The FCC Provides a Peek Into Proposed Rules for $7 Billion Remote Learning Fund

Contributing Writer
FCC issues proposed rules for $7 billion in stimulus dollars

The Federal Communications Commission is just days away from finalizing how it will implement a new $7 billion fund to help school districts pay for at-home devices and internet connectivity for students and staff during the pandemic. 

And in advance of that happening, the FCC has taken the rare step of publicly releasing a draft of the new rules for the fund.

That move has set off a scramble by school districts, consultants, trade associations, nonprofits and major corporations to respond to the draft order to influence the final outcome. 

The massive COVID-19 stimulus package approved in March allocated $7 billion to the FCC for the creation of  an “Emergency Connectivity Fund” to pay for all costs associated with high-speed internet and devices for remote learning. 

Money from the connectivity fund is not part of the E-Rate program, though many aspects will follow already established E-Rate guidelines, and Congress gave the commission 60 days to get final rules in place for how it will distribute the money. That means the FCC has a May 10 deadline to wrap up the rulemaking process.

Draft FCC orders are not typically made public, but the agency’s acting chair says the desire to help schools immersed in remote learning has compelled it to act.

Last week, Acting Chairwoman Jessica Rosenworcel announced she is providing the public with an unusual peek behind the commission’s curtain as it gets closer to finalizing rules.

Draft orders are typically circulated internally among commissioners. But in a statement highlighting the time crunch to approve rules and the overall “extraordinary circumstances” K-12 schools are in because they’ve been forced to shift to remote learning during COVID, Rosenworcel said she was releasing the 80-page draft order because of “the commission’s desire to receive targeted and timely input from a broad cross section of the affected public.”

That decision has been widely applauded by an array of stakeholders. However, there’s still a lot of jockeying going on to get changes to different elements of the draft order.

How the final rules shape up will have big implications for companies across the ed-tech market — not only those focused directly on providing connectivity to schools and homes, but also those whose digital products would benefit from students being able to connect more easily

It’s unclear what changes will result from the FCC undertaking the unusual process of releasing draft rules and accepting additional input in the final days of rulemaking.

We’re in unprecedented territory,” said John Harrington, CEO of Funds for Learning, an organization that consults school districts on the E-Rate program and has met with the FCC several times since March to discuss ECF rulemaking. “It’s remarkable and commendable that they’ve invited us to all take shots and offer more ideas. They are willing to be as flexible as possible, and all options will remain on the table as long as time allows.” 

Here’s a look at a few key issues that have emerged as the FCC enters the home stretch on its rulemaking for the $7 billion remote learning fund.

How Will The Money Be Distributed?

The FCC proposes to use a funding prioritization system that weighs heavily toward the most financially disadvantaged schools, according to the draft order. Schools with the highest poverty levels — those qualifying for the max 90 percent E-Rate Category One discount — will receive first priority. From there, money will be distributed to schools “at each descending discount level until there are no funds remaining.”

Harrington has labeled this an “all-or-nothing” approach because he said it allows the FCC to fully fund reimbursement requests for the largest urban districts and then work its way down the line, a process he says that could exclude as many as 5 million students from receiving devices or Wi-Fi connectivity. Funds For Learning estimates that a total of 10 large districts could gobble up about 14 percent of the total $7 billion pot under this funding formula.

“Because there’s no limit, you’ll have some schools where it’s all-you-can eat and they can request a disproportionate amount of the funding,” he said. 

His group is proposing that the FCC use a system similar to E-Rate’s Category Two funding, where a district’s  reimbursement cap is based on enrollment and poverty level, which would lessen the amount that those same 10 large districts qualify for by roughly half. 

Likewise, the State E-Rate Coordinators’ Alliance, which represents a network of E‑Rate coordinators in 46 states and two U.S. territories, is asking the FCC to make changes to how it plans to distribute the money. The group also advocated for an applicant cap to be set on what districts could request for reimbursement ($100 for every urban student and $150 for every rural student). 

With that option no longer being considered, Debra Kriete, who chairs the group, said her members would now like to see the FCC incorporate a proration element into the mix, where if demand exceeds the $7 billion available, then all districts would receive a little less than what they asked for. The request is supported by groups such as the Consortium for School Networking, the American Library Association, and the State Educational Technology Directors Association.

“Everybody shares equally in a reduction,” said Kriete, whose group was meeting with commissioners and staff this week to discuss the issue. “You get 100 percent of something instead of getting 100 percent for the 90 percenters and $0 dollars for the lower applicants.” 

What Time Periods Will Be Covered By the Fund?

In a request for public comments issued in March, the FCC asked how far back it should allow applicants seeking funding to recoup costs. The draft rules provide an answer. 

The FCC is proposing to open two different application filing windows: one covering expenses already incurred by school districts and one for future purchases, though there’s no guarantee that money will be available for the second wave of reimbursements. 

A 45-day application window allowing school districts to request retroactive payments for spending on remote learning technology made between the dates of July 1, 2020, and April 30, 2021, would open first. That first window is expected to open sometime this summer. If there’s left over money, a second filing window would allow districts to ask for reimbursements for purchases made between May 1, 2021, and June 30, 2022. 

The FCC, in the draft order, explained that making future expenditures the primary reimbursement target would have been “unfair to those schools and libraries that have already paid for eligible equipment and services,” and the commission noted it could be inconsistent with their mandate from Congress. 

Harrington, of Funds for Learning, said the priority should be for new purchases: “I don’t think any of us expected that they would pit the past versus the future.”

Kriete, who chairs the nonprofit representing state E-Rate coordinators, said her group proposed one filing window that stretches back to March 1, 2020 — around the time schools started shutting down, turning to remote learning and making mass tech purchases — and runs through June 30, 2022. 

“We think the program should strike a balance between funding retrospective and prospective eligible devices and services,” she said. 

Will Smartphones and Desktops Be Eligible For Reimbursement?

Under the draft rules, the short answer is no. But some major players — including Samsung and the wireless industry’s biggest lobby group — are actively working to change that. 

When it comes to desktops, the FCC said the lack of portability is the biggest strike against the devices. But the commission also noted that Congress specifically didn’t identify desktops as eligible connected devices. 

On smartphones, the FCC is equally stringent, saying “they lack the full functionality students, school staff, and library patrons need to perform necessary remote learning activities, homework, or research.” 

“We also find it significant that we did not receive a single comment or other filing from a school or library claiming that they purchased smartphones to use instead of laptops or tablets for their students, school staff or library patrons or have found smartphones to be good substitutes for tablets or laptop computers,” the FCC noted in its order. 

[T]he fact that some smartphones can be made more functional for educational purposes by adding these extra [connectivity features] does not persuade us that smartphones are generally adequate for remote learning.FCC's Draft Order

Within the last week, however, a team from the trade group CTIA, which included lobbyists from AT&T, Verizon, T-Mobile and Tracfone, met with staff from the FCC’s Wireline Competition Bureau on a videoconference. One of their key messages: Smartphones should qualify for ECF reimbursement because “these and other similar devices serve as Wi-Fi hotspots, modems and routers.” 

Around the same time, Samsung lobbyists met with Rosenworcel and FCC commissioner Geoffrey Starks in separate videoconferences to try and persuade them to add smartphones to the list of devices eligible for reimbursement. At those meetings, according to FCC filings, Samsung provided a video demonstration of how one of its smartphones can be used for remote learning. 

The company also emphasized how most smartphones can connect to TVs or monitors to provide large-screen videoconferencing. 

But the FCC, in its draft order, had already shot down the idea of connecting smartphones to bigger screens for remote learning. The agency said that “the fact that some smartphones can be made more functional for educational purposes by adding these extra peripherals does not persuade us that smartphones are generally adequate for remote learning.”

Photo: Jessica Rosenworcel, the acting Federal Communications Commission chair, speaks during a Senate Commerce, Science, and Transportation committee hearing last year. (Alex Wong/AP) 

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