FCC to Invest Additional $2 Billion in High-Speed Broadband for Schools, Libraries

The new funds are a “doubling of investment in broadband,” and are projected to connect 20 million students in 15,000 schools to high-speed Internet access, the news release said. The additional support will go toward “the most urgent Internet upgrade needs of schools and libraries,” it said. “Today only about half of E-Rate funds go to true high-speed Internet connections."

According to an FCC spokesman, funding for the new investments will come from “reprioritizing existing E-Rate funds,” “increasing efficiency,” and “modernizing management of the E-Rate program.” In a Jan. 24 blog post (CD Jan 27 p8), Wheeler said the money had been found “as part of our top to bottom review of E-Rate.” An industry official said the top to bottom review found that Universal Service Administrative Co., which administers the E-rate program, was so worried about not having the money to meet funding requests that it essentially put $1 billion in a savings account. This “shocked and surprised” the Wheeler administration, the official said. An FCC spokesman did not comment.

Wheeler has been vocal about applying business lessons to FCC processes. “We will take a business-like approach to the management of the program, identifying opportunities to improve the ways funds are deployed and streamlining the process for schools and libraries,” he said in a statement. In his blog entry, Wheeler announced upcoming “administrative improvements” that must include “strong oversight and enforcement to ensure every dollar that is intended to reach schools and libraries, gets there and gets the job done."

A USAC spokesman explained where the savings may have come from. Three categories of applications generate money into savings accounts, said Eric Iversen, USAC director-external affairs: Potential obligations for upcoming funding years; current applications that have received funding commitments but haven’t had money disbursed against them; and appeals, where money is released depending on the outcome of appeal. USAC works with the FCC every year to go through those funds and decide how much of the money it can release, Iversen said. The FCC also decides how much of those savings can be made available for new commitments, he said. That’s likely where the money for the new super-fast broadband is coming from, because “historically that’s where the money for this sort of thing has come from,” he said. The USAC hasn’t yet received any “direct guidance” from the FCC on the proper amount of savings to hold onto, but “we will implement any changes that they want to have made,” Iversen said.

"I praise the Wheeler commission for uncovering the fact that the E-rate administrator apparently was keeping a billion dollars or more of unspent money in its bank account,” said former Chairman Reed Hundt, who revamped the E-rate program in the mid-90s, and now advises the Urban Libraries Council. “But it’s sad to think of tens of millions of Americans waiting for Internet access in libraries when the E-rate money had already been raised in the past, and was supposed to have been spent for their benefit.” Hundt questioned the doubling of broadband funding for only the next two years; it should stay at that higher level, he said: “E-rate hasn’t grown significantly for 17 years."

President Barack Obama will speak about his ConnectED initiative Tuesday. That related but separate project would revamp the FCC’s E-rate program to provide faster broadband to schools and libraries. The White House first announced that program last summer, and it featured prominently in Obama’s recent State of the Union Address. White House Chief of Staff Denis McDonough previewed the coming speech during NBC’s “Meet the Press” on Sunday. “Later this week, you'll hear the president talk about ConnectED,” McDonough said. “This is an opportunity where several private American companies are going to commit over a half billion dollars to ensure that our schools across the country have the kind of technology so that our kids can compete in this economy.” The White House, not the FCC, is spearheading that private company effort, Wheeler said last week. Obama will speak Tuesday morning at Buck Lodge Middle School,in Adelphi, Md., “detailing progress toward his ConnectED goal of connecting 99% of students to next-generation broadband and wireless technology within five years,” according to the White House. The event is not open to the public.

Commissioner Ajit Pai said in an op-ed in the New Hampshire Union Leader Saturday that how much money is spent on E-rate is less important than how that money is spent. “E-Rate is leaving students in rural America behind,” said the op-ed, bylined by Pai and New Hampshire Republican Senator Kelly Ayotte (http://bit.ly/1fphFah). “The way funding is currently distributed, states like New Hampshire, Vermont, Montana, and South Dakota get the least E-Rate funding per student. In fact, New Hampshire is dead last when it comes to return on E-Rate investment.” Administrative hurdles in the application process make it difficult for many rural schools to obtain funds, they said, calling for streamlining.