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

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

Download Executive Summary

Press

Contact SHLB to conduct an interview with our Executive Director, Joey Wender. 

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E-Rate Study Sponsors

  • 35 Mile Foundation
    35 Mile Foundation
    1601 29th Street, Suite 1292
    Boulder, CO 80301
    (720)419-2443
    Sponsor
  • AASA The School Superintendent's Association
    AASA The School Superintendent's Association
    Sponsor
  • American Library Association (ALA)
    American Library Association (ALA)
    1615 New Hampshire Ave NW
    Washington, DC 20009
    United States
    (202)628-8410
    Sponsor
  • Association of Educational Service Agencies (AESA)
    Association of Educational Service Agencies (AESA)
    1023 Thomas Street
    Ripon, WI 54971
    (920)420-8822
    Sponsor
  • Association of School Business Officials International (ASBO)
    Association of School Business Officials International (ASBO)
    11160 C-1 South Lakes Drive #808
    Reston, VA 20191
    Sponsor
  • Consortium for School Networking CoSN
    Consortium for School Networking CoSN
    601 13th Street Northwest suite 1200
    Washington, DC 20005
    (202)470-2782
    Sponsor
  • InnovateEDU
    InnovateEDU
    77 Sands Street 6th floor
    Brooklyn, NY 11201
    United States
    (347)593-8369
    Sponsor
  • National Coalition for Technology in Education and Training (NCTET)
    National Coalition for Technology in Education and Training (NCTET)
    Sponsor
  • National Rural Education Associations (NREA)
    National Rural Education Associations (NREA)
    Sponsor
  • Software & Information Industry Association
    Software & Information Industry Association
    Sponsor
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