On June 25, 2026, the Federal Communications Commission (FCC) launched a new proceeding that could fundamentally reshape—or potentially end—one of the federal government's primary tools for closing the digital divide. The FCC's Notice of Proposed Rulemaking (NPRM) on the E-Rate program asks some of the most consequential questions the program has faced in its nearly 30-year history: Has E-Rate fulfilled its mission? Should eligibility be narrowed? Should funding levels change? Should new conditions be attached to support? Should children's use of school technology be restricted as a condition of federal funding? The answers will affect millions of students and library patrons—most of them living in low-income neighborhoods—who depend on E-Rate-funded connectivity every day.

Three groups of people are at risk in this proceeding: those who could be left out of E-Rate support entirely, those who could receive less support, and those whose learning could be constrained by new conditions attached to that support.

What Is E-Rate?

The Universal Service Fund’s Schools and Libraries program—commonly known as E-Rate—was created by Congress as part of the Telecommunications Act of 1996. The program provides discounts of 20 to 90 percent on internet access and internal network connections to eligible schools and libraries. Discount levels are based on the concentration of students eligible for the National School Lunch Program (NSLP)¹—a standard proxy for poverty—and on whether an institution is located in a rural area. The schools and libraries in the highest-poverty and most rural areas receive the largest discounts.

The program is administered by the Universal Service Administrative Company (USAC) under the FCC's direction and is funded through a fee on telecommunications providers. In Funding Year 2025—which runs from July 1, 2025 through June 30, 2026—E-Rate committed approximately $2.66 billion in support to schools and libraries across the country.²

When it created the E-Rate, Congress was explicit about why. The 1996 Conference Report accompanying the Telecommunications Act stated that the ability of "K-12 classrooms, libraries and rural health care providers to obtain access to advanced telecommunications services is critical to ensuring that these services are available on a universal basis." The legislation, the report said, would "help open new worlds of knowledge, learning and education to all Americans—rich and poor, rural and urban," ensuring "that no one is barred from benefiting from the power of the Information Age."³ Congress's goal, in short, was access. E-Rate was an affordable connectivity mandate, not a pedagogical one.

In the nearly 30 years since, E-Rate has become woven into the technology infrastructure of American schools and libraries. According to data from E-Rate Manager, a service of Funds for Learning, 96,416 of the nation's 100,083 public schools receive E-Rate support—a participation rate of 96.3 percent.⁴ According to the Institute of Museum and Library Services (IMLS), there are 16,751 public library locations nationwide; of these, 12,230—about 73 percent—receive E-Rate discounts.⁵

USAC data for Funding Year 2025 shows that E-Rate support flows primarily to school districts ($2.16 billion, or 81 percent of total commitments), with consortia—groups of schools and libraries that apply together—receiving $300 million (11.3 percent), individual schools $114.5 million (4.3 percent), library systems $76.6 million (2.9 percent), and individual libraries $13.9 million (0.5 percent).⁶

The students who benefit from the E-Rate overwhelmingly come from low-income households. Of the 52 million full-time students in E-Rate-supported schools, approximately 31.2 million—nearly 60 percent—are eligible for the NSLP.⁷ At the highest discount tiers, the poverty concentration is even more pronounced: among institutions receiving 80 to 89 percent discounts, more than 16.6 million of 21.7 million students served are NSLP-eligible; among those receiving 90 percent discounts, 3.6 million of 3.9 million students served qualify.⁸

Who Loses if We Lose the E-Rate?

The FCC raises the possibility that E-Rate has fulfilled its mission, noting that “some data sources state that virtually all schools report having broadband connectivity and Wi-Fi,” and asks whether continued funding is consistent with Congress's original objective, or whether the program should be “limited or sunset to reflect today's extensive connectivity rates.” The FCC asks whether:

• E-Rate eligibility should be restructured,
• Schools and libraries in areas with the lowest poverty rates should be phased out of the program, given their “likelihood of greater resources and tax bases,” or
• E-Rate support should be limited to areas where competition is weakest—for example, “rural areas or to areas served by a single provider.”

The FCC's question about phasing out funding for low-poverty institutions is targeted differently than the sunset and competition-based questions—the question points toward narrowing eligibility for schools and libraries with "the lowest NSLP participation rates" and "greater resources and tax bases," not the highest-need institutions. The NPRM does not propose a specific NSLP threshold, timeline, or mechanism for such a phase-out—it asks only whether the FCC should pursue one and whether it has the authority to do so. If the FCC were to pursue this path, it would still need to resolve significant questions: how "greater resources" would be defined and measured, whether a fixed threshold creates cliff effects for schools just above it, and whether the administrative burden of any new eligibility test would fall disproportionately on the districts least equipped to absorb it.

For the vast majority of school districts, E-Rate funding is not a supplement to adequate market-rate connectivity but a structural component of how schools get online at all. Fewer than 4 percent of public schools operate without E-Rate support. According to Funds for Learning's 2025 E-Rate Trends Report, 97.6 percent of survey respondents describe E-Rate as vital to their mission.⁹

The demographics of E-Rate schools make the stakes concrete. Schools receiving discounts of 80 percent or more—reserved for the highest-poverty and most rural institutions under the program's discount matrix—account for tens of millions of students, the vast majority of whom are low-income.¹⁰ Any eligibility change that removes these schools from the program, or substantially reduces their discount levels, would fall hardest on the students and districts least able to absorb the loss.

Libraries participate in the program at a lower rate than schools—73 percent of public library locations compared to 96.3 percent of public schools—but they use E-rate support to provide crucial connectivity to their communities. Nearly 9 percent of U.S. households have no internet subscription at all; among households earning under $20,000 annually, that figure rises to nearly one in four.¹¹ For many of those households, the library's E-Rate-funded network is their only point of internet access. Nearly all (99.4%) of public libraries offer Wi-Fi to patrons on-site. According to the IMLS Public Libraries Survey, libraries averaged 31 public computers each in FY2022, which were used an average of 9,230 times per year.

The Public Library Association's 2023 Public Library Technology Survey also found that 46.9 percent of libraries circulate internet hotspots for off-site patron use—up from 32.6 percent in 2020—specifically because patrons cannot afford home broadband subscriptions or live in areas where broadband is not deployed.¹² For these patrons, the library's public internet connection is not a convenience; it is their access to the internet.

The FCC also raises a more immediate and specific eligibility question: whether Head Start and pre-kindergarten students and facilities should continue to receive E-Rate support at all. Eligibility for these programs currently varies by state—29 states and territories include Head Start facilities, and 34 include pre-kindergarten facilities, in their definition of an eligible elementary school.¹³ In Funding Year 2025, the E-Rate program committed approximately $15.5 million to Head Start facilities and students and $43.9 million to pre-kindergarten facilities and students.¹⁴ The FCC asks whether that support should be eliminated or restricted—for instance, by limiting eligibility to Head Start and pre-K programs that operate within a public school or public school district, which would exclude standalone and non-public providers serving the same age group. The NPRM cites a single instance of a New York daycare center receiving $500,000 in E-Rate funding between FY2009 and FY2015 as justification for tightening eligibility, raising the question of whether isolated cases of misuse should drive a broader narrowing of support for low-income families who rely on Head Start and pre-K connectivity.

The FCC also asks whether E-Rate support should be limited in areas with robust broadband competition, reasoning that increased private deployment and other federal funding programs may have driven down prices enough that some E-Rate recipients no longer need program support. What the FCC has not yet established—and what the NPRM does not define—is what would constitute adequate competition, or how competition would be measured and verified. Before eligibility is conditioned on the presence of competition, the evidentiary foundation for making that determination must be established.

Scaling back or ending E-Rate could also have an effect the NPRM itself acknowledges but does not resolve: the trade association INCOMPAS notes in an ex parte filing that CIPA's child-safety requirements—including the obligation to filter content and adopt an internet safety policy—apply only to schools and libraries receiving E-Rate support.¹⁵ If a school or library no longer receives E-Rate funding, it would no longer be legally required to filter content or protect children online under CIPA, even though students would likely continue using the same school network. The FCC asks whether schools and libraries would maintain these safety protections voluntarily, but does not yet know the answer.

Who Loses if E-Rate Support is Diminished?

The NPRM raises questions about the structure of E-Rate funding—including whether the program's discount matrix should be restructured to phase out support for lower-poverty areas, whether support should be limited to areas with the highest costs or least competition, and whether the program's overall funding cap and historically underutilized demand warrant a different approach to allocating support.

E-Rate's discount formula was designed to direct the most support to the highest-need institutions. High-poverty districts receive 90 percent discounts; lower-poverty districts receive as little as 20 percent. This structure is not an accident of administration; it is the program's central equity mechanism. A funding cap that limits total commitments regardless of discount tier would, in practice, reduce the effective subsidy available to institutions that need it most, because those institutions are requesting the largest amounts in absolute dollars.

Rural Alaska schools are instructive examples. The top 25 most expensive individual site requests in FY2025—before discount—are all rural Alaska schools, several serving small, remote communities of fewer than 100 students; the smallest, Qugcuun Memorial School, serves just 16 kids. Every one of these schools reports 100 percent NSLP participation and receives an 85 percent E-Rate discount, the maximum available outside Tribal libraries. Many appear to share the cost of a single regional network contract, underscoring just how dependent these communities are on a shared, federally supported connectivity solution that no individual school could afford on its own. These schools are exactly the institutions the program's rural and poverty preferences were designed to reach. A funding cap that affects them is one that affects the program's highest-need beneficiaries.

The consortium structure is also relevant. Consortia—groups of schools and libraries that pool their purchasing power and share the administrative burden of the E-Rate application process—received $300 million, or 11.3 percent of FY2025 commitments. For smaller districts and libraries that lack the staff capacity to navigate E-Rate independently, the consortium model is often the only practical path to participation. The Public Library Association's 2023 survey found that 47.5 percent of libraries obtain IT support through a consortium, system, or other administrative entity, with suburban and town/rural libraries more dependent on this model than their city counterparts.¹⁶ Any reduction in funding that falls disproportionately on consortium applicants would therefore have the most negative impact on the smaller and more rural institutions.

PLA's survey found that 28.4 percent of libraries overall—and 35.4 percent of town and rural libraries—subscribe to internet connections that do not meet the current federal definition of broadband (100 Mbps download and 20 Mbps upload).¹⁷ For more than a quarter of the nation's public libraries, E-Rate support has not yet been sufficient to bring their connectivity up to the federal standard. Reducing their already-limited share of program funding would widen that gap.

Whose Learning Could Be Limited by New E-Rate Conditions?

One of the most novel aspects of the NPRM—and the one that has drawn the most public attention—is the FCC's questions about conditioning E-Rate eligibility on new requirements related to children's screen time. The FCC asks whether schools should be required to adopt screen-time reduction policies, including restrictions on student device use, as a condition of receiving E-Rate support.

Earlier this year, the U.S. Department of Health and Human Services issued a Surgeon General's Advisory on the harms of screen use among children and adolescents, documenting associations between excessive screen use and poor educational outcomes, sleep disruption, mental health challenges, and physical health risks.¹⁸ But the advisory draws a distinction that the FCC's screen-time questions do not draw. The harms the advisory documents are associated with recreational and social media screen use—smartphones, passive scrolling, social media platforms, and gaming. The advisory's primary recommendation to schools is a "bell-to-bell" ban on personal cell phones—not on school-provided devices used for instruction. Indeed, the advisory specifically recommends that schools "make individually-accessible devices available in a computer lab,” which is precisely the kind of educational infrastructure the E-Rate program funds. The advisory also acknowledges that the research literature on screen time shows mixed results overall, "in part because developmental effects depend on multiple factors, such as a child's age, the type of screen use, the content viewed, the context of intended purpose, and what screen time may displace." These are the very distinctions the FCC's screen-time proposals do not draw.

The distinction matters because E-Rate does not fund personal smartphones or social media access. E-Rate funds the broadband connections and internal networks that enable schools to use the internet for instruction. If the FCC were to condition E-Rate eligibility on screen-time policies that restrict educational technology use, it would conflate two very different kinds of screen time—recreational and instructional—and could create conditions that make it harder for schools to use the connectivity the E-Rate enables.

The students most at risk from such conditions are those with the fewest alternatives. For a student in a high-poverty urban school or a rural district where home broadband is unavailable or unaffordable, school-provided devices and school network access are not supplemental to their learning—they are foundational to it. Conditions that restrict when, how, or for what purposes those devices and connections can be used would fall hardest on students who have no fallback options.

The NPRM also raises questions about the FCC's authority under the Children's Internet Protection Act (CIPA). Signed into law in 2000, CIPA requires schools and libraries receiving E-Rate support to certify that they have adopted internet safety policies and technology protection measures—i.e., filtering—to block obscene or harmful content.

Under the FCC's current interpretation, CIPA's filtering requirements apply only to devices owned or controlled by the school or library receiving E-Rate support—not to personal devices that students or patrons bring onto school or library networks.

The FCC asks whether that reading fulfills CIPA's intended purpose, and whether filtering requirements should be extended to any device connecting to an E-Rate-funded network, regardless of ownership. Depending on how that question is answered, schools and libraries could face new technical and administrative obligations—and potentially new costs—to monitor or filter content on devices they do not own and may lack the technical capability to control.

Conclusion

Congress's goal in creating E-Rate was access through affordability. Had the objective been simply to connect schools and libraries once, Congress could have funded infrastructure projects directly and claimed “Mission Accomplished” when networks based each school and library. Instead, Congress created a permanent discount program—one that treats connectivity as an ongoing operational cost that high-poverty and rural institutions cannot meet at market rates without sustained federal support.

Thirty years later, the data show that the institutions most dependent on that support are those serving the students and communities with the fewest alternatives. The FCC's proceeding asks whether that arrangement should continue, be narrowed, or end. The answer will determine who gets left out, who gets less, and whose learning is constrained—and for how long.

The FCC raises the possibility that the E-Rate has solved the problem it was created to address—that schools and libraries are now connected, and the mission is complete. But that framing mistakes the effect for the cause. Schools and libraries are connected because of the E-Rate program. Without the program's ongoing discounts, monthly internet service bills would remain out of reach for high-poverty districts and rural communities—the same institutions the program was designed to serve. Ending or scaling back E-Rate would not preserve today's connectivity levels; it would erode them.

What's more, three decades of experience have sharpened our understanding of where the digital divide actually lives. For too many low-income households, home broadband remains unaffordable or unavailable. E-Rate cannot solve that problem directly, but it ensures that children in those homes have access to high-quality connectivity at school, where they develop the digital skills they will need for higher education and the workforce. And for the student who has no internet at home and nowhere to go after school, the public library's E-Rate-funded connection is not a program amenity. It is the most reliable answer to the homework gap.

Public comment in this proceeding will be due 60 days after the item is published in the Federal Register (expected to happen in July 2026). Commenters should reference FCC dockets 26-133, 13-184, 21-93, and 21-455. The main docket (26-133) is titled Ensuring Children’s Safe Use of Screens and E-Rate-Funded Services. An FCC decision on new rules is not expected until 2027.

Notes

1. Children qualify for NSLP if their families are enrolled in government assistance programs (like SNAP or TANF) or if their household income falls below 130% of the federal poverty level. https://www.fns.usda.gov/fns-101-nslp
2. Universal Service Administrative Company, E-Rate Open Data, Funding Commitment Data, Funding Year 2025, available at opendata.usac.org (accessed June 2026).
3. U.S. Congress, Conference Report on S. 652, Telecommunications Act of 1996, Report 104-458, 104th Cong., 2d Sess. (1996), pp. 132–133. https://www.congress.gov/104/crpt/hrpt458/CRPT-104hrpt458.pdf
4. Funds for Learning, "E-Rate Keeps Schools and Libraries Connected" (September 2025), available at fundsforlearning.com. School universe figures sourced to National Center for Education Statistics (NCES); participation figures sourced to E-Rate Manager®, a service of Funds for Learning.
5. Institute of Museum and Library Services, "Public Libraries Survey" (2022), as cited in Funds for Learning, "E-Rate Keeps Schools and Libraries Connected" (September 2025).
6. USAC, E-Rate Open Data, Funding Year 2025.
7. Ibid.
8. Ibid.
9. Funds for Learning, 2025 E-Rate Trends Report (2025). https://www.fundsforlearning.com/trendsreport/
10. 47 C.F.R. § 54.505(c) (2025); Universal Service Administrative Company, Discount Matrix (rev. Jan. 2024), available at https://www.usac.org/wp-content/uploads/e-rate/documents/samples/Discount-Matrix.pdf.
11. Public Library Association, 2023 Public Library Technology Survey: Summary Report (Chicago: Public Library Association, 2024). https://www.ala.org/sites/default/files/2024-07/PLA_Tech_Survey_Report_2024.pdf
12. Ibid.
13. Universal Service Administrative Company, Eligibility Table for Non-Traditional Education, available at https://www.usac.org/e-rate/applicant-process/before-you-begin/non-traditional-education-eligibility/eligibility-table-for-non-traditional-education/ (last visited June 2, 2026), as cited in FCC 26-41 at note 119.
14. Nesbitt, Tom. Letter to FCC titled "Funding Year 2025 E-Rate Commitment and Disbursement Data for Head Start and Pre-Kindergarten Entities," CC Docket No. 02-6, USAC (June 2, 2026). https://www.fcc.gov/ecfs/document/10602178709176/1
15. Letter from Staci L. Pies, Senior Vice President, Government Relations, INCOMPAS, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 26-133 et al., at 4 (filed June 18, 2026) (INCOMPAS Ex Parte), as cited in FCC 26-41, ¶ 41 & n.167.
16. Ibid. (Public Library Association, 2023 Public Library Technology Survey)
17. Ibid.
18. U.S. Department of Health and Human Services, Office of the Surgeon General, "Surgeon General's Warning on the Harms of Screen Use: An Advisory and Toolkit on How to Protect Children and Youth" (2026), available at https://www.hhs.gov/sites/default/files/us-surgeon-generals-advisory-warning-on-the-harms-of-screen-use.pdf

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