Internet Cooperative Purchasing Initiative (ICPI)


The Internet Cooperative Purchasing Initiative (ICPI), also known as the Consortium, is a program implemented by the New Jersey Department of Education in 2014 to improve broadband procurement for K-12 schools. The initiative bundled schools into four regional groups, shifting from a decentralized procurement model to a centralized one. Under this new system, schools voluntarily participate in a coordinated procurement process where a single Internet Service Provider (ISP) wins the right to supply internet to all schools within a region.

The ICPI aims to reduce costs and increase access to high-speed internet for schools. It leverages the benefits of demand aggregation to overcome the exposure problem faced by ISPs and increase competition. The program works alongside the federal E-rate subsidy program, which provides 20-90% subsidies for schools telecommunications expenditures based on poverty level and rural status.

Results from the initiative have been significant. Participating schools experienced an average price decrease of $9.33 per Mbps per month, from a base of $19. In response to lower prices, schools increased their broadband demand sixfold, by an average of 628 Mbps compared to non-participants. The program has led to substantial cost savings for schools, ranging from $1.82 million to $6.53 million in total, depending on demand assumptions


Pros

Significant cost savings for participating schools

Substantial increase in broadband speeds for schools

Leverages economies of scale to negotiate better prices

Reduces administrative burden on individual schools for procurement

Complements existing government grant subsidy program

Cons

Potential for increased market concentration among ISPs

Schools on existing long-term contracts may not be able to participate immediately

May lead to uneven adoption across schools


Partners

New Jersey Department of Education

Educational Services Commission of New Jersey (ESCNJ)

Participating Internet Service Providers

Federal Communications Commission (FCC)

Universal Service Administrative Company (USAC)


Links and Ressources