FCC to 5th Circuit: Preserve E-Rate Funding Authorization for School Bus Wi-Fi

The FCC’s Oct. 25 declaratory ruling authorizing E-rate funding for Wi-Fi on school buses (see 2312200040) was simply the commission’s response to requests to add to the list of services eligible for support under the E-rate program, the FCC’s 5th U.S. Circuit Appeals Court appellee brief said Monday (docket 23-60641) in support of the ruling.

Petitioners Maurine and Matthew Molak contend the ruling will increase the federal universal service charge they pay each month as a line-item on their phone bill to fund the E-rate program. They further argue that the ruling will give children and teenagers unsupervised social media access. This, they contend, would undermine the “crucial mission” of the nonprofit they co-founded in memory of their son David, a cyberbullied suicide victim.

The Molaks challenge the ruling as exceeding the FCC's authority. But the FCC has authority from Congress to periodically update services eligible for support under the E-rate program by taking into account advances in telecommunications and information technologies and services, the commission’s appellee brief said.

School and educational advocates told the FCC that millions of students still lack a home internet connection, “even though a majority of students require a broadband connection to complete their homework assignments,” the appellee brief said. Many students, particularly in rural areas, also travel long distances to and from school, it said.

The FCC concluded, based on the record, that equipping school buses to allow students to complete “broadband-dependent assignments” serves an educational purpose under Section 254(h)(1)(B) of the Communications Act “and is eligible for funding,” said the appellee brief. The Molaks argue that Section 254 directs the FCC only to make rules enhancing access that classrooms and libraries have to telecommunications and information services and that a school bus is neither a classroom nor a library.

Without having participated in the proceedings before the agency, the Molaks now argue that the ruling is outside the commission’s statutory authority, said the appellee brief. If the 5th Circuit “reaches the merits of petitioners’ claims,” the FCC “should prevail,” it added.

But the 5th Circuit shouldn’t reach them, said the appellee brief. As the FCC explained in its motion to dismiss the Molaks’ petition, the petitioners’ failure to participate in the agency proceedings requires dismissal under Section 405(a) of the Communications Act and Sections 2342(1) and 2344 of the Hobbs Act, it said.

The Molaks also haven’t met their burden “to demonstrate an injury-in-fact sufficient for Article III standing,” said the appellee brief. They assert that E-rate support for school bus Wi-Fi -- applications for which total about $19 million for funding year 2024 -- will increase the fee they pay to support the $8 billion universal service program, it said: “But they have provided no evidence of any imminent increase.”

If the 5th Circuit does reach the merits, it should reject the Molaks’ challenges, said the appellee brief. The petitioners argue that Section 254 limits E-rate to classrooms, but “this mistaken assertion is inconsistent with the text of Section 254(h) and decades of agency practice,” it said.

The ruling primarily relies on Section 254(h)(1)(B), which authorizes support for schools, not classrooms, said the appellee brief. The FCC has relied on that provision to authorize E-rate discounts since 1997, in an order that was upheld “in relevant part” by the 5th Circuit, it said.

For decades, the commission has allowed E-rate support for services “outside of brick-and-mortar classrooms,” said the appellee brief. That has included discounts for services in “non-instructional spaces on school campuses,” such as offices, it said. That also has included discounts “for certain off-campus services for which a need and justification existed,” it said.

It was in line with those precedents for the FCC to designate school bus Wi-Fi “as eligible for support when a convincing case for that designation existed,” said the appellee brief. The Molaks “largely ignore” Section 254(h)(1)(B), other than to raise “meritless challenges” to the commission’s authority to provide E-rate support under that provision, “which has been solidly established for decades,” it said.

The Molaks instead focus on the commission’s conclusion that Section 254(h)(2)(A) independently authorizes the ruling, the appellee brief said. That provision directs the FCC to adopt rules enhancing access to advanced communications services for classrooms, it said. But the commission “reasonably concluded” that in light of “contemporary educational trends," a classroom isn’t confined to brick-and-mortar locations and may now include school buses, it said.