E-Rate Economic Impact Study
The FCC is asking whether to end E-Rate. Here's what would happen to the economy.
Eliminating E-Rate Would Cost the U.S. Economy $4.2 Billion a Year
SHLB uses rigorous economic research to shape the broadband policy conversation, and as the FCC considers whether E-Rate should be terminated, narrowed, or geographically limited, SHLB is putting new economic evidence into the record about what is at stake. The Brattle Group’s report models the consequences of eliminating E-Rate on GDP, employment, labor income, and economic output, including indirect and induced effects throughout the economy. The analysis also examines the disproportionate impacts on rural and economically disadvantaged communities.
Read the full study conducted by The Brattle Group
Top 5 Things to Know
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Eliminating E-Rate's roughly $2.6 billion in annual support would reduce real GDP by about $4.2 billion, real wages by about $2.8 billion and tax revenues by about $1.5 billion each year.
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Eliminating Category 2 funding alone, which supports internal Wi-Fi and networks, would cut about $1.2 billion in support and reduce GDP by roughly $2.5 billion.
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The South and West received the most E-Rate funding from FY2021 through FY2025. Average annual funding was about $999 million in the South, $786 million in the West, $454 million in the Midwest and $361 million in the Northeast.
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Because the South receives the most support and has the highest ratio of E-Rate funding to education output, it would see the largest losses in GDP, labor income and tax revenue.
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The economic loss exceeds the federal support removed because higher connectivity costs leave less money for other productive activities, and those effects ripple through suppliers, labor markets, household income, consumer spending and tax revenues.
Press
Contact SHLB to conduct an interview with our Executive Director, Joey Wender.
E-Rate Study Sponsors
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American Library Association (ALA)
1615 New Hampshire Ave NW
Washington, DC 20009
United States (202)628-8410Sponsor -
Association of Educational Service Agencies (AESA)
1023 Thomas Street
Ripon, WI 54971 (920)420-8822Sponsor -
Association of School Business Officials International (ASBO)
11160 C-1 South Lakes Drive #808
Reston, VA 20191Sponsor -
Consortium for School Networking CoSN
601 13th Street Northwest suite 1200
Washington, DC 20005 (202)470-2782Sponsor -
InnovateEDU
77 Sands Street 6th floor
Brooklyn, NY 11201
United States (347)593-8369Sponsor -
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