FCC E-Rate Overhaul Could Affect VoIP Eligibility

Regulation Watch

FCC E-Rate Overhaul Could Affect VoIP Eligibility

On July 23, 2013, the FCC (News - Alert) released a Notice of Proposed Rulemaking aimed at updating the E-Rate program, which subsidizes communications service and technology purchases by schools and libraries. The NPRM proposes three overarching goals: ensuring schools and libraries have affordable access to 21st Century broadband that supports digital learning, maximizing the cost-effectiveness of E-rate funds, and streamlining the administration of the E-Rate program. 

As part of its planned overhaul of the program, the FCC has requested comment on whether to phase out support for certain “outdated” services (i.e., paging, directory assistance, custom calling features, inside wiring maintenance, call blocking, text messaging), as well as other types of services such as e-mail, web hosting, basic maintenance of internal connections (BMIC), cellular data plans and air cards, and possibly all basic phone service.

Importantly, in light of its consideration of which types of services should be phased out, it also asks whether VoIP provides a viable alternative to public switched telephone service, whether the advent of increased broadband speeds in schools and libraries has made VoIP service a more cost-efficient and attractive way to receive voice services, and how the E-Rate rules can and should accommodate the needs of schools and libraries in areas without VoIP services, including some tribal lands. Alternatively, the FCC asks whether it should simply phase out funding for all voice services altogether, including VoIP service.

Thus, the FCC could: retain the status quo (retain eligibility for VoIP and non-VoIP voice services); reduce support for non-VoIP voice services (leaving VoIP eligible); or remove all voice services (including VoIP) from the E-Rate program. As such, the NPRM poses significant questions for VoIP providers that are providing services to E-Rate eligible institutions. 

William B. Wilhelm (News - Alert) is a partner and Jeffrey R. Strenkowski is counsel at the global law firm of Bingham McCutchen LLP (www.bingham.com).

Edited by Stefania Viscusi