E-rate is funded by federal telecom levies and administered through the Federal Communications Commission (FCC) by the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC). The headquarters are in Washington, D.C., and the SLD contractors are in Lawrence, Kan., and Whippany, N.J.
Spending for the E-rate program is based on demand up to a funding year cap established by the FCC. E-rate funding years run from July 1 to June 30. In 2014, the FCC increased the cap for the program to $3.9 billion and indexed it to inflation. The cap for funding year 2020 is about $4.23 billion.
How does a vendor play a role in the E-rate process?
The first official act a vendor can do is to respond to a Form 470, the “Description of Services Requested and Certification Form,” which is a request for a quote for specific services. To request bids for service, the applicant must create an account in the E-rate Productivity Center (EPC). This is also where bids are publicly posted.Form 470
This is an online form that is generated by the district. It identifies what is being requested and asks for bidders to respond. The request must stay open for a minimum of 28 days. This is a mandatory part of the E-rate process. If you are working with a school and they say they will be using E-rate money to pay for what you are offering, expect this process to take place. You may want to make sure the school puts in the proper specifications, so it gets the correct service or product when the bids come in. Form 471 When the school selects a vendor, it files Form 471 with the SLD identifying what is being purchased and for how much. This must be completed by a specific date, which is usually by mid-March of each year, but the FCC will now accept the forms through April 29, to give districts more flexibility amid the coronavirus outbreak.
Conditional Contract
Once the school selects its vendor and submits its Form 471 request to the SLD, it enters into a conditional contract with the vendor. That contract will say what will be purchased, outline the scope of work and state that everything is conditional until funding is received. Therefore, until funding is secured, no work may be done. Sometimes, however, a school may want work to commence prior to the confirmation of funding — new school construction, etc. — and will state that in the contract. In that case, funding will not be contingent, but will be supplemental to E-rate funding.What is an Item 21?
Item 21 is the specific list of products and services filed with the SLD for which funding is being requested. The Item 21 form must be filed separately from Form 471, but it should reference Form 471. It includes quotes and contracts, as well as part numbers, quantities, and individual line item pricing. This is the document SLD reviewers use to check the eligibility of products. Item 21 data is considered public information. Contracts cannot contain prohibitions against disclosure of price information; any such restrictions will not be honored for E-rate purposes. Schools and libraries must meet statutory definitions to be eligible for E-rate program support.E-Rate Discount Calculations
E-rate discounts for schools are determined based on the National School Lunch Program (NSLP) formula. Discounts range from 20-90 percent, and schools pay the remaining costs themselves. Other formulas apply for libraries and other entity types. Below is the current schools discount matrix.
Eligible E-Rate Services for Funding Year 2021
Each year, E-rate releases guidance on the eligibility of products and services for discounts under the program. Below are the eligible products and services for funding year 2021:Category 1 – Data Transmission and/or Internet Access
- Asynchronous Transfer Mode (ATM)
- Broadband Over Power Lines
- Cable Modem
- Digital Subscriber Line (DSL)
- DS-1 (T-1), DS-3 (T-3), and Fractional T-1 or T-3
- Ethernet
- Integrated Services Digital Network (ISDN)
- Note: Dedicated voice channels on an ISDN circuit are no longer eligible.
- Leased Lit Fiber
- Leased Dark Fiber [including dark fiber indefeasible rights of use (IRUs) for a set term]
- Self-Provisioned Broadband Networks (applicant owned and operated networks)
- Frame Relay
- Multi-Protocol Label Switching (MPLS)
- OC-1, OC-3, OC-12, OC-n
- Satellite
- Switched Multimegabit Data Service
- Telephone dial-up
- Wireless (e.g., microwave)
- Antennas, connectors, and related components used for internal broadband connections
- Cabling
- Caching
- Firewall services and firewall components separate from basic firewall protection provided as a standard component of a vendor’s Internet access service
- Racks
- Routers
- Switches
- Uninterruptible Power Supply (UPS)/Battery Backup
- Access points used in a local area network (LAN) or wireless local area network (WLAN) environment (such as wireless access points)
- Wireless controller systems
- Software supporting the components on this list used to distribute high-speed broadband throughout school buildings and libraries (applicants should request software in the same category as the associated service being obtained or installed)
- Services provided by a third party for the operation, management, and monitoring of eligible broadband internal connections are eligible managed internal broadband services (e.g., managed Wi-Fi).
- E-rate support is limited to eligible expenses or portions of expenses that directly support and are necessary for the broadband connectivity within schools and libraries. Eligible expenses include the management and operation of the LAN/WLAN, including installation, activation, and initial configuration of eligible components and on-site training on the use of eligible equipment.
- In some eligible managed internal broadband services models, the third-party manager owns and installs the equipment, and school and library applicants lease the equipment as part of the managed services contract. In other cases, the school or library may own the equipment but have a third party manage the equipment for it.
E-rate support is available for basic maintenance and technical support appropriate to maintain reliable operation when provided for eligible broadband internal connections. The following basic maintenance services are eligible:
- Repair and upkeep of eligible hardware
- Wire and cable maintenance
- Configuration changes
- Basic technical support including online and telephone-based technical support
- Software upgrades and patches including bug fixes and security patches Source: FCC Order DA 20-1418 – Nov. 30, 2020
