O'Rielly Seeks USAC Assistance to Combat Overbuilding 'Waste' in E-Rate Program
FCC Commissioner Mike O'Rielly sought Universal Service Administrative Co. help in "identifying and eradicating potential waste in the E-rate program" for schools and libraries due to applicants seeking subsidy funding to overbuild existing broadband networks. O'Rielly noted he dissented from…
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a 2014 order that allowed E-rate discounts for "self-construction" but rejected recommendations to prohibit funding such projects in areas that already had broadband. He said he continues to hear concerns that USF support is "being wasted by E-rate applicants" on overbuilds, which he said is "especially problematic" when the existing networks are being subsidized, including by the high-cost USF program. "In those instances, ratepayer dollars are being used to support artificial competition potentially jeopardizing service to the broader community," he wrote in a letter posted Friday to USAC CEO Chris Henderson. O'Rielly said he was particularly troubled by a recent news article in which the school system in Arlington County, Virginia, discussed plans to seek E-rate funding to pay for a backup fiber network. He said he doesn't believe that's permitted under the FCC's rules, and regardless, he saw no policy justification to support such projects. O'Rielly sought answers from Henderson by Feb. 17 to a series of questions to better understand the scope of overbuilding under the program. USAC and Arlington County Schools didn't comment.