Sweeping E-Rate Changes Proposed by FCC Member After Forward Exposes Flaws

Orthodox Groups Take Advantage of $2B Telecom Subsidy

ari jankelowicz

By Josh Nathan-Kazis

Published July 17, 2013.
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A Federal Communications Commission commissioner has proposed sweeping reforms to the E-Rate program, a school and library technology subsidy that was the subject of two Forward exposes this year.

The proposed changes to the program, announced by Republican FCC commissioner Ajit Pai at the American Enterprise Institute on July 16, would entirely reshape how the $2.25 billion paid into the program each year is distributed to schools and libraries.

Pai argued that the current distribution model is flawed, sending technology subsidies not to schools where need is highest but to schools that are “most adept at navigating the system.” In making his case, Pai uses data from a Forward analysis that showed that students in the Orthodox town of Lakewood, New Jersey received $282 in E-Rate funding per student in 2011, while the impoverished nearby city of Newark received just $82 per student.

(Pai did not cite the Forward as the source of the data in the distributed text of his address. An FCC spokesman did not immediately respond to a request for comment.)

The proposed reforms to E-Rate would simplify the application process, increase transparency in how the funds are used by schools, reduce the role of paid E-Rate consultants, and distribute funds according to a national formula based on need. The changes would also adjust 1990s-era rules that make it easier to get E-Rate funds for things like phone bills rather than for wiring classrooms.

The proposed reforms appear designed, at least in part, to reduce the ability of well-organized applicants, like the administrators of Orthodox schools, to receive more than their fair share of the available E-Rate funds.

It’s unclear how long it would take for these changes to the E-Rate system to go into effect, if they were approved. Pai, a Republican, is only one of three FCC commissioners, though other members of the commission have been discussing separate proposals to amend E-Rate in recent weeks. The FCC issued a press statement shortly after Pai’s speech with praise for his proposal, mostly from Republican politicians.

The Forward reported in February that E-Rate had committed $1.4 million in library funding to ultra-Orthodox religious institutions in Brooklyn that don’t actually qualify as libraries.

A second story in April revealed that the ultra-Orthodox town of Lakewood had received more in recent years in E-Rate money than any other municipality in all of New Jersey.


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