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.”