FCC opens E-Rate program review citing student screen time concerns

A reduction in E-Rate subsidies would force K-12 districts to choose between cutting digital services or diverting funds from other educational priorities to cover rising utility-style internet bills. For the streaming and EdTech ecosystem, this move signals a pivot away from the 'universal connectivity' mandate of the last decade toward a more restrictive, performance-based funding model. If school-based demand for high-bandwidth video and interactive services drops due to regulatory pressure or budget gaps, infrastructure providers and content platforms may see a cooling in the institutional market. Watch for public comments on the FCC's June 2026 notice of proposed rulemaking to gauge the scale of proposed eligibility cuts.

The E-Rate review comes amid a series of recent regulatory rollbacks targeting off-campus connectivity. Per EdWeek and K-12 Dive in September 2025, the FCC voted 2-1 to remove school bus Wi-Fi and mobile internet hotspots from the list of program-eligible services. This decision reversed 2023 and 2024 expansions established under former Chairwoman Jessica Rosenworcel that aimed to close the 'homework gap.' Chairman Brendan Carr argued these expansions were unlawful reinterpretations of the 1996 Telecommunications Act, which he maintains was intended to fund connectivity specifically within 'classrooms' and libraries. The move resulted in the denial of approximately $58 million in pending funding requests for fiscal year 2025.

Simultaneously, a bipartisan movement to restrict student device use has gained rapid momentum at the state level. Per Visual Capitalist and EdWeek in early 2026, 31 states have enacted laws banning or strictly limiting personal device use during classroom instruction. In California, the 'Phone-Free School Act' signed in 2025 requires all districts to adopt restrictive policies by July 2026. These legislative moves align with 2025 advisories from the U.S. Surgeon General linking excessive social media and screen use to declining youth mental health and academic performance.

Legal clarity for the program's funding source was established in June 2025, when the U.S. Supreme Court ruled 6-3 in FCC v. Consumers’ Research that the Universal Service Fund (USF) is constitutional. Per Wiley and Perkin Coie, the ruling resolved a circuit split by determining that Congress had provided the FCC with an 'intelligible principle' for administering the $9 billion annual fund. While the ruling protects the existence of the USF, experts interviewed by LAist in July 2026 note that the FCC retains broad authority to modify program-specific rules, potentially making the E-Rate application process more onerous to discourage high-volume spending.