Draft E-Rate Order Calls for Gradual Phasing Out of Voice to All-Broadband

Under one aspect of the overhaul, the previous categories for funding, Priority One, which covers connections to schools and libraries, and Priority Two, which covers connections within the facilities, would be renamed categories One and Two, to no longer prioritize one over the other, said an agency official. All schools and libraries receiving Category Two funds would have a budget for the funding they will receive for the next five years, the official said. Those funds will continue to be appropriated under the current discount priority system, in which schools and libraries receive a higher percentage of their costs funded based on the number of children they serve who qualify for food stamps, said the official. The facilities eligible for the highest discounts will have priority to receive the funding each year, said the official.

That could pose problems, because lower priority schools and libraries may not receive funding for the first year or two, said an FCC official. Another said lower-priority schools would now be assured funding during the next five years, which is not assured now. During the first two years, the entire $2.4 billion budget will go to fund Category One, one official said. Category Two will be funded with $2 billion in previously unused funds -- $1 billion in 2014 and $1 billion in 2015, one official said. In the third, fourth and fifth years, the entire amount of the two categories combined will remain $2.4 billion annually, said an official. Category Two would be funded by efficiencies, purchasing transparency and from phasing out Category One funding for voice services by 20 percent a year over the next five years, an official said. As a first step in the transition, in 2014 funding would no longer be available for outdated technologies and services, including directory assistance, text messaging, email, Web hosting, or voicemail services, said an official.

Wheeler said in a blog post Friday (http://fcc.us/1w7OuSm) that the draft E-rate order attempts to tackle the “Wi-Fi gap” in schools and libraries, and would begin a “multi-year transition” of all E-rate funding away from legacy technologies like dial-up phone service and paging. An FCC fact sheet (http://fcc.us/UoFCu6) said the order will speed consideration of consortium applications to drive down prices, increasing transparency on how E-rate dollars are spent, and leverage General Services Administration pricing so schools can buy more for less.

The order would include some changes streamlining, including waivers of some competitive bidding requirements for preferred master contracts, and eliminating a requirement to develop a technology plan to receive funding, said an FCC official. The draft falls short of the reforms proposed by some FCC commissioners, said the official. The draft does move in the right direction and the task of winning a majority is not insurmountable, the official said.

The draft is “welcome,” said Marijke Visser, American Library Association’s assistant director in the Office for Information Technology Policy. The renaming of the categories for funding seemed an indication that one type was not a priority over the other, said Visser. The list of changes, while not as sweeping as those recommended by some like Commissioner Ajit Pai, was “great for us,” Visser said. “The barrier for libraries has always involved the difficulties of the application process. The challenge is a lot of the smaller libraries don’t have someone dedicated to the E-rate process.” Visser said the FCC still needs to increase funding for building broadband access to the schools.