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E-Rate Funding Commitments Already Flowing

router_GETTY.jpgMore than 8,000 schools and libraries have already received $239 million in E-rate funding commitments for 2015-16, including more than $60 million for internal wireless connectivity.

The push to get awards out to schools and libraries quickly and to make those funds available for Wi-Fi are two more signs of the dramatic overhaul of the E-rate program undertaken by the Federal Communications Commission over the past 18 months.

"Schools that are upgrading their Wi-Fi networks for the coming school year need to be able to start installation as soon as possible," said Lisa Hone, the associate bureau chief of the FCC's Wireline Competition Bureau, in a statement. "By October 1, we expect [the Universal Service Administrative Company, which administers the E-rate] to have made funding commitment decisions for nearly all of the $3.9 billion in requests received for 2015."

This week, Education Week takes a deep dive into new FCC data that show the magnitude of the recent changes made to the program. Under the E-rate, the federal government provides subsidies to schools and libraries to aid the purchase of telecommunications services. The money comes from fees assessed to telecommunications providers, which are typically passed on to consumers.

See: The E-rate Overhaul in Four Easy Charts

One story the data tell: Applications for equipment and services related to wireless connectivity were up 92 percent over 2014. That's because the FCC recently approved policy changes and an expansion of the E-rate's annual cap to $3.9 billion, meaning that money for wireless connectivity will finally be available again.

That money is also flowing out to schools more quickly, in part due to changes in the application review and award process made by the FCC and USAC in 2014.

Beyond the numbers, though, the E-rate overhaul is likely to have a very real impact on schools and libraries—and quickly.

Take, for example, the 77,000-student Milwaukee public school system, where Director of Technology James Davis said many schools have in recent years been able to provide reliable wireless access in only about 30 percent of their physical facilities. That meant that teachers and students in some rooms couldn't access the Internet. And even if they did get a connection, they might lose it if they walked too far down the wrong hallway.

On May 21, the FCC sent a letter informing Milwaukee that it will get more than $9 million in telecommunications subsidies during the 2015-16 school year, including $5.36 million in so-called "Category 2" money to cover internal wireless equipment and services.

The FCC hadn't awarded any such funds in the previous two years.

"It's significant for us," said Davis, who noted that the Milwaukee district recently approved a budget for 2015-16 that assumes $29 million in cuts to state and federal aid.

"We're not putting all this [broadband] infrastructure in place just so we can brag about it," he said. "We are up to 38,000 Chromebooks and 24,000 Dell computers. We want students to have the tools and access they need to communicate with teachers, use online curricula and tests, get library resources. The world has gone to cloud services."

The "Category 2" E-rate discounts Milwaukee is receiving will be used primarily to pay for switches, routers, and wireless access points, Davis said.

The goal is to have robust wireless networks that cover the entire building in 100 percent of Milwaukee schools by June 30, 2016, he added.

The money will be a big help. So will the timing of the commitment from the FCC.

Because the Milwaukee school district already has its commitment letter in hand, Davis said, it will be in a position to get workers into classrooms, installing equipment on July 1. That's critical, he said, because such work can only be done between 3-11 p.m. during the school year.

Experts on the E-rate program have applauded the new emphasis on quick turnarounds.

"Faster funding decisions are a very, very good thing," said John Harrington, the CEO of Funds for Learning, an Edmonds, Okla.-based group that consults with E-rate applicants. Funds for Learning in 2013 published an analysis showing that utilization of E-rate dollars declines the longer it takes for a funding commitment to be issued.

There is a potential downside to the faster funding commitments, however. 

In an email, Harrington warned that the large numbers of new applicants for Category 2 funds may not be fully aware of the nuances of how the E-rate program works in practice— i.e., that it provides discounts for purchased equipment and services, not up-front cash, and that extensive documentation is required to get those discounts approved.

"I am concerned that many of these new applicants will assume that a funding commitment equals money in the bank," Harrington wrote. "They may be disappointed if their payment requests are denied [because] they haven't kept the proper paperwork."

There is also a downside to the FCC's new emphasis on wireless.

To come up with the money to support that new focus, the commission has begun de-prioritizing support for older technologies, such as phone service. This year, that means a $337 million funding gap that schools and libraries will have to look elsewhere to fill, Education Week's analysis found.

Milwaukee, for example, has historically gotten 86 percent of its phone-services costs subsidized via the E-rate program, Davis said. This year, that's down to 70 percent. Next year, it will fall further, to 50 percent.

"We've had this conversation with our budget people," he said. "It means something else is going to have to get cut so we can come up with the couple of million dollars we need."

All in all, though, Davis said Milwaukee school officials couldn't be happier with the opportunities the revamped E-rate program will present to their schools.

Across the country, other school and library officials likely feel similar. A second wave of commitment letters went out May 29, according to the FCC, and another batch will go out this week.

"The extra funds for wireless broadband are going to go a long way," Davis said. "Kudos to the commissioners."

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