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FCC Official Calls for Schools to Chip In to Receive E-Rate Money

The lone Republican on the Federal Communications Commission has unveiled a proposal to make the E-rate program more transparent and less bureaucratic, while also requiring schools to chip in one dollar for every three dollars they receive through the program.

Commissioner Ajit Pai put forward his proposal during a speech Tuesday at the American Enterprise Institute, a think thank in Washington, just days before the FCC is scheduled to hold an open meeting to discuss potentially major changes to the program.

The Obama administration recently called for a broad reworking of the E-rate, a federal program established in the mid-1990s that provides support for telecommunications improvements to schools and libraries, particularly in rural and impoverished areas.

Obama's plan calls for a temporary increase in telecommunications fees, which currently support the program, with the goal of giving 99 percent of the nation's schools access to high-speed broadband and wireless Internet within five years. The chairwoman of the FCC, Mignon Clyburn, has called for changes that largely mirror the president's goals.

But Pai's proposal appears to offer a sharp contrast with those plans. He disputed the nation that it is necessary to "force schools to skew their spending decisions in order to help us meet an arbitary national target." And he questioned whether "funding, or rather an alleged lack of funding, is the main problem with today's E-rate program."

"If you just bake a bigger pie, the argument goes, you don't need to worry so much about what goes in the filling," Pai said. But "the FCC, like the rest of government, should prioritize fiscal responsibility. By reducing waste, eliminating misguided incentives, and distributing funds more fairly, we can accomplish more—probably a lot more—with the same amount of money."

Overall, the E-rate funding system is "haphazard," fails to provide enough targeted funding to the most impoverished states, and tends to favor a relatively small group of schools with specific technology requests, Pai argued, despite the FCC's attempts to change that process.

The commissioner, one of three current members on the FCC, cited well-publicized examples of dubious E-rate spending decisions by school districts, and said the FCC, and the public at large, knows far too little about the specifics of how taxpayer money is being used at the local level.

What the FCC does know is not encouraging, he added. The E-rate's funding system channels too much money toward outdated technology, or services that districts could fund through on their own, he said. Districts and schools have easier access to E-rate dollars for what are known as "priority one" services, such as providing basic telephone and Internet access, Pai noted. That money in some cases has supported district administrators' purchase of smartphones. While districts officials might need those devices, he said, that's "not what E-rate was meant to support."

Meanwhile, relatively little money is left over for "priority two" services, such as establishing internal Web connections within districts and schools. The E-rate needs to move away from paying for outdated services and connections to non-instructional facilties, and focus on "next-generation technologies" that help schools, including expanded broadband, the commission told the audience.

Pai said the E-rate process could be made more accountable by requiring schools to put their own money toward tech improvements, as the federal government makes its own contribution. He specifically said that schools should chip in one dollar for every three E-rate dollars they receive—an approach he likened to other FCC policies for health-care programs.

In addition, district superintendents or principals should be required to certify that E-rate funds will be used to help students, and required to disclose more information about how federal money is spent.

"All of this information should be collected and made available on a single website," Pai said, "one which allows any American to see in detail how any school in the nation has spent its E-rate funds."

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