In the September 2004 edition of eSchool News, a series of articles was published under the caption, “eSN Special Report: IP Telephony.” In that series, an article entitled “IP telephony and eRate funding” made specific representations regarding eRate eligibility of IP telephony services. This guidance has recently been updated and clarified with the October 5, 2004 release of the FCC’s most recent Eligible Services List. In that list, the following is now listed as being “Not Eligible” for eRate funding as a Priority One service:

“Voice over IP (VoIP), IP telephony, and related service offerings all employ a technology to transmit voice conversations over a data network using the Internet Protocol. Similar Internet protocols can be used to provide video services.”

Thus, IP Telephony as a Priority One service is now expressly not eligible for eRate funding, and that represents a reversal of what was said in the article. Voice over IP equipment (not a service) remains eligible for eRate funding as Priority Two “Internal Connections” when there is an outright purchase of the equipment.

It is important to note that this new Eligible Services List does not, however, alter the eligibility of Wide Area Networks and Digital Transmission Services, which remain eligible for eRate funding as Priority One services. A Wide Area Network is defined in the new Eligible Services List as:

“A wide area network is a voice, data, and/or video network that provides connections from within an eligible school or library to other locations beyond the school or library.”

Digital Transmission Services are defined in that list as:

“Leased data circuits for voice, video, and/or data that connect an eligible school or library facility to other locations beyond the school or library, including an Internet Service Provider, are eligible for discount.”

Trillion Partners, Inc., a sponsor of the report in question, has conferred with the entity responsible for issuing eRate funds, the Schools and Libraries Division of the Universal Service Administrative Co., to confirm the accuracy of this information. Trillion has an uncompromising approach to compliance with FCC and eRate regulations, and always wants to keep its customers informed as these regulations evolve. We appreciate that eSchool News has been a strong partner with school districts in keeping them informed on the latest developments on issues that affect them, including news affecting their access to eRate funds.

Scott Smyth
Vice President, Legal and Regulatory
Trillion Partners, Inc.

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