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Campus Networks

E-rate Demand Outstripping Availability - Changes Needed!

by Chris Oskuie on ‎02-05-2013 04:07 AM (1,475 Views)

Before I get to today's topic, let me put in a shameless plug for the Launch of our New Community site for the Education Segment.  You can find the site at . Lots of K-12/Primary Schools, Higher Education and Research & Education Network content has been posted there, as well as opporunities to join in conversations with your peers on topics like today's topic: the state of the E-rate program.  Join us on the Education Community site!


In the US, a big day for K-12 IT administrators draws near.  This year that day is Thursday February 14, 2013.  This is the last day for schools and libraries to file their FCC Form 470s.The universal service Schools and Libraries Program, commonly known as “E-rate,” provides schools and libraries discounts of up to 90 percent to help them obtain affordable telecommunications and Internet access.


The Form 470 is a School or Library's application to receive those discounts.  There is a long list of "eligible services"  under this program that is administered by the FCC and its agency the Universal Service Administrative Company (USAC). (the entire list of FY2013 eligible services can be found here:


To simplify, they boil down into 2 categories Priority 1 services and Priority 2 services:

  • Priority 1 services include: Telecommunications Services, Telecommunications, Internet Access Services and the necessary maintenance/technical support to reliably maintain those services.
  • Priority 2 services include: Internal connections (switches, routers, wireless network infrastructure, servers, some software, video transmission within the factility, etc.) and Basic Maintenance of those eligible Internal Connections Services.


The pool of available funds for ALL e-rate eligible discounts is relatively fixed, generally around $2-3B annually.  The money contributed to the fund comes from the "Universal Service" fees you and I pay on our cell phone, landline and other communication services bills.  (I bet you always wondered what that was... )

Here lies the issue, the demand for e-rate services in FY2012 topped over $5B and continues to rise.  And, as the names imply, Priority 1 services take precedent over Priority 2 services.  The net result:  there are not many funds left over for Internal connections and only the poorest of the poor schools will receive funding.

Funding Year 2010 was the last year that all applicants with valid Priority 2 requests were provided Funding commitments.  In Funding Year 2011, all Priority 2 funding applications of schools at 87% discount level and below were denied.  In Funding Year 2012, all Priority 2 funding application of schools at 89% discount level and below are being denied.  For funding year 2013, only schools with discount levels of 90% may receive funding for Priority 2 requests.


In addition to the lack of funding for the current and last 2 Funding Years, there is a "2-in-5" rule that states that a single school site is only eligible for Priority 2 funding requests 2 years out of 5 years.  So that means there are many schools out there that have not had any infrastructure upgrades for many years now.  This can't be good with Schools embracing new technology based learning initiatives like online testing, distance learning, bring your own device and other one-to-one computing initiatives.


The demand issue is not lost on the FCC, in fact below is an excerpt from the FCC's National Broadband Plan Agenda:


Recommendation 11.16: The FCC should provide E-rate support for internal connections to more schools and libraries.

The E-rate program provides 2 “priorities” for discounting telecommunications services. Priority 1 is for external telecommunications connections and Priority 2 is for internal connections and wiring. While the E-rate program has always been able to fund all Priority 1 requests, Priority 2 funding requests have exceeded the E-rate program’s cap in every year but one during the program’s existence. In the past 10 years, only the neediest schools and libraries have received funding for the internal connections necessary to utilize increased broadband capacity, and the vast majority of requests for internal connections have gone unfunded. For example, in funding year 2007, applicants requested more than $2 billion for internal connections and internal connections maintenance but only $600 million was authorized for funding. Only schools or libraries at a discount level of 81% or higher received funding.

The result is that the vast majority of schools and libraries, while receiving discounts to help pay for broadband services, do not receive funds for the internal infrastructure necessary to utilize increased broadband capacity. In order to ensure that schools and libraries have robust broadband connections and the capability to deliver that capacity to classrooms and computer rooms, the FCC should develop ways that Priority 2 funding can be made available to more E-rate applicants.


So what should a School District do?  A couple recommendations/options:

1.  Continue to submit your Priority 2 applications.  This is the best way to show the FCC that demand for the Internal Connections program is still there.
2.  Provide input to the FCC on how the Priority 2 eligible services should be re-distributed so more schools are eligible.  A Notice of Proposed Rule Making will eventually be issued by the FCC to address this problem.  But When?  and will your district be heard in the new rules?  Both aspects need to be pushed for by your District, demand will only increase.
3.  Consider Brocade Network Subscription (BNS) service.  BNS allows a school district to acquire networking equipment through a monthly cost basis.  Ownership of the equipment retains with Brocade and the equipment can be returned to Brocade without any penalties.  Send me an email for more info on this program, you can also see an overview here:  Capital Solutions - Brocade


The e-rate program has been a great tool for educators to promote technology in their schools in times of constrained budgets.  Hopefully, with some reform and your input it can continue to provide these services.  Check out the discussion forum and let us know how your District is dealing with constrained e-rate funding.