School Groups Raise Concerns About Prospect of Big Changes to E-Rate Bidding Process
Ed-tech groups are doubling down on efforts to persuade the Federal Communications Commission to abandon a plan to revamp the competitive bidding process for E-rate procurements.
Late last year, the FCC released a proposed rulemaking to create a national bidding portal for the E-rate program in which all vendors would have to upload bids to a system managed by the federal government, instead of submitting them directly to school districts.
A public comment period wrapped up earlier this year, and the FCC has taken no action on the proposal so far.
But groups that represent K-12 schools have grown increasingly concerned following a letter from the Justice Department to the FCC supporting the agency’s plan to create a centralized document repository for E-rate procurements. That letter, says the head of one ed-tech group, is likely to embolden the FCC to move forward with the proposal in some manner.
The FCC says its proposed changes to the E-rate competitive bidding rules would streamline document submissions and provide stronger fraud protections.
A coalition of groups that represent K-12 schools — including the State E-Rate Coordinators’ Alliance, the National School Boards Association, CoSN, and Funds For Learning — have told the FCC that its proposed bidding portal would violate local procurement laws in many states, and could also lead to fewer vendors participating in the program.
Major school districts have also chimed in: The Los Angeles Unified School District, the nation’s second largest K-12 system, spoke with FCC staff in late October, in part, to share its opposition to the portal because “it would conflict with California bidding requirements and may have a negative impact on service provider participation in the program.”
‘Robust Enforcement’ of Laws
Funded at $4 billion annually, the E-rate program allows schools to receive reimbursement for certain internet services provided on campus. More than 21,300 school districts and libraries and 3,800 vendors currently participate in the program.
School districts applying for E-rate funds already have to complete a competitive bidding process and comply with FCC bidding requirements. As part of that, districts fill out and submit a form with a description of services requested. That document is posted online for vendors to review.
Under the FCC’s proposal, the federal government would take over management of E-rate procurements — all controlled in the centralized bidding portal. Currently, districts manage the entire bidding process locally or with a third-party bidding platform of their choice.
John Harrington, CEO of Funds For Learning, an organization that consults with districts on the E-rate program, has called the FCC’s proposed bidding portal “the most radical change to the program since its inception.”
Groups that oppose the new bidding portal were hopeful the FCC would back off its proposal after receiving public comments earlier this year.
But Harrington says the Justice Department letter supporting the FCC’s proposal “rings really loud.”
“We don’t take that as random happenstance,” he said in an interview. “It shows there is a lot of discussion back-and-forth behind the scenes, and to me it signals that barring some strange turn of events it would be unlikely that they don’t move forward with the bidding portal.”
The Justice Department prosecutes E-rate fraud and abuse cases.
In its letter, the federal law enforcement agency said it supports the FCC’s proposal because it would enhance the ability of FCC watchdogs to root out and deter fraud in the E-rate program.
“The proposal would also allow for more robust enforcement of laws designed to protect the E-Rate program’s public procurement process and enhance the program’s integrity, including the investigation and prosecution of antitrust and related crimes that occur before and during E-Rate procurements,” the Justice Department wrote.
A 2017 report from the FCC’s inspector general and a 2020 report from the federal government’s watchdog agency, the Government Accountability Office, both recommended that the agency take steps to create a bidding portal for E-rate procurements to minimize fraud risks.
When the FCC released its proposed rulemaking last year, chairwoman Jessica Rosenworcel said the agency proposed a centralized document repository for E-rate procurements in response to the watchdog reports.
Harrington contends that that Justice Department’s letter overlooks already strong safeguards in place for the E-rate program. And, he said, it ignores another reality: More regulations could lead to fewer vendors participating in the program.
“Vendors are under no compulsion to participate in E-rate,” Harrington said. “It will have a chilling effect on competition.”
In a letter last month, three groups — State E-Rate Coordinators’ Alliance, the National School Boards Association, and CoSN — told the FCC that the Justice Department’s letter attempted to “obscure the sufficiency of the current tools used” to detect E-rate fraud, and also to “overstate the potential for a bidding portal to deter waste, fraud and abuse.”
“There has been no evidence or rationale offered to justify such a seismic change in the competitive bidding process that has been effective during the past 25 years,” the groups wrote.
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