Inside the Senate's "Cost of Connection" report

On October 13, 2026, the Senate Committee on Commerce, Science, and Transportation released an 11-page staff report on E-rate's consultant market. You can read the full report on this site.

“A complex system with intermediary consultants who consume hundreds of millions of dollars annually just to assist in accessing federal support for internet bills.”

The three findings

• Consultant reliance is structural. The program's multistep, technical requirements push schools and libraries to hire outside firms, and their pay is hard to evaluate.
• Consultant prices vary widely. The report contrasts DC Public Schools, which pays substantially more per student than neighboring Fairfax County, and Milwaukee's nearly $800,000 three-year contract.
• The subsidy weakens cost control. When E-rate covers up to 90% of the bill, applicants are less sensitive to price, and staff found higher average internet costs where subsidies are higher.

The scale

Staff estimate consultants are associated with about 82 percent of E-rate funding, more than $1.9 billion of roughly $2.4 billion in 2025, and earn $200 million to $400 million a year. Ten firms were associated with nearly $900 million, more than 38 percent of the total. Consultants are not directly overseen by the FCC or USAC.

The recommendations to the FCC

• Simplify program rules, including whether eligibility can be set directly from enrollment and student-poverty data.
• Require public disclosure of consultant compensation.
• Stop further expansion of E-rate, including pilot programs, until its core weaknesses are addressed.
• Bar people and entities with a direct financial stake in Universal Service programs from USAC's board.

The report also asks Congress to reexamine the program itself, noting that the phone-bill contribution factor reached a record 42 percent in October 2026.

What it means for schools

Simpler rules and fee disclosure would both take years. In the meantime, the report puts a number on what the complexity costs, and it makes every consultant contract a fair question at the next board meeting.