The FCC modernized the E-rate program starting in Funding Year (FY) 2015 and phased out voice services. The FCC, also, provided each district a budget for their Category Two purchases. The goal for phasing out of voice would be to help enable the FCC to fund all the infrastructure projects tied to the Category Two solutions. Based on the eligible services since FY 2015, applicants have requested nearly $3 billion a year for E-rate supported services. However, for the first time, USAC downgraded their initial demand estimate. USAC based their reductions on the average denial and cancellation rate since 2015 and reported to the FCC the new demand estimate as $2.59 billion for FY 2019.  
 
On March 8, 2019, the FCC announced the FY 2019 cap would be $4.15 billion. School districts still need to purchase voice services, and I cannot think of one good reason why the FCC shouldn’t make voice services an eligible E-rate solution going forward. There clearly is enough in the funding cap to support that critical service. Voice service is not a luxury, but a necessity to conduct school business and to keep everyone safe and secure. Funds For Learning submitted comments to the draft Eligible Services List in FY 2017 and provided a detailed analysis on why the FCC should reconsider their decision to phase out voice services.  
 
While the E-rate Modernization Order has certainly improved the administration of the E-rate program, Funds For Learning believes that some tweaks to the program rules would go along way to meet the FCC’s goal of connecting 100% of our nation’s classrooms to 100 kbps per student. Funds For Learning is recommending that the FCC simplify the administration of Category Two funds with a “0-1-2-3” framework:
  • 0: There should be zero ineligible network infrastructure. Cost allocations are confusing and are no longer necessary because of Category 2 budgets. Furthermore, items such as I.T. security and monitoring functions are required elements for reliable Internet connections. Applicants should not be penalized for managing their networks effectively;
  • 1: Each applicant should have a single Category Two budget governing all their sites. Allowing applicants to allocate dollars according to their specific needs will reduce the digital inequity that can exist between sites, particularly older and newer buildings;
  • 2: The per-student budget factor should be doubled. In our FY 2018 survey, 44.9% of school respondents indicated that the budget should be set at $250 per student. Another 24.3% indicated it should be set at $350 per student;
  • 3: Triple the budget floor. Nationwide, the average Category Two budget is $75,857. This is nearly eight times greater than the budget floor.  Because of the fixed cost associated with many I.T. projects, the budget floor needs to be a more reasonable amount.   
The E-rate program requires districts be in compliance with the Children’s Internet Protection Act (CIPA) and have filtering solutions on their devices, but yet, filtering solutions are not eligible for E-rate support. Based on the $4.15 billion FY 2019 funding cap alone, plus USAC projects another $1 billion is available for rollover for future years, we hope the FCC will not only include voice services in the FY 2020 Eligible Services List, but, also, consider making CIPA solutions eligible, as well as consider the proposal to streamline the Category Two process and increase the overall budget described above.