Transcript: Community Broadband Bits Episode 71

Thanks Jeff Hoel for providing the transcript for Episode 71 of the Community Broadband Bits podcast with Evan Marwell on broadband for schools. Listen to this episode here.

00:08:

Evan Marwell:  We need to get this done as quickly as possible.  We need to get every school in this country with more than a hundred kids connected to a fiber optic connection as quickly as possible.

00:19:

Lisa Gonzalez:  Hi there.  This is Lisa Gonzalez, from the Institute for Local Self-Reliance.  Welcome to the Community Broadband Bits Podcast.

It's estimated that 80 percent of our public K-12 schools do not have the Internet connections they need to take advantage of digital learning.  Nonprofit Education Superhighway plans to change that dim statistic.  Evan Marwell, CEO of Education Superhighway, joins Chris today.  At the heart of the issue is E-Rate, the federal program that helps schools pay for Internet and communication needs.  The program's been hailed as a godsend to financially challenged school districts.  And schools are more connected today than before the program.  Currently the FCC is examining the program with a goal of creating E-Rate 2.0.  Education Superhighway, along with other interested parties, have until November 8th to file comments in the proposed rulemaking.  Chris and Evan discuss E-Rate, school connectivity, and Evan shares Education Superhighway's vision.  Here are Evan and Chris.

01:20:

Chris Mitchell:  Welcome to another Community Broadband Bits Podcast.  I'm Chris Mitchell.  And today, I'm speaking with the CEO of Education Superhighway, Evan Marwell.  Welcome to the show.

01:31:

Evan Marwell:  Great to be here.

01:32:

Chris:  Evan, Education Superhighway.  It's a great name.  What is Education Superhighway?

01:38:

Evan:  Education Superhighway is a nonprofit with the mission of upgrading the Internet infrastructure in every public school in America.  The reason that we've taken this mission on is that we believe that digital learning has the power to really transform education in our K-12 schools, and help personalize learning for students, and help empower teachers, so that they can deliver the best quality education to all of our students.  The challenge is that you can't do digital learning if you don't have great Internet access.  And almost 80 percent of our schools today don't have the broadband they need to really embrace digital learning in the classroom.

02:17:

Chris:  Now, what kind of broadband does a school need today?

02:21:

Evan:  Today, what we like to say is that schools need something like 100 megabits of bandwidth getting to the school door.  And then they need a robust Wi-Fi network, to make sure that they can distribute that bandwidth from the school door into every classroom and learning area in the school.  Over time, that 100 megabits is going to need to grow.  And what we see is that bandwidth demand in schools is probably growing north of 50 percent a year, when it's not bottlenecked by not having enough bandwidth.

02:49:

Chris:  So, right now, there's a federal program, that's been around for, oh, over ten years now, called E-Rate.

02:56:

Evan:  Right.  So, E-Rate has actually been around since 1996.  I think it's entering its 17th year.  And the program, quite frankly, has been a hero for America's schools.  When E-Rate started, back in 1996, only 15 percent of the schools in this country had a broadband connection.  Seven or eight years later, by 2003, 2004, virtually every school in this country had a broadband connection.  The problem is that simply being connected to the Internet these days isn't enough.  If you want to leverage video, if you want to leverage social learning, if you want to leverage all the different web-based applications and content that are being put out there now, you really need more than just access, you need capacity.  And the E-Rate program hasn't kept up with the capacity needs of schools, in terms of how much bandwidth they need.  It also hasn't been able to keep up with the demands of schools for Wi-Fi access.

When E-Rate first started, everything was done on a wire.  You had computers in a computer lab, or maybe a couple in the back of a classroom that would plug into a switch port.  And that was the way people got access to the Internet.  Today, virtually every device being purchased by a school or being brought to a school by a student relies on Wi-Fi.  And unfortunately, the vast majority of our schools today don't have robust Wi-Fi networks.  So, E-Rate's really been a hero.  It's just that the times have changed and E-Rate hasn't.

04:19:

Chris:  So, how would you change E-Rate, to make sure it is suiting the needs of schools today?

04:23:

Evan:  Well, I think that there are three basic things that we need to do with the E-Rate program.

The first is, we need to focus the E-Rate program on broadband connectivity and equipment to distribute that connectivity to the classroom.  Today, E-Rate is almost a $2.5 billion-a-year program.  And unfortunately, something like 40 or 50 percent of it is being spent on services and equipment that are not related to broadband infrastructures.  So, things like telephony, things like cellular phone access, things like paging, and web-hosting, and that kind of thing.  So, the first thing is, we need to focus the funding of the program on the things that really matter to digital learning and moving education forward.  And that's broadband.  So, that's both broadband connectivity to the district office, it's the wide-area network connecting the district office to the individual schools, and its the local-area network and the Wi-Fi network inside the schools.  So, number one, we've got to focus on broadband.

Number two, we need to make sure that schools have the resources they need from the E-Rate program to invest in a fiber connection to every school.  Fiber is the absolutely best way to deliver broadband today, both in terms of the scalability of it -- you can literally put almost unlimited amounts of bandwidth over a piece of fiber -- and in terms of the cost of it.  The cost of delivering broadband via a fiber connection is orders of magnitude lower than delivering it over any other medium, whether it's copper or microwave or anything like that.  And so the second thing we need to do is, we need to provide the funding to get a fiber connection to every school using the E-Rate program.  And the reason that we have to do something differently there is that the biggest cost is actually the construction, whether it's digging up the streets or putting it on poles.  So, E-Rate needs to create a fund that will enable schools to make those investments in fiber.

The third thing that we need to do is, we need to increase the transparency and the efficiency of the program.  Today, the FCC really doesn't have any idea how the E-Rate funds are being spent.  And schools don't have any idea of what they should pay for things.  So, by changing some of the reporting requirements in the E-Rate program, and by making that data more transparent and available, we believe that there's a lot that can be done to drive down the cost of connectivity, and drive down the cost of equipment for schools.

So, if we make these three changes -- [1] focusing on broadband, [2] making the capital available to connect every school to fiber, and [3] making the program more transparent -- we believe we can make a tremendous amount of progress toward upgrading our schools.

07:04:

Chris:  When you're talking about building fiber to every school, that's where the Institute for Local Self-Reliance looks at that and says, well, we would really like to see that fiber being owned by the school district itself or in some way owned by the city itself, or some entity, perhaps a consortium, that is rooted in the community, that will make sure that connectivity does not suddenly go up in price five years down the road.  Is that something that you've been wrestling with?

07:31:

Evan:  I think that's exactly right.  So, one of the biggest questions is, how do we make sure that the prices that schools have to pay are reflective of the cost structure that's inherent with a fiber connection?  So, if you think about fiber and what it costs, there's a big up-front investment to actually get the fiber to the location, in this case, the school or library.  But once you've installed that, it's pretty much a fixed cost asset, right?  There's a certain amount of maintenance that has to happen every year, just sort of monitoring the network.  And, you know, if there's a cut in the fiber.  Maybe there's some pole attachment fees or other right-of-way fees that you have to pay.  But, relative to how much bandwidth is going over it, it's really a fixed cost.  And so, what to us is most important is that we need to make sure that our schools and libraries are paying essentially a fixed cost for that fiber connection regardless of how much bandwidth goes over that connection.

Now, there's a number of different ways to arrive at that goal, one of which you suggest, which is to have the network be owned by the school, right?  So, especially for the wide-area network piece, the piece that connects the district office to each of the schools, there's a very good argument than can be made that schools should own and manage that network.  They're very easy to manage.  There are hundreds of districts around the country that have taken this approach.  And it's an incredibly cost-effective approach.

There's another school of thought that says, well, we can still get to fixed per-connect pricing, as opposed to per-megabit pricing, by working in partnership.  And we've seen districts around the country partner with counties or municipalities to actually be part of their municipal network or their county network.  And, again, get a very similar approach, where they're just paying a fixed cost for whatever it costs to maintain that connection.

But there is a third approach that could potentially work, which is that, if vendors -- and you do see this with some of the competitive local exchange carriers, some of the fiber companies.  Vendors will actually provide services -- what they call dark fiber -- where the vendor will actually put the fiber in the ground but will lease the school the fiber on a dark basis.  In other words, here's the piece of fiber, we're just leasing you that, and the schools put the electronics, and, again, the vendor doesn't care how much bandwidth goes over.  So there are three -- or maybe some more -- approaches that could be taken to getting this.  The most cost-effective is, of course, what you say, which is, if the school district owns it, then they're no threat of the prices ever going up again.

10:14:

Chris:  And so right now, the FCC is looking at how to revise the E-Rate program.  If you were able to perform a legal coup d'état and take over either the organization or Congress in order to achieve any policy end that you wanted, what I'm curious about is, would the E-Rate program require more money or less money, now and in the future?

10:37:

Evan:  So, I think, first, it's important to point out that reform of the E-Rate program is a regulatory matter, purely within the purview of the FCC.  Congress doesn't need to be involved in this at all.  That being said, as I look at the E-Rate program, I think the first goal is to make sure that every dollar we spend is getting the maximum bang for the buck for our students and for our schools.  And so, to do that, it really comes down to the three things I talked about before.
 
Number one, let's make sure every dollar is getting spent on broadband and broadband infrastructure.
 
Number two, let's create a way that schools can tap into that E-Rate program to pay for the capital investments, to get fiber to every school.  Today, the schools can't do that.  The E-Rate program will not pay for that capital investment, and we need to change that.
 
And, third, we need to create transparency, to make sure that every school in this country is getting the leverage of spending $2.5 billion a year.  Which makes E-Rate, collectively, probably the largest customer for connectivity and broadband infrastructure equipment in the country.
 
So, I think the first thing is, make sure every dollar is getting -- is having maximum impact, and is getting really well spent.
 
Secondly, when you asked the question of, do we need more money or less money or what have you, I think it really depends.  Our view is that we need to get this done as quickly as possible.  We need to get every school in this country with more than a hundred kids connected to a fiber optic connection as quickly as possible.  We need to get every school in this country a Wi-Fi network that reaches every classroom and can deliver that connectivity from the school to the device that the student has, as quickly as possible.  The way that we're going to get that done is by injecting additional capital into the E-Rate program over the next 3-5 years, to pay for that one-time upgrade.  But the good news is that if we do that, it will dramatically lower the cost of the program of providing the bandwidth that students need, and, in fact, will allow us to get to the point of getting a gigabit to every school in this country, which is the goal that's been set out by the President.
.
12:54:

Chris:  I'm curious what you would say to those who say, you know, if you have a bunch of school districts going out and building fiber, they're going to turn into Internet service providers, and they're going to start offering services to local businesses, and they're going to lose the focus of what they're supposed to be doing, which is educating children.  What do you say to that?

13:11:

Evan:  Well, I think, first of all, schools -- I'll agree that schools should not be in the business of providing Internet services to businesses and others, right?  Our schools are there to educate our students.  However, we need to make sure that our schools can get the broadband that they need.  And to do that, we need to make sure that that broadband is as cost-effective as possible.  And the way to have that -- the way to achieve that goal, of the most cost-effective broadband, is for schools to be able to pay for a fiber connection on a per-connection basis, at a reasonable rate that reflects the actual cost of maintaining that piece of fiber, and the capital for putting it in the ground.  As long as we can do that, I don't care if it's owned by a school or if it's owned by a vendor.  But what the market has shown is that in most cases, vendors are not willing price that way, and vendors want to price per megabit.  So we have to give schools the option of owning and operating, or leasing dark fiber, to get the bandwidth that they need at the price that is most effective for the American taxpayer.

14:20:

Chris:  Thank you so much.  Is there anything else that we should know about your suggestions for how to run the E-Rate program, and how to make sure our schools have the connectivity they need?

14:30:

Evan:  Well, I think, again, that the key to all of this is making sure that we upgrade every school.  And upgrading means getting them a fiber connection and getting them a Wi-Fi network that reaches every classroom.  The most cost-effective-effective way to do that is to provide the capital to get those fiber connections out, and to transition every school in this country from paying per-megabit to paying per-connection for their bandwidth.  If we do that, we can go from a median of $30 a megabit for bandwidth all the way down to somewhere around 10-50 cents a megabit for bandwidth.  And that will not only get schools the capacity they need but save our taxpayers billions of dollars.

15:13:

Chris:  I really appreciate you coming on the show, because I think you did a really good job of explaining how -- you know, these one-time capital investments can really make a big difference.  And sometimes people just get caught up in how much is being spent in a given year.  But it's really important to note that when you do something right, and you have the right structures in place, you can really save yourself a lot of money over time.  And we're looking at something that -- these schools are going to need these connections for as long as they exist.  And I expect that's going to be for quite some time.

15:43:

Evan:  That's right.  And we took a look at sort of estimating how much it would cost, if we continued to do business as usual, to get to the President's goal of a gigabit for every school.  And it looks like it will cost somewhere between nine and ten billion dollars a year, if we continue doing business as usual.  Whereas, if we take the approach that we're talking about, we believe that cost can be dropped to somewhere between a billion and a billion and a half dollars a year.  So this is an imperative for us to do.  Either we'll be stuck with a choice of not getting schools the bandwidth they need, because E-Rate is never going to be a $9 billion program, or we're going to be at a point where we have to choose to spend all that money; and I really don't think that's ever going to happen.

16:29:

Chris:  Well, thank you for coming on the show.

16:32:

Evan:  My pleasure, and thanks for having me.

16:33:

Lisa:  Learn more about Evan's organization at educationsuperhighway.org .  In addition to specifics about the group's ideas for E-Rate, you can explore the tools they provide to get your schools started on a road to better Internet.  For more general info about E-Rate and current E-Rate proceedings, visit fcc.gov .  Thanks again for listening to the Broadband Bits Podcast.  If there are issues related to telecommunications that interest you, we want your suggestions for future shows.  E-mail us at podcast@muninetworks.org .  You can also follow us on Twitter.  Our handle is @communitynets .  This show was released on November 5th, 2013.  Thank you to the group Mudhoney for the song, "The Neutral," licensed using Creative Commons.  And thank you for listening.