Without taking a definitive political position, it is worth considering what a Republican-to-Democratic change in the Administration might mean for E-rate both during and following the next two-month pre-inaugural transition period.
During the transition itself, there are few, if any, decisions expected from the FCC that would have a major E-rate impact. During this period, we will or might see the following:
- The Eligible Services List (“ESL”) for FY 2021 should be released within the next few weeks. Based on the draft ESL, which has already been subjected to public comment, little change is expected. Perhaps the best that can be forecasted would be some FCC clarification expanding Category 2 firewall eligibility. Although USAC has deemed only “basic” firewall protection as eligible across the board, a careful reading of the ESL suggests that the current “basic” limitation may apply only to Category 1 internet access services. “Firewall services and components,” on the other hand, are listed as eligible — albeit without any defined limitation — as Category 2.
- The FCC will shortly announce six appointments to the USAC board to fill the positions of board members whose terms expire at yearend. We would not be surprised to see the reappointment of Joan Wade (Executive Director of the Association of Educational Service Agencies) currently holding one of the three positions reserved for school representatives.
- One pending item on the Senate docket, perhaps hampered by Senate COVID-19 infections, is the approval of President Trump’s nomination of Nathan Simington, currently a senior advisor in the National Telecommunications and Information Administration (“NTIA”), to replace Republican Commissioners Michael O’Rielly whose term is expiring.
Although not an E-rate issue, one significant aspect of Mr. Simington’s nomination is that he was one of the authors of Trump’s executive order last May encouraging the FCC to rethink — i.e., weaken — how Section 230 of the Communication Decency Act provides liability protection for content posted on social media sites. This would be a controversial FCC decision of a type that would traditionally not be made during a transition period. Consistent with precedent, Commissioner Jessica Rosenworcel and key House Democrats have called on the FCC to pause controversial activity during the transition — but this is an unusual year.
- As discussed in our last newsletter, the FCC has just received two Petitions for Reconsideration requesting (a) reconsideration of the need to allocate out Category 2 expenditures for NIFs and (b), clarification of the new rule on the treatment of part-time students for Category 2 budget purposes. These two requests should be easy for the FCC to handle within the next month or so in advance of the opening of the Form 471 application window in January.
- Last November, the FCC released an Order (FCC 19-121) barring the use of USF subsidies (including E-rate) to fund equipment, components, and services from “covered” companies — specifically Huawei and ZTE — deemed to provide a national security risk. Earlier this month, President Trump issued an executive order barring Americans from investing in a list of 31 Chinese technology manufacturing companies identified by the Defense Department as having links to the Chinese military. It would not be surprising if many of these companies (e.g., China Mobile Communications Group and China Telecommunications Corporation) are formally added to the FCC’s list of covered companies.
Looking beyond the transition, more significant changes may be in store for E-rate. First — and this might begin during the transition — is the very likely prospect for a major new stimulus bill. Several of the proposed provisions for such legislation include substantial funding for schools, in part to support remote learning and in some versions, to funnel such funding through the established E-rate program. Exactly how this might be done, should it be approved, will have to be worked out by a reconstituted FCC Commission that is expected to be rebalanced with a newly appointed Democratic Chairman and a 3:2 majority of Democratic Commissioners.
More broadly, with or without stimulus legislation supporting remote learning, the possibility of some form of E-rate support for off-campus remote learning will undoubtably improve with the move of FCC Commissioner Jessica Rosenworcel into the FCC majority. Commissioner Rosenworcel has long been a strong proponent for the use of E-rate funding to eliminate the “Homework Gap” — a gap that is no longer just about homework.