Requests Increased over 10 percent from FY2010; Highest Amount Requested since 2002

Edmond, Okla. (May 2, 2011)
The Schools and Libraries Program of the Universal Service Fund, commonly known as E-rate, received the highest requested amount since 2002. The $4.3 billion in requests for Funding Year 2011 is a 10 percent increase from 2010, according to analysis from Funds For Learning, the nation’s leading E-rate compliance services firm.

This increase comes on the heels of a year wrought with substantial changes to the E-rate program, highlighted with the FCC Sixth Report and Order. Major program changes included new applicant forms, changes in eligibility to certain internal connections and basic maintenance requests, and indexing the funding cap to inflation.

Even with the increase to the funding cap, the increase of requests will have many applicants concerned about their probability of receiving funding for Priority Two (Internal Connections and Basic Maintenance) requests. Of the $4.3 billion requested, over $2.1 billion is for Priority One (Telecommunications and Internet Access) services. If fully committed and utilized, the Priority One requests could drain the majority of available funds before any applicants could receive commitments for Priority Two services.

But according to Cathy Cruzan, President of Funds For Learning, this scenario seems highly unlikely. “There is usually a significant discrepancy between what applicants request, and what is actually committed,” Cruzan said. “This should allow USAC to fund all Priority One requests and leave funds available for Priority Two consideration. However, due to amount requested, it is likely that the discount threshold for Priority Two requests will remain in the 90 to 88 percent range.”

Every year, each application is submitted to an extensive review before any funding commitments are made. If any compliance issues are discovered during this initial review, USAC may adjust or deny the requests and apply the adjusted amount to other requests in that funding year. Since Funding Year 2007, an average of $147.5 million has been denied each year for Priority One services, in addition to an average $185 million for Priority Two applications.

Funding Year 2011 will also see some additional rollover funds to assist with the demand. On April 26, 2011, the SLD announced that they have approximately $600 million from previous years that the FCC can rollover for Funding Year 2011. This roll over, coupled with the funds that will become available during the application review process, frees up nearly $1 billion and increases the likelihood that applicants at the 90 percent level would be fully supported, and that the threshold could conceivably drop slightly below the 90 percent level.

Even with the prospect of additional funds becoming available in Funding Year 2011, schools must often consider the best way to apply for Priority Two funding.

“Priority Two requests are never guarantees, but there are ways to increase the probability of applicants receiving funding for their requests,” said Verlyne Jolley, Compliance and Regulatory Manager with Funds For Learning. “Requesting E-rate discounts for Priority Two services is more than simply filling out and submitting a form…it requires a great deal of foresight, situational awareness of the program as a whole, and strategy from the applicant level.”

Since 1998, Funds For Learning has prepared over 9,000 funding requests, for over $950 million.

For more information about Funds For Learning, visit www.fundsforlearning.com.

About Funds For Learning
Funds For Learning, LLC, is an E-rate compliance firm specializing in guiding E-rate applicants and service providers through the complex and ever-changing E-rate regulatory process. With more than 10 years of experience in providing professional advice and assistance relating to the E-rate program, Funds For Learning exists to provide high-quality solutions for the needs of E-rate stakeholders. The company was established in 1997 and is headquartered in Edmond, Okla. For more information www.fundsforlearning.com, or phone 405-341-4140.

Media Contacts
• Cathy Cruzan, Funds For Learning, LLC, 405-471-0900, ccruzan@fundsforlearning.com

• Emily Embury, C. Blohm & Associates, 608-839-9800, emily@cblohm.com

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