FCC Seeks Comment on Sufficiency of Category 2 Budgets and E-rate Administration Generally

Late last Friday, the FCC’s Wireline Competition Bureau issued a Public Notice seeking comment on whether the per-student and per-square footage budgets set for E-rate Category 2 funding are sufficient. The FCC established budgets of $150 per student for schools, and a budget of $2.30 or $5.00 per square foot for libraries (depending on location) to be spent over the course of five years in its 2014 Second E-rate Modernization Order. Category 2 funding may be used to purchase on-premise communications equipment, but was also expanded in the FCC’s 2014 modernization proceeding to fund Wi-Fi services within in a school or library building in an significant expansion of the E-rate program. Category 1 funding, in contrast, is reserved for bringing connectivity from the outside community to the school or library. The Order directed the Bureau to report prior to the commencement of the 2019 E-rate funding year whether the Category 2 budgets were sufficient to increase access to funding for such equipment and services by schools and libraries. 

In addition to asking whether the current budget levels are sufficient, the notice also seeks comments on whether there is a better budgeting mechanism than per-student or per-square footage measurements. In 2014 when the FCC was formulating its modernization agenda for the E-rate program, Chairman Pai had strongly criticized the lack of control by local school and library representatives over how E-rate funding was used. It may be that he is now looking for a way to provide E-rate recipients much greater flexibility to purchase according to locally-determined priorities rather than based on the funding allocations and budgets assigned to the FCC-managed Categories 1 and 2.

The notice also invites commenters to provide feedback on their experiences with the E-rate program more generally, including their experiences with the E-rate Productivity Center (“EPC”) system. E-rate participants as well as Chairman Pai have been highly critical of the EPC, which the Chairman said has “created major headaches for applicants requesting E-Rate funding.”

Comments on the Bureau’s notice are due by October 23, 2017, and replies are due by November 7, 2017.