Us FCC finally looks to fix the broken e-rate program

Since 2014, the E-Rate program has slowed down spending in the once-largest vertical market for WLAN gear – the K-12 education market.  Since the information about bidding and spending patterns for E-Rate is public, it is has been clear that the funding process – which adds almost a year more to the decision cycle for the typical municipality – has slowed down WLAN deployment instead of accelerating it, as the FCC had originally intended.  Also, if you look at the total dollars disbursed to WLAN projects at schools and libraries, it has actually declined year on year, at least in part due to the failure of the of USAC to properly administer the program.  In effect, the checks weren’t be cut quick enough due to incomplete IT systems and other bureaucracies.

The new FCC Chairman, Ajit Pai, put pressure on the USAC CEO during 2017 (especially in April 2017)  and the USAC CEO resigned on May 9 according to  In the April 2017 letter from Pai to USAC, Pai explained that “the E-Rate program is critical to the goals of universal service.”  This seems to address a concern as to whether Pai will support E-Rate going forward; it appears he will.

Our preliminary conclusion is that E-Rate might be improved in the future.  It certainly could get worse – but not by much, because by our estimate the reduction in overall enterprise-class WLAN equipment spending versus the rates it had seen before the E-Rate program was revamped in 2014 may have cut out as much as 5 or more percentage points from growth in the overall WLAN industry.