eRate applicants face important changes with this year’s program

Nearly $2.3 billion is available this year to help schools and libraries acquire telecommunications services and internet infrastructure.

As schools get ready to apply for federal eRate discounts for the 2012 funding year, applicants and service providers will notice some new changes to the nearly $2.3 billion-a-year program that helps schools and libraries acquire telecommunications services and internet infrastructure.

The two biggest changes to the program are new gift enforcement rules and updates to the Children’s Internet Protection Act (CIPA).

New gift rules have been “the most talked-about” changes, said Mel Blackwell, vice president of the Schools and Libraries Division of the Universal Service Administrative Co. (USAC), which administrates the eRate under the direction of the Federal Communications Commission.

The new rules are intended to prevent service providers from currying favor or influencing the bidding process by bestowing gifts on school employees. They come in response to controversies that have played out in districts such as Houston and Dallas, which have landed in hot water with the U.S. Justice Department for accepting gifts that violate federal competitive-bidding requirements.

For more eRate guidance, see also:

How to make sense of the new eRate gift rules

Five tips for eRate success

Blackwell said focusing on four key points can help service providers and eRate applicants alike navigate the new gift rules:

1. Gifts cannot be used in any way that would influence the eRate bidding process. “That’s the broad, general, underlying principle,” Blackwell said. “If you think anything you’re doing could be interpreted as—or is, in fact—influencing the bidding process, then you shouldn’t do it.”

2. The order is not intended to discourage charitable gifts. “It’s not saying you can’t give [or receive] charitable gifts—there’s no problem with that, as long as you’re not giving them as a direct result of trying to get business,” Blackwell said. An acceptable example is donating books to benefit an entire school or library, as long as the action is of a broad nature, does not target a single individual or group of decision makers, and is not intended to influence the bidding process or steer business toward the gift giver.

3. The gift rules apply year-round, not just during the school year or the eRate application process.

4. The new rules put a $20 limit on all gifts to individuals, including meals—and a $50 annual limit on all gifts per person. That means a school or district technology director couldn’t accept a free meal that costs $25, for example—or a third $20 meal in a single year from the same service provider.

Both applicants and service providers are responsible for keeping careful records about their gift giving and receiving during the year, and they should be prepared to hand over these records in the event of an audit.

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Laura Ascione

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