August 20, 2017

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Are Fewer Schools and Libraries Applying To the E-Rate Program?

Last year, E-Rate, the federal program that allows schools and libraries to get federal funds to pay for Internet connectivity, switched to an online application process, and much like the infamous rollout of Healthcare.gov in 2013, it was anything but smooth.

That’s left some experts wondering: have the program’s problems caused fewer schools and libraries to bother applying?

Perhaps, says John Herrington, CEO of Funds for Learning, an E-Rate consulting group. He says E-Rate applications are down 5 percent since last year’s tumultuous application process. The problems were significant. Although schools and libraries usually get their applications approved within a few months of submitting them, some groups are still waiting for approval for last year’s application, leaving them to foot the bill for expensive Internet service and connectivity projects in the meantime.

“The [online application] system is creating unnecessary hurdles for schools and libraries to even participate in the E-Rate program,” says Herrington. “The early pace of applications this year gave us some hope that maybe things wouldn’t turn out like they did, but, after all the dust settled, the number of applicants was down again.”

But the decline in applications may not be as simple as that, says Bill Herman, state E-Rate coordinator for Wisconsin. In 2015, E-Rate’s rules underwent “modernization,” which made many schools and libraries eligible for funding for infrastructure projects that improve Internet connectivity—such as networking equipment and maintenance—for the first time. To increase the amount of money available for these projects, E-Rate has slowly phased out funds for phone services. Schools and libraries can even get money to construct their own fiber networks.

Herman says Wisconsin’s E-Rate applications were down 18 percent in 2017 compared with 2015, primarily due to the decline in requests for telephone service funding. But the total money Wisconsin schools and libraries asked for went up 10 percent during that same period, from $44.1 million to $48.7 million.

Herman thinks that shift is partly due to the increase in availability of infrastructure funds.

“In Wisconsin, we have 426 school districts, but except for Milwaukee and a few others, none of them received any infrastructure funding for many years, so we’ve seen just a significant increase in the number of schools that can access it,” says Herman.

Also, Herman notes that E-Rate funding requests have been declining for years, long before the problematic online application or change in funding rules. In 2012, schools and libraries requested $5.2 billion nationally, and that number has been steadily declining, down to $3.2 billion this year.

“I think this concern about a decrease in funding requests is somewhat of a red herring. The important fact is that there are sufficient funds to ensure that all properly submitted applications are approved, which wasn’t always the case in prior years,” says Herman.

The data for the five largest states—California, Texas, Florida, New York and Pennsylvania–mostly show a decline in both application numbers and amount of money requested. But New York’s numbers are similar to Wisconsin’s, an increase in total money requested, especially in funding requests for infrastructure projects.

Idaho is experiencing the same trend, and Todd Lawrence, Idaho’s state E-Rate coordinator, says he expects Idaho’s numbers to keep rising. Last year’s problems were significant, he says, but in context, they were “just a blip” in the cycle of E-Rate funding years.

“Applicants are seeing some of the benefits of last year’s challenges. The process is a little bit easier. The applications are a third the length. It is still a little clunky, but it’s getting better,” says Lawrence.

But the Federal Communications Commission (FCC), which oversees the E-Rate program, doesn’t seem to have the same patience with the Universal Service Administration Company (USAC), the government entity that oversees the E-Rate process. USAC’s CEO Chris Henderson resigned May 4 after FCC chairman Ajit Pai issued a letter criticizing E-Rate’s online application system, which is $10 million over budget and still experiencing problems.

FCC Commissioner Mike O’Rielly said Henderson’s departure was a chance for USAC to “clean up its act.”

“Absent significant and timely improvements, I believe that all options should be on the table, including putting USAC’s functions out for contract,” O’Rielly said in a written statement.

USAC did not return repeated calls for comment on when a new CEO would be in place or how the organization plans to address challenges.

Despite problems, declining applications and political challenges, Idaho’s Lawrence says he believes E-Rate will continue to provide funding for schools and libraries. “Chairman Pai has been supportive of the program in and of itself,” says Lawrence. “There will be more revisions, a new modernization of the rules, but I don’t think that the E-Rate program is going to go away anytime soon.”


Megan Cottrell is a freelance reporter based in Michigan.

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Comments

  1. Regarding the decline in total money requested, I expect many libraries are starting to get faster cheaper broadband options. Eleven members of our consortium, comprising 35 sites, upgraded broadband service AND reduced costs, so our Category 1 E-Rate application this year is for less money.

    Regarding the decline in applications, E-Rate has always been a bad dream, but in 2016 it was a nightmare. Who doesn’t want to quit applying for E-Rate? If there were any less money on the table, we would.

  2. Kim Hicks says:

    Aside from the difficult to navigate website and being audited 3 times last year (yes on 3 different years-to no avail I might add as everything was fine) the biggest reason not to apply anymore is the fact that phones are being phased out. That has always been, by far, the biggest expense in our rural town and continues to be. I vowed to never apply again after all of the hours I wasted on audits last year (the most time consuming one was for $3.90 if you can imagine). But saving 80% on our internet bill was just too much money to pass up so I did apply. This was year 19 for me and while it has always been a bit cumbersome I never even considered passing on it before. I can’t help but wonder why they don’t just save a ton of money by skipping the middle man and give the money directly to the libraries to be used as needed. It’s not as if any library can get away with not having internet and the infrastructure required to run it, as it is an integral part of the role we play in our communities these last 15 years or so. The fastest broadband available here (100 Mbps) is less than $100 a month even in my small town with only 2 vendors competing. Small rural libraries don’t need infrastructure as much as we need help with our phone bills, if the money has to be dedicated to telecommunication expenses. Why not continue to offer all of the options at full discount and let each library decide which part of telecommunications they need it for the most?

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