Back to the New Basics Schools and Libraries Division Eligible Services Back to the New Basics Schools and Libraries Division Washington, DC • Orlando • Boston • New Orleans • Cleveland • San Francisco • Phoenix September/October 2007

Overview Categories of Service Eligible Services List (ESL) Proposed ESL Changes Special Eligibility Conditions Item 21 Attachments Service Substitutions Top Reasons for PIA Calls

Eligible Services Four categories of service Priority 1 (funded first) Telecommunications Services Internet Access Priority 2 (starts with neediest applicants) Internal Connections Basic Maintenance of Internal Connections

Telecommunications Service The transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received. Examples: ATM, T-1, Centrex, Local and Long Distance Telephone Service, Cellular Service and Paging Service Rule of thumb: USAC funds the various types of services USAC does NOT fund end-user equipment - e.g., telephone sets

Internet Access Basic conduit access to the Internet or for services that are an integral component part of basic conduit access. Examples: T-1, DSL, DS-3, and Wireless service Eligibility also extends to email and Web hosting services Rule of thumb: USAC funds the conduit to the Internet USAC does NOT fund content

Internal Connections Components at the applicant site that are necessary to transport information to the school or library. Examples: Access Points, Routers, Switches, Hubs, Wiring, PBXs and Codecs Rule of thumb: USAC funds items that get the information to the classroom or room in the library USAC does NOT fund end-user equipment such as telephones (including IP telephones) or laptops

Basic Maintenance of IC Ensures the necessary and continued operation of eligible internal connection components at eligible locations. Ex: Repair and upkeep of eligible hardware, wire and cable maintenance. Rule of thumb: USAC funds basic technical support of eligible hardware. USAC does NOT fund end-user support such as a student calling a help desk for technical assistance.

Eligible Services List Posted on USAC website Provides guidance to applicants and service providers on the eligibility of products and services under E-rate Organized by category of service Revised and updated each year in advance of the application window

Eligible Services List Five sections Telecommunications Services Internet Access Internal Connections Basic Maintenance of Internal Connections Miscellaneous Three special areas with additional information Special Eligibility Conditions Glossary Index

Eligible Services List ESL approval process USAC supplies suggested changes to the FCC by June 30 FCC issues draft ESL for comments and reply comments After reviewing comments and making any necessary changes, FCC issues final list for upcoming funding year Funding year application window opens 60 days after ESL issued (unless rule waived)

‘08 Proposed ESL Changes Centrex as basic phone service How distance learning and video conferencing may be eligible as Internet Access A definition of eligible web hosting “Failover” products or services added to the Other Miscellaneous Ineligible Components section as ineligible

Telecom or Internet Access? This is a direct link between two eligible schools, also known as a point to point connection. This is only eligible as a Telecommunications service and must be provided by an eligible Telecommunications carrier. Why? Because it is not being used to access the Internet.

Eligible as Internet Access? Configuration: 1x T-1 between HS and Elem 1x T-1 from Elem to the Internet Eligibility: Eligible at Telecom Conditionally Eligible in IA IA Conditions: Must be used as basic conduit access Must be the most cost effective means of accessing the Internet and documentation to support its cost effectiveness

Eligible as Telecom?

Special Eligibility Conditions Ancillary use Cost allocation Cost allocation for file servers Eligible users and locations Internet Access with ineligible features Leased Wide Area Network (WAN) infrastructure (On-premise P1 equipment) WAN vs. LAN components

Ancillary Use In general, if a product or service contains ineligible functionality, that functionality must be removed through cost allocation Functionality ancillary to principle use OK Price cannot be determined separately Combined offering is most cost-effective solution without regard to the value of ineligible functionality

Cost Allocation If a product or service contains both eligible and ineligible functionalities or uses, the ineligibles must be cost-allocated out Clear delineation must exist between eligible and ineligible components Several methods can be used, but must be based on tangible criteria that yield a realistic result Price for eligible portion must be most cost-effective means of receiving the eligible service

Cost Allocation – File Servers File servers can be used simultaneously for multiple purposes, some eligible and some ineligible Simplified method of cost allocation available based on simple averaging of the different functions

Cost Allocation – File Servers Example – file server used as Email server (eligible) Firewall server (eligible) Storage of non-email end user files (ineligible) Two out of three functions are eligible, so 67% of cost is eligible

Eligible Users/Locations Eligible users and locations are those that are involved in activities that are integral, immediate, and proximate to the education of students or the provision of library services to patrons Employees of a school or library Non-instructional facilities (NIFs) Wireless telephone services (bus driver delivering children to/from school, library staff in bookmobile, teachers/staff on field trip)

Internet Access + Ineligibles Examples of ineligibles that may be included in Internet access service offerings but should be cost allocated Specialized content Caching services Filtering services

Leased WAN Infrastructure WAN network facilities may only be leased, not owned, by applicants Limitations on initial implementation costs for service provider infrastructure Other eligibility conditions Exclusive access limitations Amortization requirements WAN Fact Sheet has detailed information

WAN vs. LAN WAN = Wide Area Network LAN = Local Area Network Rebuttable presumption – a connection is not an Internal Connection if it crosses a public right-of-way LAN is considered Internal Connections WAN is not Internal Connections because it runs from demarcation point at school or library to a point outside

Item 21 Attachments Form 471, Item 21 requests a description of services, including a breakdown of components, costs, manufacturer make and model number Can be submitted online Emailed (scanned) or paper submission can be a contract, product description, spec sheet, or other document containing the necessary information

Service Substitutions What is a service substitution? What are the benefits of a global service substitution? What are some helpful filing tips?

Service Substitution A service substitution is a change in the products and/or services specified in the Form 471. Certain conditions must be met: Same functionality Doesn’t violation contract provisions or state and local rules/regulations Doesn’t increase the % of ineligibles Within the scope of the original Form 470/RFP

Global Service Sub Involve a product and/or service that is being discontinued, has a model number change, or is being replaced. The manufacturer or service provider may submit notification to USAC that the product or service is being changed, along with a listing of one or more replacement products or services.

Helpful Service Sub Tips Refer to your original Item 21 attachment. The items and dollars from the From: section must reflect those in your Item 21 attachment. Be sure to include the dollar amounts, quantities and the make and model of equipment of the From: and To: sections. If one product is being substituted for several FRNs, be sure to include the changes in quantity and the change in dollars (if any).

Helpful Service Sub Tips Be sure to include your contact information: e.g., name, phone number, fax and e-mail. If substituting multiple products, include a spreadsheet. Digital copies are best (faxes can be hard to read) Send to USAC via Submit a Question

PIA Contact Reasons “Other” or “Misc” charges Item 21 attachment includes a summary phone bill or quote that includes the following terms, “other, miscellaneous, fees, other charges and credits, and surcharges.” Find the page(s) where these charges are itemized and include them in your Item 21 attachment.

PIA Contact Reasons Mixed bucket Mixed bucket requests are requests that include services from more than one category of service If requesting a service such as cellular service with Internet service, be sure to post for both services on your Form 470 (e.g., Blackberry services).

PIA Contact Reasons Multi-year on-premise equipment On-Premise equipment spans multiple years If you have answered the On-Premise questions in a prior year, you may refer PIA to your prior year’s FRN or application.

PIA Contact Reasons Generic or incomplete responses General make and model information only Say “Company X’s D1542 router,” not “high speed router.” BMIC request noting maintenance on “eligible products and services.” Be sure to provide the make, model and quantity for all equipment being maintained.

PIA Contact Reasons Generic or incomplete responses (cont.) The type of phone service is listed but there is no line count. Provide the number of lines when submitting the Item 21 attachment. Digital Transmission Services request doesn’t include bandwidth Provide the speed of the services being provided such as 8mbps or 100mbps…

PIA Contact Reasons Missing server functionality information Requesting a File/Network/Web server without stating the functionality State the specific functionality in your Item 21 attachment, such as DHCP, DNS, Proxy, E-mail This applies for both IC and BMIC requests

Questions?