ACA set forth its views in Nov. 8 reply comments filed with the FCC as part of the effort to modernize the E-rate program, which provides discounted broadband service to schools and libraries through the FCC's Universal Service Fund. E-rate program funding is based on demand up to an annual FCC-established cap of about $2.3 billion. The FCC has proposed refocusing the E-rate program from traditional telecommunications services to one about high-speed broadband connectivity. It also seeks to collect more and better data, simplify the application process and taking other steps to modernize the program.
In its comments, ACA, echoing statements of then-acting Chairwoman Mignon Clyburn, noted that the FCC lacked sufficient data upon which to formulate sound policies to modernize the E-rate. ACA added that neither the FCC's notice seeking public comment nor any commenter provided sufficiently precise information about the nature and size of the problems faced in bringing high-speed broadband connectivity to all schools and libraries.
Nevertheless, ACA said there is a path forward and set forth a process the FCC should undertake to reform the E-rate program, beginning by defining the new broadband connectivity mission and collecting data to define the nature and scope of the effort required to achieve this goal. Once this is accomplished, ACA proposed that the FCC should adopt the following measures to make the program more cost-effective and ensure it is fiscally responsible:
Require schools and libraries to use existing facilities of service providers to the maximum extent before constructing their own facilities;
Simplify and amend the application process to facilitate and encourage service provider participation;
Phase-out non-broadband related services from the Eligible Services List (ESL);
Increase matching funds requirements, particularly in non-rural areas that have lower costs for providing service; and
Maintain the current E-rate program budget.
ACA said its members were very concerned about an FCC proposal to permit schools and libraries to obtain additional support for and expand use of dark fiber - which effectively would support their deployment of private networks. ACA explained that because the independent cable community has deployed extensive networks using primarily private capital and sometimes support from other USF programs, any effort to enable government-supported overbuilding would not only undermine previous investment, but it would deter future investment as well - contrary to the goal of seeking to expand broadband deployment.
"Because E-rate funding is limited and government-supported overbuilding is antithetical to encouraging private investment in broadband development, the FCC should not permit schools and libraries to own, construct or operate their own facilities without robust safeguards," Polka said.
To free-up support for broadband connectivity, ACA proposed pruning the ESL by phasing out support for services that are used for only voice communications, which would free up more than $400 million annually. Numerous other commenters from across the spectrum of interested parties agreed.
ACA's rationale was that where funds are limited, support should be focused on the program's most important priorities. ACA thus urged the FCC to adopt a reasonable but relatively expeditious transition from providing support for these non-broadband related services, with one exception - in rural areas, because the cost of service may be sufficiently great, the transition should be more gradual, and waivers should be permitted in instances where costs are exceptionally high.
ACA also suggested the FCC take steps to increase the number of entities bidding to offer E-rate services because greater participation will ensure schools and libraries pay reasonable prices for eligible services. To increase the participation of smaller broadband providers, ACA proposed that the FCC simplify and make more transparent and fair the application process and to do more educational outreach to these operators who have the means of providing eligible E-rate services.
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