What's in the E-rate Order? Affordable High-Speed Broadband To and Within Schools and Libraries

What's in the E-rate Order?
Affordable High-Speed Broadband To and Within Schools and Libraries

On July 23, the Federal Communications Commission released its report and order on “Modernizing the E-rate Program for Schools and Libraries,” an effort to reorient the E-rate program to focus on high-speed broadband for U.S. schools and libraries.

The FCC adopted three goals for the E-rate program:

1. ensuring affordable access to high-speed broadband sufficient to support digital learning in schools and robust connectivity for all libraries;
2. maximizing the cost-effectiveness of spending for E-rate supported purchases; and
3. making the E-rate application process and other E-rate processes fast, simple and efficient.

In this the first of a series of articles looking at the order, we examine the FCC’s efforts to bring Internet connectivity both to the building and to devices within schools and libraries.

I. Ensuring Affordable Access to High-Speed Broadband Sufficient to Support Digital Learning in Schools and Robust Connectivity for All Libraries

The E-rate program has become increasingly ill-equipped to meet the demands of the modern classroom and library. High-speed broadband is essential for students, teachers, and library patrons seeking to take advantage of the rapidly expanding opportunities for interactive digital learning. The availability of high-speed broadband in schools transforms learning opportunities and expands school boundaries by providing all students access to high-quality courses and expert instruction.

The FCC finds that high-speed broadband connections should be available to students and teachers throughout a school, enabling them to utilize online materials and blended learning throughout the day and as part of their curriculum. In fact, the FCC focuses on the internal connections, including Wi-Fi, needed for robust broadband connectivity in all classrooms and libraries. Why? In most funding years, the E-rate program has been able to provide support for internal connections, including Wi-Fi, only to schools and libraries entitled to the highest discount levels. And in 2013, for the first time ever, no E-rate support was available for internal connections. In contrast, the E-rate program has always been able to meet demand for services that provide connectivity to schools and libraries. However, only about half of the $2.4 billion E-rate budget is used to support funding requests focused on broadband connectivity to schools and libraries.

In this order the FCC:

• ensures more equitable, reliable support for Wi-Fi networks, and other internal connections supporting broadband services, within schools and libraries and
• eliminates support for certain legacy, non-broadband services to help free up funding for these internal broadband connections

A. Providing More Equitable Funding for Broadband Within Schools and Libraries

Internal connections that support broadband connectivity will now be called “category two” services, rather than “priority two” services in recognition of the importance of Wi-Fi networks in connecting students and library patrons. In the short term, in order to provide schools and libraries more access to category two funds over the next two funding years, the FCC will make an additional $1 billion available over each of the next two years for internal connections. The FCC also set an annual budget target of $1 billion for category two services. And the FCC increased the minimum contribution rate for these category two services from 10 to 15 percent to encourage applicants to pursue the most cost-effective options. For the next two years, the FCC will test reasonable maximum per-student and per-library pre-discount budgets for category two services in order to ensure greater access to category two funding sufficient to deploy robust LANs and WLANs. Finally, the FCC updated its rules regarding eligible services to align with this new focus on providing E-rate support to services necessary for broadband connectivity.

To ensure the category two budgets the FCC sets are sufficient to meet the minimum demand that certain schools and libraries might have regardless of size, the FCC also established a pre-discount funding floor of $9,200 in category two support available for each school or library. Schools in districts that seek category two funding during funding years 2015 or 2016 will be eligible to request E-rate discounts on purchases of up to $150 (pre-discount) per student for category two services over a five-year period. Likewise, library systems and libraries that seek category two funding in funding years 2015 or 2016 may request E-rate discounts on purchases of up to $2.30 (pre-discount) per square foot over a five-year period. If an applicant receives funding for category two services in funding year 2015 or 2016, the five-year budget will apply in the subsequent five funding years, in lieu of the existing “two-in-five” rule.

Applicants will be required to seek support for category two services on a school-by-school and library-by-library basis, although school districts will use a single district-wide discount rate for all of their schools, as will library systems for all of their libraries. Under this approach, school districts, whether public or made up of more than one independent school under central control, will have the flexibility to request support for any school or group of its schools each funding year, using the number of students in any school getting LAN/WLAN upgrades to determine the maximum eligible pre-discount amount in a given funding year for that school.

The FCC decided that that E-rate must maintain its historic focus on poverty in distributing support. If demand for internal connections exceeds the available funding for category two services, the FCC will prioritize access to internal connections funding based on concentrations of poverty. In the event that requests for category one services are less than the available funding and demand for category two services is higher than the $1 billion target for category two services at the close of the funding year window, the FCC will redirect the excess funding to category two services in the same funding year.

B. Eliminating Support for Telephone Features, Outdated Services, and Non-Broadband Services That Do Not Facilitate High-Speed Broadband

The FCC decided that phasing down support for voice services and eliminating support for certain legacy services will allow us to focus E-rate program funding on the high-speed broadband needed by schools to enable digital learning and by all libraries to meet the broadband needs of their patrons. The FCC is limiting internal connections support to those broadband distribution services and equipment needed to deliver broadband to students and library patrons: routers, switches, wireless access points, internal cabling, racks, wireless controller systems, firewall services, uninterruptable power supply, and the software supporting each of these components used to distribute high-speed broadband throughout school buildings and libraries. To focus support on only those internal connections necessary to enable high-speed broadband connectivity, beginning in funding year 2015, the FCC is eliminating E-rate support for: Circuit Cards/Components; Interfaces, Gateways, Antennas; Servers; Software; Storage Devices; Telephone Components, Video Components, as well as voice over IP or video over IP components, and the components, such as virtual private networks, that are listed under Data Protection other than firewalls and uninterruptible power supply/battery backup. The FCC will also eliminate E-rate support for e-mail, web hosting, and voicemail beginning in funding year 2015.

Instead of immediately eliminating support for voice services, the FCC will reduce voice support each funding year by subtracting the discount rate applicants receive for voice services by 20 percentage points every funding year.

• In funding year 2015, the discounts applicants receive for voice services will be reduced by 20 percentage points from their discount rates for other eligible services.
• In funding year 2016, the discounts applicants receive for voice services will be 40 percentage points lower than their discount rates for other eligible services. In each subsequent funding year, the discounts applicants receive for voice services will be reduced by an additional 20 percentage points.

The FCC will report on the impact of these discount reductions for voice support by October 1, 2017.

II. Measuring Progress

The FCC will evaluate progress towards the first goal by comparing connectivity to and within schools and libraries with widely accepted connectivity targets that are based on digital learning and library needs. The FCC divides the connectivity needs of schools and libraries into three components and, for each of these three network components, the FCC adopts separate measures of progress, including distinct connectivity targets.

Internet Access – defined as the connection or connections that allow traffic to flow from a school district or library system aggregation point to the public Internet. As part of the purchase of Internet access, the school district or library system may purchase dedicated connectivity (e.g., dedicated transport) from its point of aggregation to its Internet Service Provider’s (ISP’s) point of presence. For schools and libraries that are not connected to a district Wide Area Networking (WAN), Internet access simply refers to the school’s or library’s direct connection to the public Internet.

• Connectivity Targets: Internet access for schools of at least 100 Mbps per 1,000 students and staff (users) in the short term and 1 Gbps Internet access per 1,000 users in the longer term. The FCC will measure Internet connectivity at the district level for school districts and at the school level for schools that are not members of a district (e.g., private schools). All libraries that serve fewer than 50,000 people should have broadband speeds of at least 100 Mbps and all libraries that serve 50,000 people or more should have broadband speeds of at least 1 Gbps.
• Affordability: The FCC will track pricing as a function of bandwidth and will regularly report normalized pricing (e.g., price per Mbps) for Internet access connectivity and identify any outliers.

WAN/Last-Mile – School districts and library systems frequently connect individual schools and libraries to a central aggregation point, such as a district, county, or regional data hub, that hosts the Internet demarcation point for the entire district, county, regional, or library system. The FCC refers to these connections as WAN or last mile connections.

• Connectivity Targets: The FCC target for WAN connectivity is the total number of schools that have a connection capable of providing a dedicated data service scalable to 10 Gbps per 1,000 students. In most cases, a 1 Gbps fiber connection can be readily scaled to 10 Gbps with upgraded networking equipment. The FCC will to continue analyzing data on WAN connectivity. For libraries, the FCC believes its record is not sufficiently developed to establish a performance measure and a WAN connectivity target at this time. However, to the extent that libraries are connected by a WAN, similar to the FCC approach with schools, the FCC will measure the total number of libraries that have a connection capable of providing a data service scalable to at least 10 Gbps.
• Affordability: The FCC will measure affordability of WAN connections by tracking pricing as a function of bandwidth. The FCC will regularly report normalized pricing (e.g., price per Mbps) for WAN connectivity and to identify any outliers.

Internal Connections – This category encompasses the infrastructure necessary to deliver Internet access from the edge of a school or library to the actual student, faculty, or patron end-user device. Internal connections include Wi-Fi.

• Connectivity Targets: The FCC will survey school districts and libraries to gauge the sufficiency of internal connections.
• Affordability: The FCC will seek feedback from those schools and libraries that have insufficient WLAN capacity and coverage to support the educational or library activities conducted at their school or library site as to the reason for the lack of sufficient capacity and coverage (e.g., affordability of equipment, or lack of demand for Wi-Fi).

The FCC will evaluate actual bandwidth usage and network performance statistics to continually refine connectivity targets over time.

Tomorrow we’ll look at how the FCC aims to maximize the cost-effectiveness of spending for E-rate supported purchases. We’ll also explore soon making the E-rate application process and other E-rate processes fast, simple and efficient. And then we’ll look at the FCC’s new proceeding on meeting the future funding needs of the E-rate program in light of these new goals.