Feds issue new eRate funding guidelines

Virtual private network (VPN) components and voice-mail equipment are among the products and services now eligible for support under the eRate, the $2.25 billion-a-year federal program that provides discounts of up to 90 percent of the cost of telecommunications services, internet access, and internal connections to eligible schools and libraries. Schools and libraries can start applying for 2006 eRate discounts on Tuesday, Dec. 6.


In the Dec. 2 story, “Feds issue new eRate funding guidelines,” eSchool News reported that Virtual Private Network components would be eligible for eRate discounts in 2006, but we failed to specify that FCC rules require that these networks be funded as telecommunications services and not as internet access. The SLD recommends that applicants review program rules before applying for discounts.

Also, if you’re applying for discounts to support the use of portable wireless devices in schools, SLD officials note that eRate funds can be used to provide wireless internet access for portable devices only where an applicant has a system in place to ensure that the equipment is accessed for an eligible purpose, by an eligible user, and from an eligible location.

Once the filing window opens, schools will have exactly 73 days to submit their Form 471 applications, which spell out how each applicant intends to spend eRate dollars. The filing window closes at 11:59 p.m. Eastern Standard Time on Thursday, Feb. 16.

School districts looking to install VPNs as a means of fortifying their networks and increasing communications from one building to the next now can apply for discounts through the eRate. VPN components, which had been ineligible in previous years, were among the products added to the 2006 Eligible Services List released by the Federal Communications Commission (FCC) on Nov. 22.

The release of the 2006 Eligible Services List comes as eRate applicants nationwide have criticized the FCC’s interpretation of the rules, calling its guidelines ambiguous and asking for more clarification about what is eligible under the program.

“It’s critical for any eRate applicant to review the Eligible Services List carefully each year,” said Scott Weston, director of information services for eRate consulting firm Funds for Learning LLC. Even if you’ve applied for eRate funds in the past, he said, there is no guarantee that a service that was previously eligible will remain eligible in future years. The key, as with any type of federal grant, is to understand the rules before submitting your application.

For 2006, the FCC–along with the Schools and Libraries Division (SLD) of the Universal Service Administrative Co., the private firm that administers the program on behalf of the federal government–has made several modifications that educators and other eRate applicants should pay close attention to as they prepare their applications.

In terms of additions, the only major change to this year’s list concerns the inclusion of components for building VPNs. These are private telecommunications networks that are used connect remote sites–in this case, users among different school buildings. FCC rules require that these networks be funded in conjunction with telecommunications services instead of internet access. With most VPNs, the idea is to create a secure connection that allows users within a particular organization, such as a school district, to exchange information more efficiently and with a higher degree of security. VPNs use encryption and other security mechanisms to ensure that only authorized users can access the network and that the data cannot be intercepted.

For the first time in the program’s history, the FCC said it will allow applicants to apply for eRate discounts on equipment used to help establish these networks in schools. But there’s a catch. The components are only eligible if the applicant can “provide basic and reasonable security protections to prevent unauthorized access to the information, software, and systems of & eligible components.”

But beware. As Funds for Learning’s Weston pointed out, the rules state that VPN components are eligible only under the stipulation that schools use them to extend the reach of a school’s VPN network from one building to the next. They are not, for example, to be used to connect students to the internet from home, he said, adding that “schools could very easily get tripped up on this.”

Other modifications to the 2006 Eligible Services List include a new line item for voice-mail equipment. Though voice mail was conditionally eligible in the past, 2006 marks the first year such services are eligible outright as internal connections.

Modifications to the list also were made to cover the purchase of on-premise wireless wide-area network components and internet connectivity for handheld wireless devices. According to 2006 rules, eRate funds can be used to provide wireless internet access for portable devices as long as the applicant has an audit system in place to ensure that the equipment is accessed for an eligible purpose, by an eligible user, and from an eligible location. Applicants then must apply for discounts accordingly.

Clarifications also were provided this year with regard to the purchase of terminal servers. These servers, which traditionally are used to connect computers and other standalone devices to a school’s local-area network, are eligible as long as the servers to which the discounts are being applied are used to provide internet access to computers or terminals that otherwise would not have internet access at the performance level desired. However, they are not eligible if used to store and provide access to software applications, according to rules posted on the SLD web site.

The FCC said the new rules are intended to promote “greater transparency” with regard to what is and is not permitted under the program.

Though SLD officials refused to elaborate on reasons for the changes, they said they’re looking forward to accepting applications from schools.

“We’re happy that the process is under way,” said SLD spokeswoman Tanya Sullivan. “Now schools can begin applying for funds.”


Federal Communications Commission

Schools and Libraries Division

2006 Eligible Services List

Funds for Learning LLC

eSchool News Staff

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