FCC Commissioner Michael O’Rielly Issues E-Rate Warnings

Associate Editor

A Federal Communications Commissioner delivered a cautionary message to districts, libraries, and companies last week in his opening remarks for a workshop about building fiber with E-rate funds for school and library connectivity.

At the FCC-sponsored event in Washington, Commissioner Michael O’Rielly said that the agency “will not hesitate to do everything within the law to recoup any excesses or abuses of the program, and prosecute those that push the program boundaries—no matter how well-intentioned they may be.”

Then, for anyone seeking funding for fiber build-outs to get connectivity in unserved areas, he recommended that they be “extremely cautious.” 

“Before you declare an area to be unserved, please double check with nearby providers or with the FCC to find out whether it’s truly unserved,” he said. “It would be a terrible misuse of scarce [E-rate funding] dollars…to overbuild.”

Notably, O’Rielly is one of two Republican commissioners who last year voted against modernizing the E-rate program, and increasing the cap on its funding for schools and libraries by $1.5 billion annually to $3.9 billion. The FCC’s three Democratic members voted in favor of both proposals, and they passed.

The E-rate, created by Congress in 1996, pays for improvements in school and library telecommunications services, particularly for disadvantaged communities. Funded by fees on telecommunications providers, which are passed on to consumers as charges on their phone bills, the E-rate is described by the FCC as the nation’s largest program supporting education technology.

Earlier this month, the FCC announced that it was able to fund all eligible 2015-16 E-rate requests for schools and librarieshonoring nearly $2.3 billion in applications for telecommunications, telecommunications services, and Internet access, and about $1.6 billion for internal connections and managed Wi-Fi services. For the past three years, the commission had been unable to allocate any funds for Wi-Fi.  

Warning Focuses on Use of Funds, Plans

O’Rielly was not on the initial agenda for the event, which was called the The E-rate Fiber Build Workshop. The workshop, which is archived here, gave E-rate applicants, providers, and state and local policymakers information and tools for planning fiber build projects under the new E-rate rules. It focused on issues applicants need to consider in order to choose the most cost-effective plans for deploying fiber.

“Entering into the communications space is not something to be taken lightly,” said O’Rielly. “You’d be wise to see this as an absolutely last resort.”

For Sheryl Abshire, the chief technology officer of the 34,000-student Calcasieu Parish district in Lake Charles, La., who presented her school’s case study at the event, the build-your-own fiber network idea “is not for the faint of heart,” she said. The Calcasieu district leases its network. 

Starting with writing an accurate RFP and evaluating bids, Abshire said “it takes a certain degree of sophisticated in-house expertise” to make a decision to build a fiber network, oversee the process, then maintain it. “This is a long-term decision,” she said, “and it requires years and years of services that you are committing a district to.”

Abshire, who served a term from 2010-2012 on the schools and libraries board of the Universal Service Administrative Company, which administers the E-rate program, said she agreed with O’Rielly’s other comments because the universal service program is funded by consumers. “We should all be diligent about how the funds are used,” she said.

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