Uncertain Future for Federal Ed Tech Funding Program Doesn't Deter Applicants

• By Dian Schaffhauser
• 05/07/18

Nine in 10 E-rate applicants intend to continue applying for funding in the future, even as the program faces an uncertain future. Eight in 10 consider the program "vital" to their organization's internet connectivity goals. A similar number reported that they have faster internet because of E-rate. However, people would like the processes to be easier for applying and getting their money. While most E-rate recipients believe that the program is accomplishing the FCC goal of providing affordable access to broadband (81 percent) and cost-effectiveness (63 percent), more disagree than agree that the application and invoice review processes are "fast, simple and efficient" (44 percent vs. 35 percent). As an example of dissatisfaction, one applicant reported, "The [E-rate Productivity Center] portal is extremely difficult to use. I don't understand why you don't allow our E-rate consultant great access to our portal and allow them to manage the portal for us." Said another, "...It's almost scary to submit an invoice anymore because you can be denied payment for something even though you went through all of the trouble to apply and get approved."

Those were just a few of the findings reported in the latest "E-rate Trends Report," issued a few months ago by Funds for Learning, a company that works with schools, districts and libraries to help them obtain their funding. Universal Service Funding for Schools and Libraries, otherwise known as E-rate, provides discounts to eligible educational agencies and libraries to purchase goods and services for connecting students and library patrons to the Internet. The report covered 2017 trends.

More recently, Funds for Learning issued an update on funding applications in fiscal year 2018. The analysis found that while the number of school and library sites with requests for broadband E-rate support is "steady" in the new funding year, coverage for voice services is continuing its precipitous decline.

E-rate discounts requested have dropped from $3 billion in 2017 to $2.8 billion in 2018. That's just half of what it was in 2012, when funding reached $5.2 billion. Category 1 pre-discount expenses (the total cost of the work under consideration before the discount) made up more than $2.6 billion for 2018, the bulk of which was for fiber; category 2 was $1.1 billion; and voice services were $266 million, primarily for local phone and long-distance services.

Nearly 128,000 sites were listed as pursuing Category 1 funding to cover data and Internet access, down slightly from 128,639 for 2017. However, noted Funds for Learning CEO John Harrington, during a webinar discussing the results, while the applicants are seeking help in adding or expanding Internet access, the performance they're pursuing equals "double or triple the speed" than in previous years.

Over the same period, Category 1 voice service requests dropped from 84,733 in 2017 to 33,650 in 2018. The reason: The FCC is phasing out support for phone services so fewer applicants are applying. By fiscal year 2019, coverage of voice services will be eliminated completely from the discount program. According to Funds for Learning, "This has left schools and libraries shouldering an estimated $800 million in services that formerly qualified." In fact, the 2017 trends survey found that voice services is the most sought-after change to the E-rate eligible services list, mentioned by 55 percent of respondents.

The analysis also found that about 45,000 sites were listed on Category 2 funding applications for on-campus Wi-Fi networks. This reflects a small drop from the previous year, "tied primarily to the number of sites that are prohibited from seeking additional discounts because they have 'maxed out' their Category 2 budgets," Huntington explained.

Now the company has opened its annual survey to solicit feedback from E-rate applicants for this year. The anonymized results will be issued to the FCC and shared publicly. The link to that as well as answers to frequently asked questions about the survey are on the Funds for Learning website.

As Harrington pointed out, the modernization order that expanded federal E-rate funding to include broadband and internet services is set to expire in 2020. Participating in the survey is one way to "let the FCC know your thoughts on the impact of Category 1 services, the need for Category 2 purchases, and the loss of support for telephone service."