News Story

WCB Report Recommends Continuing Erate Category Two Budget Approach

Friday, February 15, 2019 12:00 AM

On February 11, 2019, the Wireline Competition Bureau released a report on Modernizing the E-rate Program for Schools and Libraries.  The report analyzes data from the first four years of the category two budget approach that was implemented in FY2015.

The Bureau observed four ways in which the category two approach "appears to be more effective than the two-in-five rules approach." 

The Bureau's data analysis shows that the category two approach is generally sufficient to meet the goals of the E-Rate program. " Under the category two budget approach, greater funding is available for internal connections, distributed to more applicants, in a more equitable and predictable manner, giving applicants more flexibility to determine how best to upgrade their systems."

The Bureau's recommendations include the following:

We recommend that the Commission retain the category two budget approach.  Given the improvements that the category two budget approach has shown over the two-in-five rules, the Bureau does not recommend a return to the two-in-five rules approach.  The Commission established five-year category two budgets to make funding for internal connections more equitable, predictable, and more broadly available.  It did so in recognition of the importance of internal connections, particularly robust Wi-Fi networks, the role they play in enhancing educational opportunities for students and library patrons, and the potential for these networks to close the digital divide.  The Bureau’s review of the data from the first five-year category two budget cycle shows that the Commission’s goals in creating these budgets have largely been met.

Further, we recommend that the Commission consider some targeted changes to the budgets moving forward such as an increase in the funding floor, to the extent that it finds that insufficient funding is deterring entities at the funding floor and rural libraries from participating.  These recommendations are supported by the data the Bureau reviewed and are also consistent with the Public Notice comments.