Broadband Company Returns $14-Million E-Rate Grant

Published May 25, 2011

One year ago the U.S. Government awarded Education Networks of America a $14.3 million E-Rate stimulus grant to provide broadband Internet technology to underserved school districts. A year later, ENA refused the funds in order to go it alone.

The Indiana office of the Nashville, Tennessee-based company was awarded the grant from the Department of Commerce’s National Telecommunications and Information Administration’s Broadband Technology Opportunities Program. The grant supports the deployment of broadband infrastructure and services through the E-Rate program, which provides subsidized discounts to schools and libraries for the purchase of telecommunication and networking services.

ENA President and CEO David Pierce told the Nashville Business Journal his company opted not to take the stimulus money because it believed it could pursue its goal more efficiently by working through the private sector.

No Stimulus Necessary
ENA provides managed network and communication services to customers in the education, library, and government sectors. The company has been involved in the E-Rate program since its inception in 1998 and is one of the top-10 service providers in the United States, says Pierce.

Pierce says ENA currently manages multiple statewide and district-wide education and library networks serving more than 5,345 schools, 580 school districts, and 230 libraries, more than 3.6 million students, teachers, and administrators, and more than 6.2 million librarians and patrons.
“Due to ongoing build out and the increased availability of commercially available high-speed broadband service in Indiana, ENA decided to terminate its grant with NTIA,” Pierce said.

“Even though the grant will not be utilized, the grant process itself netted a very positive outcome for Indiana” Pierce added. “Through our efforts, we were able to deliver high-speed broadband service to 46 Indiana unserved and underserved school and library sites. All of this work was done without using any of the federal stimulus funds.”

Pierce says ENA plans to secure new business primarily through the company’s request for proposal process rather than seeking E-Rate funds. Under recent contracts awarded through this process, ENA will establish two new statewide education networks in Vermont and New Hampshire and provide new connectivity and communication services in school districts in Maryland and Georgia.

‘No Free Lunch’
Carl Gipson, director of small business and technology and telecommunications studies at the Washington Policy Center, applauds ENA’s decision.

“It is refreshing to see a business wise up to the fact that there is no free lunch when it comes to accepting government funds,” Gipson said.

“Once a business starts accepting funds from the state you often see the business change its business model in order to maximize this new revenue stream, thereby subjecting it to changes in the political winds,” he said.

“So many times we see businesses falter or go under because government has rescinded a subsidy or other support based not on market principles but on political expediency,” Gipson said.

Alyssa Carducci ([email protected]) writes from Tampa, Florida.

Internet Info:

“No Stimulus Necessary,” Nashville Business Journal, April 8, 2011: