On December 22, 2015, the Federal Communications Commission’s (FCC’s) Enforcement Bureau adopted a consent decree resolving the Enforcement Bureau’s investigation into whether the NYC DOE violated the competitive bidding rules of the FCC’s E-rate program.  The competitive bidding rules ensure that schools and libraries that seek E-rate eligible goods and services treat price as the primary factor when choosing their service provider.

The consent decree is significant in several respects.  First, this marks the first significant action handled by the USF “Strike Force” established by Chairman Wheeler in 2014.  It also marks the largest e-rate settlement to date, and includes many compliance plan requirements that could become de facto standards for future E-rate enforcement actions.  Further, to the best we can determine, this is the first E-rate enforcement action the Commission has taken against a school or library applicant under the program.


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After voting on December 11, 2014 to adopt new E-rate rules, the Commission’s Second Report and Order and Order on Reconsideration became available to the public on December 19.  As we wrote earlier, the new E-rate rules increase the program’s funding cap to $3.9 billion and provide schools and libraries with additional options and incentives to purchase high-speed broadband connections. 
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At yesterday’s Open Meeting, the Commission voted to increase the E-rate cap by $1.5 billion, bringing the program’s total funding to $3.9 billion.  The funding increase was originally mentioned in July’s Notice of Proposed Rulemaking, and was strongly supported by key Democratic Commissioners. According to the Public Notice of the action, the increase will give schools and libraries greater flexibility with building and supporting their high-speed broadband networks.  To raise sufficient funds for the increase, the Commission intends to raise the USF contribution rate.  The Public Notice estimates this increase to amount to an additional 16 cents per month on an individual consumer’s telecommunications bills, totaling nearly $1.90 per year.  Commissioner Pai decried the increase, stating that it would lead to a contribution factor of 20.3%, double the contribution factor from 2009.

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The Federal Communications Commission recently announced its agenda for the next Open Commission Meeting, scheduled for Thursday, December 11th.  The first item on the Commission’s agenda will be an update to the E-rate program.  At the Open Meeting, the Commissioners will consider a Second Report and Order and Order on Reconsideration in

After adopting the E-rate Modernization Order in July, Chairman Wheeler announced that the Commission is poised to take the next step in updating the E-rate program for schools and libraries.  At the Commission’s next meeting in December, Chairman Wheeler will circulate a draft order to his fellow Commissioners for their consideration.

July’s E-rate Modernization Order

The Commission recently released its first update to the E-Rate Map of Fiber Connectivity which shows fiber deployment to America’s public schools and libraries.  The update comes just one week after the FCC issued a Public Notice encouraging E-rate stakeholders including states, districts, schools and libraries to submit connectivity data to the Commission.   Parties wishing

Almost two weeks after the FCC adopted new E-rate rules, the order became available to the public.  As we wrote earlier, the E-rate rules allocate a significant amount of new funding for wireless connections and further focus the program on improving broadband services in schools and libraries across the country.  With the Order out, we finally have some of the details that will affect applicant requests and service provider business models.  There is a lot of information packed into the 141 pages of text and rules, so here is a quick study guide, if you will:
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FCC Chairman Tom Wheeler issued a Public Notice on July 14, 2014, announcing the creation of a new “Strike Force” to respond to concerns of waste, fraud and abuse in the Universal Service Fund (USF). Chairman Wheeler reiterated that “the Commission is committed to aggressively rooting out waste, fraud and abuse.” Operating within the Enforcement

At its Open Meeting today, the Federal Communications Commission adopted new E-rate rules, despite strong objections from Commissioners Pai and O’Reilly.  As predicted, the new E-rate rules direct a significant, short-term boost of funding for wireless connections to schools and further focus E-rate funding on broadband services.  While the Chairman lauded the Commissioners for approving the new rules, Commissioners Pai and O’Reilly lamented the “missed opportunities” of the new rules, and making special mention of the lack of bipartisanship during the rulemaking process.  Among the dissenting Commissioners, Pai was most concerned with how the E-rate program would continue to receive funding, and repeated assertions that the Chairman intended to raise the E-rate cap later this year.  Commissioner O’Rielly asserted that there was “no long term plan” for the program and complained that many changes were “short-sighted.”

According to the Commission’s press release, the new E-rate rules will bring digital learning benefits to 10 million students across the country in 2015 alone.  The new rules also phase-out support for voice services and lower the maximum discount for schools from 90% to 80%, meaning that for every $1 that is spent by a school, $4 will be contributed by the USF.
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