Towards E-Rate Spending Transparency

The Federal Communications Commission is updating the E-Rate program which makes telecommunications more affordable for schools and libraries. A key goal of the update is to ensure that schools and libraries purchase services and equipment in a cost-effective manner. To reach this goal, the FCC is proposing to increase the transparency of E-rate spending and specifically the prices E-rate applicants pay for service. In July 2013, FCC Commissioner Ajit Pai noted that the E-Rate program needs “an easily accessible online resource so that the public can see in detail how much E-Rate funding is available to a school and how each school is spending its E-Rate funds.” In the current proceeding, the FCC is considering requiring the Universal Service Administrative Company (USAC), the administrator of E-rate funds, to create a website where any American could easily look up the details of how any participant in the E-rate program had used its funds in any given year.

The Benton Foundation, along with many other commenters in the FCC’s proceeding, agrees on the need for an online resource to document funding for E-Rate applicants, and believes an open and transparent listing of prices and speeds will help applicants better understand the bids they are receiving and provide context for analysis. For example, the State Educational Technology Directors Association notes:

“We have too little insight today into the E-Rate’s role in ensuring cost-efficiency of school networks. Pricing data negotiated and paid for by E-Rate applicants should be made transparent and publicly accessible via an easy-to-use online portal. This transparency will serve the dual purposes of educating applicants and providers both on the varying prices currently paid by applicants, as well as facilitate the conduct of special studies and analyses by interested 3rd parties to identify best practices that can be pursued by future applicants seeking greater cost-efficiencies. ”

Schools and libraries are institutions under pressure: shrinking budgets and expanding missions place administrators in new roles. If the FCC builds a clear, easy to search, open and transparent listing of prices and speeds for E-Rate eligible services, administrators could use that unbiased information to make smarter decisions when applying to the program.

An open and transparent listing of prices and speeds will help eliminate the environment where providers can easily violate the “lowest corresponding price” rule. Transparency is also a simple strategy to combat issues of waste. As Commissioner Pai noted, “With transparent decisions, the whole community can be involved in effective oversight.” Two agencies within the Department of Interior, Bureau of Indian Affairs and Bureau of Indian Education, note that, “Transparency breeds honesty, lower prices, and an open approach to the E-Rate process.” The New America Foundation’s Open Technology Institute (OTI) echoes that and emphasizes, “[a]rmed with data, schools and libraries could more easily self-assess whether they are receiving the services that they requested. This, in turn, would improve quality and help curb waste, fraud, and abuse in the program as a whole.”

An open and transparent listing will also support the FCC’s assessment of E-Rate success in building infrastructure and will assist with other data analysis. As EducationSuperHighway states, “The Commission should create a unified portal system coupled with a single national K-12/Library broadband infrastructure database in which applicants must document the broadband infrastructure installed in every school or district.

In our comments to the FCC, we argue that the FCC require openness and transparency so the program can be properly evaluated. An open and transparent listing of prices and speeds will help applicants better understand the bids they are receiving, provide context for analysis, and minimize waste.

My colleagues at the Benton Foundation are tracking the debate on modernizing the E-rate program to meet the educational needs of today and tomorrow. We hope you’ll join the discussion about getting America’s students ahead by connecting them to the tools they need to succeed in the 21st century.

Amina Fazlullah is the Director of Policy at the Benton Foundation, working to address the communication needs of vulnerable communities. Since 2010 Ms. Fazlullah has led the Benton Foundation's work on reforming the Federal Communications Commission's universal service programs with a specific focus on the Lifeline and E-rate programs. She works on the Benton Foundation's efforts to develop and support important consumer protection policies which help vulnerable communities access, adopt and utilize broadband and voice services. Ms. Fazlullah is also responsible for the Benton Foundation's efforts around spectrum policy and children's online privacy.