As a part of a comprehensive reform of the E-rate program designed to sharpen its focus on broadband delivery, the FCC began phasing out support for all voice service at a rate of 20% per year starting in Funding Year 2015.  Combined with the immediate drop in support for legacy services, telephone service features, and cellular data, the new rules had a significant impact on applicants nationwide.

Fast Facts

  • Approximately 3,000 applicants nationwide received no support for voice service in FY2015 due to discount rates at 20% or below.  Assuming no change in discount rate for FY2016, this number will grow to over 8,600 as the phase-down affects applicants at 40% and below.
     
  • Pre-discount requests for voice service in FY2015 totaled $946 million, with approximately $516 million in discounts requested.  Assuming static demand for voice services in FY2016, the requested amount will be approximately $327 million, a reduction of around $190 million.
     
  • In total, applicants submitted 60,566 funding requests (FRNs) for voice service in FY2015.  This represents 43% of the total FRNs submitted in FY2015, and 60% of the total Category One FRNs filed.  Dollars requested for voice service represent approximately 23% of total Category One funds requested.
     
  • As of August 6, 2015, 25,466 FRNs had been funded.  Approximately 3% of these FRNs have committed amounts less than their original requested amounts for reasons other than discount rate reduction.
     
  • Twenty-three applicants submitted FY2015 requests for voice service at a 5% discount, totaling approximately $7,500.
     
  • Approximately 75% of requested funds were filed in the “Local/Long Distance” Item 21 category, while cellular voice service comprised close to 17% of requests: