ISTE11 NEWS: Latest on E-rate changes

In September 2010, the FCC announced some of the most sweeping changes to the E-rate program since its inception. John Harrington, CEO of Funds For Learning, a leading E-rate compliance services firm, presented on this topic today at the 2011 International Society for Technology in Education (ISTE) Conference at the Pennsylvania Convention Center in Philadelphia. The E-rate program is the largest source of recurring technology funding for schools and libraries nationwide.

The presentation, Historical Day for E-rate: The National Broadband Plan, featured best practices for E-rate stakeholders as they work with the E-rate program administrator during the time of regulatory change, highlighting the changes to the E-rate program in the FCC’s Sixth Report and Order.

“Success in E-rate is more than making certain that forms and applications are submitted by a certain date,” said Harrington. “Those actions must be coupled with a proactive effort to stay abreast of program changes, such as those outlined in the [FCC Sixth Report and Order].”

In an effort to make it easier for schools and libraries to obtain the necessary broadband connectivity at competitive prices, the FCC released the Sixth Report and Order on September 28, 2010. The Orders presented several changes to the E-rate program including new rules, updated applications and indexing the annual funding cap to inflation.

The changes to the E-rate program, though broadly accepted as a step in the right direction, were met with concern and requests for clarification from the E-rate community. One such change involved the codifying of the regulations regarding gifts from service providers to align with the gift rules applicable to federal agencies. Through the Order, Applicants and/or other school personnel were prohibited from soliciting and/or receiving gifts or anything of value from a service provider who is participating in or seeking to participate in the E-rate program. Additionally, service providers may not offer or provide gifts to any personnel involved in the E-rate process.

An exception to this rule is that gifts and/or meals are permissible if the total value of that gift and/or meal is less than $20.00 and does not exceed a $50.00 total value per funding year, per employee. While the Order attempted to clarify that the new gift rules were not intended to discourage companies from making charitable contributions to schools, many applicants and service providers were apprehensive from participating in contributions or fundraising activities.

Harrington added that due to the numerous “gray” areas encompassed in the new gift giving policy, he has seen a growing cause for concern from both applicants and service providers alike. “E-rate stakeholders want to follow the new guidance, but the current guidance is causing as many questions as it provides answers.”

Though the majority of the changes in the Order have already gone into effect and were evident during the Funding Year 2011 filing window, such as the new Forms 470 and 471, there a few changes that will not go into effect until July 1, 2011. One such change that is scheduled to go into effect on July 1, is the elimination of the technology plan requirement for telecommunications and Internet access.

“Before the Orders, applicants that wanted to apply for E-rate support had to develop a technology plan that covered five required elements, that included the applicant’s technology goals, strategy, and a budget necessary to meet the outlined goals,” said Harrington. “This change will eliminate an administrative burden that was often problematic for smaller applicants that were simply seeking basic telephone and Internet access.”

The Order eliminated the requirement for applicants to have a technology plan for Priority One services (telecommunications and Internet access). However, the technology plan requirement still applies to Priority Two requests (internal connections and basic maintenance). Applicants must still budget funds and competitively bid these services, but will no longer need a specific technology plan for using these services.

Harrington is the CEO of Funds For Learning and has been personally involved in the submission of nearly $1 billion in E-rate funding requests. Harrington also serves as the president of the E-rate Management Professionals Association (E-mpa).