E-rate began as a federal program to address a growing digital gap between schools regarding access to telecommunications services and the internet. In that regard, it has been successful.
“E-rate is the vehicle that enables schools and libraries to access the internet,” says Sheryl Abshire, ed tech specialist and former USAC board member. “Without it, they would not have that access. They could not fund it on their own, especially in rural districts. In 1996, only 14 percent of K–12 schools had access to the internet. Today, we have access percentages in the high 90s. That is thanks to E-rate and allocating funds to highest-need schools first. It’s been really effective.”
Any public, private or charter schools, as well as libraries, are eligible to apply for E-rate discounts. Schools are also able to apply as part of a consortium.
What Are the E-Rate Funding Categories?
E-rate purchases fall into two categories:
- Category 1 covers delivery of broadband to the school building.
- Category 2 covers hardware needed to bring the internet into the classroom.
“Category 1 provides discounts on internet access and connections between facilities within a system, across district buildings, across WANs,” says Brian Stephens, client solutions manager at Funds for Learning. “Category 2 gives discounts on LAN infrastructure inside the building, including Wi-Fi equipment, access points, switches and cabling.”
Stephens points out that, while there is no cap on the discounts offered for Category 1 purchases, there is an emphasis on cost effectiveness, assuring that the services being delivered are the most cost-effective for the school. Category 2 spending has a cap, which is dependent on the size of the district and the particular year of E-rate’s budget cycle in which the services are purchased.
The technologies covered in Category 1 and Category 2 have remained static over the years.
“The eligible services list comes out in December each year, and the list really doesn’t change,” says Chambers. “USAC evaluates new technology every year, but it’s focused on function, not hardware. Recently, some advocates have been looking to increase funds for cybersecurity. Discussions might be happening on this topic within the FCC, but nothing definitive has changed on this subject.”
What Is the E-Rate Procurement Process?
E-rate procurement begins with a competitive bidding process.
“Schools file a Form 470 and a request for proposal,” says Abshire. “All purchases must follow state and local bidding laws. They must be posted publicly and follow a 28-day waiting period. This notifies potential vendors of the opportunity. An evaluation matrix has to be provided as well. Cost must be the highest rating in the evaluation matrix, but it is not the only consideration.”
Once a service provider has been selected, schools must file a Form 471. This specifies the exact dollar amount of the services and will be used to determine the discount offered to the school through E-rate.
“An E-rate procurement contract is eligible as long as services are delivered in the specified window and the service provider follows the rules governing the competitive bidding process,” says Chambers.
Funds for Learning’s “2022 E-rate Trends Report” notes an important change in discount requests in the past few years. “Category 1 requests have flatlined as schools secure faster speeds at cheaper costs from broadband providers,” says Stephens. This aligns with Abshire’s observation on overall high percentages for internet access. Most schools are no longer looking to establish broadband but instead are seeking to improve their overall speed.
Administrators applying for discounts should be aware that many vendors continue to face ongoing supply chain challenges, and schools should plan accordingly. “This is an issue for E-rate right now,” says Chambers. “Some of my clients are waiting 18 to 24 months for hardware to be delivered. Typically, schools ask for a six-month extension. You have to apply for a rule waiver. In 2022, USAC did a blanket extension of one year for everyone because of related supply chain issues.”
E-Rate After ECF and ESSER
With students back in classrooms, there are far more devices on campus and in school buildings that need access to the internet. “The connectivity situation in schools has changed since COVID-19. You have multiple devices for all students and teachers, all having to gain network access,” says Adam Phyall, director of professional learning and leadership at All4Ed.
This poses some unique problems for schools. During COVID-19, savvy administrators began planning how to use E-rate’s ongoing, five-year budget cycle to support upgrades and refreshes that would allow them to accommodate the sharp increase in on-campus devices.
“The biggest thing admins need to have in place is a five-year upgrade plan,” adds Phyall. “It’s educational malpractice if you don’t have an infrastructure plan. Vendor partner relationships are really important to your five-year plan. You need to make sure you’re ahead of the curve when it comes to planning for funding. You need to know the ongoing status of each piece of your infrastructure, and your vendor partners are key to that knowledge.”
“This Wi-Fi and bandwidth issue will not go away,” says Abshire. “It is here to stay. Schools need newer access points, and this is all leading to new provider contracts. Admins will need to be thoughtful about how to handle this.”