More than 24,000 high-poverty schools and libraries applied for discounts on Internet access, computer networking and telecommunications this year through the E-rate program, the federal government's $3.9 billion fund for schools and libraries, a report showed.

The number of school and library sites listed on each application dropped 4 percent this year after some applicants gave up because of fewer telecommunications discounts and a difficult new application system, said John Harrington, CEO of E-rate consulting firm Funds For Learning, which published the report.

The 2016 E-Rate Trends Report included publicly available application data and results from a survey of more than 1,000 applicants. Overall, E-rate contributed $1.8 billion to cover its portion of data and Internet service requests, followed by $513 million for switches and routers, and $310 million for voice service. 

These higher discount numbers for data and Internet service reflect a shift in priorities for the E-rate program following several 2014 modernization orders from the Federal Communications Commission (FCC), which authorizes the program. The 2014 order increased the program's budget cap from $2.4 billion annually to $3.9 billion to provide more funding for internal connections, managed Wi-Fi and basic maintenance. As Internet access becomes an increasingly important part of education, the FCC is in the second year of phasing out discounts for telecommunications services by 20 percent each year over five years in favor of Wi-Fi inside and between schools. 

After this investment shift, more than double the number of applicants requested 1 gigabit per second data lines from external network providers to their campuses, with 47,333 requests this year. About 12 percent of applicants in the survey also said they had considered building their own fiber network and turned in a form for that — an option that the FCC approved as part of its modernization efforts. Of those, roughly half said that having this option encouraged vendors to offer more competitive prices for Internet connections.

"To me, that's a real success story for the policy itself that it's helping lower pricing, which is what the FCC wanted," Harrington said.

That said, E-rate discounts can't be applied to backup Internet connections, and just 21 percent of schools surveyed had a backup in case their main connection goes out. As educators continue to increase online learning activities, an outage could impact student learning time without a backup connection in place.

Harrington said the FCC originally allowed schools to apply for backup network equipment after the program started in 1996, but too much E-rate money was tied up in unused equipment. The FCC then decided not to fund backup equipment and applied that decision to Internet connections as well.

Looking ahead, the Universal Service Administrative Company program that administers E-rate has a new leader in Craig Davis, who seems to be focused on simplifying the online application process and serving schools and libraries better, Harrington said. 

"E-rate is a critical piece of the puzzle for these schools," Harrington said. "They would not be able to do as much as they are doing without the E-rate program."