FCC Chairman Tom Wheeler began circulating a draft document among the FCC’s commissioners this week  that would raise the Universal Service Fund (USF) line item charge on fixed and wireless phone bills—which  currently stands at 99- cents per line per month—by as much as 16-cents per line per month. The  change would boost funding for the USF E-Rate program by $1.5 billion per year.

The draft item is slated for a vote at the FCC’s next scheduled open meeting on December 11. During  a conference call also attended by Senator Ed Markey (D-MA), Wheeler explained that the draft  document progresses from the agency’s decision in July to reform the E-rate program (which  subsidizes Internet connections to schools and libraries) by promoting efficiency and transparency  in spending and by shifting $1 billion in funding from legacy landline connections to Wi-Fi. In  addition to raising the E-rate funding cap from its current limit of $2.4 billion to just under $4  billion per year, Wheeler told reporters that the draft rules also include a “series of targeted  policy changes to enhance the options available to schools and libraries [to] purchase affordable  high-speed broadband.”

According to Wheeler, the proposal to raise the E-rate cap responds to the lack of inflationary  adjustments in the program between 1997 and 2010, and the resulting increase in consumer bills would amount to no more than  “the cost of a cup of 

coffee” each year.   Remarking that 63% of U.S. students “do not currently have an Internet  connection capable of supporting digital learning,” Wheeler stressed that “the digital age demands that we bring  America’s schools and libraries into the 21st century so that all students have the tools they need  to compete in a global economy.” Wheeler further maintained, “we have reached the reality that,  while many schools and libraries have benefited from the E-rate program, rural and low-income  schools and libraries have not shared proportionally” for the reason “there was not enough money to  go around.”

Markey, who is credited as the pioneer of E-rate, applauded the announcement as the start of “a new  chapter in the incredibly successful E-rate program.” Outgoing Senate Commerce Committee Chairman  Jay Rockefeller (D-WV) meanwhile declared that the draft proposal “puts the goal of securing  E-rate’s future within reach.” However, FCC Commissioners Ajit Pai and Michael O’Rielly—both  dissenters against the July E-rate order—objected on grounds that additional reforms are needed to  free up E-rate funds without raising costs for consumers. Lamenting what he described as a “17.2%  tax increase,” Pai suggested that “instead of imposing a greater burden on families . . . the  Commission should pursue fiscally responsible reforms that “would cut the bureaucratic red tape and  focus resources on the children and library patrons of poor and rural America where the need is greatest.”