Education Week - May 15, 2013 - 16

EDUCATION WEEK

MAY 15, 2013

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DIGITAL DIRECTIONS > Tracking news and ideas in educational technology
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E-Rate Program Seen as Outdated, Insufficient
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nectivity capabilities. Recent technical difficulties with online testing in some states highlight
the need for better, more reliable technologies
in schools. (See Education Week, May 8, 2013.)
Demand for E-rate dollars, which help
schools and libraries get connected to the Internet, has outpaced the aid available for years.
This year, districts asked for nearly $5 billion
worth of projects, but the E-rate program itself
is capped at $2.33 billion. The cap is now adjusted for inflation, but it was largely set in the
late 1990s, well before the proliferation of mobile devices, wireless cards, and online testing.
The demand for E-rate dollars for telecommunications and Internet access has increased
252 percent since 1998, while the fund has
grown only 8 percent over that same time,
said John D. Harrington, the ceo of Funds for
Learning, an Edmond, Okla., organization that
helps schools apply for the aid.
“The E-rate isn’t broken,” he said. “It’s just
broke. The world has changed, and unfortunately, the E-rate program hasn’t changed
much. What’s happening now is creating a lot
of strain on the system.”
In the complex landscape of Inside-theBeltway budgeting, the E-rate does have an
advantage: It doesn’t need to go through the
congressional appropriations process. Instead,
it is financed through fees on certain telecommunications services. The program is governed
largely through the Federal Communications
Commission.
As advocates begin a behind-the-scenes push
for changes to the E-rate, spurred in part by
the common-core tests, the fcc—and, potentially, Congress—has a set of choices that each
come with their own set of political pitfalls.
Adding to the complications: The program
doesn’t always operate as efficiently as it could.
Between 1998 and 2006, more than a quarter
of the money allocated to schools—$5 billion—
was not disbursed when it was scheduled to be,
according to a 2009 study by the Government
Accountability Office, Congress’ investigative
arm. The report also chided the program for
lacking any sort of performance goals, which
could help set priorities in the discounts offered, and for being so complicated that some
districts are reluctant to apply.

Scaling Back Services
The option for revamping the program that
district and state officials mention most often
is to scale back the services that get funded
first to focus primarily on bolstering Internet
access for students. The program guarantees
discounts on those so-called Priority 1 services,
such as Internet access, and then allocates the
remaining aid for Priority 2 services to the
neediest districts.
In recent years, only the poorest schools received Priority 2 funds, which pay for internalconnection equipment such as wiring and
cabling and basic maintenance of internal connections.
But that issue could be at least partially resolved if the fcc took some services such as
Web-hosting and even telephone service out of
the Priority 1 mix.
Over the life of the program, “little by little,
service providers have slipped things under the
tent,” said Valerie Oliver, Alaska’s state E-rate
coordinator.
“You have to draw the line at what E-rate
pays for. ... All of the add-ons are very nice,” she
said, “but that drains and takes away money
>>

from the original intent of the program,” which
she sees as connectivity.
In particular, she said, “Web-hosting has galloped out of control.”
But Ms. Oliver is worried about the prospect
of dropping telephone service from Priority 1
all at once, because of the impact on remote
districts in her state.
“I do feel like it would hurt rural locations
more,” she said. “The Internet is not quite as
reliable in rural Alaska locations,” and people
in those areas need telephones to stay in touch,
she said.
What’s more, some districts are pushing to
add to the menu of services under Priority 1.
For instance, some districts that offer 1-to-1
laptop programs would like their students to
be able to use the devices at home as well as at
school. But that step could add substantially to
the E-rate’s already-strapped finances.
“That’s getting a lot of political attention, but
it’s unbelievably expensive,” said Gary Rawson,
Mississippi’s E-rate coordinator and the chairman of the State E-rate Coordinators Alliance.
“Should it be the responsibility of E-rate and
E-rate alone to encourage broadband adoption
across the nation?”

Poor Districts Pay More?
Mr. Rawson does favor another potential
change to the program: Asking the highestpoverty districts to kick in more of their own
money. Right now, some districts put in only 10
percent of their own funds and are able to get
all Priority 1 and Priority 2 services covered.
“There’s no financial incentive in their decisions,” Mr. Rawson said. “If I’m only going to
pay 10 cents on the dollar, I don’t care how
much it costs. I don’t care if I need it; I’m going
to get it because I can.”
For instance, he said, some districts that
qualify for high discounts go a bit overboard
in offering cellphone services to their employees, since that’s covered under Priority 1, and
the districts themselves only have to kick in a
small percentage of the cost.
But the idea of upping poor districts’ contributions doesn’t sit well with Themistocles
Sparangis, the chief technology director for the
650,000-student Los Angeles Unified School
District, which qualifies for some of the heftier
discounts.
“All [we’d be] doing is robbing Peter to pay
Paul,” he said. Even with its large discounts,
Mr. Sparangis’ district still has unmet needs.
Some districts say that even those solutions—better targeting funds, asking some districts to pay more—are no substitute for substantially boosting the cap on the E-rate fund.
“It’s just math. The need has eclipsed the
fund,” said Sheryl Abshire, the chief technology officer for the 34,000-student Calcasieu
Parish public schools in Louisiana. She is also
the past chairwoman of the board of the Consortium for School Networking, or cosn, which
represents chief technology officers from nearly
800 districts.
“If we rework some of the processes and don’t
raise the cap,” Ms. Abshire said, “I fear what
we’re doing is rearranging deck chairs on the
Titanic. … It’s not about greed or want; it’s
about mission-critical tools.”
Bolstering the size of the program would
mean either diverting money from other parts
of the Universal Service Fund—which also
helps bring telecommunications services to remote areas and rural health centers, and telephones to low-income people—or revisiting the
program’s complicated fee structure, in which

The DIGITAL EDUCATION blog tracks news and trends on this issue.

BUILDING A NEW AND
IMPROVED E-RATE

As advocates begin a behind-thepowerful telecommunications companies have
scenes push for changes to the E-rate,
an interest.
Some district officials would like to see the
spurred in part by the upcoming
fcc address contributions, even as they realize
common-core online tests, the Federal
it would be an uphill political battle.
Communications Commission—and,
“We could raise the cap, we could raise the
potentially, Congress—has a set
fee, we could widen the net of what we collect
of choices for building a new and
fees on,” said Mr. Sparangis. “It’s just pennies
out of people’s pockets.”
improved “E-rate 2.0.” Among the
But he added that telecommunications comideas proposed:
panies—which hold a lot of sway in Washington—would see any increase in fees as a tax.
“That’s the push and pull on this,” he said.
LIMIT the number of services
Representatives from the telecommunications
targeted first for financing
industry declined to comment for this story.
under the E-rate’s complicated
And while the fcc revisits the E-rate program
discount system. Right now,
periodically—
districts that want to offer such
there were key
INCREASE the size of the
changes in 2010,
telecommunications services
E-rate fund, which could
including indexas local and long-distance
mean siphoning off fees from
ing the cap to
telephone and cellphone plans,
another program, changing
inflation—it
digital-transmission services,
the fee structure so that
would be highly
Internet access, and Web-hosting
telecommunications customers
unusual for the
get priority.
pay higher fees, or requiring more
agency to concompanies to pay into the fund.
sider revamping
REQUIRE the poorest districts—
the fee structure
which now have 90 percent of
PROVIDE pricealongside tweaks to the
their services covered—to kick in
comparison information
E-rate itself. The fcc has
a higher share of the cost to help
about the cost of different
broad, but not unlimited,
ensure they are invested in the
authority to make changes
services to help inform
effective use of the funding.
to the E-rate and the Unipurchasing decisions.
versal Service Fund. The
organization declined to comment on
INVEST one-time federal dollars to help
its ability to act on suggestions made
school districts put in place the infrastructure
by interest groups, because they reneeded for fast Internet connections. That
main hypothetical at this point, a secould cost more than $7 billion, according to
nior fcc official said.
EducationSuperHighway, a San FranciscoPolicymakers are becoming increasbased nonprofit that works to help districts
ingly aware of the E-rate’s capacity
build their broadband infrastructure, but the
problems, meanwhile, even though neither Congress nor the Obama adminisspending could take considerable pressure
tration has yet sketched out a road map
off the E-rate program in future years.
for what a restructured
program might look like.
REDIRECT recent
SET clear “capacity goals” for schools
Last month, however,
savings from another
seeking aid through the E-rate,
Jessica Rosenworcel, an
Universal Service
encourage more public-private
fcc commissioner, floated
Fund program,
partnerships, and create a simpler
a list of “E-rate 2.0” proLifeline, to the E-rate.
process for E-rate applications.
posals for modernizing
the program, which include setting specific goals for the program and
GIVE schools broader
increasing the size of the fund by redirecting
leeway over how to use their
the savings from another program financed by
E-rate discounts, but cap
the Universal Service Fund.
the amount of money each
That would likely result in hundreds of
district receives. That would
millions—not billions—of extra E-rate dolencourage schools to choose
lars—a step in the right direction, but not
the services that are most
enough to keep up with rising demand, said
important to them, proponents
Jon Bernstein, the president of the Washof the idea say. Caps would be
ington-based Bernstein Strategy Group, a
based on student population
government-relations firm that represents
and economic needs.
nonprofit and corporate clients in the education technology sector.
The broad principles Ms. Rosenworcel
BUILD a “digital depository” staffed by
sketched out may have to hold off for a
information technology and business
while, since the fcc recently lost its chairexperts to help schools make better use of
man. Advocates consider it unlikely that
scarce E-rate dollars. Districts would have
there will be substantial changes in the
to form multidistrict consortia to access
E-rate until a new chairman is in place.
the depository—a way to ensure critical
President Barack Obama has nominated
mass and boost purchasing power. The
Thomas Wheeler, a former chief executive
of the National Television Cable Associadepository would help districts overhaul
tion to fill the slot.
technology-procurement practices and
share ideas about how to improve the use
Coverage of the education industry and K-12
of technology in education.
innovation is supported in part by a grant
from the Bill & Melinda Gates Foundation.
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the content of this coverage.

www.edweek.org/go/digitaleducation

SOURCES: Education Week; Funds for
Learning; NewSchools Venture Fund;
Federal Communications Commission

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Education Week - May 15, 2013

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