The Federal Communications Commission (FCC) released its E-rate Order in late July, the biggest overhaul of the program since it was created 17 years ago. As we've noted before, many of the changes are modest, although they represent an important first step in the process of updating E-rate to address critical gaps in the broadband infrastructure that our country's schools and libraries rely upon. And the Order does address some key issues like transparency and improving the application process, which could go a long way toward a more functional and easy-to-understand program. (Read the full orderor a summaryhere.)
Much of the attention in the past few months has focused on FCC Chaiman Wheeler's proposal to improve Wi-Fi access at schools and libraries across the country. Although the proposal the FCC originally floated in June — which would have directed $5 billion in additional funding specifically to address the wireless connectivity gap — was ultimately scaled back to reflect a variety of concerns, the new orderdoes indeed emphasize Wi-Fi funding and places a priority on shifting E-rate's purpose entirely to providing high-speed Internet access. In the next few years, the FCC will cut or phase out support for telephone service and pretty much anything else that doesn't fit into two main buckets: "category one," which refers to services needed to bring broadband connectivity to schools and libraries, and "category two," which addresses spreading broadband connectivity within schools and libraries. The "categories" replace the old "priority" system, which was similar but had become a bit unwieldy as pressure on the program increased.
It's the less newsworthy changes in the order that are, in many ways, more significant. The FCC announced plans to streamline the application process and improve price transparency, which are issues that OTI has heavily emphasizedthroughout the year-long proceeding. Starting in 2015, all of the data that schools submit to the FCC in the Form 471, Block 5, Item 21 attachment (which, simply put, tells you how much schools are paying and what service they are getting in return) will be made publicly available on the website of the Universal Service Administrative Company (USAC) website.
Why does this change matter? Well, for starters, better data will help improve our overall understanding the program and enable both the FCC and E-rate stakeholders to develop a clearer picture of how current funding is used. This information is critical as the FCC considers whether it will need to expand the size of the E-rate fund — as many commenters, including OTI, have recommended — in order to meet growing connectivity needs. It's hard to come up with a good cost estimate without knowing what institutions are spending for broadband service. This spring, the non-profit EducationSuperHighway released its analysisof a six-month survey of Item 21 attachment data (which they obtained directly by working with 11,000 participating schools) examining how cost effective different technologies were. The study provides some of the most in-depth information to the public about the program and how funding is distributed. But if all of the Item 21 attachment data were made publicly available on USAC's website, it would have been a whole lot easier to obtain and synthesize that information.
The FCC also wants to test the direct effects of price transparency on effective spending. In May 2012, an investigation by ProPublica revealed that some schools were being charged up to 325 percent morethan others in the region for very similar services — a figure which suggested that carriers like AT&T and Verizon had violated FCC's lowest corresponding price rule(requiring that telecom companies receiving E-rate cannot charge schools higher rates than those available to other similarly situated non-residential customers in an area). But without transparency about prices and services, schools and libraries receiving E-rate funds did not necessarily know that they were overpaying. Nor did they have the ability to hold service providers accountable for their actions. In the future, it will be significantly easier to find out what other schools are spending, which should improve the situation at various points in the process of applying for and receiving E-rate subsidies. As the Order states: "We agree with those commenters who argue that transparency is an essential tool to help applicants make educated buying decisions. Transparent pricing will give schools and libraries greater visibility into pricing and technology choices for their peers, which we expect will help applicants in negotiations with equipment and service providers."
More information is also vital for researchers who wish to study the long-term impact of the program and understand how it works. In October 2012, the FCC took an unprecedented step by releasing some of its 2010 E-rate datato the public, offering insight into what schools and libraries request for telecommunications and broadband service and how much they pay in total. But rather than publishing a one-time snapshot of the program, the Commission will now make a broad range of data available on a yearly basis, which allows longitudinal study and other, more complex analysis. Coupled with existing FCC data on residential broadband options — and even other data sets such as those maintained by the National Center for Education Statistics — this research could increase our understanding of the digital divide in America and the role of libraries and schools in closing that gap.
Of course, providing greater transparency and additional funding for Wi-Fi alone will not address all of the goals that the FCC and the Obama Administrationhave laid out in the past year. We have consistently called not just for improved Wi-Fi connectivity and better data collection, but also for support for infrastructure investments to address underlying capacity issues, clear capacity targets, and adequate support for the E-rate over the long run. Fortunately, the FCC has not closed the book on E-rate modernization. Alongside the Order, the Commission released a Further Notice of Proposed Rulemaking (FNPRM) to seek more input and information about what additional, long-term changes should be made to the program — including the question of whether E-rate needs more money to survive.
Suggested Reading
E-rate Modernization: Recommendations from OTI and the Education Policy Program Moving Toward E-rate Reform: Focused comments on high-speed Internet access and better program transparency
