FCC Boosts E-Rate Spending Cap by $1.5B

The federal E-rate funding program will be boosted by $1.5 billion, after a narrow vote passed by the Federal Communications Commission on Thursday morning.

In a 3-2 decision, FCC commissioners approved raising the cap on E-rate by $1.5 B to a total of $3.9 billion annually, according to Funds for Learning, an E-rate consulting firm.

The @FCC voted in favor to increase #Erate funding by $1.5 billion.

— CoSN (@CoSN) December 11, 2014

The E-rate program provides discounts on telecommunications and Internet services for schools and libraries. The increase comes on the heels of a large push from The White House's ConnectED initiative, which seeks to provide high-speed Internet to 99 percent of classrooms by 2018. President Barack Obama said that fewer than 40 percent of schools have been able to meet that challenge so far.

The program’s original annual cap was set at $2.25 billion in 1997. It remained at that rate until 2010, when it was raised to $2.4 billion to adjust for inflation. FCC Chairman Tom Wheeler proposed the $1.5 billion increase as a "catch up" for the lack of inflation adjustment for the E-rate program from 1997 to 2010.

E-rate is funded through the FCC's Universal Service Fund, which assesses fees on phone bills. The current fee is 99 cents per month for each landline and mobile connection. An additional 16 cents per month in fees would be required to cover the increase.

The changes approved Thursday will go into effect in the 2015 fiscal year, which begins July 1. Applications for funding will be due in spring 2015.