Feds Change E-Rate Rules

(Image credit: belastock)

On Monday, December 3, the FCC issued a Report and Order making significant changes (opens in new tab) 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.

In FY2020…

-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.”

The full Report and Order from the FCC can be found here (opens in new tab). Funds For Learning will provide deeper analysis of this news in a webinar (opens in new tab) on Thursday, Dec. 5.