JUNEAU — For many of Alaska’s most remote schools and libraries, a federal program that helps pay for internet has been a critical part of their budgets.
Now, those institutions are uncertain whether the program will continue.
The Federal Communications Commission is considering whether to scale back or possibly eliminate the E-Rate program, which subsidizes internet service, telecommunications and network equipment for schools and libraries.
During the commission’s June 26 open meeting, FCC Chairman Brendan Carr said the agency should consider reducing the program’s scope — or cutting it altogether — arguing the rapid rise of screen time on personal devices used in schools and the expansion of internet connectivity since the program was created nearly 30 years ago mean it should be opened for review.
E-Rate is one of four programs in the FCC’s Universal Service Fund. It’s funded through a surcharge on most phone lines, levied to bring telecommunications access to schools, libraries, rural communities and low-income households across the country.
The FCC spends over $2 billion annually on E-Rate. In Alaska, more than 100 schools and libraries received over $200 million through the program in 2025 alone.
A recent Daily News and ProPublica investigation found the agency has directed $4.6 billion in Universal Service Fund subsidies to Alaska telecommunications companies since 2016 — more per resident than any other state — yet Alaska continues to rank near the bottom nationally for access to high-speed internet.
The initial stories in that investigation have focused on the fund’s High Cost program, which subsidizes telecommunications providers serving rural areas.
E-Rate is structured differently: Instead of subsidizing providers directly, it reimburses eligible schools and libraries for internet service and equipment. Unlike the High Cost program, E-Rate can also subsidize eligible low-Earth-orbit satellite service, including Starlink, in addition to traditional fiber and broadband connections.
In Alaska, some school districts report massive per-student spending on internet bills. The FCC’s subsidy program covers up to 90% of those costs. A state program called the Alaska School Broadband Assistance Grant uses public money from the state to pay for some of the remainder but restricts how the money can be spent in ways that the FCC subsidy does not. That leaves districts to pay for the rest.
Joseph Calascione — the chief of the FCC’s Wireline Competition Bureau, which oversees the Universal Service program — issued a statement Wednesday reassuring the public that the FCC’s June vote didn’t eliminate the E-Rate program. He said the board’s decision to start a rulemaking process to consider changes was to “ask the tough questions necessary for protecting kids online and ensuring the FCC continues to be a good steward of the E-Rate program.”
“Responsible governance sometimes means asking whether a program continues to serve its purpose, is still consistent with the statutory goal provided by Congress, and whether there is a need for large scale changes,” Calascione wrote.
Alaska school and library officials say that E-Rate subsidies for broadband and other internet service remain critical to keeping their institutions connected — particularly in rural areas where the cost of those services is among the highest in the country and schools serve as essential community hubs. Internet access in these communities is also important for standardized testing, as well as ensuring all students — regardless of their location — can use online learning materials and grow their digital literacy skills.
Organizations including the Association of Alaska School Boards and the Alaska Library Association are encouraging schools and libraries to submit comments urging the FCC to preserve the program.
Members of the public can submit a comment to the FCC about the proposed changes to E-Rate under the docket number 26-133.
Alaska school districts pay tens of millions for internet
The Lower Kuskokwim School District, headquartered in Bethel, spans 21,000 square miles with schools scattered across dozens of communities, mostly unconnected to any regional road system.
The district is Alaska’s largest recipient of E-Rate funding. In the 2025 calendar year, the Lower Kuskokwim School District received $96.5 million in E-Rate funding, according to program data from the Universal Service Administrative Co. With the district serving about 3,800 students in the 2024-25 school year, that amounted to more than $25,000 per student for the year.
The Bering Strait School District, with a main office in Unalakleet, received about $29.7 million or around $17,000 per student. The Northwest Arctic Borough School District received about $16.2 million, amounting to nearly $8,400 per student.
The Kuspuk School District, with a student population of about 300 in villages on the Kuskokwim River, received just over $6 million from the E-Rate program. That amounts to about $20,000 per student for the year.
Tiffany Jackson, executive director of the Association of Alaska School Boards, said she saw the importance of the program firsthand as a former school board member in the Aleutians East Borough School District.
The existence of E-Rate, she said, allows school boards to direct money they otherwise would have spent on internet toward other needs, including teachers and equipment.
The possibility of cuts to funding for broadband comes at a time when education officials say state funding for years has not kept up with inflation, pressuring districts to make difficult choices on school closures, class sizes and cuts to programs, sports and other services.
Jackson said school boards across Alaska are concerned about the possibility of losing the federal E-Rate funding. She submitted a letter to the FCC on behalf of the school board association, urging the commission not to sunset the program.
“The E-Rate program is a lifeline to opportunity for Alaska’s students. Success in connecting 99% of schools should be a reason to sustain and strengthen the program, not to dismantle it,” the letter read.
Jackson said the program’s success should be viewed as a reason to continue it, rather than as evidence that its work is finished.
“Just because something is working doesn’t mean that ‘OK, it’s working, we’re done, we’re going to get rid of it.’ It means it’s working,” Jackson said. “We’ve invested in something good, and we’re seeing solid returns.”
While the FCC may point to high rates of connectivity in school buildings as a reason to sunset the program, Tonia Dousay, dean of the University of Alaska Anchorage’s School of Education, said that does not necessarily reflect the full picture of whether entire populations have reliable internet access.
“While the FCC says, ‘Hey, 99% saturation,’ they’re looking at buildings. They’re not looking at communities,” Dousay said.
Is E-Rate keeping up with Alaska’s changing broadband landscape?
The debate over E-Rate comes as schools in rural Alaska increasingly have more options for connecting to the internet than they did just a few years ago.
Starlink, the satellite internet service operated by Elon Musk-owned SpaceX, has emerged as an alternative. But the shift to satellite service has not been universal.
Unlike the FCC’s High Cost program, which primarily subsidizes telecommunications companies that build and operate networks, E-Rate is technology-neutral. Schools and libraries can use the program to subsidize eligible low-Earth-orbit satellite service, including Starlink, as well as traditional fiber, cable and other broadband connections.
The Lower Yukon School District, based in Mountain Village near the Yukon Delta National Wildlife Refuge in Western Alaska, switched to Starlink from GCI two years ago, Bethel-based KYUK Public Media reported.
Valerie Oliver, former state of Alaska E-Rate coordinator, said she was glad when Lower Yukon switched over to Starlink from GCI, whose rates had become “astronomical.”
The district’s E-Rate subsidy dropped dramatically because its underlying internet costs also fell. The year before the switch, Lower Yukon received about $6.25 million through E-Rate for internet. In 2024, when they switched to Starlink, that subsidy amount dropped to about $600,000.
Lower Yukon isn’t alone in making the switch.
The Cold Bay Public Library on the Alaska Peninsula received nearly $118,000 in subsidies for internet under Alaska Communications Internet LLC in 2023, according to program data. After switching to Starlink’s third-party vendor, Microcom, the library received about $13,000 from the FCC in 2025, its first full year with satellite access.
The Yakutat School District in Southeast Alaska switched from GCI to satellite internet in late 2025. Over the past six months on Starlink, the district has received about $21,000 in E-Rate subsidies. That’s far less than the $150,000 paid out to the school district through E-Rate in the first six months of 2025 when using GCI.
Pribilof School District Consortium, which serves a remote Bering Sea archipelago, switched from TelAlaska Long Distance Inc. to Microcom in 2024. In 2023, E-Rate paid nearly $300,000 in subsidies toward the district’s internet. In 2025, the first full year after switching to Starlink’s satellite internet, the E-Rate program paid out about $78,000 in subsidies.
Despite the savings and that some libraries and school districts are seeing success with switching providers, Oliver said she doesn’t necessarily see low-orbit satellite internet providers like Starlink as the future for all rural school districts. She said she sees fiber connection as preferable, if it’s available for the community, as it generally provides the fastest and most reliable connection with “no latency, no jitter,” and strong upload and download speeds.
“If it were me, and I could afford it, and it were were cost-effective, I probably would do the fiber connection first, as long as someone wasn’t gouging me,” Oliver said.
Alaska’s high broadband internet costs
The debate over E-Rate’s subsidies — and whether or not the internet speeds the program provides are fast enough — is not new in Alaska.
GCI, the state’s biggest internet provider, is by far the largest benefactor of E-Rate subsidies in the state. Program data shows the company has received nearly $700 million to provide service to schools and libraries through the program since July 2021.
Year to year, the size of the subsidy for each district or library can fluctuate. For example, the Lower Kuskokwim School District had nearly $59 million in invoices paid for reimbursements to cover internet service in the 2023 calendar year. That figure dropped to around $54 million in 2024 before spiking up to more than $96 million in 2025.
Alaska’s School Broadband Assistance Grant program also kicks in millions more toward districts’ internet bills. The state awarded a total of $19 million in Broadband Assistance Grants in the fiscal year that began in July 2025.
In the most recent 2026 fiscal year, the state of Alaska issued $7.2 million to the Lower Kuskokwim School District to pay for internet costs not entirely covered by E-Rate. The district itself budgets roughly $3 million annually to cover costs beyond what gets reimbursed through federal and state subsidies.
“That gap would be impossible to close through district funds alone,” Lower Kuskokwim School District Superintendent Jason Hlasny said, calling the E-Rate program “foundational” to the district’s operations.
Hlasny said staff and students are generally satisfied with current speeds with challenges remaining during peak use, like during statewide testing windows when more than 25 students are online at once.
When the district last renewed its internet service contract, Hlasny said, satellite providers couldn’t yet support 24/7 access or fast enough speeds.
“Satellite technology has advanced quickly since then, so we expect more competitive options when our contract comes up for renewal,” Hlasny said.
Representatives from the Alaska Department of Education and Early Development did not respond to multiple requests for comment about E-Rate’s impact, or who would fill in the remainder of the funding if the program were to end or be reduced in scope.
The cost of providing connection is driven in part by the building and maintaining of networks across Alaska’s enormous distances and small, dispersed communities.
Dousay, at UAA’s School of Education, said the roughly $100 million per year cost for the Lower Kuskokwim School District’s internet can sound startling without considering what it takes to connect a district spread across an area the size of West Virginia, serving about 4,000 students.
The larger and more dispersed a district is, the more infrastructure is needed for a traditional provider to connect one village to another and offer reliable service within each community. As rural Alaska communities have experienced in recent years, undersea cables can be damaged, sometimes leaving communities without service for extended periods of time while repairs are made.
Even so, E-Rate program experts said that costs from legacy broadband providers may be inflated.
Oliver, the former E-Rate coordinator, said that hard-wired broadband companies add additional costs into their services.
“They will build in extra bells and whistles that can be sold, and that will incrementally increase the price until you get to the point where it is very, very high,” Oliver said.
Dousay said she would support reforms to the program, including changes to consultant fees that can add significant costs to technology contracts.
“Honestly, it feels like highway robbery when I see proposals that schools get, and there’s a consultant built into adopting some new technology, and the percentage fee is outrageous,” Dousay said.
Asked about these fees, Christine O’Connor, executive director of the Alaska Telecom Association, said she wasn’t aware of consultant fees directly adding to the cost of broadband.
O’Connor said she believes the E-Rate program continues to serve a purpose, despite questions from the FCC about the program’s necessity.
“The work of connecting schools is not finished simply because a building has broadband. Networks require ongoing investment to keep pace with increasing bandwidth demands, cybersecurity needs, and evolving educational technologies. E-Rate has provided a stable framework that helps schools and libraries maintain and improve those connections over time,” O’Connor said via email.
[On nearly deserted Adak Island, you pay to keep hundreds of buildings wired for internet]
Help us report on this topic
This year, the Daily News and ProPublica are investigating Alaska telecommunications companies and the cost of internet service in Alaska. Do you have a tip? Want to talk to a reporter? Please fill out our survey here.
Proponents of E-Rate defend the program
In Unalaska, the public library is the only place where residents can access free internet, city librarian Karen Kresh said. The Aleutian Island community of roughly 4,300 people is remote, and internet service is expensive.
E-Rate typically pays for 50% of the library’s internet costs. In 2025, E-Rate covered $63,000, all of which went toward public internet service, Kresh said. Each year, internet costs more than what the library spends on books, magazines, databases and other electronic resources.
If E-Rate disappeared, Kresh said, the city would either have to put more money from its general fund toward the library or make significant cuts elsewhere.
Dousay said that internet access increasingly functions like a utility, even though it is not treated in the same way as electricity or other such services.
Because internet service is not regulated as a traditional utility, schools and libraries rely on subsidy programs such as E-Rate to help pay for the infrastructure and recurring costs needed to stay connected to essential government services, like court systems and bill payment portals, she said.
Dousay questioned whether concerns about student screen time should be used as a reason for the FCC to dismantle a program that provides basic connectivity, calling it a “scapegoat” to distract from “looking to pull money from education.”
“Do we need to be looking at screen time and how schools are using screen time? Absolutely, but I would leave that to departments of health and the American Pediatric Association, not commercial regulators,” Dousay said.
Oliver, who spent years working with Alaska schools and libraries to navigate the E-Rate program, said she sees E-Rate as a cost-effective program, for the most part.
“Schools and libraries depend on that money, and it is well regulated. In the state of Alaska, it runs very smoothly, and I see very little waste, fraud or abuse other than service providers that make great money on it and kind of upsell products,” Oliver said.
In Unalaska, the library previously relied on a higher-orbit satellite internet service before an undersea fiber-optic cable reached Unalaska in 2022. The fiber connection significantly improved internet speeds, though Kresh said it did not substantially reduce the library’s monthly costs.
While some rural schools have switched to Starlink, Kresh said the city’s information technology staff has recommended remaining on a dedicated fiber connection because it is more reliable and can better support larger numbers of people using the internet at once.
The change in service has made a noticeable difference. Before the fiber connection, residents routinely told the library they wanted faster internet. Now, Kresh said, those complaints have diminished.
The library sees people using its Wi-Fi every day.
“There are so many things in life that really require you to be connected, and not everybody has the resources to do that on their own,” Kresh said.