Your ticket to big savings with the eRate discount

Say your schools are spending $300,000 a year on telecommunications services. Thanks to the new eRate discount that went into effect Jan. 1, you’ll stand to save anywhere from $60,000 to $270,000 in 1998.

You will, that is, provided you jump through the right set of hoops by the proper deadline.

Saving more than a quarter of a million dollars a year would be terrific, but it certainly won’t be easy. The process by which your schools can qualify for the eRate is complicated and uncertain. But not to worry, eSchool News is going to tell you everything you need to know to lock up those huge savings…in a minute.

First, the basics:

What is the eRate discount?

The eRate—short for education rate—is an extension of the Federal Communications Commission’s (FCC) universal service discounts to include elementary and secondary schools and public libraries as mandated by the Telecommunications Act of 1996.

Designed to encourage the implementation and use of educational technologies such as the internet, the eRate will create a total savings to schools and libraries estimated at $2.25 billion per year.

But to reap those benefits, you need to apply for the discount through the Schools and Libraries Corporation (SLC), a nonprofit organization created to administer the eRate. And you must act soon. There is a 75-day filing window, after which money will only be available on a first-come, first-served basis.

Who is eligible for the discount?

Your schools and any others—public or private—are eligible if they: (1) meet the definition of an elementary or secondary school as found in the Elementary and Secondary Education Act of 1965, (2) are nonprofit, and (3) do not have an endowment exceeding $50 million.

What is covered by the discount?

In issuing its ruling, the FCC was deliberately vague as to what exactly would be discounted. The FCC’s intent was to avoid locking schools into any one type of technology and communications system, thus providing as much flexibility to individual schools as possible.

Services that will be covered include the installation, maintenance, and operating costs of all commercially available telecommunications systems, internet access (including communications links to internet service providers and eMail), and internal connections (including routers, hubs, network file servers, and wireless local area networks).

Services and products that will not be covered include teacher and employee training, voice mail, fax machines, modems, electrical upgrades, and computers and software. (One exception to that exclusion is for computers used solely as switches or file servers and for the software necessary to operate file servers.)

How much money can you save?

The eRate discounts will range from 20 to 90 percent on the costs of covered services. Officials estimate the average school saving will be 60 percent. They say about one-third of all schools will save between 80 and 90 percent.

Discount rates are based on two factors: a school’s perceived level of economic need and whether it’s in a rural area.

Schools coping with greater economic disadvantages—as measured by the percentage of students eligible for reduced-price lunches—receive higher discounts. Because schools in rural areas generally pay more for telecommunications services, these schools receive slightly higher discount rates as well. The total amount your school might save can be calculated using the accompanying chart.

To find out whether your schools are considered rural for the purposes of the eRate, check the eRate information page on the American Association of School Administrators (AASA) web site.

How to apply for the discount

To apply, you must submit three separate forms to the SLC in a specific order.

The first, Form 470, describes the services eligible for discount that you intend to purchase.

The second, Form 471, details the services you have signed a contract for.

The third, Form 486, confirms that contracted services have begun and that your technology plan has been approved.

The SLC has established a one-time, 75-day “filing window” so that all applications filed within those 75 days are treated as if they arrived on the same day.

Applications will be accepted after this filing window closes, but they’ll be processed on a first-come, first-served basis. So you should start gathering materials for the application forms as soon as possible. Even so, SLC Chief Executive Officer Ira Fishman stresses that applications do not need to be rushed in right at the beginning of the filing window. It’s much more important, he says, that they be filled out properly.

The SLC began accepting applications on Jan. 30. That’s the same date the filing window opened. You can apply via eMail or online—the application forms are available on the SLC web site.

Here’s a closer look at the forms you need to file:

Form 470, the “Description of Services Requested and Certification Form,” must be filed first. It will be posted on the SLC web site for 28 days for service providers to scan. This is intended to ensure that your schools receive the most competitive price for service in your area, as mandated by the FCC.

Form 471, the “Services Ordered and Certification Form,” may be filed any time after the 28-day web posting period for Form 470—but only after you have contracted with a service provider.

Both Forms 470 and 471 must be filed within the 75-day filing window for you to be considered among this first group of applicants—so, if possible, you should file the first form by mid-March.

If you’re applying for a discount only on current services already under contract, you still need to file Form 470, but then you don’t have to wait the 28 days before filing Form 471.

Currently contracted services are eligible for discounts, too, but if they were established after Nov. 6, 1996, they might have to meet the FCC’s competitive-bidding requirements. Information about how such contracts will be treated should be posted on the SLC web site.

Shortly after the 75-day filing window closes in April, the SLC will begin approving contracts and notifying applicants. Approved discounts will be retroactive to Jan. 1 for existing contracts or to the start date of new contracts, whichever comes later.

Until the SLC completes its review of your application, Fishman stresses, you can’t count on any specific discount. Write approval contingencies into contracts for new services, Fishman recommends. That way you’ll avoid costly surprises.

What you need to know to apply

First, you’ll need the code assigned each of your schools by the National Center for Education Statistics (NCES). You can get the codes on the AASA web site or at the NCES site.

Second, you’ll need to know your total number of students and the percentage of your students eligible for reduced-price lunches. You’ll keep those statistics together with the information you previously gathered on whether each school is consider rural.

Third, you’ll have to take inventory of your current technologies, including the number of phone lines, computers, dial-up and direct connections and speeds, and the capacity of your electrical system. You’ll have to assess your technology needs and prepare a budget (figured at pre-discount cost) for meeting those needs.

Finally, you’ll need a plan for using technology to improve the way your schools teach and how you communicate with parents and other stakeholders.

Your plan should include how you intend to train your teachers and other staff. It will have to be approved by your state education department or another FCC- or SLC-approved agency. You’d do well to contact your state education department for guidance.

Where to look for more help

The SLC has a toll-free number (888.203.8100) to answer questions. You can also find information on the SLC and FCC web sites and the U.S. Department of Education’s technology page.

On March 26, 1998, from 1-2:30 p.m. ET, PBS will air a live, interactive videoconference titled “E-Rate: The Implementation.”

Panelists will include an SLC official, school administrators who have just been through the process, and other experts on the effective implementation of educational technology. For information on licensing downlinks for this broadcast or finding a licensed viewing site, call PBS Customer Service at 800.257.2578.

Other resources include the National Exchange Carrier Association (NECA), the Consortium for School Networking (CoSN), the Education and Libraries Network Coalition (EdLiNC), your state education department, and regional education networks and consortia.

Schools and Libraries Corporation

Federal Communications Commission

U.S. Department of Education technology page

American Association of School Administrators

National Center for Education Statistics

National Exchange Carrier Association

Consortium for School Networking

Education and Libraries Network Coalition

eSchool News Staff

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