A Dialogue on E-rate Pricing Data

As part of the E-rate Modernization Order adopted last year, the Commission decided to increase pricing transparency in the E-rate program by making information publicly available regarding services and equipment purchased by schools and libraries, including line-item costs. To that end, the Commission directed the Office of the Managing Director and USAC to make such information available through open APIs and bulk data files posted on USAC’s website: https://slweb.universalservice.org/form471publicdatatool/app/#/

Helping schools and libraries obtain the best possible pricing is important for several reasons. First, funding for E-rate comes from ratepayers, and we seek to ensure that the public is getting the best value for its money. Second, E-rate does not foot the entire bill for E-rate supported services; schools and libraries share the cost of their E-rate services, which means taxpayers across the country have an interest in making sure their schools and libraries don’t spend more than necessary. Third, the funding is a shared resource -- every school or library that secures a better price helps stretch the E-rate budget to serve even more schools and libraries with better, faster service. Finally, by federal statute, all telecommunications carriers are to provide services to schools and libraries “at rates less than the amounts charged for similar services to other parties” (that's all customers, not just other schools and libraries). As a tool to help deliver on this Congressional objective, however, providing the data to make comparisons even just between and among schools and libraries is a good starting point.

Although the power of better information is clear, we recognize that many, if not most schools and libraries, will not have the data analytics tools necessary to evaluate pricing. And so, with this blog, we begin today a public dialogue on the pricing data.

In a series of short blogs, this one and others to come, we will publish the results of queries we run on the publicly available pricing data. We will run queries on questions that interest the three of us, or other members of the FCC’s E-rate team, or our colleagues at USAC. We will also publish data results that others may provide to us in order to further this public dialogue. And finally, we will accept proposals for data queries from the large E-rate community. Though we can’t promise that we will have sufficient resources to perform every data search, we expect that the questions themselves and the sharing of data will enhance our overall goal of pricing transparency. We’d ask only that questions for a data query be posed as specifically as possible.

And now, for the results of our first query. The median monthly recurring pricing by state or territory for 1 Gbps transport - the bulk transmission of data between a school district's locations - as well as 1 Gbps access to the Internet.

Two points of note about these figures. First, as these are statewide median prices in a program where the providers have a legal obligation to offer their best prices, one might have expected to see greater uniformity of pricing. The fact that there is such variation across the country speaks either to the quality of the data that USAC receives from schools and libraries, or the pricing available to schools and libraries, or both. The significant variability in the data on pricing warrants further analysis and discussion.

Second, in order to meet the FCC’s goals with the current budget, pricing is going to have to get better. Assume the program spends, as budgeted, $1 billion on internal connections within schools and libraries, and also funds necessary construction in rural areas. The program has less than $1,750 per month to spend on average for broadband connectivity to each school or library, and for every $1,750 that is spent by the program, participating schools and libraries pay $750. So, to achieve the goals of broadband connectivity under the E-rate budget, average monthly transport and internet pricing combined is going to have to be lower than $2,500. We’re not there yet, but data sharing is a good place to start.