The federal government wants to add $1.5 billion every year to a crucial pool of money that educators rely on to purchase and provide high-speed Internet — a huge shot in the arm for a fund that, for more than a decade, wasn't growing along with inflation.

Paying for the increase will be ordinary phone users, who through their phone bills contribute to the broader fund that serves the subsidy program. The Federal Communications Commission, which will vote on the proposal next month, expects Americans to help cover the cost by paying an extra $2 or so per year for their land-line or mobile phone. That's roughly the cost of a cup of coffee, FCC Chairman Tom Wheeler said Monday. In exchange, thousands of schools and libraries will be able to connect their users to the Web at the same speeds that they enjoy at home.

Schools and libraries can have the FCC subsidize their Internet service under a program known as E-Rate, which was created in 1997 to wire institutions for telephone service but has since become increasingly important in reducing the cost of educational broadband. While the vast majority of schools and libraries are now connected to the Web, too few offer the fastest connection speeds, Wheeler told reporters Monday.

"Basic connectivity is now inadequate connectivity," he said. "The digital age demands that we bring America's schools and libraries into the 21st century so that all students have the tools they need to compete in a global economy."


(FCC)

E-Rate's annual budget is currently capped at about $2.4 billion a year. In July, the FCC took steps to help make the fund more cost-efficient, but some Democratic commissioners, such as Jessica Rosenworcel, have called for more aggressive action, including raising the budget cap.

"There is nothing radical about" indexing E-Rate to inflation, Rosenworcel said at that month's FCC meeting. The failure to do so for roughly 13 years, she added, has cut the program's purchasing power and created a gap amounting to "roughly $1 billion in missing support."

Wheeler's proposal Monday does pretty much everything to meet Rosenworcel's call, according to a former FCC official familiar with the plan. "He's done exactly what she was lobbying to have him do. Exactly. Down to the nickel," said the person, who spoke on the condition of anonymity because the details were private.

The move is significant because Rosenworcel has emerged as a key vote on the commission. With Republicans largely unwilling to side with Wheeler on ideological grounds — Commissioners Ajit Pai and Michael O'Rielly both criticized the E-Rate proposal on Monday as a spending increase — the chairman has turned to his Democratic colleagues to produce a majority that can approve new rules. But Rosenworcel has proved willing to break with Wheeler on certain issues, indicating to officials both inside and outside the agency that she is an independent voter. The suggestion to raise the E-Rate cap by more than $1 billion a year, therefore, raises questions about whether the move is intended to secure Rosenworcel's vote on other issues.