New FCC Chair, Ajit Pai, and His Vision for the E-Rate Program


January 31, 2017

In 1996, President Bill Clinton presided over the creation of the E-Rate program through the 1996 Telecommunications Act. At the time, the program was designed to supply federal funds to help schools and libraries afford telecommunication technology. In 1996, that mostly meant voice technology, but in 2014, the focus shifted to WiFi and internet connectivity, after a modernization of the program. Over time, the plan was to reduce the amount of funding provided for telephony technology and increase the amount of funding for broadband capabilities. In that same year, the Federal Communications Commission (FCC) chairman Tom Wheeler proposed an increase in the budget from $2.4 Billion to $3.9 Billion.

Flash forward to today, and the new presidential administration has recently appointed Ajit Pai as the  chairman of the FCC. Pai has been critical of the E-Rate program in the past, and when the modernization discussion was held in 2014, he submitted his own proposal to modernize the program. While we cannot know for certain what changes Pai will make during his tenure as chairman, his 2013 statement outlined his vision for the program. Many of his proposed changes were not put in effect at that time, so as the new chairman, he may now have his chance.

Taking a look at his proposal from 2014, we can get a better sense of his vision for the program.


Four Goals of Pai’s Revised E-Rate Program


Pai’s plan to modernize the E-Rate program involved four main goals. On paper, these proposed changes sounded encouraging and prudent.

  1. Simplify the Application Process
  2. Increase Transparency
  3. Funding for “Next Generation Technology”
  4. A More Egalitarian Distribution of Funding


Simplify E-Rate Application Process

As it stands, the E-Rate application process was and is fairly nebulous. Libraries can be subjected to six separate forms in addition to an outside review by an approved planner. Furthermore, there are some tricky rules that may require the help of a consultant to ensure compliance. For example, the 2-in-5 rule states that a school or library can only receive funding for internal internet connections every 2 out of five funding years. However, this rule does not apply to “Category One” services or basic maintenance. This can be a hassle when trying to map out a five-year technology plan and speculating when to launch certain projects and technology updates.

Pai wanted to do away with such complexity. Instead of six forms, his initial plan called for only two. Each of these forms would only be one page long. He expected the streamlined rules to eliminate the need for consultants.


Increase Transparency

An initial reaction to these streamlined rules might be a concern for corruption. With less red tape to vet the organization and weed out those who would take advantage of the funds, the program would be vulnerable to even more exploitation. However, Pai proposed a solution for this issue. A single, centralized website could be launched to document the amount of money every school and library received as well as how they spend it. Pai stated that by publishing all this information, watchdogs, whistle blowers, ethics commissions, journalists, and other agencies could see exactly where the money is headed and ensure that it is spent justly.


Funding for Next Generation Technology

Tech moves quickly, and Pai wanted to ensure that E-Rate stays with the times. While the modernized program chose to reduce funding for telephony services over time, Pai wanted to cut it out entirely. He also wanted to eliminate the Category One and Category Two systems and place all the remaining services into one list. Pai claimed that this will allow the schools and libraries to choose the services that best meet their particular needs instead of allowing Washington to dictate priorities.


A More Egalitarian Distribution of Funding

Pai noted that funding was not distributed appropriately under the old system. He claimed that, “…the savviest of schools walk away with the lion’s share of funding while students attending other schools that need funding are deprived year after year.” To correct this issue, he proposed that funding should be allocated to schools based on its number of students. Effectively, each student would be worth a specific dollar amount. Rural students would be worth more than urban students, and low-income students would be worth more than students from affluent families. If a student moved to a new school, they would take their funding value with them.

Currently, the E-Rate program uses the school lunch program as a barometer for the schools income level. The more school lunches a school receives, the more funding it is eligible for.


Uncertain Future for the E-Rate Program

It is important to note that these ideas were proposed by Pai almost four years ago and before the last round of modernization. It’s possible his ideas have changed, and it’s impossible to know to what degree Pai will pursue these initiatives. What is certain, however, is that Pai as the new chairman of the FCC’s view of what the program should be varies greatly from what it actually is. For those schools and libraries taking advantage of the E-Rate program, this is something to pay very close attention to in the coming year.

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For Further Reading

Your Essential Guide to the 2018 E-Rate Program

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