$314 Million Never Spent, Best Year Ever, and More E-Rate Notes

An e-rate expert discusses how regulation impacts the program for K-12. 

GUEST COLUMN | by Peter Kaplan

Three hundred and fourteen million dollars represents the committed funding to schools and libraries in FY2015 that was never spent. Interestingly, that figure also represents a positive record. FY2015 is the first year that the E-rate Modernization Order took effect, and 84 percent of committed dollars were utilized, the best percentage of any funding year since the E-rate program began.

Avoiding Underutilization

It should be a goal for the FCC to simplify complex regulations, and help schools get as close as possible to 100 percent utilization rate of all committed E-rate funds. It should also be a priority to avoid underutilization, which is often caused by commitments being delayed, a lack of understanding of rules and regulations, and the shifting guidance and changing standards that are used by USAC to approve a funding commitment or disbursement.

Fair Market Prices

The competitive bidding process has been designed from the beginning to ensure that schools and libraries receive fair market prices for services and goods. These institutions have had flexibility since the beginning of the program in how they describe what solutions they are looking for.

In Fall 2017, USAC shifted the standards and released new guidance that prescribed how certain Category One services should be procured. The guidance was somewhat confusing, and tied to a new Form 470 drop down menu for “Internet Access and Transport Bundled and Transport Only-NO ISP Service”.

Many of the Form 470 applications that based their competitive bidding on this guidance were either denied, or significantly delayed. The new procedure added to the level of complexity of the E-rate program, and is still causing some headaches for applicants.

Multiple School Sites

Another regulation to consider is the limitations on using funds for multiple school sites. Currently, if a district wants to use their Category Two budget funds and has multiple school sites, the budget cannot be utilized districtwide, it must be used individually, which can lead to underutilization. Districts should have a budget to spend based on local priorities and not have the rules dictate to this level of specificity.

Good, But Even Better

The E-rate Modernization Order provided some needed relief and streamlined the rules in some areas, however, there is room for additional reforms and changes to the program to make the process simpler and more efficient.

Here are a few rule changes that could either speed up commitments and/or disbursements to stakeholders:

1. Allow applicants to submit requests for all networking equipment, including I.P. telephone and network security and management tools. Category Two budget caps have a proven track record of guarding the available funds. Applicants should have the ability to put their Category Two infrastructure funds to use where they are needed most.

2. Rather than having site-specific budgets, there should be one overall Category Two budget for each school district or library system. This would allow an applicant to shift funding to the sites that need it the most, increase overall Category Two utilization, and significantly reduce the administrative burden on estimating and tracking 115,243 budgets.

3. Increase the student budget factor by two.

4. Increase the budget floors by a factor of three as the low budget floors are a significant impediment to utilization of Category Two funding.

Local school districts budgets are tight and often get scaled back each year by state legislatures. To best serve the E-rate community, we need to reflect on current regulations and revise to best fit the needs of school districts.

Our Students Deserve High-Speed Connections

As more technologies continue to be integrated into classroom learning environments, our students deserve to have high-speed broadband connections. The E-rate program has been one of the most successful federal programs over the last 20 years, and I am looking forward to working with the FCC and other E-rate stakeholders to making even more improvements and positive reform.

Peter Kaplan is Client Solutions, Executive at Funds For Learning, a professional firm specializing in the federal E-rate funding program. Find Peter on LinkedIn. Write to: pkaplan@fundsforlearning.com

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