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A “WATERSHED” MOMENT FOR E-RATE: FCC Votes to Modernize E-Rate Program, Provide an Additional $5 Billion for Wi-Fi Connections in Schools and Libraries Over Next Five Years

" a win for students, it’s a win for educators, and it’s a win for ratepayers," said FCC Chairman Tom Wheeler.

In a landmark move, the Federal Communications Commission (FCC) voted July 11 to modernize the federal E-rate program with the goal of providing greater Wi-Fi access to millions of students. The vote represents the first major change to the E-rate program since its creation in 1996.

“Today is a watershed moment in the history of the program, because we take the critical next step in the E-rate modernization process,” said FCC Chairman Tom Wheeler in his opening statement. “And we are doing it the right way. We are targeting already available funds to meet the greatest current needs, we are getting as much as we can out of every E-rate dollar, and we are formally and expeditiously investigating the appropriate funding level for this program, based upon the steps we take today. That is why this item is a win for students, it’s a win for educators, and it’s a win for ratepayers.”

E-rate, the federal government’s largest educational technology program, has been a tremendous success in supporting internet connectivity and other communications services for the nation’s schools and libraries. Today, more than 95 percent of schools have some basic internet connectivity, compared to just 14 percent when E-rate was enacted in 1996. Likewise, most public libraries today are connected to the internet with 98 percent offering public internet access.

As it was previously structured, however, E-rate provided little support for Wi-Fi even as students, teachers, and library patrons increasingly rely more on tablets, laptops, and other devices to access the internet. Wheeler notes that fewer than 5 percent of schools and only 1 percent of libraries received funding for Wi-Fi in recent years and no money was available for Wi-Fi last year.

According to an FCC factsheet, the E-rate Modernization Order increases focus on the “largest and most urgent need”—closing the Wi-Fi gap—while moving away from non-broadband services such as pagers and phones. This change alone is expected to expand Wi-Fi to more than 10 million students in 2015. The Order also takes several steps to make E-rate dollars go further, including increasing transparency on how they are spent and what prices are charged for E-rate services. It also makes the application process simpler and more efficient.

Regarding funding for the program, the Order maintains E-rate’s current budget of $2.4 billion, but it also makes available an additional $2 billion over the next two years to support Wi-Fi. For the following three years, the program will target $1 billion annually to Wi-Fi while ensuring funding is available for broadband connectivity to schools and libraries.

Wheeler also addressed possible funding increases for the E-rate program, noting that “no responsible business would run on an IT budget last reviewed in 1998.” He said it was his preferred method to modernize the program and then address its long-term funding needs. “It would make no sense to simply add more money to a program that was still set in the twentieth century,” Wheeler said. “The changes we adopt today give us the foundation to thoroughly understand and analyze the long-term funding needs of the program, and ensure that the program remains robust for years to come.”

To help answer the funding question, the FCC issued a Further Notice of Proposed Rulemaking asking for feedback on how to meet long-term funding needs to meet the goals and funding targets established in the Order. It also asks for feedback on how to take further steps to facilitate the use of cost-effective consortium-based purchasing and alternative methodologies for allocating support for library Wi-Fi connectivity.

“The E-rate program has been remarkably effective, but like an old cellphone, it was becoming steadily obsolete,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia, in a statement reacting to the FCC’s vote. “Today, the Federal Communications Commission delivered the next generation upgrade of education. Currently, many classrooms only have sufficient internet access for a few students to be online at the same time. That’s like packing Disney World with children, then announcing only one ride is working.

“Most importantly, the FCC’s action lays the foundation for the permanent expansion of E-rate that the nation’s schools and libraries so desperately need. Reliable access to high-speed broadband is as important to learning today as traditional textbooks were twenty years ago. Today’s vote was a critical first step. I urge the FCC to quickly take the next step and permanently increase funding for E-rate so that at least 99 percent of the nation’s students will have access to high-speed broadband in their schools and libraries within the next five years.”

More information on the E-rate Modernization Order, including statements by FCC commissioners, is available at

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