What you should know about the 2011 e-Rate program


e-Rate applicants should pay equal care to program changes as well as what has remained the same.
e-Rate applicants should pay equal care to program changes as well as what has remained the same.

It’s in with the new … and in with the old as well: To fully leverage 2011 e-Rate funding in boosting broadband access, it’s important to understand the latest changes to the program (and there are many)—but don’t overlook the things that didn’t change, too.

The more things change…

The regulatory adoptions and clarifications highlighted in the Federal Communications Commission’s Sixth Report and Order align with the agency’s desire to streamline the application process, further protect against waste, fraud, and abuse, and codify the rule regarding gifting—as well as articulate the community usage of e-Rate funded resources.

Streamlining the application process

Technology plans: Before the new rules were released, school and libraries that wanted to apply for e-Rate support had to develop a technology plan that covered five required elements, including the applicant’s technology goals, strategy, and a budget necessary to meet these goals. Applicants had to submit their technology plans to an agency certified by the Universal Service Administrative Co. (USAC) for approval.

To further the FCC’s goal of streamlining the application process, the new rules eliminate this requirement for schools and libraries applying for discounts only on Priority One services (telecommunications services and internet access). This change will streamline the process for many smaller applicants who only request reimbursement on phone and internet charges.

While the technology plan requirement has been eliminated for Priority One services, you’ll still need to create and submit a technology plan to receive e-Rate discounts on Priority Two services (the wiring, switches, file servers, and other equipment needed to bring internet access into classrooms). However, if you’re seeking discounts on Priority Two services, you’ll only need to include four of the five elements in your technology plan: You no longer have to include the budget portion that was required before.

Applications: The two primary application forms, the Form 470 for procurement and the Form 471 for requesting discounts, both have undergone stylistic and substantive changes. The new forms should be available before the Funding Year 2011 filing window opens, but you can use the old Form 470 until that time. However, if you file the old version of the Form 470 on paper, the certification pages must be postmarked before the revised Form 470 becomes available on USAC’s web site. Otherwise, the agency will honor the postmarked date on the form, but you’ll have to resubmit the form using the revised version.

Protecting against waste, fraud, and abuse

Rules on gifts: Applicants now will be subject to federal law regarding gifts from vendors, and any breach of this regulation will be considered a competitive-bidding violation. Service providers may offer gifts if the total value of each individual gift is less than $20 and the total value of all gifts does not to exceed $50 per funding year, per school or library employee. Modest refreshments not offered as a part of a meal, or items with little to no intrinsic value (such as plaques or certificates), are permissible.

Articulation of community use

With its Sixth Report and Order, the FCC is letting applicants open up e-Rate funded services to the community for after-hours use, as long as this does not interfere with educational purposes. This will allow community members to have broadband access at school and library sites in their area, furthering the FCC’s goal of providing broadband access to all Americans.

The use of broadband access under the community-use exception is for on-premises use only at this time. Applicants cannot charge the community for use of their network for after-hours connectivity, but the new rules do not restrict an applicant from following local use policies that might include a fee for use of a facility after normal operating hours.

Wireless off-premises pilot: The FCC’s Wireline Competition Bureau will be administering a pilot program to measure the benefits and potential drawbacks of providing wireless off-premises broadband access by a school, school district, or library facility for use by the general public after school hours.

The FCC will release a Public Notice with further information and details about deadlines for this e-Rate Deployed Ubiquitously (EDU) 2011 Pilot Program, and participants must apply for e-Rate funds in the normal fashion.

New Eligible Services List

With its Sixth Report and Order, the FCC also approved a new Eligible Services List (ESL) for Funding Year 2011, with the biggest change being the return of dark fiber to the list. (Previously eligible, dark fiber was deemed ineligible from Funding Year 2004 to Funding Year 2010.) Dark fiber, which refers to the unused fiber-optic cables connecting school facilities, now may be leased with e-Rate discounts, including certain setup fees and ongoing monthly charges. In addition, the FCC opened the door for any e-Rate service provider, not just standard telecommunication carriers, to offer this service.

The new rules also addressed basic maintenance of internal connections. Basic maintenance reimbursements now will be made only for actual maintenance performed and approved hours used. This change will require further clarification from the FCC, but as you consider your Funding Year 2011 maintenance requests, you’ll need to make these estimates based on hours per year of maintenance, history of needed repairs, and the current life of eligible internal connections.

…The more they stay the same

While it’s important to understand these changes to the e-Rate program, it’s also necessary to remember the things that did not change this year. Many ideas that were considered or proposed did not end up happening in the Sixth Report and Order.

Technology planning

While the technology-planning requirements have been lifted for Priority One services, there are still instances where a technology plan will be required.

State requirements: The new rules do not supersede any state or local technology-planning requirements, so you’ll still need to follow these if you’re applying for discounts only on Priority One services.

Priority Two requests: If you plan on requesting reimbursements for internal connections, the following four required elements of a technology plan remain: (1) goals and a realistic strategy for using telecommunications and information technology; (2) a professional development strategy; (3) an assessment of telecommunication services, hardware, software, and other services needed; and (4) an ongoing evaluation process.

Form 470

After requesting feedback on the possible elimination of the Form 470, the FCC’s order revealed only modifications to the form. You’ll still be required to post a Form 470 seeking competitive bids and services for e-Rate discounts. You can file a Form 470 at any time during the year, and your form still must be posted on USAC’s web site for at least 28 days before you file a Form 471.

Discount matrix

e-Rate discounts depend on the level of poverty and the urban or rural status of the population you serve, and they range from 20 percent to 90 percent of the costs of eligible services. After speculation that there would be substantial changes to the existing discount matrix, the new rules did not reveal any changes to the current discount matrix. Urban and rural applicants will continue to calculate their discount rates at the same National School Lunch Program percentage levels as before.

Community use

The allowance of community use of e-Rate funded services will broaden the benefit of the program and help realize the goal of bringing broadband access to all Americans. However, these changes do not include services beyond those provided by the school, school district, or library facility after hours, such as wireless services to homes or the surrounding community.  Furthermore, the FCC’s order does not require applicants to participate in this rule change.

Web hosting

While the addition of dark fiber is recognized as the biggest change to the ESL, another important announcement was that web hosting remains an eligible service. Web hosting will continue to be eligible for e-Rate discounts in Funding Year 2011. In addition, the eligibility of web hosting has been expanded somewhat to include blogging, chat applications, and similar services. This was an important modification, as applicants have been turning to their web sites as their primary means for disseminating student‐specific and general information to parents and students.

The FCC’s Sixth Report and Order introduced many items that altered the current landscape of the e-Rate program. Keeping abreast of these changes is an important key to e-Rate success. However, it’s just as important to remember the things that didn’t change when preparing for Funding Year 2011.

Nicholas Shipley is a compliance analyst for e-Rate consulting firm Funds For Learning LLC.

Laura Ascione

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