billion did in 1997. By not adjusting the funding cap, schools and libraries have lost much of that initial purchasing power. The cost of implementing broadband connectivity is a major deterrent to applicants.   

Rural Costs

Another concern regarding cost as the largest deterrent in broadband connectivity is the additional cost incurred by rural locations to secure the services. In many cases in rural areas, the number of potential service providers is small, and in some cases only one. In these instances, the provider's infrastructure may not be equipped or they may be unwilling to deploy the necessary the advanced services of the applicant. In order for the schools to receive the services needed for their broadband connectivity goals, they have to meet the additional monetary demands that arise by providing the services to the area. Implementing high cost broadband projects on only the potential of receiving funds is too great of a risk for rural applicants to take. This is especially true for the 90% discount level applicants that still have concerns about meeting the remaining 10% based on the disparity of costs for broadband connectivity to rural areas compared to urban applicants. According to the Oregon Department of Education, rural areas simply cannot afford the installation.  "[I]n rural areas, installation of Fiber can reach $1M or higher. Even at the highest e‐Rate discount levels, most districts cannot afford $100K, or even $10k for Fiber installations[.]"

Varying Chances for Funding on P2 Services

Another common argument addressed the inability for applicants to receive funding for P2 requests. The discount threshold varies widely year-to-year and it is difficult for some applicants to take the risk with only a hope of potential funds. The risk of not receiving funding coupled with the opportunity costs associated with the application process serve as a barrier to applying for P2 funding for many applicants.

While most respondents disapproved of any changes to the current system that would be based on any "catch-up" criteria, most argued that the best way to help schools implement broadband technologies was simply to raise the funding cap. Adding any additional entities to the program or simply rearranging the funding the priorities without raising the funding cap will only make the existing users share of an already small pot even smaller.  

Reevaluating Eligibility

While the rules have remained fast on the entities eligible for E-rate funding, technology has allowed education to move beyond the confines of a traditional brick and mortar school.  However, many feel that the E-rate program seems more interested in funding the school building, instead of education.

The Emerging E-classroom

The advanced availability to internet access and affordable end-user devices such as laptops has helped transform the educational landscape from "the students come to the school" to "the school comes to the students". Wherever a student can access internet, there can be education.

Whether the student is in a traditional classroom, at home, or even at the local coffee shop, connectivity access has caused many to rethink the traditional ideas of education. Even traditional brick and mortar facilities are experimenting with the "blended learning" model where students attend traditional school courses on site, but can receive additional instruction online. However, both E-classrooms and blended learning structures, depend on affordable broadband access for the students and teachers and with the current setting, these services are ineligible for E-rate funds.

Educational Purposes

The proponents of this emerging E-classroom model argue that the definition of "educational purposes" is too narrow. Should it matter where the student is sitting as long as instruction is happening and there are results to support the effectiveness of the program?

While there have been examples of successful online only educational models, there are questions that would need to be addressed before any expansion. Two challenges that would arise would be that of CIPA compliance regulations that were designed primarily with the idea of students in a traditional classroom and determining discount rates within a structure that was designed with the idea that every student will be in the same district.

The current rules limit the ability for a school to expand broadband access to the broader community. Along with limitations on expanding the broadband coverage to the community, the limitations on "eligible users" constrains schools abilities to open their doors to the community. Most of the comments supported opening the educational facilities after hours for community use such as parents using the network during school sponsored events, adult education, non-profits, job fairs, online college courses, homework support, etc., but the current cost and cost allocation requirements act as a major deterrent in major broadband connectivity projects. There are many who support the idea of by allowing community usage with the idea that the local governments should help with the costs. Having this additional monetary support may encourage schools that had previously shied away from expensive broadband projects to invest in greater broadband connectivity projects.

However, in order for schools to expand broadband coverage to non-traditional students and communities, the FCC would need to reevaluate their definitions of educational purposes and eligible users.

Conclusion

While one shouldn't doubt the good intentions of the FCC and their desire to expand broadband connectivity to all schools and surrounding communities, questions remain regarding how this would work given the current structure of the E-rate program. There has been a consistent lack of funding for P2 requests and at the given rate of growth within the program, within the next 5 years the $2.25 billion will not be enough to fund P1 requests. Without a funding cap that adjusts for inflation, the idea of expanding P2 services doesn't appear viable. The funding cap should be increased to at least $3 billion in order to have the same buying power that the initial $2.25 billion had at the program's inception.

In regards to reevaluating the current definitions of educational purposes and eligible users, the FCC would need to offer a clear and concise outline of program regulations regarding any proposed community usage of a schools broadband connectivity. If they move forward with implementing changes without adjusting the voluminous and often confusing cost allocation and other program rules, they are not likely to see the increase in broadband connectivity -which would defeat the initial purpose of the proposed rule making in the first place.


(1)   The cost estimate was based primarily on the 1995 report from McKinsey & Company titled, "Connecting K-12 Schools to the Information Superhighway" ("McKinsey Report").