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July 18,2014


The Honorable Bill Nelson

United States Senate

716 Hart Senate Office Building

Washington, D.C. 20510

Dear Senator Nelson:

Thank you for your letter regarding modernization of the Commission's E-rate program

to enable enhanced broadband connectivity in traditionally underserved areas. We are fully

committed to ensuring that all schools and libraries have access to high-speed broadband

necessary to meet their needs, and that includes those schools and libraries you referenced in the

Panhandle and central Florida that have been unable to receive bids for competitively priced

services. We were pleased to have a representative from the rural Florida educational

consortium referenced in your letter participate at our recent E-rate modernization workshop in

March where this issue was discussed in detail. The issues you have raised are very important. I

will ensure that your letter is placed in the record of this proceeding, so your views receive due

consideration as we move forward.

There are two critical steps that we can take to address this challenge. First, we need to

provide the schools and libraries that purchase these services better tools to solicit more

affordable prices where a network is already in place. The Modernizing the E-rate Program for

Schools and Libraries Order adopted at our July Open Meeting tackles this issue head on by

providing for more pricing transparency. Second, we need to take steps to provide sufficient

incentives and funding for providers to build out in areas where high-capacity broadband is not

currently in place. This issue is being considered in both the E-rate and Connect America

universal proceedings, as described below.

Ensuring cost-effective purchasing for schools and libraries is an express goal of theE-

rate modernization process. Where price is a barrier to that infrastructure, the changes we

adopted will require far greater transparency in what is purchased withE-rate dollars. This will

allow applicants to see what others are paying for similar services and put them in a better

position to use that information to negotiate better prices. An example of this effect was

demonstrated at our recent E-rate workshop when the rural Florida educational consortium

representative learned about affordable prices for gigabit speed connections in a neighboring

state. This resulted in a fruitful conversation about how Florida schools could take advantage of

such an offering.

Pricing transparency is particularly helpful in rural areas, where there is often less

competition. Having the knowledge that providers in other similarly rural parts of the country

are offering the same service at far lower rates should help rural schools and libraries negotiate


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The Honorable Bill Nelson

lower prices. The Order also takes steps to better facilitate consortium-based applications so that

rural schools may band together with other schools to benefit from bulk-purchasing


These are important steps, but additional measures may in fact be necessary to incentivize

providers to build out in certain remote areas. We continue to analyze whether changes in our E-

rate rules may be necessary to target funds to these areas. That issue remains an open question

as part of the ongoing E-rate modernization process. Additionally, we are considering what

obligations to serve rural schools and libraries should be established for recipients of support

from the Connect America Fund, an annual $1.8 billion rural infrastructure fund administered by

the FCC.

Modernization of the E-rate program is among the most important tasks currently facing

the Commission. The Commission took some important steps in the Order we adopted in July to

focus program resources on high-speed broadband connectivity both to schools and libraries and

within schools and libraries while simultaneously improving the efficiency and administration of

the program and establishing explicit program goals and measurements. There is nevertheless

more work to be done. It is critical to America's future that our schools and libraries have

affordable access to modern high-capacity broadband technologies.

I can assure you that as we continue with reform of this important program, we will take

the views of all stakeholders into account, including the representatives referenced in your letter.

Thank you again for your letter. I look forward to working with you toward our mutual goal of

increased access to high-speed broadband in our nation's schools.

!J1 / /


" tP(n~v

Tom Wheeler

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