As 2024 comes to close, the funding that supports E-Rate and other related programs is undergoing critical examination. Recent litigation developments have also led to speculation about the future of these critical programs – especially within the K-12 community.
While these concerns are well-founded and forward-thinking, I do not believe that this current round of scrutiny and litigation will lead to the end of these programs. However, significant changes to E-Rate and more may be on the horizon, depending on a forthcoming decision from the US Supreme Court and potential actions from Congress.
Currently, there is no evidence to suggest that the proposed changes will impact funding for FY25 (25-26 school year), which is currently in the application stage. Even so, now is the time to stress the significance of E-Rate funding and the impact that it has on K-12 schools and libraries like your own.
In July 2024, the US Court of Appeals for the Fifth Circuit held that the Universal Service Fund (USF), which funds E-Rate, is unconstitutional on two grounds:
In short, the Fifth Circuit ruled that the FCC overstepped its authority when it comes to administering USF. This conflicts with previous ruling from the 6th and 11th Circuit Courts, which found the FCC’s framework and procedures constitutional in similar cases.
Due to this circuit split, the US Supreme Court agreed to hear the case. While the case has not yet been scheduled for oral arguments, the Court will likely hear arguments in spring 2025, with a decision likely by June 2025.
If the Supreme Court agrees with the Fifth Circuit’s ruling, USF’s funding mechanism may be invalidated and made unenforceable. In this case, Congress will likely need to update the Telecommunications Act of 1996 to create a constitutionally legal funding mechanism for USF. Congress will have a head-start on this because members of both parties are already working on a USF modernization plan.
In either case, this update is overdue. The current funding system, which relies on fees from long-distance and international phone calls, no longer brings in enough money to keep USF programs running long-term. These programs include support for rural areas, schools, libraries, health clinics, and low-income households, making their continued availability crucial for communities across the country. While this path won’t be easy, I am confident that Congress will come through with these necessary updates – either on their own or at the Supreme Court’s insistence.
Disclaimer: This is not the only way the Supreme Court may rule in Federal Communications Commission v. Consumers’ Research. More potential outcomes will be shared after oral arguments are presented in spring 2025.
Several K-12 funding stakeholders are currently collecting data about E-Rate usage and impact. I encourage you to respond to these requests to ensure your district’s perspective is captured during this critical period.
I’ll have more updates to share throughout the spring, as this case moves through the courts and as new leadership steps in at the FCC.
To keep up with all funding updates, bookmark our Funding Updates feed or join the LTC Community.
More analysis of E-Rate and USF’s current situation, including potential impact on K-12 schools:
Mindy provides leadership, expertise, and support related to broadband connectivity, equipment and device access, and funding sources, including E-Rate.
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