As expected, albeit by a contentious 3:2 vote in its Open Meeting last Thursday, the FCC approved a Report and Order (and Further Notice of Proposed Rulemaking) making the loan of Wi-Fi hotspots for at-home usage to school students and library patrons eligible for E-rate funding as of FY 2025. The Order, which is only currently available in draft form, needs to be finalized and published in the Federal Register (for 30 days) before becoming final.
Following the Commission’s vote, the FCC’s news release noted that the Order would:
- “Allow schools and libraries to use E-Rate funding to loan out Wi-Fi hotspots and support high-speed internet access for students, school staff, and library patrons in both rural and urban parts of the country.
- “Adopt a budget mechanism that sets a limit on the amount of support that an applicant can request for Wi-Fi hotspots and services over a three-year period. In the event that demand for E-Rate support exceeds available funding in a given funding year, eligible on-premises category one and category two equipment and service requests will be prioritized and funded before eligible off-premises equipment and service requests.
- “Adopt numerous safeguards to protect the integrity of the E-Rate program, including measures to ensure the supported Wi-Fi hotspots and services are in use, are used for educational purposes, are not funded through other sources, and are properly documented for auditing purposes.
- “Require compliance with the Children’s Internet Protection Act.”
As discussed in our newsletter of July 1, the three-year, pre-discount, hotspot budgets mentioned in the second bullet point above would be governed by the formulas below:
Applicants interested in applying for hotspots for FY 2025 should note the following two points:
- Like any E-rate service, contracts for hotspot equipment and services must be competitively bid via the Form 470 process. As discussed in our last few newsletters (most recently July 15), the availability of the Form 470 for FY 2025 has been delayed pending the approval of the hotspot Order. We expect the revised Form 470 to be available by the end of August.
- As indicated above, the FCC’s hotspot decision was controversial, split along party lines — three Democratic Commissioners approving and two Republican Commissioners dissenting. The basis for dissent, echoed by several senior Republicans in Congress, is that the FCC does not have the authority to use E-rate funds for off-campus services. If the presidential election results in a Republican win in October, the complexion of the FCC Commission will change, possibly later in 2025, to a 3:2 advantage in favor of the Republicans. If and when that occurs, hotspot eligibility may be reexamined.