News

How to prepare for eRate funding year 2014

By John Harrington
December 10th, 2013

Here are several strategies to help you get the most out of the new eRate funding year

funding

At this point, the name of the game is agility, Harrington says.

With eRate reform on the horizon, the stallion of change is still galloping from a considerable distance. That being said, for funding year 2014 you should prepare for things to stay the same—while also preparing for them to change.

Same program, different funding year … for now

With the release of the 2014 Eligible Services List on Oct. 22, the same goods and services as the previous funding year generally continue to qualify for funding. Minor modifications include updated eligibility criteria for lit and dark fiber services, as well as eMail services. One notable change, though, is the new language outlining web hosting eligibility. Now, communications features that are eligible for eRate support as part of a web hosting package are not permitted for funding as stand-alone services. Additionally, applicants are not allowed to request eRate funding for web hosting services from multiple providers. Rather, schools and libraries are limited to seeking support for a single provider for web hosting.

Funding forecast for 2014

The rollover catchall is a pattern that is not unfamiliar to eRate applicants. Earlier this year, the Federal Communications Commission announced that $450 million from prior funding years would be used to help cover all eligible Priority One funding requests in funding year 2013. Before the rollover, funding requests for 2013 exceeded the FCC’s funding cap by approximately $350 million and would not have been funded regardless of eligibility.

The goal of increasing the $2.3 billion-a-year budget cap probably will not be realized by funding year 2014. While the lion’s share of eRate stakeholders are pushing for a budget increase to $5 billion or more, it is more realistic to expect a modest increase in funding from rollover funds generated from previous funding years and inflation adjustment. The forecast for funding year 2014 likely will continue to follow the pattern of the most recent funding years, with Priority One goods and services taking—well—priority, leaving all other requests for support lacking funds.

Navigating Priority Two funding—or lack thereof

Funding year 2014 will not see a change to the current “priority” system. While Priority One services will still be eligible for eRate assistance, the present system leaves little to no financial support for internal connections. The Schools and Libraries Division of the Universal Service Administrative Co., the agency that administers the eRate, has recommended the denial of 2013 Priority Two applications at the 89-percent discount threshold or below.

Without a change to the priority system, this model will remain for funding years to come. So, what should you do about this?