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eSN Special Report: 2014 eRate Survival Guide

eRate-ESG

Applying for eRate discounts on IT infrastructure isn’t easy. Here’s what you should know for 2014.

Uncertainty. That’s the key theme as school officials prepare to apply for the next cycle of eRate funding.

In one of the most comprehensive evaluations of the eRate since its inception in 1997, the Federal Communications Commission (FCC) earlier this year issued a rulemaking process to overhaul the $2.3 billion-a-year federal school wiring program from top to bottom.

The move came in response to President Obama’s ConnectED [1] initiative, a call to bring broadband internet access to 99 percent of classrooms within the next five years. Even the eRate’s strongest supporters agree that the program—designed in an era when dial-up internet access was the norm—is ill-equipped to deliver on this promise as presently constructed.

This past year, schools requested approximately $5 billion in eRate funding—nearly twice the program’s capacity.

More than 52 million students in 113,000 individual school buildings rely on the eRate for internet connectivity. Without new regulations, 47 percent of schools will have no eRate support in 2014, and by 2015, there would be no support for 71 percent of schools, according to estimates from eRate consultant Funds for Learning (FFL).

Yet, despite a widely recognized need for change, it appears that any adjustments to the eRate for the 2014 program year will be minor at best.

(Next page: What experts suggest for eRate applicants; Download a PDF of this report)

Click here to download a PDF of this eSN Special Report.

While eRate applicants ponder what changes actually will take hold, the eRate remains “status quo, for now,” said FFL’s chief executive, John Harrington. All signs point to only modest alterations, if any, for the coming year—with more radical changes possibly on tap for the 2015 program year.

Why do experts believe that major eRate changes will be put off for at least another year? One reason is timing. The government shutdown in October delayed the FCC’s review of public comments reacting to its proposed changes by at least a few weeks. Even without this delay, the new rulemaking process kicked off rather late in the game to make any significant impact for 2014.

The FCC’s release of an updated Eligible Services List (ESL) in late October gave further credence to the idea that 2014 will be largely business as usual. The revised ESL makes only minor changes to eRate-eligible services, such as clarifications on lit and dark fiber and web hosting services.

During the public comment period, many eRate stakeholders requested a funding increase to $5 billion, which Harrington said is “unlikely” for the coming program year—although a more modest increase is probable.

One of the changes being considered by the FCC involves eliminating the distinction between Priority One services (telecommunications services and internet access) and Priority Two services (internal connections). Because this change is not likely for 2014, it appears there will be little funding left for internal connections—the wiring, routers, switches, and file servers needed to bring internet access into classrooms—again this year.

“We know the FCC wants to move away from the status quo with all the changes being discussed,” Harrington said. “But, because no one knows with certainty when those changes will be implemented or what [they] will look like, the best likelihood of getting funding is to focus on Priority One services” in 2014.

Harrington called the uncertainty surrounding this year’s eRate “a really challenging situation.” “Schools are trying to get technologies deployed and get their classrooms connected, and in many cases their budgets are on life support,” he said. “There’s pressure to get newer, faster connections, and at the same time do so with small, shrinking budgets. Schools are looking to the eRate for help, but they don’t even know what the eRate is going to be able to provide.”

If school leaders were planning IT infrastructure projects for 2014 regardless of eRate funding, they should go ahead and apply for Priority Two discounts on these projects, Harrington said, in case the FCC ends up increasing the amount of funding available for 2014 significantly.

To be in the best position to obtain eRate discounts this year, however, school leaders “should consider shifting more costs to hosted or managed services that qualify as Priority One eligible,” he said.

That’s what the Durand Community Unit School District 322 in Illinois did when it applied for eRate assistance to help fund a modern voice-over-IP system at its Dolan Education Center last year.

The district qualifies for an 80-percent discount under eRate rules. While that’s a significant discount on eRate-eligible services, it wasn’t enough to guarantee funding for internal connections.

However, by choosing Mitel’s MiCloud for Education [2]—a software-based, hosted platform that centralizes all communications over a single IP network—Durand was able to subsidize 80 percent of the system’s cost as a P1 service (everything but the telephone handsets, which are not eRate-eligible).

The eRate can be “a very cumbersome process to navigate,” said Bill Damon, the district’s business director.

School districts often experience high turnover with their eRate coordinators, or leave eRate applications to already-burdened technology directors—and Damon said finding a reliable eRate consultant can relieve the pressure on technology staff and help the application process run as smoothly as possible.

Applicants should take advantage of eRate assistance wherever they can get it, he added.

“Our general office of education has offered workshops to help people work on the applications and talk about the process, so someone who is new to the process could reach out to a regional office for more [guidance],” Damon said. “[Applicants] also could reach out to other people, such as a network of technology directors, who are involved in the eRate process.”