45 school districts across Tennessee could lose up to $50 million depending on the outcome of a dispute over the federal E-rate program which provides funding for internet services to schools.
Dessislava Yankova reports on the impact to Sumner County and gives an overview of the issue.
The dispute is a result of an FCC ruling regarding the bid to provide internet service to the “Sweetwater Consortium,” a group of 45 school districts in Tennessee that joined together for the purpose of gaining access to high-speed internet services at a more affordable price.
Yankova summarizes the issue:
“USAC evaluated Sweetwater’s competitive bidding process and the services requested and determined that the applicant did not select the most cost-effective offering,” the letter stated.
While evaluating AT&T’s appeal, USAC ceased E-Rate funding to ENA, which continued providing phone and Internet to the schools without receiving full payment.
On June 9, ENA Senior Director of Sales Mark Smith wrote a letter to Sumner County schools seeking a $1.4 million payment for services over the last three years and informed Sumner schools that next year’s bill would be for an additional $550,000.
“While waiting on approval of your E-Rate funding over the last three years, ENA has delivered and billed the district for 100% of the services contracted for, while collecting only the discounted portion of the services provided,” Smith stated. “The school district is ultimately responsible for full payment for services received.”
While Sumner County has funds available to shift to cover the costs, other districts may not be able to do so without making cuts elsewhere. The alternative could be a loss of access to quality high speed internet service, a service that is essential to the new TNReady tests being administered in 2016.
Chuck Cagle, an attorney representing the consortium, notes the impact to local school systems:
On May 21, 30 months after payments stopped, USAC notified all 45 systems that federal funding was denied and no back or future payments would be made. Based on the provisions of the consortium’s contract, individual systems are now responsible for full payments to the ENA, Cagle said.
“That is an egregious and seriously harmful outcome of decisions made by an over-reaching federal agency,” Cagle said. “It is crucially important to note here that this move by the FCC is unprecedented. In our collective experience, we have never known this agency to reach down into the state’s legal and proper procurement process and override an award.
“These 45 school districts are reeling from this decision by the FCC and USAC,” Cagle said. “Without accessibility to adequate broadband, advanced statewide student testing and digital learning hangs in the balance — as does the fiscal health of the districts.”
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