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FCC Expands E-rate Using Unspent E-rate Funds

The program provides schools and libraries with discounts so those institutions can afford to obtain entry onto the Internet.

The E-rate program, a federal project designed to assist U.S. libraries and schools obtain access to the Internet, has been expanded by using $900 million in unspent E-rate money, says a top Federal Communications Commission (FCC) official who opposes using the unspent funds for the expansion.

The E-rate program provides schools and libraries with discounts so those institutions can afford to obtain entry onto the Internet, and the FCC’s expansion of the program seeks to furnish schools with more options for accessing the Internet that can be provided to not only students, but to the surrounding community, too.

In a written statement, the FCC says it has “upgraded and modernized the E-rate program,” but to pay for the expansion, the FCC re-appropriated “hundreds of millions of dollars” of unused E-rate funds. The FCC says re-allocating the funds was necessary because E-rate funding has been capped at $2.25 billion since the program began in 1997, but that the program���s operational costs have risen 30 percent during that time. “Since 1997 when the E-rate program started, inflation has raised costs 30 percent, but the program remained capped, significantly decreasing its effective purchasing power,” says the commission. In addition, the commission says it is “fiscally responsible” to tabulate “the cap on E-rate funding to inflation.”

Nonetheless, while most FCC commissioners hail the expansion, Commissioner Robert McDowell opposes raising the funding cap. In statement separate from the FCC’s, McDowell says, “I do not agree with the decision to raise the $2.25 billion E-rate cap by indexing it to overall inflation.” In addition, McDowell said the federal fiscal year 2010 allocation for E-rate had $900 million in unspent funds beyond the existing cap (the next federal fiscal year, FY 2011, starts on Oct. 1), causing him to question why the cap was raised. “In light of this, I question why the Commission is raising the cap when the fund has almost $1 billion in left over cash,” he said.

“This is the first time the E-rate cap has ever been raised, and tying it to a general inflation index may make future support of this program more difficult to achieve,” said McDowell, who added the commissioners’ action “is not fiscally prudent.”

The commission says the expansion of the E-rate program is designed to make “it easier for schools and libraries to get the highest speeds for the lowest prices by increasing their options for broadband providers and streamlining the application process.” The expansion covers three areas. Those areas are:

Super-Fast Fiber: The FCC’s E-rate Order will help provide schools and libraries with access to “affordable, super-fast fiber connections.” E-rate participants can use E-rate funds to connect to the Internet in the most cost-effective way possible, including via unused fiber optic lines already in place across the country and through existing state, regional and local networks. Using those fiber networks, schools and libraries can provide students and communities with cutting-edge connectivity, while at the same time saving millions of dollars by bypassing more expensive options. School Spots: The FCC is encouraging the creation of local “School Spots,” those are where schools have the option to provide Internet access to the local community after students go home. With affordable fiber, School Spots can be a major step toward connecting an anchor institution in every community to affordable 1 gigabit per second broadband. School Spots will help ensure that people who otherwise lack access can use broadband.

Learning On-the-Go: The FCC is launching a pilot program that supports off-campus wireless Internet connectivity for mobile learning devices such as digital textbooks and other innovative wireless devices.