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The E-Rate Program: 6 Big Numbers to Know

FFL Map.pngIn the K-12 world, few critically important federal programs are as under-the-radar as the E-rate. Established by an act of Congress in 1996, the program relies on fees on consumers' telephone bills to raise billions of dollars each year to help subsidize the cost of phone, internet, and other telecommunications services for America's schools and libraries.

In recent years, the program has experienced big changes, remarkable successes, and new perceived threats, all of which Education Week has covered in-depth.

Sometimes, though, it's helpful to step back and see the big picture. A new report from Funds for Learning, an Edmond, Okla.-based consulting organization that helps thousands of schools and libraries prepare their E-rate applications each year, does just that. You can read the entire document, titled "2017 E-Rate Trends Report."

The group's findings come from an analysis of publicly available 2017 E-rate application data, as well as an original survey of 1,096 E-rate applicants that FFL says are broadly represented of program participants as a whole.

It should be noted that Funds for Learning isn't exactly a disinterested party on this issue, and the group notes up front that its survey isn't scientific. 

But there's still a lot to be gleaned about the state of the E-rate and school connectivity. Here are six big numbers to know.


1. The E-rate program continues to have extraordinary reach, impacting more than 118,000 school and library facilities across the U.S.

In 2017, more than 23,000 schools and libraries submitted requests for E-rate services for roughly five times that many individual facilities, Funds for Learning found. The total number of applicants is down a bit, from more than 27,000 in 2015. Those who did apply requested a total of $4.6 billion in E-rate supported services.


2. Schools' appetite for bandwidth continues to grow, with $2.5 billion in E-rate requests for data & internet service:

By far, the biggest slice of the 2017 E-rate pie was for "data and internet service," which accounted for more than half of program requests.  

In addition, almost two-thirds of the survey respondents told Funds for Learning they expect to see an increase of at least 50 percent in their bandwidth usage over the next three years, and 15 percent of survey respondents predicted they'd soon be doubling their bandwidth usage.


3. Among surveyed applicants, 55 percent want voice services to remain E-rate-eligible.

When the FCC overhauled the E-rate in 2014, one of the big changes was to prioritize broadband and Wi-Fi. That meant a corresponding phase-out of program support for older technologies, such as voice.

But schools still need phone lines. Just check out these new numbers from Funds for Learning: Voice services accounted for $619 million of the E-rate-supported services requested in 2017, more than Wi-Fi related hardware or services. And more than half of survey respondents said they wanted voice on the E-rate's eligible-services list, suggesting continued uneasiness about what might happen to school and library budgets when that funding dries up all together.


4. The average school site requesting E-rate funding now spends $32,576 on Wi-Fi equipment and services.

For schools and libraries, Wi-Fi related equipment (such as switchers and routers, which accounted for $572 million of supported requests in 2017) and services ($288 million) falls under what the E-rate dubs 'Category 2" expenses. In 2014, the FCC made it a priority to ensure that more schools and libraries could get program funds for Category 2 requests. But to control costs, it also capped the total amount of Category 2 funds that an applicant could receive at $150 for each student.

The results of those policy changes don't form a neat picture. While there was a big spike in Category 2 spending by schools and libraries in 2015, that seems to have leveled off the past two years. The average school site is now spending $32,576 on Category 2 equipment and services, with E-rate picking up a little over two-thirds of that total.

Furthermore, half of the E-rate applicants surveyed by Funds for Learning said they don't expect to have used up their available Category 2 funds by the end of 2018, leaving a short window to take advantage of the opportunity—and causing concern among some school-broadband advocates.


5. Among surveyed applicants, 48 percent said the E-rate's 'self-provisioning' option lowers bandwidth costs.

To help rural and remote schools and libraries struggling to find affordable broadband options, the FCC also in 2014 gave E-rate applicants the option to apply to use program funds to either build their own networks (known as self-provisioning) or lease the actual cables that private providers run, rather than just pay for the information that flows over them (known as dark-fiber leases.)

According to Funds for Learning, 11 percent of 2017 E-rate applications included a self-provisioning option. About two-thirds of those applications ended up with the school or library in question either getting its own network or leasing a dark fiber network that ended up being cheaper than the alternatives. Nearly half of those surveyed agreed or strongly agreed that having a self-provisioning option lowered their bandwidth costs, a key goal of the commission under its previous (Democratic) leadership.

The issue is especially worth paying attention to, as the new (Republican-led) FCC has been delaying and denying E-rate requests for self-provisioned and other "special construction" networks, as Education Week has been reporting.


6. Among surveyed applicants, 44 percent still don't like the E-rate application process.

That's the percentage of  respondents who told Funds for Learning they disagree or strongly disagree that the E-rate application process is "fast, simple, and efficient."

Not coincidentally, 45 percent said they used a paid E-rate consultant to help them navigate the application process.

Map via Funds for Learning 2017 E-Rate Trends Report.


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