You already know that E-rate provides discounts on services and products that enable classrooms and libraries to receive
voice, video, and data communications. The amount of the discount depends on the school’s location and level of poverty,
but it ranges from 20 percent to 90 percent.
To be eligible to receive discounts, a school or library must meet certain criteria. In general, a school is eligible to
receive a discount as long as it doesn’t operate as a for-profit entity or possess more than $50 million in endowments.
Now, while the basic structure of E-rate has remained the same, the FCC Sixth Report and Order brought some major
changes to the program. Other FCC orders involving CIPA compliance and service-provider gifts have caused confusion.
SchoolCIO spoke with John Harrington, chief executive officer of Funds for Learning (www.fundsforlearning.com), the
E-rate compliance firm specializing in guiding applicants and service providers through the ever-changing E-rate regulatory
process, to gain insight into the latest iteration.
1. CIPA compliance
On August 12, 2011, the FCC issued an
order based on the Protecting Children
in the 21st Century Act, which updates
the Children’s Internet Protection Act
(CIPA). The order will become effective
on July 1, 2012. The additional requirements
it contains focus on educating
minors about appropriate online behavior,
including interacting with other individuals
on social-networking web sites
and in chat rooms, as well as awareness
of, and response to, cyberbullying.
Applicants now must follow either their
own state and local laws regarding gifting
or the FCC rules, whichever are
stricter. Applicants and/or other school
personnel are prohibited from soliciting
and/or receiving gifts or anything of
value from a service provider that is participating
in or seeking to participate in
the E-rate program. Additionally, service
providers may not offer or provide gifts
to anyone involved in the E-rate process. Modest refreshments not offered
as a part of a meal and items with little
to no intrinsic value, such as plaques and
certificates, are acceptable. An exception
to this rule is that gifts and/or meals
are permissible if the total value of the
gifts and/or meals is less than $20 and
the total of gift/meals received do not
exceed $50 per employee from any one
source per calendar year.
3. Expanding eligibility
The rule mandating that requested services
be used solely for educational
purposes was overturned permanently.
The new rule states that services will
be used primarily for educational purposes.
The following conditions apply
to schools that wish to open their doors
after hours for the community’s use:
Schools may not request funding
for more services than are necessary to
serve the student population.
The public can gain access to services
only when school is not in session:
after school hours, on weekends
and holidays, and during summer vacation.
Schools will determine whether
community access is allowed. (A box
will appear on Form 471 for entities to
check to indicate that they took advantage
of the rule change.)
Schools may not charge for the use
of services that are subject to a universal
service discount. Fees may be assessed
for additional electricity, security, heating,
and equipment not covered by E-rate.
4. Indexing the funding
cap to inflation
The FCC will use the gross domestic
product chain-type price index
(gDP-CPI) to adjust for inflation the
amount of funds available annually to
E-rate program participants. In practical
terms, the cap for FY 2010 would
increase to $2.27 billion. The FCC will
continue to roll over unused E-rate dollars
to future years.
5. Dark fiber: Back again
Starting with funding year 2011, dark
fiber may now be purchased from any
E-rate service provider (vendors need
not be telecommunications carriers),
with the caveat that the applicant must
light the fiber immediately. while installation
and maintenance of dark fiber will
be eligible, any special construction that
is necessary as a result of the fiber will
not be eligible for E-rate discounts.
6. Connectivity to
The FCC authorized up to $10 million
for funding year 2011 to investigate
“the merits and challenges of wireless
off-premises connectivity services.”
Twenty schools were selected to participate,
and while the findings of the
project may not be released for some
time, the subsidizing of the research
indicates that E-rate funds may eventually
be used for off-site learning.
In an effort to streamline the application
process for smaller applicants,
the Sixth Report and Order eliminated
the requirement that applicants have
a technology plan to receive Priority
One services (telecommunications and
Internet access). A technology plan is still
required for Priority Two requests (internal
connections and basic maintenance).
8. Disposal of E-rate
Applicants can now “[dispose] of E-rate
equipment for payment or other consideration,
but no sooner than five years
after the equipment is installed.” This
rule overturns previous guidance barring
applicants from reselling or transferring
ownership of E-rate–funded equipment
for money or anything of value.
9. Changes to basic
Unbundled warranties were deemed
ineligible because they are purchased
as a type of retainer and not as an
actual maintenance service. Basic
maintenance requests must be for
actual work performed.
10. Item 21 deadline
Effective with funding year 2011, Item
21 attachments are now due before
the close of their respective filing
window. The Item 21 (or description
of service) attachments help
with the funding process and provide
the Universal Service Administrative
Company with information needed
to make funding decisions quickly.
Incomplete or missing Item 21 will
delay the decision on an applicant’s
funding request. When the funding
request is reviewed, the applicant
may be contacted so that they may
provide the Item 21 information if it
has not been filed in time.