E-Rate for Education | Citizens Against Government Waste

E-Rate for Education

The WasteWatcher

Without a doubt, broadband provides the promise of improving every aspect of daily life in America.  Job seekers can find employers, shoppers can find great deals and information can be shared through Internet access. 

On June 14, 2013, the White House released a report on the state of broadband.  According to the report, in 2000 4.4 percent of American households had connection to broadband in their homes; by 2010 that number had reached 68 percent and average delivered speeds have doubled since 2009.  In 2012, the average mobile data connection speed was 2.6 Mbps, nearly twice that available in Western Europe, and more than five times the global average. 

Broadband brings technology innovation to the classroom, including digital textbooks, interactive learning games, digital instruction personalized for each student and online courses from colleges and universities.  In May 2013, the Georgia Institute for Technology announced plans to offer what is known as a “massive open online course (MOOC)” for a Masters degree in Computer Science in collaboration with Udacity Inc. and AT&T for a cost of $7,000, which is a significant savings from traditional college costs.

According to a report released during The Cable Show in June 2013 from Cable in the Classroom on “Trends in K12 Education,” 33 percent of schools currently use social media in teaching, 46 percent plan to exclusively use online assessment tests within the next five years, 50 percent of schools have adopted a formal plan to transition to digital textbooks by 2018, and 20 states have already shifted their funding from print to digital textbooks.  Yet, 80 percent of the schools surveyed for the report also indicated that their existing broadband connections are insufficient to meet their current needs.

On June 6, 2013, President Obama announced new federal efforts to bring a minimum of 100 Mbps broadband with a goal of 1 Gbps to 99 percent of all schools by 2015.  The administration’s ConnectED program would be funded through the Federal Communication Commission’s (FCC) E-Rate fund.  According to a speech by Department of Education Secretary Arne Duncan at The Cable Show on June 12, the cost of the program would amount to the price of a postage stamp on consumers’ communications bills. 

The E-Rate program is part of the Universal Service Fund (USF) and offers funding and discounts to schools and libraries in five service categories: telecommunications, telecommunications services, Internet access, internal connections, and basic maintenance of internal connections. 

The USF is an unfunded mandate on the telecommunications industry, which passes the charges on to consumers in the form of the USF fee.  The amount of the fee is based on adjusted contribution rates that rise or fall based on the cost of the entire USF program.  The USF contribution rate currently hovers around 15-17 percent and helps to explain some of the exorbitant taxes and fees already found on consumers’ bills.  If the E-Rate program is expanded as proposed by the administration, then funds will either need to be redirected from other USF programs such as the high-cost fund or the Lifeline/Linkup fund, or additional revenue sources will need to be found.

Expanding the E-Rate program under USF to provide more broadband to schools across the country isn’t a new idea.  In 2009, the stimulus package provided broadband loans to communities for broadband build-out under the National Telecommunications and Information Administrations Broadband Technology Opportunities Grant Program (BTOP).  This has led to the build-out of fiber optic lines over the top of existing fiber lines, directly competing against those built by the private sector. 

For example, in Colorado, Eagle-Net, received a BTOP stimulus grant award of $100.6 million to bring high speed broadband services to all the schools, libraries and anchor institutions in underserved areas of Colorado.  This is one of the larger BTOP grants provided under the stimulus.  On February 7, 2013, KUSA-Channel 9 News in Denver, Colorado reported on issues within the administration of the grant under which the funding was used to build new fiber optic lines alongside those already in existence, directly competing with local telecommunication providers.  The report cited a school in Agate, Colorado which serves 11 students and now has three separate high speed broadband connections, including the one provided by taxpayer dollars.  Meanwhile, 80 percent of schools across the country still wait for adequate broadband service.

This example and other issues bring the current effectiveness of the E-Rate program and the overall USF program into question.  While efforts to improve digital learning across the country are laudable, many private sector companies are already stepping up to the plate to improve technology and digital literacy in schools across the country.  ConnectED seems likely to become another wasteful program that will fail to meet its stated goals at the taxpayers’ expense.

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