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Among other state budget actions, the Joint Finance Committee voted along party-lines last week to transfer $22 million in federal e-rate funds (which are meant to support telecommunications services in schools and libraries–the “e” in e-rate stands for “education”) in each year of the budget to the Broadband Expansion Grant Program. The amount transferred is $19.8 million more than what the Governor’s budget had proposed.

While this may be viewed by some as good news for rural areas that currently lack adequate broadband (high-speed internet) connections, it could spell concerns for schools and libraries in the future.

According to the non-partisan Legislative Fiscal Bureau, the current e-rate aid appropriation could support this transfer. However, it would reduce the current closing balance of the fund, which is currently $37.5 million, to just $3.8 million in 2020-21.

Schools and libraries also currently face barriers to apply for Broadband Expansion Grant Funds as current law does not expressly list them as eligible applicants.  Thus, the transferred money may be lost to schools and libraries, even though it was originally intended to assist them.

Meanwhile, at the federal level, the Federal Communications Commission (FCC) last week released a Notice of Proposed Rulemaking (NPRM) that seeks public comment on a proposal to establish an aggregate cap on the Universal Service Fund and combine the E-rate and Rural Healthcare program caps. If enacted, the plan could result in diminished funding for the E-rate and disrupt cooperation among USF stakeholders working to address broadband gaps across the country. It is expected the NPRM to be published in the Federal Register later this month, at which point the public will have 30 days to comment.

The National School Boards Association (NSBA) strongly opposes the FCC’s proposal and intends to work with the Education and Libraries Networks Coalition to file comments in the proceeding and educate Members of Congress about the problems this idea could present for the E-rate program’s operations.

Background:

The e-rate program – or, more precisely, the Schools and Libraries Universal Service Support Mechanism – uses federal Universal Services Fund revenues to provide discounts to assist schools and libraries in Wisconsin and throughout the United States with obtaining affordable telecommunications services and Internet access. The E-rate Program primarily supports connectivity – the conduit or pipeline for communications using telecommunications services and/or the Internet.

Applicants for E-rate funding are responsible for providing additional resources; such as, end-user equipment (computers, telephones), software, professional development, and other elements that are necessary to effectively make use of that connectivity.

Eligible participants include public and most non-profit K-12 schools as well as all public and many private libraries. All program participants must carry out a competitive bidding process to select the most cost-effective companies to provide the goods and/or services requested.

Funding may be requested under five categories of service: Telecommunications, Telecommunications Services, Internet Access, Internal Connections, and Basic Maintenance of Internal Connections. Discounts for support depend on the level of poverty and the urban/rural status of the population served and range from 20 percent to 90 percent of the costs of eligible services.

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