There is a lot of discussion right now about the math behind FCC Chairman Wheeler’s proposed Category 2 funding cap system. Under this proposal, the E-rate program would remain a discount program, providing Category 2 support to all schools, but discounts would be capped for each applicant based on their discount rate and enrollment. Wheeler’s new approach would more equitably distribute E-rate discounts by reinstating a discount-based, sliding scale of support for internal connections and basic maintenance. In short: the nation’s most economically challenged schools would receive the most support – yet all schools would receive some support for their on-campus connectivity needs.

As shown in this Funds For Learning analysis, under the Wheeler method, but using the current discount matrix, schools in the 80% to 90% discount band would, as a group, qualify for discounts of up to $481,035,797 in Category 2 discounts in 2015. That is a far cry from the $0 these same schools received in 2013.

The proposal being floated goes a step further and reduces discount rates, lowering the top rate from 90% to 80%. Under this revised Category 2 discount matrix, the top discount-rate schools would still, as a group, qualify for up to $424,460,360 in E-rate discounts.

#####

It is time to retire the FCC’s Priority system and replace it with something that is more predictable and equitable. On its best days, the Priority System rarely supported on-campus connectivity for more than a small percentage of schools. Eliminating the priority system and replacing it with the new Category system is definitely a step in the right direction.