New Hope & E-Rate

In 2015, the NC Legislature approved an expansion of the School Connectivity Initiative to help pay for wireless expansion in the schools.  Sounds great!  Well not so fast when the NC Department of Public Instruction and it’s CFO, Phillip Price, is involved.

Under the program, schools would be responsible for applying for E-Rate funds and then the amount not paid by E-Rate would be covered by the School Connectivity Initiative Funds.  So far so good.  The problem is that the DPI has mandated (despite the appropriation not requiring for them to do so) that all participants use a state convenience contract managed by DPI staff.  Schools who have sought bids for comparison through other convenience contracts or through their own RFPs have found consistently lower prices may be obtained elsewhere.

Unfortunately this is not only a waste of State and Federal funds but as the E-Rate program has a $150 per student  cap on equipment funding for every 5 year period, it is wasting valuable and scarce E-Rate funding as well.  We have seen bids well in excess of $100,000 less than DPI contracts have to be ignored so that the schools will be awarded their SCI matching funds. Schools would like to choose the lowest cost qualified vendor but the NCDPI has chosen to pursue power over what is right.  Tax dollars be dammed.  

Schools are too afraid of reprisals from DPI to overtly complain with this high handed process though everyone I have spoken with is completely exasperated. We have taken the issue to the State Superintendent and she is unwilling to make the necessary policy changes.  Why would Atkinson and Price not care?  Could it be the their convenience contract carries a 1.75% administration fee?  Is this fee going to pay DPI staff and thus increasing their own personnel power base at the expense of children?  Something is up because its definitely a waste of taxpayer, E-Rate and school dollars

The NC Legislature approved an expansion of the School Connectivity Initiative to help pay for wireless expansion in the schools.  Sounds great!  Well not so fast when the NC Department of Public Instruction and it’s CFO, Phillip Price, is involved.

Under the program, schools would be responsible for applying for E-Rate funds and then the amount not paid by E-Rate would be covered by the State.  So far so good.  The problem is that the DPI has mandated (despite the appropriation not calling for them to do so) that all participants use a state convenience contract managed by DPI staff.  Schools who have sought bids for comparison through other convenience contracts or through their own RFPs have found consistently lower prices may be obtained elsewhere.

Unfortunately this is not only a waste of State and Federal funds but as the E-Rate program has a $150 per student  cap on equipment funding for every 5 year period, it is wasting valuable and scarce school funding as well.  We have seen bids well in excess of $100,000 cheaper have to be ignored so that the schools will be awarded funds from DPI. Schools would like to choose the lowest cost qualified vendor but the NCDPI has chosen to pursue power over what is right.  Tax dollars be dammed.  

There has been much discussion about raising the E-rate cap and we believe that it is an essential element  to ensure the program is able to continue to support rural schools while helping to expand Wi-Fi access to all students.  But where will the additional funds come from?  The easy answer is the expansion of the Universal Service Fund's Contribution Base.

The USF currently is funded via a tariff on interstate and international telephone calls. As a result of recent modernization, the funds allocated to E-Rate are now targeted to broadband and away from voice services.  The amount of money spent by consumers on voice every year will fall as VOIP and other lower cost alternatives continue to gain market share with businesses and home use.  This will result in a larger percentage fee being levied to pay for the USF.  The simple solution to the growing fee is not to lower contribution rates but to expand the contribution base.  A fee on broadband should be used to expand broadband access not a fee on voice.

The more people spend on broadband because it is an important part of daily life, the more important it is to ensure that all people have access to it.  Tying the funding level of a broadband program to broadband usage makes a lot more sense than tying it to voice usage.  Unfortunately, the broadband lobbies seem to be driving E-Rate reform and while they have a strong opinion on how schools should spend their money, they are opposed to having their industry included in the funding model. 

COMMENTS OF NEW HOPE TECHNOLOGY FOUNDATION

  on the

  REPORT AND ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING

  Adopted: July 11, 2014 and Released: July 23, 2014

  The New Hope Technology Foundation provides E-Rate support services to many school districts and charter schools in 19 different states and works with a variety of schools that range from wealthy to poor and urban to rural.  I would first like to thank the FCC for your continued support of the E-Rate program and diligence in working to reform E-Rate.  Without such support, many of the schools we represent would not be able to obtain affordable telecommunications and internet access.  The program has been extremely successful and we urge the Commission to take measures to further refine and properly fund the program.

The following are our specific replies to the further notice of proposed rulemaking;

  268. Meeting Future Funding Needs

The elimination of voice from the E-Rate program will have a substantially disproportionate negative effect on small rural school districts.  Rural schools do not have the tax base to overcome major changes in their school budgets such as the phased out elimination of voice services.  Eliminating voice subsidies will only ensure that many districts do not have the funds to pay their undiscounted share for Wi-Fi.  We strongly encourage the FCC to index the fund for inflation back to 1998 and to use the additional revenue to fund next generation voice technology (VOIP) for all schools.  This would encourage schools to use the most current technology but not unfairly penalize small rural schools.

As a case study for the effects of the elimination of voice services, we will use two school districts in Illinois. Vandalia Community Schools in downstate Illinois is in a rural area and currently spends annually $9,675 per student (according to Home Surfer.com).  They have approximately 1,600 students and an 87% discount rate.  Northbrook School District #28 is in suburban Chicago and spends annually $15,996 per student (according to Home Surfer.com). They have approximately 3,300 students and a 40% discount rate.  Vandalia received a funding commitment for $36,000 in voice services in 2014 while Northbrook received a commitment of $8,500.  Neither district has ever received Priority Two funding.  Under the new rules, over the next five years Vandalia will receive $116,000 less in funding for voice while Northbrook will receive $36,750 less.  Vandalia will be eligible to receive $192,000 in funding for Wi-Fi and Northbrook would qualify for an additional $198,000.  In reality, with budget pressures as they exist today, it will be almost impossible for Vandalia to find the $116,000 in lost funding plus the $48,000 in undiscounted funds to make applying for Category Two funding a reality.

In summary, Vandalia receives 60.5% less than Northbrook in per student funding outside of E-Rate.  With the changes in the program to make funding more equitable, they will lose over three times as much  in Category One funding while gaining the same dollar amount of Category Two funding as Northbrook.  Considering that E-Rate was created to help poor and rural schools, it is imperative that the cap be increased and the additional money used to help rural schools.

Another area where we believe additional funds could be used to benefit rural schools is in the $150 allocation for Wi-Fi.  New Hope has many rural clients who need in addition of Wi-Fi equipment substantial amounts of new wiring to bring high speed connectivity to the class room.  The condition of their buildings and wiring is very poor in comparison to our more urban clients.  We believe that the cost of wiring many of these rural districts was severely underestimated in the initial order.  During the last E-Rate cycle, we had several districts issue 470s and RFPs for wiring upgrades as well as wireless access points.  They received competitive bids from multiple reputable companies that indicated reworking the entire wireless network was going to cost closer to $350 per student.  Having a multiplier on the cap associated with a district’s rural status would be another way to ensure rural schools gained access to the funding they need to compete with urban America.

  284. Mandatory Use of NSLP Data for Schools That Participate in NSLP-

The New Hope Technology Foundation strongly opposes this concept. E-Rate regulations plainly state  “The primary measure for determining Schools and Libraries Program discounts is the percentage of students eligible for free and reduced lunches under the National School Lunch Program (NSLP), calculated by individual schools. Students from households whose income is at or below 185 percent of the federal poverty guideline are eligible for the NSLP.”

NSLP applications measure the total number of eligible students that elect to participate in the NSLP, not necessarily the total number who are eligible. A district should be given the opportunity to measure total eligibility by using whatever combination of NSLP applications, direct certification, sibling match, and income surveys that most properly measure total eligibility. If the district determines that the NSLP applications undercount the number of students who are eligible they have a right, if they so elect, to use multiple sources. It is the district that must determine if the result of that additional effort is worthwhile, not the FCC.

The FCC, in the E-Rate modernization report and order, stated “We agree with New Hope that allowing schools to use an alternative method for determining eligibility is essential”.  None of our clients who have conducted income surveys have found them to be too complex or burdensome.  Furthermore, there has been no significant delay in the PIA approval process for these districts relative to ones who have used only NSLP application data.  New Hope does not believe that streamlining the PIA process for USAC should be done at the expense of guaranteeing districts the opportunity to provide NSLP eligible data that is truly reflective of their student population.

There are numerous reasons why NSLP eligible households might not complete NSLP applications:

As local economies undergo severe fundamental changes, families which have traditionally been employed find themselves structurally unemployed and unable to find work without relocating or undergoing lengthy job retraining.  These families are often unaccustomed to asking for or receiving governmental aid.  They may have some savings which they are willing to spend before applying for services, thus preventing them from qualifying as a direct certification for NSLP or for applying for free and reduced lunches.  This causes NSLP application data to substantially lag NSLP eligibility.  New Hope has observed this scenario in a number of districts in the states of North Carolina and Virginia where local economies have been severely affected by changes in the textile, tobacco, and furniture industries.  In these instances, we have found that many families were willing to respond to surveys who otherwise choose not to apply for assistance.  The surveys produced a significantly more reflective representation of the district’s true poverty level.

Non-English speakers often find the process of applying for financial aid to be confusing.  A simplified income survey will often identify students who are eligible but whose parents find the NSLP application process overly complex.  Some families are also hesitant to fill out applications for Federal aid when there are concerns about members of the family’s immigration status. No matter what that status may be, the students still attend the school and should be properly accounted for in the NSLP eligibility calculations.  We have found that these families are much more likely to fill out a simple survey than they are a NSLP application. In particular, New Hope has seen this to be the case when conducting surveys in rural districts with a large agricultural workforce.

It is often the case that free and reduced participation levels significantly fall as students advance to high school. Eating lunch is no longer “cool” for high school students or the student fails to take the application home to his/her parents. Most high schools have a lesser percentage of NSLP participation than the elementary and middle schools that feeds it.  High school also happens to be where the largest amount of per student funds are spent on technology.  Depending on how a state organizes their school districts, there can be districts made up solely of high schools.  These districts would be unfairly penalized if they could not use surveys to obtain a more accurate level of their NSLP eligibility.  We have conducted surveys where we have found significant numbers of high school students were willing to respond to a survey that otherwise did not participate in the NSLP program. In some instances, we have found their NSLP eligibility has been underreported by as much 15% by using NSLP applications alone to determine eligibility. 

In all of the above mentioned instances, a school district is able to derive more accurate NSLP eligibility data than applications alone can produce.  It should be the goal of the E-Rate program to use the most accurate data, not the easiest for USAC to process.  With proper planning and documentation by the applicant, we have found that there is little, if any, additional time added to the PIA review process from the use of surveys.  Furthermore, with USAC data retention policies, there should not be any undue risk to the program due to waste, fraud and abuse.  New Hope, therefore, strongly urges the FCC to continue to allow Districts the option of using alternative discount methods in conjunction with NSLP applications to determine NSLP eligibility.

  294. Consortia-

New Hope would suggest that the FCC make a distinction between consortia applications and master or convenience contracts. Master or convenience contracts are entered into by a group of school districts/libraries who aggregate demand and thereby are able to drive more competitive pricing. Such contracts are bid by a state entity, a group of schools, an education service agency, or a private purchasing cooperative. Schools who elect to participate in such a buying cooperative should be free to apply for funding via filing a Form 471 on their own. There should be no requirement that these schools also combine together to file a Form 471 if they elect to file on their own. If incentives are granted to schools who participate in master contracts they should not be mandated to file consortia of consolidated Form 471’s to receive those incentives. It is the aggregating of demand that results in lower prices not the filing of a consortia funding application.

New Hope strongly supports incentivizing the use of master contracts.  We further encourage the FCC to empower groups of E-Rate eligible entities, in addition to traditional state consortia, so that applicants can be assured of choices that accurately reflect their needs. Smaller consortia that take advantage of local buying opportunities may be more efficient than a state run consortia.  The same can be said of consortia made up of applicants across several states.

The form 470 should make it easy for master contracts, beyond traditional state master contracts, to be filed on behalf of a consortia of applicants.  For instance, encouraging professional associations, made up of E-Rate applicants, to file 470s and create master contracts should allow for applicants to quickly acquire additional pricing leverage on the specific products and services that matter the most to them.

Conclusion

The E-Rate program has been very successful in its mission thus far. The New Hope Technology Foundation strongly supports modernization efforts that allow for flexibility and provide choices in both how a district confirms its poverty level and on what and how products are purchased.  We further believe that the fund should be increased with additional revenues being allocated towards rural schools.  Thank you for considering our response.  We appreciate the FCC’s continued support in helping to ensure that E-Rate is a successful program and its limited resources are protected and preserved. 

Sincerely,

John W Hughes III

President

Lets compare Seattle Washington and Yadkin County NC to see what happens if E-Rate reform is passed as proposed.

I am going to assume that neither school will be funded in 2014 for P-2.

Seattle applies for $524,331 in P-1 funding.  After "outdated" services are subtracted, they would be applying for $119,442.

Yadkin applies for $325,726 in P-1 funding.  After "outdated" services are subtracted, they would be applying for $205,511.

Seattle would qualify for $936,000 per year in wifi funding.  Yadkin would qualify for $138,000.

Seattle's net gain between the two comes out to an extra $531,111 per year.  Yadkin gets an extra $15,758.

I do not know all the details concerning the condition of Seattle's school wiring and wifi i but I do know where Yadkin stands.  They applied for $2,000,000 in internal connections funding to try and bring their network and wiring up to speed. They will need more during the next 5 years. $15,758 is not going to get high speed broadband in the hands of students without funds being cut from somewhere else in the school budget.  Staff cuts? sports? music?

First lets define "digital divide".  According to wikipedia- digital divide is an economic and social inequality according to categories of persons in a given population in their access to, use of, or knowledge of information and communication technologies.  Notice that it does not describe everyone getting more access to technology.  The term describes the disparity of access between persons in a given population.

Before I go any further let me state a few of my beliefs.  I am for all children getting more access to technology funding. As a result, I am for raising the Cap beyond 1998 levels.  I am for modernizing E-Rate so that the programs encourages schools to put funding towards the latest technologies. Overall I approve of Commissioner Wheeler's proposal as a start in the reform process.  The problem is that the NPRM process should have involved an actual proposal that stake holders could comment on.  Instead, the FCC choose to post two rounds of nebulous questions and still has not released a specific proposal to the public.  To say that time is of the essence and that whatever Wheeler has proposed is a take it or leave it situation for 2015-2016 funding, does not seem right at all. For those people saying we need to get behind Wheeler now or there will be no funding in 2015 for equipment, the FCC could still use the found $2 billion to fund 2014 P-2 and get wifi to a whole bunch of the neediest kids even faster.

Back to the digital divide.  A well funded and modernized E-rate program would clearly help solve the digital divide.  The current proposal does not increase overall funding.  It doubles the contribution rate for the neediest schools.  It removes funding for voice services that on a proportional basis will effect the poorest schools the most.  In the name of increased equipment funding (which schools do need), the latest proposal will net decrease overall funding for our neediest applicants.  To me it looks like the digital divide is actually increasing from its current state and not decreasing at all.  

Many people are loudly stating that the current program only lets a few schools receive equipment funding and that more schools should have access.  I agree completely.  Raise the Cap.  Does every public school child receive the same amount of overall per student funding?  NO! Not even close.  The fact that the current E-rate program tries to help bridge some of this gap is admirable.  Diluting this effect in any way does nothing to help solve the digital divide.

Does the $150 Cap on wifi get adjusted by a discount rate, by urban versus rural, or by any other factor?  This is probably a question we should all know the answer to before anyone can make an intelligent comment on the proposal.  Once again, it is a shame that there was never an NPRM on the actual proposal or that the specific details have not been released to the public before the FCC votes on them.

There is a lot of speak in the media and directly from the FCC about the new modernized E-rate being more equitable.  To determine if that is true one would need to define equitable.  

Is the policy that every district can get $150 in wifi funding equitable? Sounds good, but only if every district had the same needs and cost.  Is the concept that every public school child should have access to the same technology and opportunities equitable?  That seems to make sense but there is already a massive disparity that exist between funding in wealthy schools vs poor schools and that would seem to indicate that to provide equitable access, E-Rate should only be concerned about the poorest schools because even then per student spending would still be greater at wealthy schools.  

Within program rules is it more equitable to only pay for broadband and not fund outdated technologies?  Sounds good again but many rural schools do not have access to dependable high speed broadband.  Are the T-1 lines they are using out of necessity still going to be funded?  Without dependable broadband, they can not move to VoIP.  How are they going to be able to afford phone service?  Many poor rural districts use cell service to communicate with school buses.  If they have to find money to fund this important function, how will they find match money for wifi (and for the neediest of these schools the new rules would double their contribution)?  It does not seem to me that the new rules are more equitable for the very people the fund was originally created to help.

I am posting their analysis because I could not agree more with their position.  I am personally particularly perplexed as to how raising the match on the neediest schools somehow helps solve the digital divide.

WHAT’S IN THE PROPOSAL: While the FCC Chairman did release details about his draft Order on June 21, his office did not release a comprehensive document detailing every aspect of their proposal. This analysis is based on the information received by the Commissioners, as well as information collected through direct meetings with staff at the FCC, staff within the commissioners’ offices, the commissioners themselves and collaborative advocacy with other E‐Rate advocates. The absence of a final document means that the details are subject to change (meaning that the Chairman and Commissioners have flexibility to shape/craft/modify the proposal before final consideration). You can read AASA’s quick analysis of and response to that proposal on the blog (http://www.aasa.org/aasablog.aspx?id=33814&blogid=286).

  Programmatic Changes and AASA Analysis:

Focus on Priority Two: The proposal wants to increase the ability of E‐Rate dollars to reach a wider cross‐cut of eligible E‐Rate entities, and focuses on making Wi‐FI available to classrooms and libraries. The proposal is concerned that the current program barely makes a dent in actual Priority Two demand and that some eligible entities are denied funding year after year. The FCC estimates its own plan would take five years to deploy wireless internal connections to all applicants, though the plan only identifies funding for two of those five years.

Shift to Category I and Category II: Rather than maintaining Priority One and Priority Two, where the focus was on first ensuring that schools and libraries receive the support they need to maintain monthly connectivity, this proposal shifts to Category One and Two. This change in semantics—an obvious shift away from a commitment to maintain monthly connectivity—is in addition to a commitment that Category II would have a permanent, protected pot of its own.

Elimination of Legacy Services: The proposal phases out support for voice services and immediately eliminates support for ancillary services, including web‐hosting, email and paging services.

Per Pupil Cap: The FCC has calculated that Wi‐Fi can be done for roughly $150 per student. The FCC is concerned that the current structure of E‐Rate results in some schools unnecessarily ‘loading up’ and running programs that cost far above the perceived average cost. In an effort to curb this perceived over subscription, the FCC wants to cap Priority Two funding to $150 per pupil over five years. This per‐pupil cap would apply only to Priority Two (Priority One would still be allocated based solely on concentration of poverty). AASA and the E‐Rate beneficiary community have long advocated against the concept of per‐pupil funding, documented in comments filed with the FCC reaching as far back as 2005. The very act of diluting E‐Rate funds to a per‐pupil level is antithetical to the cornerstone of the E‐Rate program of targeting E‐Rate dollars to concentrations of poverty, not individual students. Further, a shift to per‐pupil allocation is a significant shift away from need‐based allocation to making E‐Rate more of an ‘entitlement’ program: each child is ‘entitled’ to a specific allocation once every five years.

Limiting Access to Once Every Five Years: The FCC would limit funding to $150 per student over five years. That means a school could access an average of $30 per student per year, or apply for all of it at once. This proposal is disconnected: on the one hand, the Order is a call to provide Wi‐Fi for all students within 5 years, presumably with a desire for the WI‐FI to be functional each of the five years, while the other hand limits access to adequate funding to only once in five years. (Currently, applicants cannot access Priority Two E‐Rate funding more than twice within a five‐year span. The thinking was that by limiting access to Priority Two funding, it would allow a deeper distribution of the resources to all entities, serving those schools that are needy, but not the neediest. Unfortunately, we have no information that indicates that this type of time‐constrained limiting has actually succeeded in distributing the dollars to a broader cut of applicants.)

Lack of Certainty Regarding Funding: The FCC’s proposed five‐year plan requires an additional $3 billion, beyond the $2 billion “freed up”. The incentives do not align: funding has only been identified for the first two years of the five‐year plan. The sentiment among applicants will likely be ‘Well, I will apply in one of the first two years where funding is available. You can apply in one of the out years.’ Applications in years one and two will far exceed available funding, and there is no way for entities to know when—or if—they will actually ever receive any benefit from the program modernization.

Small/RuralSchool Minimum: The FCC is proposing a minimum funding level of $6000 “floor” for those schools with less than 22 pupils. While AASA applauds the recognition that there are some communities that would be disproportionately and negatively impacted by a per‐pupil allocation (namely, very rural or very small), an arbitrary floor/minimum is again blind to actual concentrations of poverty and ignores the varying costs and availability of connectivity and broadband in different communities.

Adjusting the Discount Matrix for the Neediest Schools: The top‐tier discount level would be reduced from 90 percent to 80 percent. This means that the neediest of schools would see a doubling in their out‐of‐pocket expenses as it relates to the costs of internal connection services.

Calculating Poverty at the District (Not School) Level: The FCC proposes to calculate poverty at the district level, not the school level. The is problematic as it sets up potential windfalls for the wealthiest schools within relatively poor districts by raising their discount rate, and hurts the poorer schools within districts by lowering their discount rate.

We are hearing that Wheeler will release his version of E-Rate reform today to the rest of the FCC with the intent of it being voted on in July.  If what we are hearing is true, he has managed to take the worse piece of every proposal and make it the basis of his proposal.

He is going to side with the Republican Commissioners and propose no increase in the cap.  There is NO rational person who can say that schools do not need more assistance today with technology funding than they did before the creation of the I-Phone.  There will not be anywhere near enough money saved from program changes to fully fund wireless needs.  A schools budget is fixed so when you play a shell game with what you are funding, a bunch of wireless access points are not going to magically appear.

He is going to take the idea of a funding Cap from the Funds for Learning proposal (we here $150 per student for every 5 year period for equipment) without adding any funding certainty.  So basically a per student cap without a per student funding model.  Limiting districts who need it the most without gaining any advantages form funding certainty seems like a poorly conceived notion to me.

He is going to propose a decrease in the discount rate matrix (as SECA proposed).  This will ensure that the poorest schools will lose funding so that everyone can have access to funds.  If you would like everyone to have access, raise the funding cap to a level that actually works.  This proposal will do nothing but widen the digital divide which is already so pervasive in this country.

He is going to talk about how there is an extra $1 billion targeted for broadband for 2015 and 2016.  This money will have come from not funding P-2 for 2013 and 2014.  That is hardly new money and it is once again taking money from high need schools and redistributing it to less needy schools.  See above comment about the digital divide.

The proposal will also change the fund from being technology neutral to a broadband based fund.  This is being loudly called for by a number of organizations (mostly made up of companies that directly and indirectly benefit form broadband) and sounds really good on the surface.  The problem is that by taking away flexibility at the local level, they will be limiting schools abilities to change as new technologies are introduced.  The FCC should not be in the business of choosing technologies for schools but in the business of encouraging innovation.

Did I mention that there is going to be no increase in the cap!

Did I mention the digital divide!

Lets take a quick look at the potential results of failing to fund Priority Two for the second year in a row.  

The only schools who would be likely funded in 2014 are the poorest schools.  These are the same schools that applied for funding in 2013 and were told that the fund did not have enough money.  These are the schools that desperately need the most assistance and need it now.  Due to local tax support and outside fund raising availability these are the very school with the lowest per student funding.  E-rate is often the only real means they have to help close the funding gap for technology spending.

It would seem that the FCC would like to not fund P-2 for 2 straight years so that they can accumulate enough roll over to fund everyone in 2015.  That is basically taking away money from the most needy schools (by denying them 2013 & 2014 funding)and giving it to the wealthier ones (everyone has access in 2015).  Considering the great inequality that already exist between funding for wealthy and poor districts, this is a very troubling concept.

New Hope attended the E-rate modernization workshop last week and also met with all of the FCC Commissioner's staff (as well as most of the Commissioners).  We would like to thank everyone, including Rep. Butterfield's staff, for taking the time to meet with us.  The purpose of our visit was to express our concerns over the E-Rate modernization process and to gain a better understanding of proposed rule changes.  Here are some bullet points that we took away from our meetings;

Traditional voice will be phased out- VoIP will probably continue to be funded

Cellular service will be phased out.

The FCC is aware that funding needs to be more predictable

There will be an emphasis placed on wireless equipment

We expect the new rules to be announced in June of July

Not funding P-2 for 2 straight years will leave the fund with extra $2 Billion to fund wireless in 2015

The rules will probably be changed this summer and a permanent increase in the fund will be discussed afterwards

    April 21, 2014

  Federal Communication Commission

445 12th Street SW

Washington, DC 20554

  Dear Sir/Madame-

I am writing in response to the FCC’s Notice of proposed Rulemaking, which, among other things, proposes changes to the E-Rate program.  The New Hope Technology Foundation provides E-Rate support services to many school districts and charter schools in 12 different states and works with a variety of schools that range from wealthy to poor and urban to rural.  I would first like to thank the FCC for your continued support of the program and diligence in working to reform E-Rate.  Without such support, many of the schools we represent would not be able to obtain affordable telecommunications and internet access.  The program has been extremely successful and we urge the Commission to take measures to refine and properly fund the program and not recreate it.

Funding Levels

Technology needs and usage has changed substantially over the last 16 years.  When the funding cap was originally put into place, such things as tablets, one to one learning, “bring your own devices”, online text books, and online testing did not exist.  A modern classroom with modern technology requires modern funding levels. The cap needs to increase to at least $5 billion.  Real demand is actually far in excess of funding applications as many schools, including what would be normally described as “poor” schools, only receive 80% discounts and in 2014 did not apply for Priority 2 funding.  In the State of North Carolina 37% of the students in the state of North Carolina attend schools that are in the 80% discount rate.  They currently will not qualify for Internal Connections funding despite attending a relatively poor school. 

Services Funded

While changing the eligible services list to reflect a changing technology environment is a positive step, please keep in mind that most school budgets are currently severely constrained.  State legislatures have decreased funding for K-12 and local governments are seeing their revenue decline, thereby decreasing local contributions to K-12.  A budget is finite and increasing a school district’s cost by eliminating discounts on essential services such as telecommunications, email and web hosting will negatively affect its ability to fund its share of infrastructure projects.  Likewise, changes in the discount rate structure could have a substantial negative impact on the poorest districts ability to fund many needed infrastructure projects.  The districts that need funding the most are already struggling to come up with their “match” or unfunded portion of internal connections expenses.  We do support removing such outdated items as pagers and 411 but the elimination of these items will not provide the amount of funds necessary to meet needed demand.  If phone service is eliminated from the program, we have school districts that will absolutely have to make a choice between funding infrastructure and keeping teachers.  This is particularly true for our small rural districts.

Per Student Model

We strongly support the model put forth by Funds for Learning and believe that, when combined with the elimination of the Priority System, it would allow for creating and implementing a fiscally responsible technology plan with funding certainty.  A per student cap would also help address the problem of some districts, such as large urban districts like New York City, applying for unnecessarily large amounts of maintenance and inefficient solutions.  By solving that problem without eliminating the category entirely, smaller districts would not be disproportionately harmed as they may depend heavily on maintenance contracts.  We feel that the proposed mechanism that doubles the allotment of funds for rural schools adequately adjusts for differences in cost.

2014 Priority Two Funding

We strongly encourage the Committee to consider funding 2014 Priority Two applications as part of this process.  In order for many districts to be ready for the Common Core and online testing, it is imperative that funding for the most recent Internal Connections applications be granted.  Many of the poorest districts are relying on this funding to be able to upgrade their connections to the necessary capacity and face deadlines that are in the very near future.  Denying two straight years of Internal Connections funding will have significant consequences on schools with the most severe needs. This funding should not be forgotten in the process to reforming the entire program.  Looking at current projections, it would appear that if the FCC took an extra 2 quarters rollover, then even the worst case amounts for funding request for 90% discount schools could be funded.  This would be a similar approach to what the FCC was taking last year before determining that there would not be enough funds.

Waiting until 2015, which means the summer of 2016 for installation, to allow the schools with the greatest needs to have access to Internal Connections is depriving many poor children of equal access to a quality education.  There is NO reason to wait that long.  The FCC should not wait until the 2015 cycle, so that it can accumulate 3 years of rollover money in order to find the much hyped $2B.  Schools need bold action today.

Consortium purchasing for Internal Connections (The proposed NC Demonstration Project)

New Hope supports the use of consortia in the purchase of highly commoditized products such as Internet Access.  The State of North Carolina has been extremely successful with this program.  We also support the creation of state contracts to leverage buying power for Internal Connections.  We further support states assisting school districts and charters with studies on how to best implement Internal Connections projects.  This is an area where demonstration projects and consortia funding could be very helpful. 

However, we do not support any mandated consortia purchasing whereby Internal Connections funding for a statewide application flows through the state and not directly to the individual schools and school districts.  The NC model for WAN funding whereby the state reimburses districts for their undiscounted share, but allows them to independently contract for the solution which best suits the district, is far superior to allowing the state to control purchasing decisions for Internal Connections.

Internal Connections, such as wireless networks, are not highly commoditized products and different schools and libraries have significantly different solutions in place.  Attempting to create a statewide solution would cause a massive amount of waste of already invested resources and E-Rate dollars.  Furthermore, having funding flow through a state controlled entity as opposed to directly into the local school district, subjects funding to unnecessary political influence outside of the districts control.  Our clients in North Carolina, are very concerned that any demonstration project whereby the state gains control of all Internal Connections funding will result in administration charges and cost overruns that could be avoided with local control.  We welcome the states support and involvement, but believe empowering local decision makers is more effective than adding additional layers of administration to the program.

Conclusion

The E-Rate program has been very successful in its mission and should significantly increase funding, as well as make changes that optimize, but do not rework a successful format.  Thank you for considering our response.  We appreciate the FCC’s continued support in helping to ensure that a successful program and its limited resources are protected and preserved.

Sincerely,

  John W Hughes III

President

Details about the workshop from WRAL-

FCC E-Rate Modernization Workshop (May 6)

The Federal Communications Commission will host an E-Rate Modernization Workshop on Tuesday, May 6 in the Commission Meeting Room (TW-C305).

The E-Rate Modernization Workshop will provide an opportunity for the FCC and E-Rate stakeholders to discuss the challenge of delivering high-speed connectivity to and within schools and libraries and highlight successful strategies. Additional details concerning the workshop agenda and panelists will be forthcoming.

As E-Rate reform gets closer, I would like to address my favorite E-rate sound bite. "The FCC has found $2B in unused funds to support a one time injection for Broadband".  What they should be saying is that the FCC intends to not fund Internal Connections for the second year in a row resulting in a pile of money to fund Internal Connections.  If they waited 3 more years, maybe there would be $5B to brag about.  Schools would be better of getting the funding in the 2014-2015 school year rather than waiting another year to fund P-2.

Now that the CEP is going to be expanded nationally, we have been receiving a large number of questions about how the program interacts with E-Rate.  The following are some answers to FAQ;

Q; Can a school participate in E-Rate if they switch to the CEP?  Will it put E-Rate funding in danger?

A: Yes , schools should always participate in E-rate regardless of the method they use for the lunch program.  No, E-Rate funding will not be put in jeopardy.  We have already assisted schools in successfully receiving funds in both programs.

Q:How are reimbursements determined for the CEP program?

A: Automatic qualifiers are multiplied a by a predetermined factor.  SLD applications and surveys are not allowed to be used in the process for determining lunch reimbursements.

 Q: If our district decides to pursue the CEP, how will we determine E-Rate discounts?

A:Traditionally an applicants E-rate discounts are determined by NSLP data or by using a survey to determine NSLP eligibility.  A CEP school currently has two options to determine it's discount.  Either a survey may be conducted or the last years discount rate may be used.  We expect a more permanent solution to be announced later this summer (along with other E-Rate reforms) which will likely include using  the multiplier as an option.

Q: Do surveys still make sense to use for CEP schools?

A; Yes, in many cases the multiplier will not pick up all of the eligible children.  An applicant should at least explore this useful tool.

Q: Can surveys be used to apply for the CEP?