Oct 06 2014

The Next Chapter in E-Rate 2.0’s Ongoing Journey, from the Inside

Efforts to modernize the program are just getting started, says Managing Director Jon Wilkins.

This isn't Jon Wilkins' first rodeo. In fact, he'll soon complete the first year of his second tour of duty with the Federal Communications Commission.

Wilkins worked in the agency's Office of Strategic Planning and Policy Analysis from 1998 to 1999. And then, after 14 years with the management consultancy McKinsey & Co., he returned to the FCC in November 2013 as managing director and adviser to the chairman for management.

In these roles, Wilkins counsels Chairman Tom Wheeler on an array of activities of import to the FCC — including the overhaul of the popular, yet overburdened E-Rate educational technology funding program for schools and libraries. He spoke to EdTech in July, less than a week after the FCC's historic vote to make "E-Rate 2.0" a reality.

EDTECH: What's your history with the FCC?

Wilkins: I worked here as a young staff attorney from 1998 to 1999, which, coincidentally, was also the early days of the E-Rate program. In between that tour of duty and this one, I worked for McKinsey & Co. in the telecommunications and media industries, where I became well-versed in the business and technology issues that relate to what the FCC does and worked with federal government agencies on management issues.

My current role at the FCC is an interesting combination of those experiences. As managing director of the FCC, I oversee all business operations, including the budget, human capital, IT and other day-to-day administrative functions. As adviser to the chairmen for management, I am a direct participant in all of the chairman's office's activities on any issue, of which E-Rate is but one example.

Anyone who has been involved with the FCC knows that there is a relatively small community of people who have worked here. I got to know and worked with Chairman Wheeler quite a bit over the years in our respective business endeavors. When the previous managing director decided to move to another agency last summer and I saw that this position had opened up, I threw my hat into the ring.

EDTECH: What have you learned about broadband availability in K–12 in particular?

Wilkins: I did a lot of work at McKinsey in the broadband market, but there are two things that I would say I really didn't know when I returned to the FCC last year.

The fact that schools have less Wi-Fi infrastructure than fiber optic infrastructure struck me as amazing. That's not to say that there isn't work to do on the fiber side too, because there is. But the fact that there are schools out there in which the biggest problem isn't getting a 100-megabit-per-second or a gigabit connection to the school, but rather, that once it's in the school, there isn't sufficient wireless local area network capacity for students and teachers to use it as effectively as they want to is striking. It almost seems counterintuitive — usually the hard part is the physical fiber infrastructure, because that involves construction.

At first blush, you might say, "Wi-Fi? What's so hard about that? You just set up some routers and you're good to go." But as we dug into it, we came to understand that there are some issues there that have led to that being, in some ways, the most immediate gap for broadband in K–12.

The other big thing I have learned is how widely K–12 fiber broadband availability and affordability vary depending on policies and practices at the state level.

EDTECH: What were your first impressions of the E-Rate program?

Wilkins: My first impression was what an amazingly successful program it is, and frankly, how beloved it is for the impact that it has had. In a world where high-speed connectivity has become so central to everyone's day-to-day lives, it's easy to take it for granted.

If you think back 20 years, the simple idea of providing dial-up Internet connectivity at every school was kind of a radical, pie-in-the-sky idea. The fact that the E-Rate program has actually accomplished that, for the most part, is an amazing thing.

I also was struck by the need for modernization — and I mean that in a positive sense. Over the history of the program, the relevance of those internal connections to a given school or library, the Priority 2 services, has changed almost indescribably. Fifteen years ago, inside connections were nice to have for a certain kind of school setup. The program supported it as a bit of a bonus, I would say.

Today, this paradigm has completely flipped. There really are schools out there where a lack of sufficient internal connections is a barrier to them using the connectivity they have; it's a barrier to actually integrating them more into their day-to-day work at school. The program rules as they existed until very recently didn't reflect how much more important those internal connections are.

But nothing in government can change as quickly as it can in a private company or institution, which just inherently has a simpler governance structure. That's always the challenge for anything the FCC does. And the E-Rate program is a great example of that. The needs of schools, the needs of libraries, the technology itself changes so quickly year to year. But you can't do a major overhaul every year.

EDTECH: What key things did the FCC want to do differently with E-Rate?

Wilkins: As I have gotten a much better understanding of how the E-Rate program works day to day, I have discovered that, ultimately, it works. You're talking about 50,000 applications that are generated at a mostly local level and then administered by a very dedicated staff at the Universal Service Administrative Co. That's not to say that there aren't improvements that we are going to be making, but fundamentally, the program works.

Still, the No. 1 thing we heard during the public-comments phase was the need for planning predictability. Under the old Priority 2 rules, applicants didn't know when they applied whether they'd receive funding. In many cases, they wouldn't know whether their request would be supported until nine to 12 months after they applied.

School leaders don't think in terms of one year. You don't build a Wi-Fi network one year and then it goes away. It isn't a matter of having Wi-Fi when you get funded and not having it when you don't. Making the support that E-Rate provides a predictable and reliable funding stream lets school and library officials plan and budget for what really must be multiyear networks.

EDTECH: What role does Big Data play in all this?

Wilkins: One of the most amazing things to me when I got involved in this E-Rate effort was that, despite all the discussion, no one in Washington could answer the question of how many schools have fiber. This seems like a pretty important starting point, but it's complicated because it's local and there aren't national databases on such things.

We've been trying to get as much information from as many states, districts and third parties as we can concerning the actual state of the infrastructure in schools and libraries today. What are the prices being paid? What do usage patterns look like over time?

EDTECH: How would you characterize the public-comments process?

Wilkins: This has been a highly collaborative process.

The number of senior staff across the commission who have mobilized on the E-Rate proceedings is really remarkable. We're meeting with anyone who wants to meet with us, considering all comments. No amount of engagement, outreach or input is too much, and that's going to continue to be the case.

Chairman Wheeler believes that his job is to lead on these issues — to lead and to do so collaboratively. But the way to lead is to offer a specific proposal, not to set a high-level goal and let everyone chime in and go with the lowest common denominator where everyone agrees or no one complains too much. Instead, he said, "I want to figure out what I think is a great proposal and put it out there in a transparent way, and then we will be as flexible as we can to reach an agreement that works for everyone."

In some ways, this first round of E-Rate modernization we went through was very contentious; people have strong opinions because it's such an important program.

The chairman made a very specific proposal — some aspects of it were new and different, and there were a lot of people who agreed with it and quite a few who didn't. We went through a fairly open process and ended up with an initial outcome that we feel pretty happy with.

EDTECH: On July 11, FCC commissioners voted 3 to 2 in favor of a plan to modernize E-Rate. Can you explain briefly what these changes entail?

Wilkins: It's important to note that the July order is not the end of the story. Both the discussion at the meeting, as well as what the order itself says, identified additional issues. We are in the midst of a multistep process: The first step was some of the original administrative work we had been doing earlier in the year; the second step was the July vote (see sidebar, "E-Rate 2.0 at a Glance"); the third step — and beyond — we will get to in due haste.

The most important thing that this first item has accomplished is that it has put E-Rate on a decisive and irreversible modernization course toward being all about broadband. In a world where no matter what you do, there always will be limited funding, what is the highest need to which that funding should be committed? Chairman Wheeler feels strongly that it should be about high-speed broadband to the school, inside the school, first and foremost. Any nonbroadband service will either be out — or phasing down — as of the 2015 funding year.

Another fundamental step forward was the commission's adoption of a very clear target to support $1 billion a year for Wi-Fi. We did put in a safety net to make sure that an applicant would never be in the bad situation of having money for Wi-Fi but not the connections to make it work.

The next two funding cycles are going to run according to these guidelines, but it's going to be studied continuously. It's a huge change to have a $1 billion annual target for Wi-Fi as an ongoing part of the program.

There also was a lot of discussion about how to streamline the program and ease administration. This first item offers a good first set of improvements, including switching to using much more certain and easily knowable data to support discount rate calculations.

EDTECH: How do you respond to critics of the reforms that were adopted?

Wilkins: We all agree that E-Rate should evolve to support all schools getting significantly higher levels of broadband in the classroom — and that's huge. Deciding how to achieve those goals will continue to be debated.

By far, the biggest point of difference has been the question of what level of funding is needed and how quickly the program should go there.

The chairman's view is that the most effective way to work through an issue is to approach it in a step-by-step fashion, to make sure that everything we are doing is efficient and effective, and then think about how to make it even better.

We are on a path now where all those questions are going to be addressed. The good news is that everyone is going to have their chance to make their arguments as we enter this next phase of work. The fact is, change is hard. This is a program that, even though we think there are some really good improvements to be made, it works.

Any individual change that's proposed will have proponents and detractors. It's the nature of any government updating process. The level of passion that I hear from folks can make any given day, any given meeting feel pretty challenging. But at the end of the day, it's important that we're doing it. This stuff matters.

EDTECH: What timeline do you have in mind to roll out the new program?

Wilkins: We hope to achieve the goals adopted in this item over a five-year period. That doesn't mean that the FCC is done with everything it's going to do in five years, though.

No matter how fast the government moves, it's a bit of a process. Any change that we make then has to be worked through the administrative apparatus of updating the applications, explaining how it's going to work and implementing it. The item that we just adopted on July 11 will be implemented for the 2015 funding year, but it will take effect starting with applications in January.

I think the chairman's goal would be to move quickly enough so that any additional modernization steps could be adopted and implemented in time for the 2016 funding year and done with enough notice that applicants can really plan for them.

EDTECH: If a school can't get the funding it needs for IT improvements through E-Rate, where else would you point them?

No matter what improvements happen to E-Rate, it fundamentally will remain a matching program — not a grant program. There is always going to be some level of additional funding required.

One of the hallmarks of E-Rate is that it has been more locally rather than centrally driven. The central program creates rules, but ultimately it's up to a local school district to decide what it wants and how to budget for it.

At the end of the day, the fallback is always your local school district budget. And it's absolutely clear from all the engagement we've had with district leaders that those budgets are tight. So it becomes a bit of a question of, is the matching investment required to go along with E-Rate actually going to give you a big return on your education investment? And then, to what extent do state-level education strategies reflect and assist with that?

The world of education modernization is a lot bigger than E-Rate. There are many nonprofits and foundations out there looking hard at these issues.

John Loomis

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