Recently, President Obama gave a speech reaffirming his ConnectED pledge to connect 99% of America’s students to high-speed broadband within five years. As the President put it: “In a Nation where we expect free WiFi with our coffee, why shouldn’t we have it in our schools?”
The President pointed to $750 million in new private-sector commitments to schools for non-E-rate goods and services from Apple, Autodesk, Microsoft, O’Reilly Media, and cellular carriers AT&T, Sprint, and Verizon. (Items not listed as eligible for eRate discount)
On the E-rate front, the President outlined a new FCC “plan to direct $2 billion over the next two years to dramatically expand its investment in high-speed connectivity for America’s schools and libraries. That investment will begin flowing to schools in 2014, and will focus specifically on the broadband connection and Wi-Fi that too many schools lack, and will be the foundation of the ConnectED transformation of schools.”
On Wednesday, FCC Chairman Wheeler made a presentation (see article: “Tom Wheeler; FCC Chairman on eRate and Education Issues) emphasizing his personal commitment to ConnectED’s goals, stating: “During my tenure as Chairman of the FCC there may be no bigger and more significant issue than making sure our schools and libraries are connected to high-speed broadband networks.” He went on to indicate that the FCC would be “applying a business-like approach” to E-rate “allowing us to double, to $2 billion, the money to be spent on high-speed connections beginning this year.”
The promise to double E-rate funding on broadband, starting this year, garnered a lot of press. But what did the Chairman mean by “this year?” And what do the Chairman’s remarks really mean for E-rate applicants? Our answer — at least in the short-term — is “not much.”
The first half of “this year” — if that means calendar 2014 — is the second half of FY 2013. The Chairman’s talk didn’t mention FY 2013 at all, and we expect no changes. E-rate is already on track to fund all valid Priority 1 requests, including broadband, in the current funding year. As indicated above, we expect the FCC to shortly approve the denial of all FY 2013 Priority 2 requests.
FY 2014 begins in the second half of calendar 2014. The Chairman promised to “fund all Priority 1 services in 2014.” With the roll-over we expect to be available for FY 2014 (see below), we were already projecting full Priority 1 funding. The Chairman said nothing about Priority 2 for FY 2014 which, if Priority 1 continues to increase, will be difficult to fund at any level.
The one concrete change for FY 2014 that the Chairman did mention was a plan to prioritize the review and approval of “consortia and other joint applications” to “accelerate” funding so as “to get cash that is already in the program working to support broadband projects more quickly.” Taking the position that “time is money,” the Chairman appears to mean that “more money” for broadband, at least this year, really means the same “money more quickly.”
The one reference the Chairman made to “more money” was the following single sentence: “Should it be necessary to increase the permanent funding levels for the E-Rate program, we will do what is appropriate” — in other words, no new funding for now.
So much for the short-term; but what about the long-term? The best way to interpret the promise to double E-rate funding on broadband, beginning this year, is to focus on the word “beginning.”
Most importantly, what the Chairman indicated was that the FCC would “release a Public Notice in the coming weeks seeking comment on a targeted set of issues.” The apparent goal is to fast track a restructuring of E-rate, effective for FY 2015, to re-prioritize existing E-rate funding to broadband. Without providing details, the Chairman indicated that this would include:
- Phasing out “legacy services, including low-bandwidth connections.”
- Targeting “high capacity connections” to ensure “high-speed WiFi” to all classrooms and libraries.
Reading between the lines, this suggests an end to Priority 1 and Priority 2, as we know them today. In the future, the highest priority will be on broadband services all the way to the classroom, with a focus on end-user wireless access in schools and libraries.
From an applicant perspective, our bottom line view on last week’s speeches is that there was no “ado” about FY 2013, little “ado” about FY 2014, and much “ado” about FY 2015 and beyond. What comes next is the release of the FCC’s Public Notice, probably by March.