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FCC Votes to Make Changes to E-Rate Fund

As advertised, the FCC voted Thursday to make some major changes to its E-rate program fund for broadband

connectivity to schools and libraries.

Among those changes were to put more money into the program by indexing the fund's cap to inflation, to

officially allow E-rate funding for after-school access to computers and broadband by the community, to make

so-called dark fiber eligible for that funding, to streamline the application process and to better guard

against waste, fraud and abuse.

There was agreement on all those except allowing the fund to grow with inflation. Republican Commissioner

Robert McDowell dissented from that part, and fellow Republican Meredith Attwell Baker concurred, which is

neither dissent nor approval.

McDowell said that issue was better left to the FCC's pending overhaul of the entire Universal Service Fund,

of which the E-rate program is a part. He also said that it should have been indexed to inflation in the

telecom sector, which is basically flat, rather than the overall economy.

Commissioner Michael Copps went the other direction, saying it was a modest change and that he be in favor of

reconsidering the cap altogether, though that this was not the time to do it.

So-called dark fiber is owned by municipalities, and network operators are concerned that they will be

competing with the same government entities that regulate them.

The National Cable & Telecommunications Association had no comment, but AT&T saod ot was "disappointed" that

the FCC voted to make dark fiber eligible for support. "To be clear, dark fiber is a technology, not a service.  Dark fiber does not connect students to the Internet - electronics and a network separate and apart from the "dark fiber" are required for that connectivity.  Using the limited funding that is available for the E-rate program to fund specific technologies that do not themselves provide access to the Internet goes beyond what the program was designed to support - connecting students to the Internet."

McDowell appeared to signal that was the case, saying at the meeting that he had initially had concerns about

the "dark fiber" decision, but that he was now comfortable with it.

He said his concerns were about how competitive the bidding process would be--the municipal offering would

have to be the cheapest to get suport--and whether the FCC could insure an arms-length transaction when the government was bidding against private industry He was also concerned that opening up dark fiber, which is in

the ground but currently unused, would lead to large upfront construction costs.

That said, he added that in the past few days, the chairman had made "great strides" to reflect those concerns and he could support that section. But he added that the FCC needs to keep a close eye on the process.

FCC Chairman Julius Genachowski said that lighting that dark fiber would be one way to allow anchor institutions to choose from a full range of options in the marketplace.

He billed the vote as one for ensuring higher broadband speeds to schools and libraries at affordable prices, and helping insure the digital literacy that is critical to education and advancement.

Looking at the glass mostly full, McDowell had pointed out that 97% of schools are connected to the 'net, but Genachowski countered that 80% of those connections are not at speeds to tap into the apps of today, much

less those of tomorrow.

He also pointed to the price, saying that a school used to be able to hook up to dial-up broadband for $25 a month, but to get the kind of speed it now needs, that figure is more like $500.

The FCC also voted to approve a pilot project that would fund mobile devices to help kids trade 50-pound backbacks for smartphones. Copps "cautiously" endorsed the pilot, saying that was the way to go, but with some reservation, saying he thought the FCC should first make sure schools and libraries were taken care of.

"We have to remember that the basic task of this program is to get high speed, high capacity broadband out to schools and libraries," he said, "and until met, that challenge needs to take precedence over other meritorious ideas which could, and will, bring added luster to E-Rate."

McDowell went even further dissenting on the pilot project."I recognize that putting wireless technologies into the hands of students and teachers can be a powerful and exciting way to supplement our education system," he said in a statement.  "Nonetheless, I am concerned that opening up this new spending line item may be far beyond what Congress originally intended when it mandated subsidies for the wiring of schools and libraries to the Internet. Myriad questions abound that should be addressed in a further notice before launching such a trial. "

McDowell told B&C that while he believed students should have "every benefit of technology,"  he wasn't sure the FCC should be providing constant mobile access to the Internet for learning purposes without getting additional statutory authorization to do so, no matter how noble the goal. He is also concerned about the cost. "We need to think long term of what the financial implications might be," he said.