In June 2013, President Obama challenged the Federal Communications Commission ("FCC") to modernize the existing Universal Service Program for Schools and Libraries, better known as the E-rate program, to connect schools and libraries serving 99% of public and private school students to next generation high-capacity broadband within five years.  In July 2013, the FCC responded by requesting public comment to its three proposed E-rate goals: (1) increase broadband capacity and determine how to assess discount amounts; (2) permit cost-effective purchasing; and (3) streamline the program administration.  The FCC received over 1,500 comments in response to its request and held hundreds of meetings with interested parties to determine the most effective proposed changes for the E-Rate program.

In February 2014, the FCC provided its response to the public comments by issuing its proposed plans, policies, and revisions for the E-rate program.  It identified three reasons why schools need higher bandwidth: (1) the increased use of tablets in the classroom; (2) Wi-Fi connectivity; and (3) the improved content available on the internet.  Eighty percent of current E-rate participants do not have sufficient bandwidth to meet their educational needs.  To address these issues, and to meet President Obama's goals, the FCC proposed a $2 billion increase in spending on the expansion of high-speed connections over the next two years.

The FCC also realized it needs to improve the speed and effectiveness of its review of E-Rate applications.  Consequently the FCC promised to begin immediately working on outstanding applications and requests that are on hold or on appeal.  The FCC's new goal is to give priority to current E-rate requests and applications that will provide "the most students the most broadband."  This goal will look at the amount of students served, not the location or locality of the school that submitted the application.  Moreover, the FCC admitted that schools applying jointly with other schools have been "penalized" as their applications are more complex and take longer to resolve.  The FCC promised to consider schools that apply jointly for priority to the extent they give the most students the most broadband.

In March 2014 the FCC issued a Public Notice seeking additional comments on specific E-Rate issues.  Some of the issues addressed in that Public Notice are how to ensure equitable distribution of E-rate funding, create incentives for making cost-effective purchasing decisions, and appropriately phase out outdated services, such as such as paging and voice services.  The objective is to have outdated services phased out before students return to classrooms in fall 2014.  The FCC will consider the additional public comments in finalizing its new proposed E-rate program policies and revisions.  The FCC's goal is to issue an order later this spring which will put the new E-Rate program policies into effect by 2015.