Digital Liberty Joins Coalition Opposing Wasteful Expansion of E-Rate

Today Digital Liberty signed onto a letter opposing the FCC’s attempt to expand the E-Rate program for the use of remote learning. 

Remote learning during the pandemic is an important mission. Our students want to stay in school, that is why Congress has already given nearly $70 billion in COVID stimulus to support this cause, the vast majority of which hasn’t even been spent yet. 

In addition, the E-Rate program is the wrong choice to deliver these services to students. The E-Rate program, which falls under the Universal Service Program (USF), is funded through a regressive fee structure based on contributions from companies offering outdated paging and landline phone services.  

As the number of consumers using these technologies decrease, so does the funding. This could deplete billions of dollars in just a few months

It’s simply bad policy for the FCC to twist the E-Rate program to be used for this purpose, instead they should continue to support the efforts of the Department of Education to help ensure the already appropriated funding gets used most efficiently. 

You can read the full text of the letter below: 

February 23, 2021

Dear Secretary Dortch:

We the undersigned organizations submit these comments pursuant to the Federal Communications Commission’s rules (47 C.F.R. §§ 1.415 & 1.419) in response to the above-referenced proceeding that the FCC announced in its Public Notice DA 21-98 (“Notice”) of February 1, 2021.

In its Notice, the FCC focuses on specific areas of inquiry, including on page 6 where it asks for comments addressing “Funding and Prioritization,” stating that “substantially more funding might be needed than is potentially available to support remote learning through the E-Rate program.” Our comments seek to illustrate how:

  1. Additional funding for the E-Rate program is currently unnecessary because of the availability of more than $60 billion in public funding still unspent from other congressionally created programs. The FCC should assist in these disbursements before considering E-Rate expansion.
  2. Ongoing and well-documented inefficiencies in the Universal Service Fund make the E–Rate program an inappropriate vehicle to deliver effective relief to students while maintaining the solvency of the fund. The FCC should work with Congress on contribution and distribution reforms, if the USF is to continue.

The CARES Act (Pub.L. 116–136) established the Elementary and Secondary School Emergency Relief (ESSER) Fund as well as the Governor’s Emergency Education Relief (GEER) Fund, providing for an initial funding of $12.8 billion and $3 billion respectively. Of the $12.8 billion appropriated for the ESSER fund, only $3 billion has been spent. Congress appropriated an additional $54 billion for the ESSER fund and an additional $4 billion for the GEER fund in the Consolidated Appropriations Act of 2021 (Pub.L. 116–260). This makes a total of $68 billion currently available to support remote learning for students, including helping schools equip students with broadband connectivity, laptops, and tablets. Before moving to expand the E-Rate program, which is not statutorily able to support at-home devices and connectivity, the FCC should assist states and the Department of Education in disbursing these funds more effectively to better help students hit hardest by the pandemic.  

The USF program provides funding to provide communications to areas of the country that are hard to reach (high-cost); rural health care; schools and libraries (E-Rate); and low-income support (Lifeline and Linkup). The companies paying into USF funding include wireline phone companies, wireless phone companies, paging service companies, and certain Voice over Internet Protocol (VoIP) providers. These fees or contributions are typically passed on to the consumer in the form of a USF fee. As many of these pools of contributors shrink, mobile customers increasingly take the brunt of these fees.

The contribution factor for USF has been on an upward trajectory for the last decade where it increased from 20% to 31.8% in just the last two years, putting exceedingly regressive fee percentages on individuals’ voice service. At the current contribution rate, if everyone eligible for Lifeline services signed up for the program, billions of dollars in funding could be exhausted in only just a few months. Simply expanding the E-Rate program, which also draws on USF, under current conditions is unsustainable.

Both the E-Rate and Lifeline program distribution processes should be examined for reforms. It is likely that distributions at the customer level will be more efficiently disbursed and utilized than distribution at the carrier level. Expansion of the E-Rate program before reassessing the contribution factor and distribution mechanisms will endanger all of the four programs that are part of USF including rural healthcare and the high-cost programs. The FCC should continue to work with Congress to use existing funds to support home-based connectivity during the COVID-19 pandemic. And, if USF programs are to continue, the FCC should work with legislators to develop the most cost-effective contribution and distribution reforms that reduce the strain on consumers and taxpayers before expanding any programs within the USF to protect its solvency.

The COVID-19 pandemic has created extraordinary challenges that require extraordinary efforts to solve. While the government works to ensure that students remain connected with their education, the FCC should continue its policy to support the work of the Department of Education and states instead of endangering the sustainability of the Universal Service Fund and all of the programs that it supports.


Grover G. Norquist
Americans for Tax Reform

Roslyn Layton, PhD
Visiting Fellow
Aalborg University

Phil Kerpen
American Commitment

Krisztina Pusok, Ph. D.
Director of Policy and Research
American Consumer Institute
Center for Citizen Research

Jeffrey Mazzella
Center for Individual Freedom

Thomas Schatz
Citizens Against Government Waste

Jessica Melugin
Director, Center for Technology and Innovation
The Competitive Enterprise Institute

Katie McAuliffe
Executive Director
Digital Liberty

Sarah Anderson
Director of Policy

Mario H. Lopez
Hispanic Leadership Fund

Carrie Lukas
Independent Women’s Forum

Heather R. Higgins
Independent Women’s Voice

Tom Giovanetti
Institute for Policy Innovation

Andrea O’Sullivan
Director, Center for Technology and Innovation
The James Madison Institute

Seton Motley
Less Government

Brandon Arnold
Executive Vice President
National Taxpayers Union

Tom Hebert
Executive Director
Open Competition Center

Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council

James L. Martin
60 Plus Association

Saulius “Saul” Anuzis
60 Plus Association

David Williams
Taxpayer Protection Alliance

James E. Dunstan
General Counsel