E-rate/Schools and Libraries Program

The Federal Communications Commission's Office of Managing Director (OMD) announced that the proposed universal service contribution factor for the fourth quarter of 2026 will be 0.42 or 42.0 percent. The FCC's Wireline Competition Bureau (WCB), in consultation with the OMD, instructs the Universal Service Administrative Company (USAC) to apply $69 million in unused funds to offset the Schools and Libraries program demand and $56 million in unused funds to offset the Rural Health Care program demand.

In its August meeting, the Federal Communications Commission adopted a Notice of Proposed Rulemaking titled Maximizing Efficiencies in Universal Service Administration Company that looks at changing the rules governing USAC, the Universal Service Administration. USAC is a non-profit corporation that was formed by the FCC after passage of the Telecommunications Act of 1996, which created the Universal Service Fund.

For more than thirty years, American communications users—really, American consumers—have been charged roughly $1 billion to $3 billion a year to subsidize Internet and related services for schools and libraries through the government's E-Rate program, which is one component of what's called the “Universal Service Fund.” That is a lot of compulsory generosity. Yet only now are policymakers asking the obvious question: Is this money helping students learn—or is it doing harm? Some treat that question as out of bounds. It is not.

A new "consensus-driven roadmap" on the future of the Universal Service Fund argues that universal service should be understood as an ongoing responsibility, not a goal to achieve, and offers six principles for Universal Service Fund reform.

The Federal Communications Commission, which oversees the E-rate program Congress created 30 years ago, has launched a “top-to-bottom” evaluation that has leaders of the nation’s school districts on edge. The FCC is collecting views on how the program should be reformed, or even whether it should be abandoned because it “has fulfilled” its mission. In addition to asking whether the benefit should be restricted to rural districts, the agency links E-Rate to present-day concerns over screen time. Comments are due Oct. 13 and replies are due Nov. 12.

The Future of Universal Service Reform Task Force chaired by, Mignon Clyburn and Rachelle Chong, was convened to explore how the nation’s universal service policies should evolve to meet the communications needs of the twenty-first century. Participants represented a broad range of perspectives, including consumer advocates, industry representatives, education and health care stakeholders, public interest organizations, and policy experts.

The Schools, Health & Libraries Broadband Coalition and its partners urged the communities that depend on E-Rate to act now. The Federal Communications Commission's proposal to potentially terminate the E-Rate program was published in the Federal Register today, formally starting the clock on the public's chance to respond.

Last week, we covered some of the broadband and digital equity initiatives launched by the states this summer. From digital equity resources in Louisiana to historic investments in broadband infrastructure funding for the Navajo Nation, here are some more notable broadband news bites we've seen from states and Tribal governments around the country.

The Federal Communications Commission adopted a proposal to strengthen the management and administration of the Universal Service Fund (USF) and the FCC’s oversight of the Universal Service Administrative Company (USAC). The proceeding builds on a prior inquiry into improving USAC’s administration of the USF and would launch a comprehensive review to ensure that funds are used for their intended purpose and the administration of those funds is efficient, fair, and cost-effective.

Judges probed the role of the $8 billion-per-year Universal Service Fund and its administrator. Conservative nonprofit Consumers’ Research is challenging the Federal Communications Commission program again, after a defeat at the Supreme Court in 2025. USF supports building and maintaining rural broadband networks, plus voice and internet discounts for low-income households, schools, and healthcare centers.