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FCC Approves E-Rate Modernization Along Partisan Lines

By Sean Cavanagh and Michele Molnar

Washington

The Federal Communications Commission on Friday approved a broad series of changes to the E-rate program meant to boost support for Wi-Fi technology and create more efficiency, though Republicans on the panel strongly criticized the plan as bloated and bureaucratic.

The plan passed on a 3-2 party-line vote.

The approved order, as described by the FCC, would boost Wi-Fi funding for schools and libraries by $1 billion a year over the next two years, and set an annual "funding target" for that amount for years after that. 

"Technology has changed, the needs of schools and libraries have changed," FCC Chairman Tom Wheeler said during the agency's open meeting on the policy. "And now, the E-rate has changed."

Wheeler and others have pressed for retooling the E-rate through steps they say are necessary to modernize a program that devotes too much money toward antiquated technologies.

FCC officials indicated on Friday that they made late modifications to their original draft plan in the face of criticism from the K-12 community that the Wi-Fi funding boost would come at the expense of cutting back on basic broadband connectivity, or external connections to districts and libraries.

The final order will include a "safety valve" that will allow for a channeling of money to basic, external connections, if Wi-Fi demand consumes too much funding, Wheeler told reporters after the vote. 

Several education advocacy organizations commended the commission for listening to their constituencies with this revision. "We applaud the chairman and commission for adjusting the original proposal in response to concerns raised by rank-and-file educators on behalf of their students," said Mary Kusler, the director of government relations for the National Education Association, in an interview.

But the plan drew an at-times scathing response from the FCC's two Republicans, who claimed they were shut out of the drafting of the order, and that the costs of the plan will be much greater than expected.

GOP Commissioner Michael O'Rielly accused the FCC of having crafted a "policy du jour" to address the "so-called Wi-Fi gap."

O'Rielly predicted that the plans would lead to a technology "funding cliff" for schools, and possibly higher costs for phone users, whose fees support E-rate. And he said that he and fellow Republican Ajit Pai were kept in the dark about too much of the proposal.

"I don't believe it's appropriate to refuse to negotiate with me" just because of his party status, O'Rielly said during the hearing.

The E-rate supports telecommunications services in the nation's schools and libraries, giving priority to the most impoverished applicants.

The program, which was created in 1996 and has a $2.4 billion yearly budget, is supported through fees on telecommunications providers, charges that get passed on to consumers.

Reaction From Educators, Library Officials

Several organizations representing educators, and educational technologists, applauded the FCC's move as a positive first step to modernizing the E-rate, and a victory for their long-standing efforts to move the agency forward on this issue.

The FCC "rolled up its sleeves and did great work to reach a compromise," said Noelle Ellerson, the associate executive director for policy and advocacy at AASA, the School Superintendents Association. "This moves the program forward, while also ensuring it will still be here in 20 years."

Doug Levin, the executive director of the State Educational Technology Directors Association, said the FCC vote was an "incredibly important" improvement for schools' technology. The benefits for schools are clear, he said, despite the criticism of the plan and the "sausage-making" on display as the FCC weighed the K-12 community's concerns.

If the FCC had not acted, K-12 systems' internal connectivity would have continued to languish, and the program would have continued to review applications and award funding under an out-of-date model, he said. "If we had not done this, it would frankly have been devastating for schools and libraries," Levin said. 

He also praised the agency for another piece of its plan—phasing out support for out-of date services, and using that money for modern Web connectivity.

As it now stands, the FCC "has put a line in the sand and said this program is about broadband," Levin said.

The Consortium for School Networking praised the move, too, citing its own E-rate and broadband survey that showed a massive Wi-Fi gap in many classrooms. The FCC "dedicated meaningful funding for internal connections, while also maintaining a focus on broadband connections to the school door," said CoSN CEO Keith Krueger, in a statement.

He also commended the FCC for approving an evaluation of the program's long-term funding needs. "School districts cannot meet today's Wi-Fi and broadband technology needs on a 1997 budget, and that will mean our nation must eventually invest more for this critical need," he said.

Evan Marwell, the CEO of EducationSuperHighway, a San Francisco-based nonprofit that advocates for improved school connections, called the commission's vote "a home run."

The American Library Association also saw the commission's decision as the culmination of a year of its own advocacy.  In a statement, the association lauded the commission for "addressing the long-term shortfall of funding ... and [the fact] that support will be available for more libraries to meet the demands for mobile access and service."

Presidential Imperative

The FCC's five members are all appointed by the president, though no more than three members can belong to one political party. The White House also gets to name the chairman—which has given President Barack Obama, who selected Tom Wheeler for that spot—influence in shaping the direction of the FCC, and by extension, E-rate policy.

Obama has called for a major expansion in schools' broadband access, and has recruited private corporations, through a separate administration effort, to donate technology equipment and services to schools.

The draft plan circulated by Wheeler in recent weeks promised a major focus on increasing schools' and libraries' Wi-Fi connections—internal, classroom-by-classroom Web capability that many K-12 officials say has been severely shortchanged in recent years.

In addition, his proposal backs efforts to make E-rate dollars go further by focusing on processes to drive down prices and increase transparency about E-rate spending. For instance, the plan calls for speeding applications from consortia and leveraging General Services Administration pricing so that schools could buy telecommunications services for less.

But as details of the draft plan circulated around the nation's capital and beyond, a number of school organizations raised serious objections to it.

One major worry was that Wheeler's focus on increasing spending on Wi-Fi technology would result in an erosion of support for basic, external broadband connections to districts.

Per-Pupil Test Run

Others feared that changes to the funding formula for E-rate would reduce the program's support for the most impoverished schools, as well as rural schools.

And more broadly, a number of education organizations, including the nation's two largest teachers' unions, and Capitol Hill lawmakers, have pushed to raise the overall size of the E-rate program—in some cases, arguing for as much as $5 billion a year. Those groups have pointed out the demand for E-rate funding has far exceeded spending in recent years.

FCC officials appeared to be intent on addressing some of the criticism through late changes made to the order, discussed at the July 11 meeting.

In addition to creating a "safety valve" to protect basic broadband funding, the order was also changed to address concerns about a proposal to judge applicants seeking money for internal connections on a per-student, or per-square foot basis.

Applications for E-rate funding will begin being judged by that standard right away—but the policy will be under constant review and will be re-evaluated based on the agency's findings, the FCC said. An FCC official said Friday that despite some criticism of the per-pupil and per-square foot measure within the education community, the reaction has been positive among many E-rate applicants who have contacted the agency.

"We still do have concerns about per-student [funding]," said Kusler of the NEA. "But we're delighted it's not a permanent change in the program. We're really going to watch it, and make sure especially small rural schools are not harmed by it."

Wheeler also indicated that the FCC will look to make other changes to the E-rate soon, potentially affecting the program's overall funding. The FCC is putting forward a notice of proposed rulemaking that will seek public comments on "long-term funding needs," agency officials said.

This news pleased the International Society for Technology in Education, which on July 8 submitted to the FCC a petition signed by 1,500 educators urging the commission to raise the cap and modernize the E-rate. The commission has shown conviction to do "what's right for education and launch a serious conversation about change the E-rate truly does need—more funding," said Brian Lewis, CEO of the organization, in a statement. "Our community has spoken, and the need for additional support is real."

In recent days, support for the E-rate proposal seemed to fracture along partisan lines, with one of the panel's two Republican commissioners, Pai, raising concerns about the draft plan.

On Friday, Pai reiterated that criticism, saying that the proposal was drafted by the FCC majority in a "take-it-or-leave-it" fashion, and that the numbers behind the projected spending increase on Wi-Fi don't add up.

Wheeler had vowed to hold down costs for the E-rate program before seeking a major funding increase. But Pai predicted that the FCC would seek a boost in telecommunations fees—waiting until after the November elections to do it.

"Any talk of fiscal responsibility will be short-lived," Pai said.     

But Wheeler, one of three Democrats on the panel, said the plan would help millions of students by giving them faster, more reliable connections. Fellow Democrats Jessica Rosenworcel and Mignon Clyburn agreed, while acknowledging that they both needed to be convinced to back various parts of the plan.

Rosenworcel argued that the FCC needs to raise the overall funding cap for E-rate so that it meets demand from schools, and said creating an inflation adjustment for the program should be on the table.

"We need to own up to the fact that inflation has cut the purchasing power of this program," she said.

Other government programs are indexed to inflation, Rosenworcel said. "There is nothing radical about this," the commissioner said, adding, "We should do it for E-rate, too."

[UPDATE: This post has been updated with reaction from various parties and other details.]

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