A Big Picture Look at E-rate Changes for 2015

With a redesign and increased funding, the federal discount program for school and library technology is making broadband a priority.

by Tanya Roscorla / October 13, 2014 0
Crystal Hopson

The Federal Communications Commission (FCC) has made some major changes to its discount program for school and library technology that are expected to connect 10 million students a year to digital tools.

Traditionally, the E-rate program provided discounts on telecommunications and Internet access for K-12 schools and libraries based on the poverty level and urban or rural status of the populations they served. But more than half the budget went toward telephone services, email and other items, and there wasn't much money left over for Wi-Fi after broadband requests were funded.

With the modernization of the 18-year-old program in July, E-rate will now phase out telecommunications discounts so it can focus on broadband and Wi-Fi starting in 2015. This shift is happening because Internet access has greater potential to affect student learning than telecommunications, said Patrick Halley, associate chief of the Wireline Competition Bureau at the FCC in a CoSN webinar last month.

Broadband service providers bring high-speed Internet access to schools through a number of transmission technologies including fiber and wireless. But if schools' internal connections aren't up to snuff, students won't be able to access the high-speed Internet through their school's wireless network. 

Three E-rate goals came out of this modernization order:

1. Close the Wi-Fi gap 

2. Maximize E-rate spending 

3. Simplify, speed up and make E-rate processes efficient 


Infographic by Crystal Hopson

While the program budget will stay at $2.4 billion, improved financial management practices have freed up some of those dollars for internal connections. And more money will become available as voice service and circuit discounts drop by 20 percent each year while other non-broadband discounts stop next year.

The E-rate program has two buckets of funding: Category 1 for broadband and Category 2 for internal connections. For fiscal 2015 and 2016, $1 billion annually will go toward internal connections, basic maintenance and managed internal broadband in Category 2.

Category 1 broadband discounts are determined per district, while Category 2 internal connection discounts are calculated per school. Schools that receive Category 2 discounts have a five-year funding cap that they can use up at any time during the five-year period. The cap fluctuates depending on student enrollment. 

As a result of these changes, planning is more important than ever, particularly because the E-rate program has significant rules and requires strategizing to figure out when to request funds during the five-year budget window for Category 2, said John Harrington, CEO of Funds for Learning, in the CoSN webinar. Technology planning is the first, second and third item that education technology leaders need to do to prepare for these upcoming changes.