Wheeler FCC Driving Toward Controversial E-Rate Overhaul

Tom Wheeler photo credit: LA Times

Under new Chairman Tom Wheeler, the Federal Communications Commission has intensified and accelerated its initiative to complete a massive transformation of its E-Rate universal service fund program to bring advanced high-speed broadband capabilities to America’s K-12 schools and libraries in the next few months–perhaps as early as this summer.

If Wheeler and the Democratic members of the FCC succeed, they will likely do so over strenuous objections of their Republican colleagues and Republican congressional leaders.

The drive to transform the program–formally known as the Schools and Libraries Program–into a high-speed broadband fund to enhance digital learning for students and library users across America has been underway since last summer, but it has picked up tremendous momentum since President Obama singled it out in his January 28 State of the Union address and then doubled down by hawking it during his post-SOTU “tour.” The president first outlined his vision for reform last June when he called on the FCC to overhaul the E-Rate program to connect 99 percent of America’s students to broadband at speeds of at least 100 megabits per second (Mbps) by 2015, with a target of 1 gigabit per second (Gbps) by 2020. In the SOTU, Obama made clear that he intends the expansion of the E-Rate fund to be one of the signature accomplishments of his second term, and on Feb. 4 he advanced the ball by announcing $750 million in commitments of services and equipment by the likes of Apple Inc., Verizon Communications Inc., Microsoft Inc., Sprint Corp. and other leading telecom companies.

Momentum Building, But So Is Opposition

Wheeler’s March 17 speech framed the key elements of E-Rate transformation: “While the details of E-Rate modernization remain in flux, the goals are clear. For E-Rate modernization to be successful, the updated program must be: (1) focused on delivering faster-speeds to schools and libraries and Wi-Fi throughout; (2) funded and future-proofed; (3) fiscally responsible and fact-based; and (4) friendly to use.”

In a bow to his more fiscally conservative colleagues, he emphasized that “simply sending more money to the E-Rate program to keep doing business as it has been for the last 18 years is not a sustainable strategy…My colleagues and I can’t just pour more money into the program as it presently stands.” But he also stated for the first time that he will recommend raising the universal service “contribution factor”–the fees assessed to telecom service providers to fund the federal universal service programs, which are invariably passed through to consumers as a line-item fee in their telephone bills–“should it be warranted.”

Wheeler Avoids Full-Commission Vote–For Now

But Wheeler chose to issue the recent public notice as a bureau-level document, thus avoiding putting it to a vote of the commissioners. In doing so, he exposed anew the growing frictions between the Democrats and Republicans on the agency. Republican Commissioner Ajit Pai immediately issued a statement complaining that Wheeler’s end-around “depriv[ed] comissioners of an opportunity to weigh in” and that “even if the right questions were posed, this is the wrong way to pose them.” In recent weeks, both Pai and fellow Republican Commissioner Michael O’Rielly have affirmed their opposition to increasing the universal service program budget, declaring instead that any increase in E-Rate funding “must be offset by reductions elsewhere within the federal universal service budget.” Given that the educational community, the administration and other E-Rate champions believe that a doubling or tripling of the program’s funding will be necessary to realize the proposal’s high-speed broadband goals–and that most Democrats do not want to raid other components of the overall universal service fund–these pronouncements are widely perceived as a poison pill that would defeat the administration’s objectives. Moreover, Republican congressional leaders, as well as the National Association of Regulatory Utility Commissioners, have called upon the FCC to refer E-Rate reform to a federal-state joint board, which surely would slow momentum toward final action to expand the program.

Time to Act Is Now

Clearly, Wheeler and the Democrats are willing to weather a divisive, partisan, 3-2 vote if necessary. In any event, it is abundantly clear that Wheeler and the Obama administration believe that time is of the essence, and they need to act fast–by this summer– lest another signature administration initiative run aground on the shoals of political deadlock.

Read the entire article by James M. Smith on Bloomberg BNA at http://www.bna.com/wheeler-fcc-driving-n17179889631/

For more information, read SETDA on E-Rate Modernization and The Broadband Imperative from SETDA at http://www.setda.org/2014/04/08/setda-on-e-rate-modernization/

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