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Funding Shake-Up May Change Subsidies for Internet Access in Schools, Libraries

Federal Communications Commission Chairman Tom Wheeler’s plan to shake up the E-Rate program of federal subsidies for Internet service in public schools and libraries has only partly been successful — his FCC colleagues have agreed to make more money available for Wi-Fi, as Wheeler proposed in June, but only if the money isn’t needed for basic Internet connections.

The commission’s decision is the latest development in a continuing debate over how E-Rate should be used and what role the government should play in expanding and improving Internet service.

The subsidies are paid for with a maximum $2.4 billion from the Universal Service Fund Congress created in 1996, partly to provide Internet to schools and libraries and to extend advanced telecommunications to rural areas of the country. The money in the fund comes from fees on phones and other telecommunications services.

E-Rate has two priorities: Helping schools and libraries pay for the basic cost of Internet access by giving them discounts of 20 percent to 90 percent; and, if there is money left, improving internal networks in the schools and libraries by adding thing such as wireless routers.

Wheeler, who has been a lobbyist for the telecommunications and cable TV industries, has said it is important to speed up internal networks. He proposed funneling an additional $1 billion a year into these “Priority 2” programs to expand wireless access.

The money for the first two years would come from efficiencies within the E-Rate program; in future years, it will come from winding down support for phone services and cutting off subsidies for outdated technology such as pagers, which would be a big shift in what services the program currently funds.

Some Democrats and education organizations questioned whether there would be enough savings from outdated technology to continue providing the $1 billion for wireless connections.

Republicans also questioned Wheeler’s math and contended his proposal would force the FCC to raise the overall cap on the Universal Service Fund.

The proposal the FCC ultimately adopted earlier this month targets $1 billion for wireless needs, but includes what Wheeler called an “escape valve, a safety net” to ensure basic broadband connections are prioritized over wireless funding, should the need arise.

Square Feet of Wi-Fi

Education groups also had balked at the way Wheeler proposed allocating money for wireless connections and calculating the poverty metric used to provide discounts on Internet service.

Wheeler’s proposal would have awarded Priority 2 wireless funds on a per-pupil basis for schools and a per-square-foot basis for libraries, rather than on the basis of plans submitted by grant recipients.

Education groups said this shift failed to account for the varying prices of wireless expansion projects, particularly in rural areas where costs may be high. They also said it went against E-Rate’s original purpose to target pockets of poverty, as opposed to increasing access for every student.

Republicans panned that part of the proposal, too; FCC Commissioner Michael O’Rielly called it “one of the silliest policies I’ve ever seen.”

And some urban libraries had contended that determining Wi-Fi distributions based on a square-foot calculation would be unfair to urban libraries.

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