FCC hikes rates to fund Internet in schools

The Federal Communications Commission (FCC) voted Thursday to increase fees on phone users in order to boost funding for a program that provides Internet connections for schools and libraries. 

The rule would increase the funding cap on the E-rate program by $1.5 billion, to a total of $3.9 billion per year. 

All three Democrats on the commission approved the proposal, while both Republicans dissented. 

FCC Chairman Tom Wheeler said he was "aghast at the hostility" at giving students a 21st century education, noting that the fee increase would be about $2 a year per phone line for customers.  

"When you get to the real bottom line on this issue … we are talking about a moral issue, the greatest responsibility — the greatest moral responsibility — that any generation has is the preparation of the next generation," he added. 

The move is meant to increase high-speed broadband and Wi-Fi access for education, especially in low-income communities. Advocates have previously said the cap will not be hit immediately. 

"We have to take a fresh look at funding for the digital age," Democratic Commissioner Jessica Rosenworcel said, noting the program is "frozen in the age of dialup" if the funding does not keep up with inflation.  

The 1996 E-rate program and the broader Universal Service program are funded through fees on phone customers. Customers currently pay 99 cents a month per phone line to the Universal Service Fund. That would rise by 16 percent, according to the FCC. 

Wheeler unveiled the plan last month, arguing the connectivity gap with low-income schools in rural and urban areas is unacceptable. 

The fee increase is part of a broader plan to update the E-rate program. The FCC, for example, voted in July on a plan to expand Wi-Fi in schools and libraries, while ending funding for older services like "paging and traditional phones." 

The three Democratic commissioners hinted that the commission could soon move on to updates to the lifeline program, which was started in 1985 to help subsidize phones for low-income individuals. They argue those subsidies should be broadened to include broadband Internet as well.  

Republican Commissioner Michael O'Rielly said that the E-rate updates Thursday would make the program more complex and wasteful. Support for modernization of the program, he said, is not contingent on supporting Thursday’s proposal. 

Republican Commissioner Ajit Pai similarly said estimates show that the demand for broadband in schools and libraries is not enough to break the current funding cap for the foreseeable future — arguing the fee increase in not needed. Pai has warned of the increase for months, and he accused the commission of purposing delaying the rate increase.  

"It’s no accident that a spending increase was quietly promised before the election and the tax increase to pay for it is coming after the election," he said.