E-rate: A Historical Perspective

As E-rate applications for 2016 near their deadline, let's look back at how E-rate has changed over time and why E-rate 2.0 became necessary.

by John Halpin / April 18, 2016

Though this year's E-rate Form 470 deadline has passed, the E-rate process and buying season for U.S. schools and libraries are not yet over. They have until May 26 to file their Form 471 purchase requests with the Universal Services Administrative Company’s (USAC) Schools and Libraries Division (SLD), which is the entity that administers the E-rate program for the Federal Communications Commission (FCC).

Now that we're in the second year of the revised E-rate program, let's take a look back at where we came from and why E-rate needed a major overhaul. 

From funding years 1997 to 2014, the E-rate program changed little from its original mission, which was to connect all schools and libraries to telecommunications and data services. From a school's perspective, the program emphasized services and connections to classrooms to enhance learning. Grounded in the reality of the mid-90s, E-rate set parameters and projections on budgets, what minimum services schools should be able to access, and which services were optional. Denial of service attacks did not exist then. Voice over IP was just a concept. On-premise networks were wired, and the Internet was in its infancy. On top of that, local area networks required neither management nor security to operate safely and effectively.

So to stretch E-rate dollars further, the SLD denied services that didn’t directly connect classrooms, including network management and network security services. Over the past decade or so, these services became not only necessary, but vital to protect students, staff and institutional data. But this service denial policy remained in place even after Congress passed the Children's Information Protection Act, which required schools to block or filter Internet access to obscene, pornographic or harmful pictures in order to receive E-rate discounts. The FCC mandated that schools comply with the law's provisions.

That is not to say there were no changes in the program. There were a few. In response to the growing use of virtual servers, USAC began allowing the program to cover virtualization software in 2010. Another change occurred late in the last decade when it became apparent that school districts constantly bought equipment for their high discount schools and moved it to lower discount schools after a year or two. To stem this abuse, the FCC enacted two rules.:

  • The 3-in-5 rule prohibited the same school from purchasing equipment for more than three years in a five-year span; and
  • The three-year installation rule also prohibited schools from transferring equipment to another school within a three-year span. 

These rules helped somewhat, but by 2012, it became apparent that the program needed a major overhaul. Technology had changed, teaching methods and curriculum had changed, and connected learning was integrated into the learning process. More systemic change was needed.

As a result, we have the new revised E-rate program that places a higher emphasis on information connectivity to students and teachers, and less emphasis on how it is done and where it physically resides. These changes reflect how much technology has changed and how education now uses technology.

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