Funding, Grants & Awards

E-rate Update Helps Improve Internet Access at Schools, But Not Enough

• By Dian Schaffhauser
• 09/19/16

The biggest allotment of E-rate requests in applications for fiscal year 2016 was dedicated to data and internet service. More than $2.3 billion focused on that type of funding help, with the E-rate portion totaling $1.8 billion and the applicant portion covering $559 million. Nothing else came close. Requests related to voice services reached $897 million; switches and routers extended to $743 million; and on-campus wi-fi was $412 million.

Most applicants applied for Category 2 funding in FY2016. Fifty seven percent sought E-rate discounts to cover on-campus broadband connectivity, either in the form of internal connections or managed internal broadband services. The average Category 2 spending per site dipped from fiscal year 2015 to fiscal year 2016. Whereas the average school spending in 2015 was $37,911, that had dropped to $31,032 in 2016. During the same period, the portion of cost expected to come from the applicant rose, from 25 percent in 2015 to 29 percent in 2016.

Those statistics come from a report compiled by E-rate consultancy Funds for Learning from 2016 request data. The same report also shared the results of a survey done among a nationwide set of 1016 E-rate applicants whose demographics equate to the overall population of applicants.

E-rate was initially created from the Telecommunications Act of 1996 to help schools and libraries boost their communications capabilities by providing financial support for Internet access, telecommunications and computer networking. Currently, about 24,000 applicants participate in the program, which has benefited 118,000 schools and libraries in the two decades since E-rate's launch.

The survey found that nine in 10 respondents said they expected to add faster internet connections over the next three years. Two-thirds (65 percent) said they expected to attain a bandwidth increase of 50 percent or more from what they currently have in place.

Much of that growth is directly tied to a major change made in 2014 by the Federal Communications Commission, which modernized the E-rate regulations and put new emphasis on high-speed connectivity to buildings and on campus Internet access.

As part of that program update the FCC poured more funding into E-rate and set a five-year $150/student budget cap to enable schools and libraries to update their Category 2 infrastructure rapidly. According to the survey, only 20 percent of applicants have "exhausted" or will use up their budget cap by the end of the 2016 fiscal year. Another 63 percent reported they anticipate doing so by the end of fiscal year 2019. And 15 percent said they don't expect to hit their funding caps at all.

However, the cap may not be enough. The survey found that more than eight in 10 applicants (82 percent) said they consider the $150 cap insufficient to meet their school's needs. Perhaps that's why almost all respondents (94 percent) said they expect to continue applying for E-rate funding in the future.

Yet three-quarters of applicants (76 percent) agreed with the statement, "We have faster Internet because of the E-rate program."

What changes would applicants like to see made? Twelve percent said they'd like to see filtering/security solutions become part of the eligible services list and 10 percent said they would like to add end-user devices.

The full report is freely available on the Funds for Learning website.