Presented by:

Tricia Dalton

Fall 2006

E-rate Newbie Training 2007

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What is E-rate? Telecommunications Act of 1996 established

“Universal Service Discount Program for Schools and Libraries”

Annual $2.25 billion program Provides 20-90% discounts on telecommunications

services, Internet access, and internal connections Fund made up from charges on your phone bills Most public libraries, public and private K-12

schools, including charters and vo-techs are eligible

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Who Administers E-rate?* FCC

Created program and its rules USAC

Universal Services Administrative Company Created by FCC to run E-rate and other universal service

programs Pays invoices

SLD Schools and Libraries Division Entity within USAC that runs E-rate Makes no policy decisions

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Fair Warning! E-rate is not an easy process Only for the strong willed and determined Long process, a lot of paperwork, some frustration Patience is needed, in addition to diligence in

reading correspondence Rewards can be great Never ever try to cheat the program

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Getting Organized E-rate Binder contains everything:

Forms, Instructions, Samples Tips, checklists, contact sheets PowerPoint handouts Timeline

Rule 1 – Get Organized Create your Own Year 10 Binder Keep copies of all forms, letters, bids,

correspondence, etc. Important!

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E-rate Admin Acronyms Client Service Bureau (CSB)

E-rate “Help Desk” where applicant & service providers can get answers to questions

Accessed via toll-free number Technical Client Service Bureau (TCSB)

Team answering technical questions about eligible services & program rules.

Also accessed via same toll-free number. CSB will refer you to this area.

Program Integrity Assurance (PIA) Team that reviews every application for compliance w/FCC rules. Everyone receives calls from PIA before funding

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Resources to Remember* SLD web site: www.sl.universalservice.org SLD CSB: 888-203-8100 E-rate listserve Contacts:

Tricia Dalton 601-359-3510pdalton@mde.k12.ms.usGary Rawson 601-359-2613gary.rawson@its.state.ms.us

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Applicants Must have E-rate Entity Number to participate

One for every building in your district or library All applicants already have unless it’s a new building

Must have FCC Registration Number (FCCRN)* Just for billed entity All applicants should have obtained in Yr 7

Must have NCES code (schools) Found at: www.nces.ed.gov Leave blank if non exists

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Funding Priorities

Needed because demand exceeds cap of $2.25 billion Priority One: Telecommunications and Internet Access

All approved-inside the window-likely to be funded Priority Two: Internal Connections / Basic Maintenance of IC

Funds go first to neediest applicants (90% discount level), then to others in order of discount until funds are exhausted Year 1 -- funded to 70% Year 2 – all approved applications funded Year 3 – down to 82% Year 4 – down to 87% Year 5 – down to 81% Year 6 – down to 70% - significant rollover funds Year 7 – down to 81% Year 8 – down to 81% so far Year 9 – non so far

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Funding Priorities What does this mean?

Always apply for all telecommunications services and Internet access

Make judgment call on internal connections depending on discount level and planning for the Two in Five Rule

Exactly what services ARE and are NOT eligible?

New Eligible Services Listed has not been released yet.

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Eligible Telecom Services MUST be provided by regulated

telecommunications carrier Must have Y on SPIN search

Basic Telecom Services Local, long distance & voice mail

Advanced Telecom Services MPLS, ATM, Point-to-Point, Frame Relay,

ISDN, lit fiber, etc.

Including most taxes

and surcharges!

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Eligible Telecom Services, cont. Wireless Services

Cellular service – all staff eligible Paging service Blackberry service – only at eligible locations

Calling cards Not pre-paid cards

Centrex, custom calling features Installation fees OK Can be installed before funding year begins so services

are ready by July 1 Limited to priority 1 services

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Ineligible Telecom Services

Sharing of bandwidth 900 Calls Payphones Cost of not-publishing phone numbers Cost of additional directory listings End user equipment (phones, beepers, cell

phones, fax machines, etc.) VOIP as an actual service

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Tariffed Services/MTM* Services that are purchased mainly from a phone

company, such as T1

OR Monthly services such as cell or Internet Access For which no contract is signed Must competitively bid every year, regardless of

competition in your area for those services E-rate does not recognize multi-year tariffs… these

must be contracts.

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Fiber Networks* Dark Fiber (unlit) is not eligible Lit Fiber is eligible … IF

Modulating electronics are bundled with the lease cost of the fiber

Applicant will never own fiber Applicant cost allocates any lease of fiber that

isn’t being used in that funding year.

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Internet Access Eligible:

Subscription fee to ISP E-mail Firewall fees Webhosting – be careful! Internet bandwidth

Ineligible: Filtering Any remote access

outside school property to internet

Blackberry services presumed ineligible

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On-premise, Priority 1 Equipment* Permitted if bundled from telco or ISP Must certify:

No applicant ownership – ever No exclusive use LAN functions without use of equipment Service provider maintains equipment

Not applicant

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Eligible Internal Connections Network and phone

wiring Routers Switches Hubs Network servers Video codecs

System operating software Wireless Access Points Private branch exchange (PBXs) Firewalls Anything needed for transport –

not end user devices Installation of eligible internal

connections “Basic” Maintenance contracts

on eligible internal connections New category for basic

maintenance on 470/471

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Ineligible Internal Connections Network management s/w Routers for remote access Curriculum software Phones, beepers Owned WANs Salaries of SD staff to

install or maintain network or components

Any equipment used for remote access to network or Internet

Personal computers FAX machines Asbestos removal Cameras Electrical wiring Teacher training

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Eligibility Issues* Purchased Wide Area Networks (WANs) are not E-rate

eligible. If leased from a regulated telecommunications provider then

it’s eligible as a Telecommunications Service Local Area Networks (LANs) are eligible

SLD has made the WAN/LAN distinction as follows: If the network crosses a public right-of-way, it’s considered a

WAN. Connections considered LANs:

computer to computer classroom to classroom building to building on the same campus that does not cross a

public right-of-way

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Gotcha!Words to Never Use 2-way Radios/walkie-

talkie (direct connect OK as a cell service)

Filtering Network monitoring Directory

advertising/listings

Cellular phones Management Redundancy Helpdesk 24 hour technical

support Insurance policies Remote access

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Application process at a Glance*

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Year 10 Details For services rendered 7/1/2007 - 6/30/2008 Application process has begun!

Write tech plan now File 470 now once tech plan is written File 471 when window opens (normally middle

of November) Window normally closes first week in February

Must be inside window to be funded

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You Must Have a Technology Plan!*

Five SLD technology plan criteria Goals and Strategies for using technology Needs Assessment Professional Development Budget – including sources of funding

Evaluation

Must align with 470 request for services Must be “written” before 470 is filed Must cover full 12 months of NEXT funding

year

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Technology Plans, cont. Vendors cannot write or approve technology plans No tech plan required for basic phone service or long

distance (includes cell and voice mail) Centrex is not basic phone service

Be sure to include dates of tech plan! Get approval letter by July 1

then Print/Maintain Approval Letter Tech plans approved for 3 years Certify on 486 who approved plan Can amend technology plan if yours is not specific enough

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Competitive Bidding

Everyone must do it Even if no competition in your area Even if bidding under state law Must be done when signing any new contracts Must be done each year for all tariffed/MTM services

Bidding on web site does not exempt you from bidding under state law Can be done simultaneously Only exception is if someone bid it for you (ITS)

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Competitive Bidding on SLD web site using Form 470*

File Form 470 any time to begin procurement process Listserve reminder sent out

Should align with technology plan Provide as much detail as possible so bidders can

respond – a mini RFP If you have an RFP, list where it can be obtained,

AND provide description of what’s in RFP Make sure you list possibility of multi-year

contract and/or contract with voluntary extensions

Vendors cannot help with RFP/470 process

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Form 470 File online Posted on SLD web site 28-days Must have form posted on web at least 29 days

before the Form 471 window close (example: Feb 4 close = Jan 7 deadline) Don’t wait this long File 470 by Thanksgiving, if possible

Mail certification page to SLD ASAP unless eCertifying Read the

Instructions!

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Get 470 Information Immediately!* Posted 470 available on SLD web site to view Upper right corner of online application shows:

Posting date of application Earliest date that your contract can be signed and thus 471

submitted Date that certification page was received at the SLD

View and print immediately after posting SLD also sends this info in Receipt Notification

Letter*

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Next: Bid Evaluation* After 470 is posted for at least 28 days, review all bids

received for all services Cannot consider “free services” such as “I’ll give you 20

computers if you purchase my service” Cannot consider ineligible services in price evaluation factor

Can be considered in another category Cost must be highest percentage amount

Keep documentation of criteria used to select vendor Keep all winning and losing bids Retain all correspondence between applicant and all vendors

(winning and losing)

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Choosing the Winning Bid Applicant must pick “most cost-effective bid” Cost doesn’t have to be only factor, but must be most heavily

weighted factor For example, if you have 3 bid evaluation criteria, price must

be at least 34% of total weight. Examples of other specified factors:

Prior experience Personnel qualifications Technical excellence Management capability Cost of switching providers Etc.

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Signing E-rate Contracts* Signing Contracts/Selecting Provider must be done

before you submit 471 Be careful not to make any decisions, sign anything

or file any forms during 28 day waiting period. Contracts must be signed and dated by both parties Must sign contracts unless tariff or MTM service

If using EPL, no contract needed, but you must be able to explain why you chose reseller A over reseller B

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Signing E-rate Contracts* List contract extensions and contract expiration dates

These also must be listed in RFP or 470, Item 7b Include non-E-rate funding out clauses Separate internal connections/wiring portions of

contracts for highest discount schools

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Next: Filing the 471 Very important form

Watch listserve for reminders Filed by entity that actually pays the bills Shows discount calculations Requests discounts (funding) Describes services ordered and details contract

information Must be filed at least 29-days after posting Form 470 eCertify!! Or submit signed certification page ASAP

(postmarked within window)

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What is My Discount?* Two criteria make up discount:

Poverty Location

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Poverty – NSLP Data* Based on National School Lunch Program Eligibility

Eligibility based on % of student whose family’s income is within 185% of federal poverty level

Doesn’t matter if school serves lunch or participates in NSLP

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Discount Matrix for Single School*

Urban Rural

<1% 20% 25%

1-19% 40% 50%

20-34% 50% 60%

35-49% 60% 70%

50-74% 80% 80%

75-100% 90% 90%

% of Students Eligible for School Lunch Program Discounts

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Alternative Measures to NSLP Data*

Goal: Discounts based on true eligibility – not participation. 2 Ways to do this

Take existing participation data and add to it Using sibling match Using existing family income data

Conduct family income survey Must survey 100% of families. If 50% response rate, then OK to

extrapolate the rest Maintain complete records Sample survey available* Valid for 2 years

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Alternative Measures to NSLP* Also, participation in these programs also

qualifies: TANF Medicaid Food Stamps Supplementary Security Income Federal public housing assistance (section 8) Low income home energy assistance (LIHEAP)

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Discount Calculations by Entity* Schools: Use straight matrix discount Districts: Use weighted average of schools’ individual

discounts Library: Use the total number of students eligible for

NSLP in the school district in which the library is located divided by the total number of students in that school district, then use matrix discount

Library System: Uses simple average of member libraries’ discounts

Consortium: Uses simple average of members’ discounts

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Form 471 Filing Tips

File and certify online! Multiple forms OK No one-to-one correlation with 470

required Meaning, you can have (1) 471, but (3) 470’s.

All services listed on 471 must have been listed on a 470

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30% Rule - Important

30% or more of FRN Ineligible SLD will deny entire request

29% or less of FRN is Ineligible SLD will attempt to remove ineligible costs and

approve only eligible costs Why? SLD Time Allocation Issues

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Cost Allocation Guidelines*

If service or component is part eligible/part ineligible: Must perform cost allocation based on percentage of

function that is eligible Cannot request discounts on ineligible portion

Can subtract ineligible costs before 471 OR Can subtract ineligible costs on 471, Block 5 Cannot list any ineligible service/component on

attached description of services. Example: networks shared by district and community

(ineligible) organization

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Item 21: Description of Services* Probably most crucial piece of 471

Part of form used to deny applications Never, ever list an ineligible item PIA will call applicants with specific questions Must have separate description for each FRN (funding

request) Detailed list of products with associated prices that add

up to funding request Maintenance request showing equipment being

maintained

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Item 21 Attachments – Paper* Provide enough information, but not too much Identify each attachment Be sure to mail with signature page or fax to SLD

Not required to be postmarked or faxed within window, but should do so a few days after window closes

Copies of bills if ongoing service, and explanation if request exceeds documented costs Quote sheet from service provider if new tariff or month-to-

month service -- Itemized details of one-time costs associated with Internet access or telecommunications services

Copies of contract

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Item 21: New Online Description of Services* Consistent format Don’t need to submit bills or contracts

But must have available and may be asked to submit during application review

Should speed processing of application

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471 Certifications - Important Have secured access to all non-eligible resources

(computers, training, software, maintenance, etc) Tech plan written (covering all 12 months) Carefully considered all bids Selected most cost effective solution with price

being primary factor Complied with state procurement laws Won’t resell services or products Will retain all documents for 5 years

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471 Certs, cont. Authorized to submit application Acknowledge that if you lie or cheat that you’ll be

disbarred from program and prosecuted Have cost-allocated out any ineligible functions or

components Haven’t violated 2/5 rule Non-discounted portion won’t be paid or waived by

service provider Nothing free offered by service provider

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Paying Non-Discounted Portion If your discount is 65%, you MUST have the

ability to pay the remaining 35% Cannot come from outside source Must have the nondiscounted portion in budget

Many vendors will say they can get a “grant” for this amount – NOT PERMITTED

90% discount applicants beware.

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Paying for Non-Eligible Resources* Applicant must certify that they can also pay for

the non-E-rate eligible items that are needed to effectively use the E-rate eligible services/equipment

Future budget tally now required on 471, Item 25b

If you file multiple Forms 471 for this funding year, you must calculate your total budgeted amount allocated for these resources and enter that total on Item 25d of each Form 471.

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Item 25d, cont. Hardware

Such as computers, printers, fax machines, video equipment, scanners, CD-ROM drives, and application servers

Professional development Such as ongoing technology-related training for technical staff, teachers

and/or librarians Software

Such as end-user applications Maintenance

Such as systems maintenance and operations costs for ineligible hardware and software and salaries of technical staff

Retrofitting Such as electrical wiring, asbestos removal, building modifications,

renovations, and repairs.

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Next: SLD Sends 471 Receipt Acknowledgment Letter (RAL)*

Confirms receipt Verifies block 5 information Confirms successful data entry of application

into SLD system Example in binder Service provider receives similar letter when

they are listed as SPIN on 471 Make corrections, if any, and fax back to SLD

ASAP

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Next: Application moves to Program Integrity Assurance (PIA) Review*

Checks for rule compliance – Audit phase Eligible Services Eligible Entities Appropriate discount

Almost everyone receives a PIA call Document contacts with PIA May be sent to Selective Review Process

Copies of budget, tech plan, all correspondence, winning and losing bids, bid evaluation process and documentation, etc.

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Next Step?

Wait Return PIA calls within 7 days

Ask for extension if absolutely necessary E-mail Tricia if you’re not sure how to answer a

question Watch E-rate listserve and mail to see

which wave of funding you’re in!

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Next: SLD Sends Funding Commitment Decision (FCDL) Letter!* Tells you which funding requests (block 5’s) of

Form 471 are approved or denied Provides information for Form 486 Can appeal if you don’t agree with your

decision Must do so within 60 days Can appeal to the SLD for their errors, or FCC if policy

decision. If SLD denies, can appeal to the FCC within 60 days

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Next: Applicant Files 486* Must be postmarked no later than:

120 calendar days after the Service Start Date featured on the Form 486 or

120 calendar days after the date of the Funding Commitment Decision Letter

whichever is later. Signifies that it’s OK for SLD to pay any invoices for that FRN Lists who approved tech plan Certifies CIPA compliance Submit online (using PDF version – not interview) Most information contained on FCDL Use 07/01/2007 as service start date for Yr 10

Usually

around Oct.

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CIPA* Filtering and Internet Safety Policies Required for any school or library receiving:

Either Internal connections or Internet access

Recipients of only Telecommunications services are exempt from E-rate CIPA compliance

Consortium members submit Form 479 to consortium leader certifying compliance

Details in binder

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How do YOU get E-rate $? Two choices

Discounts on bills OR Reimbursement process

Must select one or the other for entire year Try to determine choice in contract or prior to choosing

service provider Now a non-binding choice on 470

If you want discounted bills, call provider as soon as you are funded

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Discounted Billing Method* Discounts appear on applicant’s bill Service providers submit Form 474.

the Service Provider Invoice Form (SPIF)* Provider should get reimbursed by SLD within 60 –

90 days from date of submission. Applicants do nothing except make sure they are

getting discounts they deserve on bills. Do the math!

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Reimbursement Method*

Applicant pays bill in full Applicant submits Form 472 – BEAR Form for reimbursement*

Quarterly, semi-annually, or at end of year Complete one BEAR for each SPIN Must contain SPIN signature on last page

Send or fax to SPIN SPIN will mail or fax back

AT&T has signed copy on web www.att.com/erate

Must be submitted by Oct. 28 (following funding year) for recurring services; by Jan. 28 for non-recurring services.

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Reimbursement Method, cont.

SLD approves BEAR and sends approval letter to vendor and copy of letter to applicant

SLD then waits 20 days and sends check to SPIN SPIN must send check to applicant within 20 days Call SLD if:

You don’t get a check in a timely manner after receiving approval letter or SPIN takes too long to sign BEAR

NEW ONLINE BEAR COMING IN LATE OCTOBER

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Invoicing Scrutiny Auditors found that many applicants were:

Substituting products or services without E-rate approval Not basing reimbursement requests on actual bills

Result: BEAR and SPIF invoices are being heavily scrutinized

Be careful not to switch services/products in mid-funding year. If so, seek clarification whether it’s allowable and get official permission from the SLD

SLD may ask you to sign service cert for SPIF SLD may ask for copies of bills for BEAR

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Quarterly Disbursement Reports

Sent only to applicantsAuthorized personBilled Entity (BEN) address

Contains all invoice (Form 472 and Form 474) payment authorization amounts for the Billed Entity for all funding years approved during that quarter

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Optional Form 500* File Form 500 to either:

Change a service start date or a contract expiration date

Cancel or reduce a funding commitment Warning: reductions or cancellations of funding

commitments are irreversible But: Auditors are citing applicants for leaving

significant $ on the table and not filing a Form 500

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Changing Service Providers* Can change providers Only after receiving funding commitment letter Must write a letter to the SLD requesting change

Must certify that you are permitted in your contract and by state law to do so, and that you have informed your current provider.

Sample letter/form on SLD website Can also submit on web at “Submit a Question” Can request to split an FRN

Allocate $ to 2 providers in same funding year

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eCertification* You will receive a PIN once you have signed a 470, 471

or 486 PIN then may be used for 470, 471, 486, & coming soon

the online BEAR Forms PIN is given to a person and is specific to that entity. Not

given to an entity Must accept terms/conditions before use Can change PIN to your own password

6-8 characters, at least 1 special character (*&%$#@) Applicants are highly encouraged to use their PINs Old PINs should be discarded eventually

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Document Retention* Rules now require all applicants to retain

ALL E-rate and related documents for 5 years from last day of service in a particular funding year

If auditor visits in 4 years, and documents are missing, it will be the basis to recover all funding from that funding year

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Documents to Retain*

Tech plan and approval letter

Consultant agreements RFP and proof of

publication date All vendor

correspondence Winning and losing bids Professional development

records

Contracts signed by both parties

NSLP documentation Budgets Purchase orders Packing slips Asset or inventory records Installation records Invoices Proof of payment to SLD

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2/5 Rule* An entity may only receive discounts 2 out of

every 5 years for internal connections Doesn’t include basic maintenance

Building level, not district level Plan accordingly to maximize discounts

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Transfer of Equipment* E-rate funded equipment must remain at approved

site for 3 full years after installation After which it may be moved to another eligible

location, providing documentation is retained describing transfer

If school or library closes, equipment may be moved to another entity, regardless of discount Must send letter to SLD outlining closing of school and

transfer of equipment Must keep documentation regarding transfer for 5 years

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Service Substitutions* SS required when a change is made to any service on your

approved 471, Item 21 attachments After FCDL issued Applicant must seek SLD approval which meets all of these

conditions: The substituted services or products have the same functionality as the services or

products contained in the original proposal. The substitution does not result in an increase in the requested pre-discount amount.

(The substitution amount may be higher, but will only be funded at the amount originally approved.)

The substitution does not violate any contract provisions or state or local procurement laws.

The substitution does not result in an increase in the percentage of ineligible services or functions.

The substitution is consistent with the establishing Form 470 posting and original RFP, if any.

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Red Light Rule/FCCRN* Says if a service provider or applicant owe $

to the feds, no E-rate $ will be paid until all debts are cleared

Must now have FCCRN for billed entity, in addition to E-rate entity number https://svartifoss2.fcc.gov/cores/CoresHome.html

Most entities’ FCCRNs are now in SLD system Ask service provider if they are on red-light list

Questions?

Time to take an E-rate Quiz

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E-rate Quiz

You must have the non-discounted share of the service in your budget?

True False

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E-rate Quiz

You don’t need a contract for any tariffed service.

True False

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E-rate Quiz

A school must use NSLP participation to calculate discounts.

True False

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E-rate Quiz

Under the FCC rules of priority, who receives E-rate funding first?

1. Everyone who applies for telecom services and internet access

2. Applicants with discounts of 90%

3. Applicants who have never applied before

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E-rate Quiz

Which of these services is not eligible for E-rate discounts?

1. Basic phone service

2. T1 lines

3. Leased satellite dishes

4. Voice mail

5. Filtering

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E-rate Quiz Which of these

instances of remote internet access is eligible for E-rate discounts?

A teacher dials-in from home to District’s computer system to access the Internet.

The superintendent dials-in from a conference to the District’s computer system to access the Internet.

The technology director uses her Blackberry phone to access the internet from home.

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E-rate Quiz

E-rate contracts may be signed on or after what day?

1. 1st day after 470 is posted to web

2. 28th day after 470 is posted to web

3. Anytime

4. 29th day after 470 is posted to web

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E-rate Quiz A Form 470 is not

required if you bid under state law.

Contracts may be voluntarily extended if such extensions were listed in the 470/RFP OR in the contract?

True False

True False

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E-rate Quiz

A Form 486 is used to:

1. Return unused funds to the SLD

2. Request discounts

3. Post requests to SLD web site

4. Tell the SLD to turn on funding/CIPA certification

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E-rate Quiz

The 486 must be submitted by July 1.

True False

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E-rate Quiz

For recurring services, the BEAR Form (472) must be submitted by:

November 4 January 16 July 1 October 28

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E-rate Quiz

An applicant-owned WAN is not eligible.

True False

Now that you know the rules…

Let’s complete the forms, step-by-step