In a mostly uncontroversial vote, the Federal Communications Commission (FCC) agreed yesterday to establish an online competitive bidding portal for applicants to the E-Rate program, also known as the Universal Service Schools and Libraries Program. The portal will go online to collect applications for the 2028 funding cycle, which begins July 1, 2027.
All agree that the E-Rate has been a necessary and successful process for wiring schools and libraries for internet access, especially in rural areas. At the same time, the program has been vulnerable to fraudulent applications through much of its 30-year history. The Commission intends a Report and Order it adopted during the monthly agenda meeting to control the application process more closely and at the same time simplify the process for applicants.
In a 2017 report, the FCC’s inspector general gave examples in which lack of transparency of self-certified data supplied by applicants bidding for E-Rate support resulted in potential fraud. Applicants sometimes misrepresented their compliance with E-Rate competitive bidding rules, leaving the FCC with no way to double-check their assertions. The inspector general recommended that the Universal Service Administrative Co. create a “competitive bid repository” to maintain data integrity.
The Government Accounting Office (GAO) investigated the E-Rate in 2020 and recommended action “to clearly define and fully document the data fields in all relevant E-rate program computer systems to help improve the FCC’s ability to understand and use data to manage fraud risks.” At that time, GAO estimated that “improper payments” through the program increased sharply to $140 million between 2014 and 2019.
“Today, we finally act on those warnings… We do so, bringing much needed transparency to the E-Rate bidding process,” said FCC Chairman Brendan Carr. “Instead of continuing to rely on self-certifications, we can rely on verifiable data.”
A draft of the Report and Order claims that the new rules also simplify and streamline the applications process. However, Commissioner Anna Gomez voted approve in part/dissent in part, saying the Commission did not go far enough to ease complexity.
While supporting the overall goals of the order, Gomez said she had “continuing concerns about whether the structure and implementation timeline of the portal will work for the schools and libraries that depend on this program most. I cannot offer my full support today,” she said.
She predicted the new FCC E-Rate portal could have a “rocky rollout” and rural schools and libraries without budgets to hire computer consultants could run into new barriers to funding.
