E-Rate Requests Down for FY 2015

From Electronic Education Report, May 22,2015

The demand for E-Rate funding for the year running July 1, 2015 to June 30, 2106 is $3.92 billion, down almost $900 million from fiscal year 2014. That estimate came in May from the Universal Service Administrative Co., the administrative arm of the Federal Communications Commission, which oversees E-Rate.

Early indications are that the FCC will be able to fully fund, or come close to fully funding, the 48,404 applications filed for fiscal 2015. Funding projected to be available for 2015 based on the current annual collection rate-fees tacked on to bills from telecommunications service providers fund the E-Rate program-is projected to be $2.39 billion. Additionally, the FCC projects a carry forward of unused previous years’ funding of almost $1.58 billion.

One reason for the decline in funding requests may be that schools and libraries still are working through the new rules the FCC issued for E-Rate in July 2014. Looking to focus E-Rate on supporting broadband connectivity and Wi-Fi networks that can facilitate digital learning, the FCC made changes that were intended to:

•Significantly expand funding for Wi-Fi networks and distribute it fairly;

• Maximize the cost-effectiveness of E-Rate spending through greater pricing transparency, encouraging consortia and bulk purchasing, and better enforcement of existing rules; and

• Simplify the E-Rate application process and overall program administration.

Funding Two Categories

Applicants for E-Rate funding file for two different categories of support. Requests for category one, which covers voice and Internet access, were $2.25 billion, or 57.5% of the 2015 total. Requests for category two, which covers internal connections, were $1.67 billion, or 42.5% of total.

According to E-Rate Central, which provides consulting, compliance and processing services for E-Rate applicants, the decline in category one funding requests likely reflects the ineligibility of web-hosting, some telephone service components and most cellular data services that E-Rate applicants previously may have sought funding for. Additionally, there has been a 20% phase-out of discounts on voice services.

The FCC has instructed that the current contributions portion of 2015 funding should go to category one requests, with the goal of fully funding that category.

The decline in category two funding requests, again according to E-Rate Central, are attributed to the narrow eligibility focus on broadband equipment and some hesitation on the part of school districts to file category two requests which may not have been funded in the past when total demand far outpaced available funds and the priority was put on funding category one.

The E-rate program over its 19-year life has helped connect almost all U.S. schools and libraries to the Internet. In May 2015, wave 53 of fiscal 2014 funding was released bringing the total for that year to $2.2 billion. Also in May, wave 89 of fiscal 2013 funding was released bringing the total for that year to $2.16 billion. •