1. Universal Service Administrative Company E-RATE AND YOU A RELATIONSHIP MADE IN H…

2. Universal Service Administrative Company WELCOME TO DEATH… by PowerPoint….

3. Universal Service Administrative Company E-Rate and You A Relationship Made in H… Mary Mehsikomer, State E-Rate Liaison November 2007

4. Universal Service Administrative Company Overview Schools and Libraries Program Provides discounts to eligible schools and libraries for Telecommunications Services, Internet Access, Internal Connections, and Basic Maintenance Applicants can be schools, libraries, or consortia, but only eligible recipients of service can receive discounts Applicants must apply for discounts each year (Form 471 application filing window) Funding cap each year is $2.25 billion 4

5. Universal Service Administrative Company Overview Funding year – July 1 through following June 30 Competitive Bidding Process – Form 470 July – 28 days before end of 471 window (usually February) Services Selected – Form 471 November – February (check website for exact dates) (60 days after release of Eligible Services List from FCC) Receipt of Services Confirmation – Form 486 120 days after USAC response from 471 letter or 120 days after the service start date Billing Entity Reimbursement Form – Form 472 or Form 474 120 days after date of the Form 486 Notification Letter or 120 days after the last date to receive service 5

6. Universal Service Administrative Company Overview Forms for Applicants Technology plan – Letter from MDE Form 470 Form 471 Form 486 Form 472 – BEAR 6

7. Universal Service Administrative Company Overview

8. Universal Service Administrative Company Overview Application process Eligibility Technology planning Competitive bidding / Form 470 Calculating discounts Funding requests / Form 471 Application review / Funding commitments Starting services / Form 486 Invoicing USAC / Form 472 (BEAR) or Form 474 8

9. Universal Service Administrative Company Calculating Discounts 9 Discount Matrix

10. Universal Service Administrative Company Eligibility Applicants Eligible Entities - Schools Must meet the statutory definition of elementary or secondary school found in the No Child Left Behind Act of 2001. Must be a non-profit institutional day or residential school, including a public charter school, that provides elementary or secondary education, as determined under state law. Must not be operating as a for-profit business. Must not have an endowment exceeding $50 million. 10

11. Universal Service Administrative Company Eligibility Applicants Eligible Entities - Schools Pre-kindergarten, Adult Education, Juvenile Justice students/facilities may be eligible. In MN, Pre-K and Juvenile Justice are eligible. Must provide elementary or secondary education as determined under state law. USAC requests updated eligibility information from state departments of education every two years. 11

12. Universal Service Administrative Company Eligibility Applicants Consortia Eligible schools and/or libraries may form consortia with Other eligible schools and/or libraries Certain health care providers Public sector (governmental) entities Only eligible entities can receive discounts 12

13. Universal Service Administrative Company Eligible Services Both Priority 1 – funded first Telecommunications Services Basic telephone service — wireline or wireless phone service (local, cellular/PCS, and/or long distance) Voice mail Transmission services (T-1, DSL) Internet Access Basic conduit access to the Internet 13

14. Universal Service Administrative Company Eligible Services Both Priority 2 Internal Connections (switches, hubs, routers, wiring) Basic Maintenance on Internal Connections Priority 1 funded first, then Priority 2 begins with neediest applicants (90% first, then 89%, 88%, etc.). Internal Connections funded in only two out of five funding years. (may or may not make a difference ). 14

15. Universal Service Administrative Company Eligibility Applicants Educational Purposes Activities that occur on school property are presumed to be integral, immediate, and proximate to the education of students or the provision of library services to library patrons and therefore qualify as educational purposes. Customary work activities of employees of a school or library are presumed to fall under the definition of education purposes. 15

16. Universal Service Administrative Company Eligibility Applicants SCHOOLS: Administrative buildings School bus barns and garages Cafeteria offices Facilities associated with athletic activities 16 Examples of Non-instructional Facilities (NIFs) that can receive Priority 1 services

17. Universal Service Administrative Company Eligibility Applicants Educational Purposes – Priority 1 Wireless Telecommunications Services used offsite may be eligible. For example, School bus drivers delivering children to and from school when cell phones are need to make sure no child is left behind. Cell phones for teachers or other school staff accompanying students on a field trip or sporting event. 17

18. Universal Service Administrative Company Eligibility Applicants Educational Purposes – Priority 2 Priority 2 services to NIFs are NOT eligible unless those internal connections are essential for the effective transport of information to an instructional building of a school. 18

19. Universal Service Administrative Company Technology Planning Applicants Technology Plans Not required for basic telephone service (but they’re a good idea anyway) Must be written before Form 470 filing Must be approved by a certified approver before the Form 486 is filed or discounted services start, whichever is earlier Must cover entire program year Must cover five specific elements 19

20. Universal Service Administrative Company Technology Planning Applicants Technology Plans Must cover five specific elements: Goals / Strategies for using technology Professional development Needs assessment Sufficient budget Evaluation process 20

21. Universal Service Administrative Company Competitive Bidding / 470 Applicants Filing Form 470 opens a competitive bidding process. Can also issue a Request for Proposals (RFP). Applicants are responsible for ensuring an open and fair process and selecting the most cost-effective provider of the desired services. 21

22. Universal Service Administrative Company Competitive Bidding / 470 Applicants Request for Proposal (RFP) Not required under FCC rules, but a good idea Must comply with local and state procurement laws Describes your project scope, location, other requirements in detail Even if you have an RFP, you must describe the services you desire on your Form 470. 22

23. Universal Service Administrative Company Competitive Bidding / 470 Applicants Competition Goal is to have as many bidders as possible Promotes better service and lower prices Fair and open process All bidders treated the same No advance knowledge of RFP information No secrets in the process All bidders know what is required of them. 23

24. Universal Service Administrative Company Competitive Bidding / 470 Applicants Selecting service providers Applicants must choose the most cost- effective solution to their Form 470 or RFP, with price as the primary factor Other factors can be considered, but price must be the most heavily weighted. Evaluation process should be carefully documented and that documentation must be maintained. 24

25. Universal Service Administrative Company Competitive Bidding / 470 Applicants Form 470 Deadline Absolute deadline is 28 days before the close of the Form 471 filing window. However, if the applicant waits until that date to file a Form 470, the following must all occur on the last day of the window: Selecting a service provider Signing a contract Signing, dating and submitting Form 471. 25

26. Universal Service Administrative Company Competitive Bidding / 470 Applicant Tips Retain worksheets, bid evaluation criteria, winning AND LOSING bids Prepare a memo to file if you received only one bid or no bids File (and certify) online Reduces errors and speeds processing USAC will issue you a PIN 26

27. Universal Service Administrative Company What should I keep? Keep all documents FIVE years after the last day of service for the E-rate funding year. Applicants, service providers, and consultants should ALL retain E-rate documentation.

28. Universal Service Administrative Company TOP 5 MISSING DOCUMENTS Discount verification (NSLP, etc.) Asset listings Signed and dated contracts Consultant agreement or LOA Bid evaluation/award schedule

29. Universal Service Administrative Company Competitive Bidding / 470 Applicants Form 470 Receipt Notification Letter (RNL) Cover page of important reminders Notifies applicant that Form 470 has been posted to the USAC web site RNL generated before certification Contains Allowable Vendor Selection / Contract Date 29

30. Universal Service Administrative Company Calculating Discounts Applicants Discounts are calculated using Percentage of students eligible for National School Lunch Program (NSLP) Urban or rural status of county in which school or library is located (from web site) These two pieces of information are carried into the Discount Matrix 30

31. Universal Service Administrative Company Funding Requests / 471 Applicants Form 471 Provides specific information on services, service providers selected, and contracts Provides discount calculation information Must be filed for each funding year Contains certifications of compliance Can include one or more funding requests, but break out Form 471s based on service category. 31

32. Universal Service Administrative Company Funding Requests / 471 Applicants Form 471 Deadline Must be filed online or postmarked on or before the close of the Form 471 application filing window. Forms 471 filed after the close of the window will be considered after all Forms 471 filed in-window. Certifications for associated Forms 470 also must be filed online or postmarked before the close of the window. 32

33. Universal Service Administrative Company Funding Requests / 471 Applicants Contracts Applicants and service providers must sign contracts for services that are not provided under tariff or under month-to-month arrangements Contracts can cover more than one year or contain extensions, but applicant must indicate these options in the Form 470 33

34. Universal Service Administrative Company Funding Requests / 471 Applicant Do’s and Don’ts WAIT AT LEAST 28 DAYS BEFORE Selecting a service provider Signing a contract Signing and dating the Form 471 Submitting the Form 471 These actions must occur in this order. Refer to 470 RNL for allowable date. Both applicants and service providers must sign and date all contracts. 34

35. Universal Service Administrative Company Funding Requests / 471 Applicant Tips Remove ineligible costs from funding requests Document ineligible costs carefully 30% rule – if 30% or more of the dollar value of the request is for ineligible products and services, the entire request will be denied Work with your service provider(s) to create your Item 21 attachment(s) 35

36. Universal Service Administrative Company Funding Requests / 471 Applicant Tips Don’t combine Priority 1 and Priority 2 requests on the same Form 471. Review of Priority 2 requests may hold up Priority 1 commitments. “When in doubt, split it out.” File (and certify) online Reduces errors and speeds processing USAC will issue you a PIN 36

37. Universal Service Administrative Company Funding Requests / 471 Both Form 471 Receipt Acknowledgment Letter (RAL) Cover page of important reminders Provides confirmation of certain information entered from Form 471 Data entry errors may be corrected Applicants can request funding reductions but not funding increases 37

38. Universal Service Administrative Company Application Review Applicants Forms 471 are reviewed by Program Integrity Assurance (PIA) for compliance with program rules concerning areas such as: Competitive bidding process Contracts Discount calculation Sufficient budget Establishing Form 470 Technology plan Children’s Internet Protection Act 38

39. Universal Service Administrative Company Application Review Applicant Tips Provide information to Program Integrity Assurance (PIA) promptly – 15 days Work with your service provider to comply with information requests. Make sure your answers respond completely to the questions asked. Ask for more time to respond if you need it. However, if you ask for more time, your PIA representative will work on other applications and you may wait longer for a decision. Check the 471 Application Status Tool. 39

40. Universal Service Administrative Company Funding Commitments Both Funding Commitment Decision Letter (FCDL) Cover page of important reminders Reports status of individual funding requests: Funded Not funded As yet unfunded (Priority 2 requests) Cancelled May receive more than one FCDL 40

41. Universal Service Administrative Company Funding Commitments Applicant Tips Check all entries on the Funding Commitment Decision Letter (FCDL) carefully to make sure there are no data entry errors. Use the information on the FCDL to prepare your Form 486. 41

42. Universal Service Administrative Company Starting Services / 486 Applicants Form 486 Notifies USAC that services have started and invoices can be paid Certifies that Tech Plan (if required) meets program requirements. Certifies the status under Children’s Internet Protection Act (CIPA). Lead members of consortia may be required to collect CIPA certifications from consortium members on a separate form (Form 479). 42

43. Universal Service Administrative Company Starting Services / 486 Applicants Children’s Internet Protection Act (CIPA) Applicants must certify compliance with requirements: Internet safety policy Public notice or meeting Technology protection measure (filter) CIPA does not apply to requests for plain old telephone service, but does apply to any request for Internet access. 43

44. Universal Service Administrative Company Starting Services / 486 Applicants Form 486 Deadline Form 486 must be filed online or postmarked no later than 120 days after the Service Start Date OR 120 days after the date of the Funding Commitment Letter whichever is later. If the Form 486 is late, discounts will be reduced to reflect the submission date. 44

45. Universal Service Administrative Company Starting Services / 486 Both Form 486 Notification Letter (486NL) Cover page of important reminders Provides confirmation that a Form 486 has been successfully data entered. Reports Service Start Date or Adjusted Service Start Date USAC will accept invoices from applicants (Form 472 - BEAR) or service providers (Form 474) once the Form 486 is certified. 45

46. Universal Service Administrative Company Starting Services Both Obligation to Pay Non-discount Share Applicants are required to pay their share of the cost (the “non-discount” portion or share) — this share cannot be donated, forgiven or ignored. Service providers cannot waive or credit the applicant’s share. Offers to reduce price must be incorporated into the “total pre-discount amount.” Service provider must bill the applicant for non-discount share of services. 46

47. Universal Service Administrative Company Invoicing / 472 or 474 Both Billed Entity Applicant Reimbursement (BEAR) Form 472 is filed by the applicant and certified by the service provider after the applicant receives services and pays for the services in full. Service Provider Invoice (SPI) Form 474 is filed by the service provider when the bills to the applicant are directly discounted by the provider. 47

48. Universal Service Administrative Company Invoicing / 472 Applicant Do’s and Don’ts Form 472 (BEAR Form) DO verify that your service provider has signed the last page of the form before you submit it. DO check your calculations. Make sure you have service provider bills that agree with your reimbursement request. DO make sure you have paid your non- discount share. 48

49. Universal Service Administrative Company Invoicing / 472 Both Invoicing deadlines Form 472 (BEAR) must be filed online or postmarked no later than 120 days after the last date to receive service OR 120 days after the date of the 486 NL whichever is later. If using BEAR – do them quarterly. If the invoice is late, payment will be denied. Extensions of invoicing deadlines may be requested under certain conditions. 49

50. Universal Service Administrative Company Invoicing / 472 BEAR Notification Letter Cover page of important reminders Provides confirmation that a Form 472 has been successfully data entered. Indicates what amounts are being paid and reasons for reductions or denials. Invoice Status Report / E-notification Indicates what amounts are being paid and reasons for reductions or denials. Sent only to service providers. 50

51. Universal Service Administrative Company Invoicing / 472 Quarterly Disbursement Report Sent only to applicants Authorized person Billed Entity (BEN) address. Contains all invoice (Form 472 and Form 474) payment authorization amounts for the Billed Entity for all funding years approved during that quarter. 51

52. Universal Service Administrative Company Appeals USAC decisions can be appealed to USAC and to the FCC. Applicants MUST appeal first to USAC. Can appeal to the FCC if USAC does not grant the appeal. Can be filed electronically or on paper. Must be filed electronically or postmarked within 60 days of the USAC decision. Requests for waivers of rules must be filed with the FCC. 52

53. Universal Service Administrative Company General Tips If you submit something to USAC: Check your work Sign and date it (online or on paper) Submit it by the deadline Keep a copy and proof of submission If USAC sends something to you: Read it Take all appropriate actions Save it for AT LEAST FIVE YEARS. 53

54. Universal Service Administrative Company Assistance Schools and Libraries / USAC web site http://www.universalservice.org/sl/ Client Service Bureau Use the “Submit a Question” link on the web site Fax toll-free at 1-888-276-8736 Telephone toll-free at 1-888-203-8100 Form instructions 54

55. Universal Service Administrative Company Assistance (continued) Mary Mehsikomer, Minnesota State E- Rate Liaison (651) 582-8827 mary.mehsikomer@state.mn.us