FCC Chairman Tom Wheeler dismissed their claims about safeguards, saying that the Republican commissioners were exaggerating to make their point. John Harrington, CEO of Funds for Learning, an E-rate consulting firm, has worked with hundreds of schools on the paperwork they need to turn in for E-rate, and said the entire process is audited and exhaustive.
"The controls that are in place in the E-rate program are far more intense than any other program that I'm familiar with," Harrington said. "It is highly regulated with a great deal of oversight."
As for the argument that the cap increase is not offset, the FCC did decide back in July to reduce support for telephone services and eliminate support for services including email and Web hosting.
On top of that, this is the first major modernization effort since E-rate started in the dial-up days of 1997. Now broadband is more expensive, just like gas, according to the U.S. Energy Information Administration. While gas prices rose from a little over a dollar to over $3 today, school districts still pay for school buses at the higher rate because students need transportation. And if the commissioners support the E-rate program, they need to spend more for Internet access, Harrington said.
The order that passed today will raise the E-rate cap permanently by $1.5 billion annually and also increase the Universal Service Fee on phone bills by about 16 percent from $0.99 to $1.15 a month. Schools and libraries will now be able to collectively request up to $3.9 billion in discounts for services including broadband.
This means that next year, school districts are more likely to receive support for on-campus Internet connections, which has historically been hard to get because the supply of money has not kept up with demand. Schools and libraries typically request $5 billion each year for Internet access and discounts on Internet components, but the fund was previously capped at $2.4 billion, Harrington said.
Another important change removes the pressure on school districts to submit applications for connections and equipment they weren't sure they needed. Back in July, the FCC set a limit on the amount of money that schools and libraries could request over two years for internal connections. But that money was available on a first come, first serve basis, and there was no guarantee that the money would still be there when they needed something in 2017. An increased funding cap and new five-year time table reassures schools that the money will be there when they need it.
To prepare for these changes, school district leaders should take three steps, Harrington said.