Senate Republicans Skeptical of E-rate Expansion

Senate Republicans criticized what they called cost and service deficiencies of President Barack Obama’s recent proposal to reform the E-rate program. During a committee hearing Wednesday, Sen. John Thune, R-S.D., questioned whether the president’s proposal would unfairly benefit those in schools in more urbanized areas. Obama recently proposed to modernize the E-rate program to ensure that schools and libraries are connected through broadband of at least 100 Mbps with a target of 1 Gbps (CD June 7 p7).

Thune said he supports the recent proposal of FCC Commissioner Ajit Pai to require more “simplicity, transparency and accountability of E-rate providers and their beneficiaries.” Pai’s plan would prioritize next-generation Internet services over standalone voice telephone service, notify schools how much money they would have to spend prior to the school year, and include a “straightforward matching requirement” that sees schools contributing $1 for every $3 they receive (CD July 17 p2). “I am also pleased by his focus on local decision making and flexibility, allowing schools to meet their own needs, which may not always be what Washington assumes,” said Thune. “Finally, I want to applaud his suggestion that reform be achieved within the current resources available to the Universal Service Fund … it is very important for all government programs to stay within their means in this difficult fiscal and economic environment.”

Thune said the president’s proposal may not offer equal benefits to students in rural areas: “The fact is, schools in remote areas are more expensive to reach than their counterparts in more urban areas,” he said. “The President’s ConnectED Initiative includes the goal of connecting 99 percent of America’s primary and secondary students with high speed broadband and wireless within five years. We should keep in mind, however, that the unreached one percent in this case amounts to over half a million students -- and that assumes the goal is met, so the real number could be much higher. As a senator from a very rural state with just 147,000 school children, the parents, teachers, and students I represent would like to know where they stand as a priority for this federal program moving ahead,” Thune said.

Sen. Kelly Ayotte, R-N.H., said the issue of fairness was particularly important in terms of funding and access and asked witnesses how the program could be made more efficient. Ayotte lamented her state’s position as last on the list of states which benefit from USF funding relative to their contributions. Ayotte cited in a separate news release an unnamed 2011 report that said New Hampshire contributed $10.4 million to E-rate and received about $2.6 million -- a return of only 25 cents for every dollar the state contributed.

Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., addressed the concerns of some that expanding the program is too expensive. But he asked: “Can we afford not to do this? Cost comes from two directions. Can we afford to let our kids fall further and further behind their global peers in math and science? It is embarrassing now and it will get worse.” House Communications Subcommittee Chairman Greg Walden, R-Ore., had previously urged acting FCC Chairwoman Mignon Clyburn to cap the overall fund at current levels (CD July 16 p3). Clyburn previously circulated an NPRM ahead of Friday’s commission meeting tied to Obama’s proposal to modernize the E-rate program.

Rockefeller, the original author of the E-rate program, acknowledged that policymakers should look at “what isn’t working well” in the E-rate program, notably funding fairness in small states. But he said “the impact of the E-rate program on our schools has been nothing short of extraordinary.” E-rate has “done more than just connect our schools, it has spurred a broadband revolution, insufficient, but nevertheless a broadband revolution that has been a catalyst for widespread adoption of broadband technology,” Rockefeller said.

Sen. Ed Markey, D-Mass., said “I love the fact that my first hearing in the Senate is about the E-rate because in a lot of ways it is the educational program over the last 18 years in America.” As a House member, Markey led the effort to include E-rate in the 1996 Telecom Act. Markey commended the president and the FCC for their work to modernize the program and said “it is time for us to establish a plan so that we maintain our excellence … the best way to do that is ensure we take the E-rate program and modernize it for the 21st Century. … We need great speed, better Wi-Fi and a more streamlined process for applications. We have to make this whole thing work better.”

Sen. Ron Johnson, R-Wis., said the hearing would have benefitted from having an FCC commissioner testify and said the program was generally ineffective. “As I look at the figures I have, the amount of spending we have on education … about six percent comes from the federal government,” he said. “When you look at the problems in the E-rate program … I'm not quite sure why we are looking to expand this program if it’s not working all that well,” he said. “I just don’t see the results.”

Sen. Richard Blumenthal, D-Conn., objected to Johnson’s negative characterization of the program. “At a time when we bemoan and criticize government, this program is a real American success story,” he said. “The impact is … literally on tens of millions of students across the country.”

Patrick Finn, senior vice president-public sector at Cisco Systems, said in his opening statement that E-rate needs to “keep up with the times.” “These networks should enable remote learning and remote access especially in remote areas.” Finn said the government needs to increase program funding levels, adopt minimum bandwidth requirements based on the size of the schools, and said certain priority 1 (telecommunications and Internet access) and priority 2 (internal wiring and maintenance) funding rules no longer make sense.

James Coulter, co-founder of TPG Capital, told lawmakers that this is a “Sputnik moment” in education, according to his testimony. Expanding and strengthening E-rate is “a critical component for providing current and future generations the education and skills they need to compete in today’s global and technologically enabled economy.” Linda Lord, Maine state librarian, said lawmakers “simply can’t allow inadequate bandwidth to be the factor that limits what our students and our nation can achieve.”