Wheeler Proposes $1.5 Billion E-rate Cap Increase

Commissioner Jessica Rosenworcel, who with Wheeler and Mignon Clyburn helped approve July's E-rate modernization order on a party-line vote, stopped short of endorsing the proposal. Rosenworcel, who has called for increasing E-rate spending, said in a statement to us that instead of “letting other nations outspend us, out educate us, and out achieve us,” the commission now should "update the E-Rate cap and fully invest in the success of our schools and students in the digital age."

Education and library organizations, which have also been pressing for more funding, praised the proposal. “We will not be able to close the achievement gap unless we’re able to close the connectivity gap," Bob Wise, president of the Alliance for Excellent Education and former Democratic governor of West Virginia, said in a call with reporters.

Joined on a media call by Sen. Ed Markey, D-Mass., Wheeler said much of the 62.5 percent increase in the spending cap, from the current $2.4 billion to the proposed $3.9 billion annual limit, would make up for the loss of buying power the program has faced since it inception in 1997. The spending cap that year was $2.25 billion, he said, and while the cap was increased to $2.4 billion in 2010, it would have risen to $3.3 billion next year had it been increased at the rate of the Consumer Price Index changes each year since its start, an agency fact sheet said. Wheeler told reporters that the years since E-rate’s creation have seen technological advances that left many of the nation’s schools and libraries behind, and created disparities for poor and rural students.

About two-thirds of public schools nationally, serving more than 40 million students, do not meet the short-term goal of 100 Mbps per 1,000 students and staffing the commission set in July’s E-rate modernization order, the agency said. About 41 percent of rural schools lack access to fiber networks sufficient to meet the goal, compared with 31 percent of suburban and urban public schools, the agency said.

Calling the announcement “historic,” Markey said it would push the program toward the original goal of connecting students to the “world wide web… regardless of race or geography or income.” Markey co-sponsored the creation of the program as part of the 1996 Telecom Act

Raising the cap wouldn’t immediately increase E-rate spending by the full $1.5 billion increase in E-rate collections, FCC Managing Director Jon Wilkins told reporters. The agency arrived at the figure by anticipating future needs, he said. Under the USF, the agency is required to collect the amount needed to cover costs in its programs, including E-rate, so should spending rise to the level of the cap, the agency would have to collect the full additional $1.5 billion annually, an agency spokesman said.

July's E-rate modernization order (see 1407140044) changed the program by no longer making eligible for funding legacy costs things like pagers. Republican commissioners had predicted the commission would move to raise the funding cap after the November elections. “Mark my words ... in five months, maybe six, we'll be back at this table discussing how much to increase Americans’ phone bills,” Pai had said in dissenting at the time. “Now, less than two weeks after the election, those chickens are coming home to roost,” he said Monday.

USF Increase Debated

Pai said what he called a 17.2 percent tax increase for the total USF fee would impose “a greater burden on families struggling to make ends meet in this lackluster economy." Pai called for reforms instead.

The commission spokesman said the 17.2 percent figure was within the possible range of the impact, but the agency believes the increase would be closer to 16 percent. Hitting the spending cap would mean raising the average monthly 99-cent USF by 16 cents, the spokesman said. E-rate now represents about 25 cents of the current monthly fee. Wheeler told reporters that that the increase would be the equivalent of $1.90 annually.

The proposal didn't address the potentially contentious issue of increasing the contribution base to broadband. Wheeler said his proposal “deals with contribution system we have.” O’Rielly said Wheeler’s proposed increase would bring the total USF budget to approximately $10 billion. “How will the FCC pay for this spending spree?" he asked. "I predict the FCC will disastrously impose new fees on broadband service."

E-rate Study

A study released Monday by the Alliance for Excellent Education also found disparities in access to high-speed Internet at schools for minority and rural students. The study found 39 percent of white students had access at school to Internet at 100 Mbps or more, compared with 29 percent of Latino students and 27 percent of black students, said the study’s author, John Horrigan, during a call with reporters.

“Rural and low-income areas must have access to the world class connections they need to take advantage of today's digital learning tools,” House Commerce Committee ranking member Henry Waxman, D-Calif., said in a statement.

“The critical increase in permanent funding” Wheeler proposed “will help ensure that libraries can maintain the broadband upgrades we know the vast majority of our libraries are anxious to make,” American Library Association President Courtney Young said in a statement.