F.C.C. Backs Plan to Update a Fund That Helps Connect Schools to the Internet

WASHINGTON — The Federal Communications Commission voted on Friday to overhaul and possibly expand its E-Rate program, a $2.3 billion effort to provide schools and libraries with up-to-date telecommunications service and equipment, including high-speed Internet connections.

A proposal approved by the commission, which will be made available for public comment before a final version is completed, calls for funds to be moved away from outdated uses like paying for paging service and long-distance phone calls and into areas that will accelerate digital literacy, like Wi-Fi connections within a school or library.

The proposal also calls for measures that would drive down the cost of services, like adoption of purchasing consortiums, and the streamlining of administrative requirements — among them, shifting much of the required paperwork for applicants to electronic filings. “One of the biggest obstacles to seizing the opportunities of digital learning in America is inadequate bandwidth at our schools and libraries,” Mignon L. Clyburn, the F.C.C. chairwoman, said before voting. “Simply put, they need faster high-capacity connections and they need them now.”

Just last month in a visit to a North Carolina middle school, President Obama set a goal of connecting 99 percent of school students to the Internet through high-speed broadband and high-speed wireless within five years.

“To get there, we have to build connected classrooms that support modern teaching — investments we know our international competitors are already making,” Mr. Obama said on Friday.

The E-Rate fund has financed Internet connections to more than 95 percent of American public school classrooms, while only 14 percent were connected when E-Rate was established in 1997.

In 2010, however, an F.C.C. study found that more than half of the schools and libraries reported that their Internet connections were too slow to meet their needs. For the coming school year, libraries and schools requested more than $4.9 billion to pay for connections and equipment, more than twice the size of the fund.

“We fail our students if we expect digital-age learning to take place at near dial-up speeds,” said Jessica Rosenworcel, an F.C.C. commissioner. “Contrast this with efforts under way in some of our world neighbors. They are pouring resources into these subjects, into schools and connectivity.”

The E-Rate program has been faulted for inadequately allocating money in the fund, which is provided through a tax on consumers’ phone bills, a monthly charge between 50 cents and $1.

Commissioner Ajit Pai, the lone Republican on the five-member commission (where two seats are vacant), criticized allocations of the fund, saying an average of only $1.8 billion had been spent in each of the last 10 years, leaving more than $5 billion unused in the E-Rate account.

Mr. Pai also complained that the program placed greater emphasis on the wrong services.

“E-Rate today prioritizes long-distance telephone calls and getting phone service to a school’s bus garage over wiring up a classroom,” Mr. Pai said in a speech this week at the American Enterprise Institute. “How can it be that E-Rate in the last few years committed about $600 million, more than one-quarter of its annual budget, to support voice telephone services while at the same time denying eight out of 10 applicants’ funding for connecting classrooms?”

At a Senate Commerce Committee hearing this week, both Republicans and Democrats spoke favorably of the fund, although some quoted Mr. Pai’s observations in a warning of reckless spending.

F.C.C. Backs Plan to Update a Fund That Helps Connect Schools to the Internet

WASHINGTON — The Federal Communications Commission voted on Friday to overhaul and possibly expand its E-Rate program, a $2.3 billion effort to provide schools and libraries with up-to-date telecommunications service and equipment, including high-speed Internet connections.

A proposal approved by the commission, which will be made available for public comment before a final version is completed, calls for funds to be moved away from outdated uses like paying for paging service and long-distance phone calls and into areas that will accelerate digital literacy, like Wi-Fi connections within a school or library.

The proposal also calls for measures that would drive down the cost of services, like adoption of purchasing consortiums, and the streamlining of administrative requirements — among them, shifting much of the required paperwork for applicants to electronic filings. “One of the biggest obstacles to seizing the opportunities of digital learning in America is inadequate bandwidth at our schools and libraries,” Mignon L. Clyburn, the F.C.C. chairwoman, said before voting. “Simply put, they need faster high-capacity connections and they need them now.”

Just last month in a visit to a North Carolina middle school, President Obama set a goal of connecting 99 percent of school students to the Internet through high-speed broadband and high-speed wireless within five years.

“To get there, we have to build connected classrooms that support modern teaching — investments we know our international competitors are already making,” Mr. Obama said on Friday.

The E-Rate fund has financed Internet connections to more than 95 percent of American public school classrooms, while only 14 percent were connected when E-Rate was established in 1997.

In 2010, however, an F.C.C. study found that more than half of the schools and libraries reported that their Internet connections were too slow to meet their needs. For the coming school year, libraries and schools requested more than $4.9 billion to pay for connections and equipment, more than twice the size of the fund.

“We fail our students if we expect digital-age learning to take place at near dial-up speeds,” said Jessica Rosenworcel, an F.C.C. commissioner. “Contrast this with efforts under way in some of our world neighbors. They are pouring resources into these subjects, into schools and connectivity.”

The E-Rate program has been faulted for inadequately allocating money in the fund, which is provided through a tax on consumers’ phone bills, a monthly charge between 50 cents and $1.

Commissioner Ajit Pai, the lone Republican on the five-member commission (where two seats are vacant), criticized allocations of the fund, saying an average of only $1.8 billion had been spent in each of the last 10 years, leaving more than $5 billion unused in the E-Rate account.

Mr. Pai also complained that the program placed greater emphasis on the wrong services.

“E-Rate today prioritizes long-distance telephone calls and getting phone service to a school’s bus garage over wiring up a classroom,” Mr. Pai said in a speech this week at the American Enterprise Institute. “How can it be that E-Rate in the last few years committed about $600 million, more than one-quarter of its annual budget, to support voice telephone services while at the same time denying eight out of 10 applicants’ funding for connecting classrooms?”

At a Senate Commerce Committee hearing this week, both Republicans and Democrats spoke favorably of the fund, although some quoted Mr. Pai’s observations in a warning of reckless spending.

Amazon Plans an Internet Video Device

The company is developing a television set-top box and has begun discussions with outside providers of content to distribute their video services to the device, according to three people briefed on the plan, who spoke on condition of anonymity because the Amazon product had not yet been announced and remained confidential.

Amazon is planning to introduce the set-top box in the fall, one of these people said.

Bloomberg Businessweek first reported news of Amazon plans on Wednesday.

Kinley Pearsall, an Amazon spokeswoman, declined to comment.

It was not immediately clear why Amazon would bother designing its own set-top box. The device will most likely showcase Amazon’s own online video offerings, which include Prime Instant Video, a Netflix-like subscription video service with more than 40,000 movies and television episodes that is included as part of Amazon’s broader Prime membership.

Among other benefits, Prime members, who pay $79 a year, get free two-day shipping on orders bought through Amazon’s site.

Amazon also offers a much broader library of video content, totaling 150,000 titles, that anyone, including people who aren’t Prime members, can buy and rent.

But Amazon’s video services are already available on hundreds of devices, many of which connect to television sets, like game consoles, digital video recorders and Blu-ray players. An app for using Amazon’s video service is even embedded in some television sets, including models from Sony, Panasonic and Samsung.

Although Amazon was an early entrant in the e-reader market with the Kindle, the company is late to the market for set-top boxes, where the incumbents include Apple’s Apple TV device and a family of products from Roku.

Amazon, though, has considerable strengths and has shown an aptitude for reinventing itself in new categories, like cloud computing and tablet computers. One media executive who has participated in discussions with Amazon about its set-top box said he thought the company’s standing as a top shopping destination would allow it to promote its new device and give it a strong chance of attracting an audience.

The company could use other creative techniques for getting its set-top box into more living rooms.

Michael Pachter, an analyst at Wedbush Securities, said one approach that could make sense was for Amazon to sell the device for $100 or less, about what Internet set-top boxes cost today, and to include a free year of its subscription video service.

At the end of the term, customers would have an incentive to sign up for Amazon Prime to continue receiving all of its membership benefits, including the video service. “I think this is a Trojan horse to get people to join Prime,” Mr. Pachter said.

Amy Chozick contributed reporting from New York.

Amazon Plans an Internet Video Device

The company is developing a television set-top box and has begun discussions with outside providers of content to distribute their video services to the device, according to three people briefed on the plan, who spoke on condition of anonymity because the Amazon product had not yet been announced and remained confidential.

Amazon is planning to introduce the set-top box in the fall, one of these people said.

Bloomberg Businessweek first reported news of Amazon plans on Wednesday.

Kinley Pearsall, an Amazon spokeswoman, declined to comment.

It was not immediately clear why Amazon would bother designing its own set-top box. The device will most likely showcase Amazon’s own online video offerings, which include Prime Instant Video, a Netflix-like subscription video service with more than 40,000 movies and television episodes that is included as part of Amazon’s broader Prime membership.

Among other benefits, Prime members, who pay $79 a year, get free two-day shipping on orders bought through Amazon’s site.

Amazon also offers a much broader library of video content, totaling 150,000 titles, that anyone, including people who aren’t Prime members, can buy and rent.

But Amazon’s video services are already available on hundreds of devices, many of which connect to television sets, like game consoles, digital video recorders and Blu-ray players. An app for using Amazon’s video service is even embedded in some television sets, including models from Sony, Panasonic and Samsung.

Although Amazon was an early entrant in the e-reader market with the Kindle, the company is late to the market for set-top boxes, where the incumbents include Apple’s Apple TV device and a family of products from Roku.

Amazon, though, has considerable strengths and has shown an aptitude for reinventing itself in new categories, like cloud computing and tablet computers. One media executive who has participated in discussions with Amazon about its set-top box said he thought the company’s standing as a top shopping destination would allow it to promote its new device and give it a strong chance of attracting an audience.

The company could use other creative techniques for getting its set-top box into more living rooms.

Michael Pachter, an analyst at Wedbush Securities, said one approach that could make sense was for Amazon to sell the device for $100 or less, about what Internet set-top boxes cost today, and to include a free year of its subscription video service.

At the end of the term, customers would have an incentive to sign up for Amazon Prime to continue receiving all of its membership benefits, including the video service. “I think this is a Trojan horse to get people to join Prime,” Mr. Pachter said.

Amy Chozick contributed reporting from New York.