FCC Proposes to Scrap E-rate Amortization Duty; O'Rielly Wants Broader Inquiry
The FCC proposed to eliminate a suspended E-rate amortization requirement, waiving it for the duration of a rulemaking. E-rate use is limited “by requiring schools and libraries to amortize over three years upfront, non-recurring charges of $500,000 or more, including…
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charges for special construction projects,” said an NPRM/order adopted unanimously Tuesday and released Thursday in docket 19-2. New Commissioner Geoffrey Starks was sworn in Wednesday. The commission said the requirement “increased costs for E-rate supported builds and created uncertainty for applicants” about funding availability in the second and third amortization years. The agency had suspended the rule through funding year 2018 to lower broadband investment barriers. “Allowing the amortization requirement to be restored would decrease broadband investment while increasing administrative burdens,” and “eliminating the requirement would not create a drain on E-Rate funding,” the item suggested. Commissioner Mike O’Rielly would have been open to a broader “E-rate reform” inquiry and questioned whether special construction projects should include applicant self-provisioned networks, which “can be a recipe for wasteful overbuilding.” He called for reviewing 2014 self-construction and dark fiber policies, and the track record of E-Rate applicants as network operators. Commissioner Jessica Rosenworcel said the amortization proposal “is the right call.” The Schools, Health & Libraries Broadband Coalition “is thrilled” by the developments. “As the FCC points out, the concern that special construction might overwhelm the E-rate program has dissipated,” said Executive Director John Windhausen in a statement. “Reinstating the amortization requirement would have been costly ... and would have jeopardized several state matching programs. Special construction has proven to benefit thousands of schools and libraries, and has reduced the demand for E-rate dollars by allowing applicants to obtain lower-cost broadband services.”