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E-Rate to Slash VoIP and Telecom Spending in 2015

While E-Rate’s changes won’t make a dent in the global UC market, it will provide opportunities for vendors, resellers, and consultants to help our school systems make some tough telecommunications decisions.

Wi-Fi and broadband providers rejoice! The FCC's recently approved E-Rate rules set aside $5 billion over the next five years for broadband within schools and libraries. Some of this earmarked spending will come at the expense of communications-related funding, effectively ending the windfall for phone systems and services carriers have benefitted from over the last 17 years.

One could argue that the change is overdue, and that the FCC's main mission was accomplished several years ago. In 1997, E-Rate introduced its Priority One services. At that time, only 14% of classrooms had access to the Internet, and 75% of the schools that had Internet access used dial-up. By 2005, nearly all schools had access to the Internet, and 94% of all instructional classrooms had Internet access. Similarly, by 2006, nearly all public libraries were connected to the Internet, and 98% of them offered public Internet access.

On the other hand, some school districts have been living off the drip for several years, and will be faced with tough cuts.

"The telephony infrastructure in all [Philadelphia] schools was designed around current E-Rate program rules," said Jennifer Gardner, director of IT, finance, and subsidies for the School District of Philadelphia in comments submitted to the FCC, "and the elimination of voice telephone service as an eligible service would be of great hardship and would pose a direct risk to the safety and security of students and teachers."

With advances in technology, for each of the last three funding years, estimated demand for Priority One funding alone exceeded the funding cap. Schools stand to lose $800 million in voice-related services.

Starting in the July 15, 2015, school budgeting year, some services, like voice mail, paging, and speech-enabled directories, will no longer be eligible for E-Rate discounts. What's more, the discount percentage schools get on telecom services will be reduced by 20% each year, to $0 by 2019. Many schools currently get discounts of 20% to 40%, which means that their discounts will be gone in one to two years. The FCC will evaluate its five-year phase-out after two years, at which point it will decide whether to continue.

On one hand this plan is bad news for schools, but on the other hand they'll get much needed funding to keep up with the demands of bandwidth from BYOD and one-to-one tablet/laptop initiatives. It's also an opportunity for schools to take a close look at their telecom expenses and decide if what they've been doing still makes sense today. Simply replacing or paying more for the same basic services makes no sense.

Schools have the opportunity to:

  • Assess their telecom trunking models. Traditional PRIs are $200 to $600/month, whereas a SIP trunk costs 25% to 70% less, and as a bonus has better options for redundancy. Some SIP trunk providers leverage ISP bandwidth for transport rather than a dedicated IP circuit. The cost of more Internet bandwidth can still be offset by E-Rate funds.

     

  • Determine whether a cloud or on-premises solution makes more sense.

     

  • Take a look at unified communications requirements, including mobile distance learning, flipping the classroom, softphones on tablet/Mac/laptop instead of traditional phones, etc.

     

  • Investigate other ideas and collect insight.

Will E-Rate's changes make a dent in the global UC market? Not even close. But it will mean opportunities for vendors, resellers, and consultants to help our school systems make some tough decisions... including whether to retain and hire qualified teachers... or whether to continue to pay the phone bill.

 

 

 

  • Determine whether a cloud or on-premises solution makes more sense.

     

  • Take a look at unified communications requirements, including mobile distance learning, flipping the classroom, softphones on tablet/Mac/laptop instead of traditional phones, etc.

     

  • Investigate other ideas and collect insight. Will E-Rate's changes make a dent in the global UC market? Not even close. But it will mean opportunities for vendors, resellers, and consultants to help our school systems make some tough decisions... including whether to retain and hire qualified teachers... or whether to continue to pay the phone bill.

     

     

     

  • Take a look at unified communications requirements, including mobile distance learning, flipping the classroom, softphones on tablet/Mac/laptop instead of traditional phones, etc.

     

  • Investigate other ideas and collect insight. Will E-Rate's changes make a dent in the global UC market? Not even close. But it will mean opportunities for vendors, resellers, and consultants to help our school systems make some tough decisions... including whether to retain and hire qualified teachers... or whether to continue to pay the phone bill.

     

     

     

  • Investigate other ideas and collect insight. Will E-Rate's changes make a dent in the global UC market? Not even close. But it will mean opportunities for vendors, resellers, and consultants to help our school systems make some tough decisions... including whether to retain and hire qualified teachers... or whether to continue to pay the phone bill.

     

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