In a 3–2 decision this morning, the FCC Commissioners voted to accept Chairman Wheeler’s proposal to increase the E-rate funding cap by $1.5 billion. The proposal, also known as the Second Report and Order on E-rate Modernization, is the second step in the reform process that began last July. The first step emphasized changes intended to strengthen the structure and administration of the program, while sharpening the focus of the E-rate program only to support broadband-related goods and services.

Today’s action builds on the First Report and Order by providing additional financial support for broadband Internet access. Since 1998, the demand for E-rate support has outpaced the available funding. Based on historical demand, along with new analysis by FCC staff, the FCC has opted to significantly enhance the support available to applicants, closing the gap between what is needed and what is available. This additional funding will provide greater access for students and library patrons to utilize online educational resources. 

Further adjustments to the program include:

  • Provides E-rate discounts for the purchase of wide area networks when cost-effective
  • Increases the Category 2 budget cap for urban libraries from $2.30/sq ft to $5.00/sq ft
  • Offers an incentive for state support of "last-mile" broadband facilities
  • Suspends the requirement for applicants to amortize upfront construction costs
  • Makes permanent the Category 2 budget system through 2019

These changes will be in effect for the 2015 funding year, which begins July 1, 2015. Funding applications for FY2015 will be due next spring.

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On Thursday, December 11th, 2014 at 3:00 p.m. ET, join Funds For Learning for an applicant training webinar as we walk through the implications of the funding increase, deciphering E-rate Modernization and what it will mean for applicants in Funding Year 2015. Please click here for registration information.