E-rate Funding Year 2015: Analysis of Funding Request Data and Applicant Survey

This report summarizes the FY2015 demand for E-rate support and provides a snapshot of feedback from a nationwide survey of applicants conducted in June of 2015. The purpose of this report is to provide E-rate stakeholders and policy makers with new perspective and feedback “from the field.”

In FY2015, there were 27,132 applicants for the reformed E-rate funding program. They requested a total of $3.92 billion.

• The typical applicant submitted four funding requests totaling less than $25,000.
• 48% of applicants have a 1:1 or BYOD initiative to support end-user devices.
• 65% of applicants describe Wi-Fi as an absolute requirement, but most have Wi-Fi networks that are 3+ years old.
• Applicants indicated that the E-rate application process took longer and was much more complex than prior years.
• 1% fewer applicants participated in the E-rate program than in the prior year.
• For the first time in the history of the program, the majority of applicants used a consultant.

Discounts for Internet access, leased data lines and phone service, collectively referred to as “Category 1”, totaled $2.25 billion:

• The median school reported a total Category 1 expense of $47.80 per student.
• The average E-rate discount was 77% for broadband services and 55% for voice services.
• Telephone service is the most frequently requested service and 86% of applicants express concern over its phase-out.
• 58% of applicants support a combined Category 1/Category 2 budget system that gives them spending flexibility.

In FY2015, E-rate funds were available for on-campus networks for the first time in two years. For many applicants, it was their first viable opportunity to receive discounts for the purchase, maintenance or operation of their local area networks. There were 10,588 applicants who took advantage of this opportunity, requesting a total of $1.67 billion in discounts.

• 21% of applicants had never requested C2 support.
• 57% of sites did not request any C2 support in 2015, but most applicants expect to exhaust their C2 budgets by 2017.
• An estimated $4.9 billion in C2 budgets remain available for use in FY2016 through FY2019.
• Two-thirds of applicants believe the current C2 budget cap is insufficient.
• 37% of applicants think that a $250-to-$350 per student C2 budget would be sufficient to meet their needs.
• Network switches and routers were the most sought after C2 discounts, representing 41% of the overall C2 demand.
• Discounts for the new “managed Wi-Fi” service represented 2% of the overall Category 2 demand.