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FY 2010 Funding at 80% Awaits FCC Approval

Last week, at the FCC’s request, USAC informed the agency that it had been able to identify additional monies from reserve accounts “not already designated for carry-forward” that would be “sufficient to make commitments at the 80% discount level for Priority 2 requests for Funding Year 2010.” The fate of those 80% funding requests now rests with the FCC. USAC will not be able to begin funding them unless, and until, the FCC decides to direct USAC to use those funds for that purpose — as Funds For Learning and other organizations have requested.

The FCC is reviewing the matter now, but a favorable decision for the 80% funding requests is not guaranteed. Instead of designating the newly-identified funds for FY2010 funding requests, the agency could decide, for example, to accept USAC’s January 2011 recommendation to cut off FY2010 funding at 81% and lump the newly-identified amount in with the $400 million in unused funds that USAC told the FCC back in January was available for carry forward to FY2011.

Students Will Benefit

Funds For Learning has conducted an analysis of the funding requests that USAC has indicated it can support. The pending school and school district applications represent over 2.1 million students at nearly 4,000 school buildings in every state. Because these schools qualify for an 80% E-rate discount, we know that somewhere between 50% and 74% of these students qualify for the National School Lunch Program. This means that approximately 1.4 million students from impoverished households stand to benefit from USAC’s new recommendation. (NOTE: this estimate does not include the students and library patrons included in library and consortium applications.)

The table below summarizes the pending funding requests by applicant type. The median requested amount for all applicants is $35,776.

Pending Funding Requests by Applicant Type

Looking to the FCC

Because of the rapid growth in demand for Priority One (telecommunications services and Internet access) funding, it is highly unlikely that E-rate dollars will ever be available again to support 80% Priority Two services (internal connections and basic maintenance) unless the FCC decides to make substantial changes to E-rate program rules. Consequently, the funds that USAC identified last week, funds that USAC says could fund every FY2010 request at 80%, could very well be the last E-rate funding those relatively poor schools and libraries ever receive to help them purchase and maintain their local area network infrastructure.

The opportunity for these students to benefit from these funds now rests with the FCC.

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