On July 18, 2024, the Federal Communications Commission voted to adopt a Report and Order updating E-rate program rules to include Wi-Fi hotspot equipment and services as eligible for Category One discounts. Under the new rules, schools and libraries participating in the E-rate program can receive funding to support hotspot loan programs which would enable students and library patrons to have internet connectivity in their homes or other off-campus locations. Key elements of the new rules include:
Eligibility
Funding is limited to Wi-Fi hotspot technology only; multi-user services or other transmission technologies are ineligible. In the Report and Order, the Commission notes that the rules “limit the capability of a sole purpose Wi-Fi hotspot to devices that: (1) are portable; (2) are a single device (i.e., not a set of linked devices); and (3) do not have ethernet ports either upstream (WAN-type ports) or downstream (LAN-type ports).” In addition, “multi-functional” devices like smartphones, PCs, or tablets are not eligible even if they are cellular enabled.
Funding Caps
The Report and Order adopts pre-discount funding caps for schools and libraries seeking funding for hotspot products and services. Functioning in a similar manner to the current Category Two budget system, each applicant will calculate a pre-discount funding cap that will be enforced on a three-year budget cycle. Funding caps are calculated using the following formula:
As an example, a school district with 2,500 students and a 90% Category One discount rate would have a three-year budget for hotspot service of $283,500 (2,500 * 20% * 90% * $630).
In addition to per-applicant funding caps, the rules establish a pre-discount limit of $15 per month per line on recurring internet service and $90 per hotspot device purchase.
Utilization and Recordkeeping
To “prevent the warehousing of Wi-Fi hotspots and reimbursement for unused equipment and/or services,” the new rules require service providers to notify applicants of any hotspot that goes unused for a minimum of 60 calendar days, and to terminate service if activity is not detected on the hotspot within 30 calendar days after. Per the Order, “on the first day of each month, service providers are directed to identify lines of service that have gone unused for no less than 60 days and provide the school or library with 30 days’ notice that failure for the hotspot service to be used within the 30-day notice period will result in service termination for that particular line.” Further, “in the event of a terminated line of service resulting from this non-usage requirement, service providers are prohibited from billing the applicant for the balance that was not paid for by the E-Rate program.”
Although the new E-rate rules do not establish “unmet needs” requirements for hotspot lending programs, applicants are required to maintain asset inventories and circulation records. Schools receiving support for hotspots are required to maintain “(1) the equipment make/model; (2) the equipment serial number; (3) the full name of the person to whom the equipment was provided; (4) the dates the equipment was loaned out and returned, or the date the school was notified that the equipment was missing, lost, or damaged; and (5) service detail.” Libraries must maintain the same records, excluding the full name of the patron borrowing the hotspot. In both cases, “service detail” is defined as “the line number or other unique identifier that associates a device to that particular line of service.”
General E-rate Requirements
As newly eligible services in the E-rate program, all requests must be compliant with the same rules and regulations that apply to other eligible services, including:
- CIPA compliance
- Competitive bidding requirements (FCC Form 470 and E-rate procurement rules)
- Ten-year document retention requirements
- Equipment disposal requirements (hotspot disposal allowed after three years)
The FCC’s Report and Order may be viewed here.
