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U.S. FCC to vote in July on Internet subsidy changes for schools

Federal Communications Commission (FCC) Chairman Tom Wheeler and FCC Commissioner Ajit Pai arrive to testify before a Senate Appropriations Financial Services and General Government Subcommittee hearing on the FY2015 budget justification for the FCC, on Capitol Hill in Washington March 27, 2014.
CREDIT: REUTERS/JONATHAN ERNST
Federal Communications Commission (FCC) Chairman Tom Wheeler and FCC Commissioner Ajit Pai arrive to testify before a Senate Appropriations Financial Services and General Government Subcommittee hearing on the FY2015 budget justification for the FCC, on Capitol Hill in Washington March 27, 2014. CREDIT: REUTERS/JONATHAN ERNST

By Alina Selyukh

WASHINGTON (Reuters) - U.S. Federal Communications Commission will vote on July 11 on proposed changes to a subsidy program aimed at improving wireless Internet in schools and libraries nationwide without spending more, the agency said on Friday.

The five-member FCC will vote on Chairman Tom Wheeler's proposal to begin transitioning the largest U.S. education technology program, E-Rate, to focus entirely on high-speed Internet services and to better use its current funding on new technology.

The $2.4 billion E-Rate program is funded by fees Americans pay on their monthly phone bills and helps schools and libraries get discounts on Internet services and digital devices, which some studies have shown help to improve test scores and graduation rates.

Created in 1996, the program has helped connect almost all U.S. classrooms and public libraries to the Internet, but rules have limited how much money could fund broadband and Wi-Fi.

Last year, no E-Rate funds were available for Wi-Fi, the FCC said, and Internet speeds in many U.S. classrooms remain too slow to support new-generation digital learning.

President Barack Obama last year urged the FCC to expand the program so that 99 percent of U.S. schools would have access to high-speed broadband and wireless Internet within five years.

Experts agree that the program, whose applications had been mired in bureaucracy and funding allocated to outdated technologies like pagers, needs modernization.

However, disagreements remain about E-Rate's funding cap.

Some education advocates have demanded the FCC increase E-Rate's funding. Obama's plan suggested a temporary increase in the phone bill fees that fund E-Rate, but Republicans have staunchly rejected such calls.

"Instead of throwing more money at the program, we need actual reform that will get us the most bang for our bucks," FCC Commissioner Ajit Pai, a Republican, told the Federal Communications Bar Association on Wednesday.

Wheeler's proposal, which other FCC commissioners will review and could tweak before the vote, relies on more streamlined bureaucracy and management and better accounting to fund E-Rate in the future with a new focus on Internet.

It also reinforces an FCC pledge from February to commit to Wi-Fi $1 billion in 2015 and another $1 billion in 2016 on top of regular E-Rate funding through reserves left unused from previous years, a senior FCC official said.

The FCC would also speed up processing of applications for multi-year funding or those submitted by school consortiums, and would set a maximum 4-to-1 matching level for the poorest schools, with E-Rate providing $4 for each $1 spent by the school on Wi-Fi services.

E-Rate's funding for Wi-Fi would be allocated depending on the size of a school's student body, the FCC said.

(Reporting by Alina Selyukh; editing by Ros Krasny and Richard Chang)

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