A new class of special purpose acquisition companies could give rise to a constellation of publicly traded education companies, with more visibility and greater access to capital.
A bill recently introduced in the U.S. Congress would make make E-Rate money available to support Wi-Fi on school buses, the latest of several recent recent efforts to expand student internet connectivity outside school hours.
Sens. Ben Ray Lujan, D-N.M., and Lindsey Graham, R-S.C., have introduced the legislation, which would require the Federal Communications Commission to issue regulations to make Wi-Fi access on school buses eligible for support under the E-Rate program no later than 180 days after enactment. Under the bill, schools would be reimbursed for equipping buses with Wi-Fi.
The E-Rate program is funded at $4 billion annually, and allows schools to receive reimbursement for certain internet services provided on campus.
If policymakers provide more financial support for off-campus wireless services, it could increase the ability of students to make use of companies’ ed-tech tools, apps, and platforms, including on long bus rides where students have access to laptops and other devices, if this bill gets enacted.
The bill is aimed, in part, at promoting digital equity for rural and tribal communities in states like New Mexico, according to Lujan’s office.
Approximately one-quarter of New Mexico’s over 350,000 students don’t have affordable internet, according to a statement by the New Mexico Homework Gap Team, which describes itself as an ad hoc group of professionals who support narrowing the digital divide for K-12 students in the state.
A December study by the Alliance for Excellent Education estimated that almost 17 million students nationwide lack home internet access to complete school assignments.
“For rural and tribal students who travel hours to and from school, these commutes can be valuable time accessing the internet, completing assignments, and conducting research,” Lujan said in a statement. “Empowering our schools to equip buses with Wi-Fi is an opportunity to uplift our students, tackle the homework gap, and help alleviate the financial strain that too many families are experiencing at home.”
If passed, the legislation would give schools more flexibility in terms of figuring out how they can best use ed tech to promote equity, said Amina Fazlullah, equity policy director for Common Sense Media, a nonprofit dedicated to promoting safe and effective technology use for children.
“Every community has different layers of barriers to equitable access to education related to technology,” she said in an interview. “Having that flexibility ultimately in the E-Rate program will be incredibly useful for schools where students have long commutes.”
But Fazlullah suggested that the ed-tech funding expansion outlined in the Lujan-Graham bill shouldn’t substitute for other potential federal initiatives to support costs for students’ home connectivity.
It remains to be seen whether the FCC will act decisively on some lawmakers’ and education advocates’ calls for a long-term, dedicated funding source to support students’ home connectivity.
The COVID-19 stimulus package approved earlier this month allocated $7 billion to the FCC for the creation of what is being called the “Emergency Connectivity Fund,” separate from E-Rate, to pay for high-speed internet and devices used off campus.
The commission also recently announced plans for a policy that, among many other things, would allow school districts to apply for reimbursement for costs they have paid for students and teachers to access broadband at home.
FCC Acting Chairwoman Jessica Rosenworcel, in an interview with Education Week this month, said the agency remains in the “process of evaluating how we can update the current E-Rate program to meet the moment students and families find themselves in.” She spoke after the agency in February issued a request for public comments on whether E-Rate funds could be used to support remote learning during the pandemic.
In 2018, then a U.S. congressman, Lujan became familiar with how Wi-Fi operates on a school bus when he attended a “Rolling Study Halls” event. Hosted by Santa Fe Schools and funded by Google, the event took a Wi Fi-equipped bus to a Native American pueblo in New Mexico, Tom Ryan, chief information and strategy officer for the district, noted in an email.
In addition to Santa Fe, the Albuquerque district is one other school system that has outfitted school buses with mobile Wi-Fi units, installing hot spots on 80 buses across the area as of October.
Rep. Peter Welch, D-Vt., has introduced legislation similar to the Lujan-Graham bill in the House.
The legislation has picked up endorsements from the National Education Association, Competitive Carriers Association, Free Press, Public Knowledge, School Superintendents Association, Association of Educational Service Agencies, Association of Latino Administrators and Superintendents, National Rural Education Association, National Rural Education Advocacy Consortium, and the State Educational Technology Directors Association.
Photo: Sen. Ben Ray Lujan, D-N.M., is pictured on June 29, 2018, visiting the Kewa Pueblo, a Native American settlement southwest of Santa Fe, N.M. The program was called “Rolling Study Halls” which was funded by Google.
The Federal Communications Commission has a new $7 billion pot for schools to recoup the costs of paying for student and teacher access to broadband at home — and now the agency must figure out how to distribute the money.
Since the money came through, the FCC has started the process, recently announcing that it is formally requesting public comment for the new program aimed at addressing the so-called “homework gap.”
The COVID-19 stimulus package approved earlier this month allocated $7 billion to the FCC for the creation of what is being called the “Emergency Connectivity Fund” to pay for high-speed internet and devices used off campus.
The agency has 60 days from enactment of the relief measure to get final rules in place. That means school districts could start applying for money as early as mid-May or early June, said Reg Leichty, founding partner of the education consulting group Foresight Law+Policy.
School systems looking for help covering the costs of keeping students connected earned a major win with the federal funding, said Leichty, but it won’t serve as a long-term solution for remote learning since the money isn’t permanent.
“It’s not a comprehensive plan,” he said, “but it is a huge leap forward.”
The FCC’s request for comments about the new policy surfaced a number of key questions. They include how the $7 billion in funding can be distributed equitably; whether it should create broadband adoption goals, benchmark speeds and data thresholds; what type of devices qualify; if services and equipment can be used for educational purposes only; and what the bidding process should look like.
The answers to those questions have implications for companies across the ed-tech market — not only those focused directly on providing connectivity to schools and homes, but also those whose digital products would benefit from students being able to connect more easily.
Here are six critical issues that companies keeping track of the FCC program should watch for:
While some questions remain unanswered, this much is clear: Wi Fi hotspots, modems, routers, devices that combine a modem and router, along with laptop and tablet computers all qualify for funding.
What about smartphones? The FCC says nope, and has proposed that all eligible devices need to be able to support video conferencing platforms and other software necessary “to ensure full participation in remote learning activities.” And that’s where the FCC believes smartphones don’t make the cut, writing in the public notice that such devices do not sufficiently allow students, school staff, and library patrons to meaningfully participate in remote learning activities.”
And what about desktops? The FCC is asking for folks to weigh in on that one: “Although not specifically identified, should desktop computers be eligible for funding as ‘similar end-user devices’ that are capable of connecting to ‘advanced telecommunications and information services?’”
The FCC also wants to know if it should impose minimum system requirements for eligible devices, and whether it should require devices to be Wi-Fi enabled and have video and camera functions for remote learning.
The FCC wants to know how far back it should allow applicants seeking funding to recoup costs. In its request for public comment, the agency’s Wireline Competition Bureau proposed that the full FCC allow eligibility to begin on Jan 27. 2020, the date U.S. health officials determined coronavirus to be a public health emergency. But the agency also asked if another date should be considered.
There has been some disagreement among school systems on a date, according to public comments the FCC received in a different remote learning inquiry. The FCC noted that it has received comments as part of that other inquiry from the New York City Department of Education advocating for a reimbursement period to begin in March 2020, when most schools switched to remote learning. But others, including the Wisconsin Department of Public Instruction, have made the case in public comments for a July 1, 2020 date that coincides with the beginning of the E-rate funding year.
Leicthy said this is a big question for the agency to answer since many districts have spent the last full year scrambling to find money to buy Wi Fi hotspots and devices, and don’t want to be “penalized“ when it comes to being able to offsetting those costs.
“You should be able to look back to cover some costs incurred and one reasonable way to do that is to look at the entire 2020 and 2021 school year,” he said.
Since many districts have already entered into contracts for broadband and devices for students to use at home, the FCC is proposing to allow some school systems to bypass the competitive bidding process for purposes of seeking reimbursement through the homework gap fund.
Instead of going through the formal bidding process, the FCC says it could allow those districts to simply certify that they have complied with state and local procurement requirements.
And for those districts that have yet to purchase broadband or devices for off-campus use, the FCC is asking in its request for comments whether it should adopt a streamlined competitive bidding process, which could include reducing from 28 days to 14 days the time that a district must wait to enter into a contract with a service provider after posting an RFP.
There’s also some disagreement among school systems and organizations about this. The FCC has established a benchmark of 25 Mbps downstream and 3 Mbps upstream as adequate to support remote learning.
But the Los Angeles Unified School District told the agency in public comments in another remote learning inquiry that those speeds are “inadequate for supporting uninterrupted teaching and learning, particularly in households in densely populated urban areas where multiple students are often struggling to stay connected.” The L.A. school district did not specify speeds it thought would be suitable.
However, INCOMPAS, the internet and competitive networks association, a D.C.-based trade organization, wrote to the FCC recommending that the benchmark speeds of at least 25/3 as the minimum service standard.
So the FCC is asking in its request for comments if what should the downstream and upstream speed targets be? And what Internet speeds are necessary for people with disabilities who use telephone relay service and video relay services?
School districts have been vocal about the need for federal funds dedicated specifically to off-campus connectivity.
Most were expecting that money to come from an FCC change to its longstanding position that funds from the E-Rate program can’t be used to help with internet access in students’ homes. That was the expectation after the agency initiated a request for public comment on the issue back in February. The general thinking was that the FCC would roll over unused E-rate funds to create an emergency pot of money that districts could tap sometime this spring or summer.
But Congress all but sidelined that discussion for now by approving the $7 billion as part of the latest stimulus plan.
So now expanding E-rate to cover off-campus connectivity needs will get put on a back burner of sorts while the FCC works through delegating the $7 billion that Congress has appropriated. The FCC is going to “wait and reassess the situation before making a decision on E-rate,” said Leichty.
FCC Interim Commissioner Jessica Rosenworcel, in an interview with Education Week this month, said the agency is still reviewing comments, and remains in the “process of evaluating how we can update the current E-rate program to meet the moment students and families find themselves in.”
The FCC’s public notice cites research from a nonprofit organization that estimates it would cost between $6 billion and $12 billion to cover costs for broadband and devices in the first year. So it’s not immediately clear how long Congress’ $7 billion infusion will meet the connectivity needs of schools and families.
Demand for reimbursement is expected to be high through the first funding window, according to the FCC’s notice. But if there’s leftover money, the FCC is suggesting that a new application window be opened the second quarter of every year until the money’s gone.
Once that happens, future funding remains uncertain to help curb the cost of providing mobile Wi Fi hot spots and broadband for students.
“This emergency connectivity fund would be the driving factor for any change over time, and if the FCC decides they need more funding they could follow up and roll over unused E-rate funds at that time,” said Leichty.
Photo: A teacher in a Dallas high school last year displays one of the Wi Fi hot spots that were being given out to students so that they could connect online during COVID-19. (AP Photo/Tony Gutierrez)
State laws affecting the deletion of student information and other practices can have a big impact on education companies, says Tyler Park of the Future of Privacy Forum.
The pandemic has fueled demand for academic lessons outside of core curriculum, as districts seek flexibility and digital materials that engage students.
The number of published solicitations in K-12 declined sharply in 2020 — dropping to the lowest in almost a decade — but the education sector is poised to return to pre-pandemic levels for RFPs faster than many other government markets that buy products and services, according to GovWin from Deltek.
Last year’s dip in solicitations was due primarily to a tectonic shift in school district spending and purchasing priorities as a result of COVID-19 and the mass move to remote learning.
Districts typically rely on RFPs and bids as part of the procurement process, but in many cases last year did not want to wait through the long process involved with those traditional purchasing vehicles. School systems also relied on sole-source (non-competitive) procurements or turned to cooperatives last year to purchase goods and services quickly, according to GovWin from Deltek, which tracks published solicitations.
The company estimates that K-12 RFPs and bids fell off by 18.5 percent during 2020 compared to the same period a year earlier, according to its recent “State and Local Procurement Snapshot – Q4 2020” report.
The report, which analyzed RFPs and bids from all public school districts with an enrollment of more than 500 students, says that K-12 solicitation volume is expected to grow by 13 percent this year and then almost another 5 percent in 2022 as spending and purchasing conditions normalize further.
“Education overall is one of the markets that’s going to rebound most effectively through the next two years,” said Morgan Parkin, a research analyst for GovWin at Deltek.
That rebound, said Parkin, has already started, fueled in part by several rounds of federal emergency dollars.
She is forecasting that soft demand in a broad swath of K-12 spending categories should begin to reverse, and vendors could “start to notice those changes as early as now.” At the same time, solicitations for some “high priority purchases” have remained strong in recent months, according to the report.
Two big areas Parkin said she’s noticing an uptick for published solicitations is STEM curriculum and career-technical education programs.
She also expects to see an increase in school districts issuing bids for assessment programs. Moving forward, districts could be issuing solicitations for a broader mix of assessment tools “coming from all types of vendors, large and small,” to better understand achievement gaps caused by the pandemic,” according to the report.
“A major contract might get split up into smaller ones so more vendors can get in on it,” Parkin said, noting that districts might be less willing to sign with a big assessment provider for multiple years. “There’s going to be more work in assessments, but it will look a little different going in 2021 and 2022.”
Demand should also stay steady for digital textbooks, small-scale remote learning tools, and computer equipment — all tools needed in case of another move back to distance learning.
Rising Interest in PD, and Consulting
The report notes that vendors should “continue to watch for opportunities across all aspects of education, as this market involves a vast amount of services, supplies, systems, software, construction and maintenance. “ Districts not only have more money at their disposal now than at some points in 2020, as a result of a new federal stimulus, but more time and increased flexibility in how they use those funds.
“Spending has returned already at the start of 2021,” Parkin said.
Bids and RFPs issued by independent school districts rose from about 45,000 in 2014 up to 53,864 in 2019, for a compounded annual growth rate of 3.6 percent.
In 2020, the total was 43,903, which was the lowest since 2012, according to data from GovWin from Deltek.
GovWin from Deltek provides business customers with market intelligence and leads on federal, state, local, and education government contracting. A recent analysis by the organization of contracting in the K-12 and higher education markets can be found here. (EdWeek Market Brief partners with GovWin from Deltek’s searches as a source for Purchasing Alerts, our twice-weekly breakdowns of education-focused RFPs from around the country.)
Through 2020, schools showed a strong interest in procuring supplies and safety products. But as the year progressed, so did district needs, as more schools issued bids for COVID testing services and there was a stronger focus on consulting and professional development, according to GovWin from Deltek.
Parkin said she expects the trend from 2020 of districts using cooperative purchasing to continue, but that school systems will likely rely on sole-source procurements with less frequency since they have more money and are no longer facing do-or-die timelines for purchases.
Also, Parkin anticipates that a trend in districts making more contract opportunities available to minority and women-owned businesses will continue.
And she has a message for vendors: Virtual sales pitches and demonstrations are still in demand, based on RFPs in 2021 that Parkin has analyzed, even as the pandemic subsides.
“Schools will be more willing to entertain the option of a virtual presentation,” she said. “I’ve seen more bids and RFPs that list it as an option, so that won’t be gone completely even as the world returns to normal in terms of spending.”
Image by Getty
Investors are putting a premium on companies that have the products and expertise to span distance learning and a return to in-person lessons.
Global spending on artificial and virtual reality in education is expected to soar from $1.8 billion to $12.6 billion annually over the next four years, a new analysis projects.
Spending on artificial intelligence in education, meanwhile, will jump from $800 million to $6.1 billion yearly over that same period, according to the report released recently by HolonIQ, a global research and intelligence firm.
The report made several projections for global ed-tech expenditures in K-12, higher education, and corporate training through 2025. Those include forecasts of total education spending, upskilling, spending on digital technologies as a proportion of total education spending, and venture capital investment.
“AR/VR is coming down the stack from workforce into higher ed, and is slowly making its way into K-12,” Patrick Brothers, the co-CEO and co-founder of HolonIQ, said in an interview.
Augmented and virtual reality has seen only modest uptake yet in K-12 because there’s a big learning curve for students and teachers to become familiar with the technologies, and because their use will take some time to catch on, he said.
Other areas of advanced technology figure to see significant growth in expenditures through 2025, include robotics and blockchain, according to the report. It projects that the total spent on robotics will rise from $1.3 billion in 2018 to $3.1 billion in 2025, and that the total spent on blockchain will rise from $100 million in 2018 to $600 million in 2025.
The biggest driver for the use of blockchain in education is a desire for secure and scalable credentialing, while the biggest spark behind the use of robotics in education is schools looking for different ways to engage learners in STEM fields, Brothers said.
HolonIQ forecasts overall global spending on ed-tech to rise from $227 billion in 2020 to $404 billion in 2025.
Currently, spending on digital technologies makes up just 3.6 percent of total expenditures in the areas of K-12, higher ed, and corporate training. In 2025, that percentage is expected to rise to a higher but still small level of 5.2 percent of overall spending.
“While the longer term impact of COVID-19 on education models is yet to play out, over the next few years we expect an upswing of spending on digital infrastructure in education and greater spending over the long term in new digital models,” the report states.
HolonIQ defines spending in the report as governments, companies, and consumers devoting money to a learning product or service. That distinguishes it from education investments, which are characterized by the supplying of capital in exchange for a stake in a company, Brothers said.
The report also notes that global ed-tech venture capital funding has risen from its previous record of $8.2 billion in 2018 to $16.1 billion in 2020, with Chinese companies occupying the largest share of funding compared with other countries.
Investment in education “will continue to grow, but is not evenly spread across the globe and weighted heavily towards late-stage mega-rounds,” the report says.
Chinese ed-tech companies saw $26.8 billion in venture capital investment between 2010 and 2020, while U.S. companies saw $13 billion invested in the same period.
Overall, HolonIQ projects that total global education spending will rise from an estimated total of $5.4 trillion in 2020 to a total of $7.3 trillion in 2025, noting that education composes over 6 percent of global GDP.
One of the biggest challenges facing school districts during the pandemic is also one of those most fundamental — they have many students who don’t have reliable internet access.
The Killeen Independent School District in central Texas has taken a multifaceted approach to solving that problem.John Hocking is director of network and…
Low bandwidth in students’ homes poses a challenge for education companies. Here’s how they’re responding, with products and workarounds.