The FCC is preparing to vote on an order to expand the E-Rate program, which although well-intentioned, could end up being a bad deal for consumers. The order proposes to allow schools and libraries to purchase Wi-Fi hotspots and wireless internet services for off-premises use, extending the program’s reach far beyond its original scope. 

The Universal Service Fund (USF), which supports the E-Rate program, is funded by a tax on consumers’ phone bills. Currently, this tax sits at a staggering 34.4%, a notable increase from previous years. Expanding the E-rate program would only put further pressure on this tax and make it even more expensive for consumers. With numerous federal and state initiatives already funneling billions of dollars into broadband programs, adding more financial strain onto consumers through tax increases is not the prudent choice.

What Is E-Rate Even For?

The primary aim of the E-Rate program has always been to provide connectivity to schools and libraries but funding off-premises Wi-Fi and wireless services would deviate the program from its intended purpose. This move could dilute the efficacy of the E-Rate program and divert resources from ensuring educational institutions and libraries actually have robust connectivity. 

A critical concern within the proposed expansion is the potential for redundant and wasteful overbuilding of existing networks. E-Rate funds have sometimes led to inefficient spending and duplicative infrastructure and the proposed safeguards in the new order are insufficient to prevent this. With so many programs already in existence to address broadband access, this expansion risks unnecessary and wasteful use of funds.

The Start of an FCC E-Rate Overstep

Expanding the E-Rate program to fund consumer devices and off-premises internet services exceeds the FCC’s statutory authority. Congress has specifically limited the E-Rate program to enhancing connectivity within classrooms and libraries, so the FCC’s attempt to extend this mandate goes beyond what the law permits. These actions undermine the legal framework and could result in setbacks that will further delay the FCC’s commitment to streamline federal broadband funding that helps get unserved and underserved consumers connected to the internet. 

The FCC should focus on optimizing the existing E-Rate program to fulfill its core mission of increasing connectivity within schools and libraries, not overstepping its authority and increasing taxes. Consumers want to be connected to the internet, but the FCC’s recent actions leave us questioning if and when they will ever bridge the digital divide.

E-Rate Expansion Takeaways

• Optimize the existing E-Rate program to focus on connectivity within schools and libraries.

• Avoid extending the E-Rate program to off-premises Wi-Fi to prevent increased consumer taxes.

• Ensure the E-Rate program adheres to its statutory authority, focusing on classrooms and libraries.

• Streamline federal broadband funding to effectively connect unserved and underserved consumers.