On Monday, December 3, the FCC issued a Report and Order making significant changes to E-rate rules for Category 2* funding applications. The order adopts a long-awaited permanent Category 2 budget system for all applicants, and establishes streamlined rules which will take effect starting in FY2021.
Key takeaways are as follows:
Starting in FY2021…
-All applicant budgets will be reset.
-The program will adopt ‘fixed’ five-year budget cycles.
-Category 2 budgets will be calculated on a school district or library system basis.
-Equipment transfer rules will be eliminated.
-A new budget cycle will begin in subsequent five-year periods (e.g. FY2026) with no rollover of funds from cycle-to-cycle.
-The budget ‘floor’ for smaller sites will be increased to $25,000.
-Category 2 budgets will be calculated using the same per-site methodology used in FY2015-2019.
-All C2 site budgets will expire at the end of FY2020 and will not carry over to FY2021.
-The eligibility of caching equipment and services, Basic Maintenance of Internal Connections and Managed Internal Broadband Services will be retained.
-All applicants’ site budgets will be increased by 20% (i.e. one-fifth of the maximum FY2020 C2 budget)
Response from Funds For Learning CEO John Harrington:
“This highly anticipated Order from the FCC gives schools and libraries the assurance they’ve been seeking to proceed with RFPs for Wi-Fi and other Category Two services. By making permanent the enhanced Category Two budget system, the FCC is sending a strong message of support for our nation's students and library patrons. This move creates stability and offers reassurance to schools and libraries that look to the E-rate program for assistance.”