E-Rate 101.

E-Rate 101

Program Overview Commonly Used Terms Discounts Categories of Service Eligible Services Applicant E-rate Process

Program Overview

Overview of E-rate Program
The Universal Service Schools and Libraries Program, commonly known as “E-rate,” helps ensure that schools and libraries can obtain telecommunications and Internet access at affordable rates. From USAC Schools & Libraries Website

Program Overview When it began… Who is eligible?
Congress directed the FCC to establish the E‐rate Program in Program Began January 1998. The FCC sets rules and policies through orders. USAC develops procedures for specific actions, such as how to process applications. K-12 schools and school districts. Non-traditional educational entities (differs by state). Libraries and Library systems. School and Library Consortia.

COMMONLY USED TERMS

Commonly Used Terms FCC- Federal Communications Commission an independent U.S. government agency, established and oversees the E-rate program. USAC- Universal Service Administrative Company, a not-for-profit, administers the E-rate program along with three other programs. SLD- Schools and Libraries Division is the part of USAC with responsibility for E-rate. Billed Entity- The entity that receives the bill and pays for the supported service. Applicant- The entity applying for universal service support (i.e., a school, library, consortium, or other eligible entity that files program forms. )

Commonly Used Terms FCC Form 470- competitive bidding form for services desired that are eligible for discounts under the E‐rate Program. FCC Form 471- the application process used for requesting services listed on Form 470. FCC Form 486- The Receipt of Service Confirmation Form. Filed letting you know when service will begin and will comply with CIPA requirements. Funding Commitment Decision Letter (FCDL)- Notification letter sent to applicant after PIA review is complete and the application has been “approved”.

Commonly Used Terms BEAR Form- Applicant filed form submitted to USAC for reimbursement (Applicant pays full cost of service and files BEAR for discounted share.) SPI Billing- Service Provider Invoicing method. Applicant pays only their non-discounted share and receives discount for the remainder of the cost of service. Block 1- Section of 471 that lists the Billed Entity, type of application, and contact information. Block 4- Worksheet used in the 471 application to determine discount; a complete list of schools in district. BEN- “Billed Entity Number”- the unique number assigned by USAC to each billed entity that pays for services and/or recipient of service.

Commonly Used Terms Non-Instructional Facility (NIF)- A school building without classrooms or a library building without public areas. Eligible only for Category One services; does not receive Category Two budget. Funding Request Number (FRN)- Unique number that USAC assigns to each funding request in a completed FCC Form (Three types: Internet Access, Telecommunications, Voice) Block 5- FRN Section of 471 application where the applicant provides details of services requested including service provider, contract information, category of service, and associated cost. Item-21- Provides detail of services requested, including type, purpose, amount/quantity, and, recipient of service monthly cost of service. *no longer a separate upload but integrated into the Block 5 section of the 471 application process.

DISCOUNTS

Example: School District with a 70% discount applies for a 1,000 mbps Internet Access at $82,000 total annual cost. 70% x $82,000 = $57,400 Customer would be “reimbursed” in the amount of $57,400 at funding year’s end (June 30th). *BEAR billing method E-rate applicants apply for discounts on their Internet Access, Voice, and Telecommunication services. Applicants pay only non-discounted portion.

Discounts Discounts are based on the percentage of students eligible for the National School Lunch Program (NSLP). Discounts are 20‐90 or percent of eligible costs, depending on category of service. Discount level for a school or library depends on: Level of economic need, Urban or rural designation of district where located Voice Services Phase Down All voice services continue to be subjected to a 20 percentage point reduction per year from the regular discount for the next four years.

Discounts Discount Calculation Example: School District (10 schools)
Total student population of all schools = 3,000 students Total students eligible for NSLP = 1,000 students 1,000 students eligible for NSLP/ 3,000 students = 33% eligible. 70% of district is rural; district receives rural discount rate.

Discounts

Discounts What is the Block 4?
The Block 4 section of the 471 application is where the applicant’s discount is calculated. What the Block 4 IS What the Block 4 IS NOT A complete list of ALL the eligible schools in a district, ALL libraries in your library system, and/or ALL members of a consortium. A recipient of service list.

Discounts Libraries and Library System
Libraries get their discount based on the percentage of students eligible for the NSLP in the school district in which the main outlet is located. No longer calculate discount based on all districts in which library system has outlets. Libraries calculate their own urban/rural status based on their own outlets. Therefore, the library system’s discount may not match the school district’s discount rate. Bookmobile and kiosks count as library outlets.

Discounts Consortia calculate their discount based on the simple average of their consortia members. All consortia members now are listed at their district-wide discount rate, even if only some schools in the district participate in the consortium. Only consortia entities can get a discount that doesn’t come straight from the discount matrix. All funding request numbers (FRN), regardless of the entities served, get the same consortia-wide discount rate.

Discounts Discount Mechanisms: National School Lunch Program (NSLP). Community Eligibility Program (CEP). Survey.

Discounts National School Lunch Program (NSLP) Discount Mechanisms
The national school lunch program determines students' eligibility for free or reduced-price lunches based on family income, A school may use either: An actual count of students eligible for the national school lunch program or; Federally-approved alternative mechanisms to determine the level of poverty for purposes of the universal service discount program.

2. Community Eligibility Provision (CEP)
Discounts 2. Community Eligibility Provision (CEP) Schools utilizing the CEP shall calculate their student eligibility for free or reduced priced lunches by multiplying the percentage of directly certified students by the CEP national multiplier. To compensate for low income families not reflected in the direct certification data, schools apply a standard, national multiplier, currently set at 1.6. If, during the four-year cycle, a school’s percentage of identified students increases, the school may use the higher percentage in determining USDA reimbursement. If the percentage of identified students decreases, the school may continue to use the original percentage for the remainder of the four-year eligibility period. Schools participating in the CEP will not be considered to have a greater than 100 percent A school is eligible for community eligibility if at least 40 percent of its students are “directly certified,” Schools are required to renew their direct certification numbers once every four years a school should multiply the percentage of directly certified students by the CEP national multiplier. This percentage should then be applied to the total number of students attending the school as their home school to determine the number of students eligible for NSLP for purposes of E-rate at that school location Each school that participates in CEP must determine on a school-by-school basis the number of students to be counted as eligible for NSLP for purposes of E-rate.

CATEGORIES OF SERVICE

Eligible Services Categories of Service
Category One: Services needed to support broadband connectivity to schools and libraries *Outside the demarcation point Telecom Internet Access Voice Category Two: Those needed for broadband connectivity within geographically contiguous schools and libraries *Inside the demarcation point Internal Connections MIBS Management of Internal Connections

Categories of Service Category One: - Internet Access
-Telecommunications - Voice - Fiber

Categories of Service Category Two: Internal Connections MIBS MIBC

Categories of Service Category Two Funds
One billion dollars per year set for FY 2016 – 2020 * No funding guaranteed after 2020. If Category Two demand exceeds available funds, prioritize based on discount rate. If there are insufficient funds in a single discount rate, prioritize based on the percentage of students that are eligible for free and reduced school lunches within each applicant’s school district. 4 year budget, not 5. One billion cap not reached in 2015

Categories of Service Each individual school and each library outlet or branch has a Category Two “budget”. $150 per student (school) or $1.30 per square foot (library). 5$ per square foot for large urban populations of 250,000+ (library). No budget for Non-instructional facilities (NIFs) – including school NIFs with classrooms and administrative buildings. Districts or library systems may not average their costs across multiple school or library budgets.

ELIGIBLE SERVICES

Data Transmission and Internet Access
Eligible Services Category One Data Transmission and Internet Access OC-1, OC-3, OC-12, OC-n Wireless Service (e.g. microwave) Satellite Services DS-1, DS-2, DS-3 Ethernet T-1, T-3, Fractional T-1 Leased Lit Fiber Leased Dark Fiber Including dark fiber indefeasible rights (IRU’s) for set term) Frame Relay SMDS Cable Modem DSL ATM Telephone Dialup Broadband over Power Lines Switched Multimegabit Data Service

Category Two: Internal Connections
Eligible Services Category Two: Internal Connections Access points Cabling Caching Firewalls Switches Routers Racks UPS Wireless LAN Controllers Support Software Improvements, upgrades and software necessary to support eligible broadband internal connections components Functionalities listed here that can be virtualized in the cloud, and equipment that combines eligible functionalities are also eligible.

Category Two Eligible Services
Managed Internal Broadband Services (MIBS) e.g. Managed Wi-Fi Basic Maintenance of Internal Connections (BMIC) Services provided by a third party for the operation, management, and/or monitoring of eligible broadband internal connections components. Basic maintenance of internal connections ensures the necessary and continued operation of eligible internal connection components at eligible locations.

Changes to ESL? Scenario:
Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus. Cat 1 or Cat 2?

Category One Changes to ESL? Scenario:
Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus. Cat 1 or Cat 2? Category One

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus but with a right away separating one of the schools? Cat 1 or Cat 2?

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus but with a right away separating one of the schools? Cat 1 or Cat 2? Category One

Changes to ESL? Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Same school but NIF is located three miles off campus? Cat 1 or Cat 2?

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Same school but NIF is located three miles off campus? Cat 1 or Cat 2? Category One

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Single school with three separate NIFs? Cat 1 or Cat 2?

Changes to ESL? Scenario: Category Two
Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Single school with three separate NIFs? Cat 1 or Cat 2? Category Two

Changes to ESL? Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Single school with three NIFs across a right away? Cat 1 or Cat 2?

Changes to ESL? Category Two
Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Single school with three NIFs across a right away? Cat 1 or Cat 2? Category Two

APPLICANT E-RATE PROCESS

Applicant E-rate Process
Competitive Bidding (Form 470) Selecting Service Providers Applying for Discounts (Form 471) Application Review Starting Services (Form 486) Invoicing (Form 472 or 474) Note: For Department of Management Services (DMS) billed SUNCOM users the E-rate Team will file and certify FCC Forms 471, 486, 500, and relevant invoicing forms.

(Competitive bidding)
The E-rate Year Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FCC Form 470 (Competitive bidding) July 2016 – June 2017 Risks: May not get funded, provider may not offer discounted billing, FCC states if you start the process before receiving FCDL “you’re on your own”. 486: if funded, file 486 and submit BEAR as soon as you receive the NL.

The E-rate Year Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FCC Form 470 (Competitive bidding) FCC Form 471 (Application) July 2016 – June 2017 Risks: May not get funded, provider may not offer discounted billing, FCC states if you start the process before receiving FCDL “you’re on your own”. 486: if funded, file 486 and submit BEAR as soon as you receive the NL.

The E-rate Year Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FCC Form 470 (Competitive bidding) PIA Review FCC Form 471 (Application) July 2016 – June 2017 Risks: May not get funded, provider may not offer discounted billing, FCC states if you start the process before receiving FCDL “you’re on your own”. 486: if funded, file 486 and submit BEAR as soon as you receive the NL.

The E-rate Year Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FCC Form 470 (Competitive bidding) PIA Review FCC Form 471 (Application) July 2016 – June 2017 Invoicing Risks: May not get funded, provider may not offer discounted billing, FCC states if you start the process before receiving FCDL “you’re on your own”. 486: if funded, file 486 and submit BEAR as soon as you receive the NL.

Planning Your E-rate Year
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FCC Form 470 (Competitive bidding) PIA Review FCC Form 471 (Application) July 2016 – June 2017 Invoicing Category Two installation can begin. Fiber special construction can begin.

Applicant E-rate Process
Invoicing Methods Form 472: Billed Entity Applicant Reimbursement (BEAR) Filed by applicant for discounted portion after services have been paid in full. Applicants must file form 498 for direct payment. Form 474: Service Provider Invoice (SPI) Filed by service provider after the applicant has been billed for the non‐discounted portion of eligible services. * Invoicing method offered depends on contract with service provider.

Data Transmission and Internet Access
Changes to ESL? Category One Data Transmission and Internet Access OC-1, OC-3, OC-12, OC-n Wireless Service (e.g. microwave) Satellite Services DS-1, DS-2, DS-3 Ethernet T-1, T-3, Fractional T-1 Leased Lit Fiber Leased Dark Fiber Including dark fiber indefeasible rights (IRU’s) for set term) Frame Relay SMDS Cable Modem DSL ATM Telephone Dialup Broadband over Power Lines Switched Multimegabit Data Service

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus. Cat 1 or Cat 2?

Provided explanation on when a connection is eligible for Category One or Category Two (Internal Connections) funding. Scenario: Different schools on the same campus. Cat 1 or Cat 2? Category One