e-rate 2.0 overview

CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved

E-RATE OVERVIEW

What is E-Rate? What is Changing?

Presented by – Dan Rivera [PSC Group]– Kezia Gollapudi [Aruba Networks]

CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved

Aruba Networks

HQ: Sunnyvale, CA

Founded in February of 2002

$730M in Revenue

2,000 Employees

Leader in Unified Access & NAC

40,000 Customers World-wide

NASDAQ: ARUN

Comprehensive list of Industry Partners

Ecosystem • Channel • Distribution

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Addressing the Needs of Digital Learning

SECURE & SIMPLE NETWORK ACCESSProvide differentiated access to network & enable BYOD

INTELLIGENT APPLICATION HANDLINGBring curriculum to life with interactive & multimedia apps

FLEXIBLE SOLUTIONSInvest in architecture & management right for your schools

SIMPLE CLASSROOM MANAGEMENT Empower teachers in digital classrooms

CLASSROOM-READY WI-FIBoost 1:1 learning on mobile devices

E-RATE BASICS

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What is E-Rate?

Created in the Telecommunications Act of 1996

First funding year in 1998 (Year 1)

Funding years are July 1 through June 30 (FY2014: July 1, 2014 – June 30,

2015)

Provides subsidies of up to 90% for eligible services

Available to schools and libraries

Administered by the Universal Service Administration Company

(USAC)

Specifically, the Schools & Libraries Division (SLD)

Universal Service Program overseen by FCC

Original Funding Cap of $2.25B, adjusted for inflation

Currently at $2.4 Billion (Funding Year 2014)

Funding committed to Category 1, then (if funding remains) Category 2

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E-Rate Eligible Services

CATEGORY 1 SERVICES (Formerly Priority 1)Telecommunications servicesTelecommunicationsInternet access services

CATEGORY 2 SERVICES (Formerly Priority 2)Broadband internal connectionsManaged internal broadband servicesBasic maintenance of eligible broadband internal connections

E-Rate Process

• ESL Released• Application

Window Announced

• Form 470/RFP Filed

Bids Submitted

• Bids Reviewed• Service Provider

Selected

Form 471 Filed • PIA Review

• FCDL Issued• Form 486 Filed

Service Starts

• Invoices Submitted (BEAR or SPI)

Funding Disbursed

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E-Rate FY2015 Timeline

1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul

1 Jul

7 Aug

3 Sep

18 Sep

25 Oct

1 Jan

20 Mar

1 Apr

1 Jul

WHAT CHANGED?E-Rate Modernization Order

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E-rate Modernization Order (E-rate 2.0) Highlights

Focus on Wi-Fi

Reorientation of Services

Category Two Budgets

Maximum amounts set

Eligible Services

Significant changes to the ESL

Discount MethodsCalculations / Classifications

Cost-Effective Purchases

Pricing Transparency

Preferred Master Contracts

Consortia Purchasing Encouraged

Streamlined Application

Process

Multi-year Form 470/471

Tech Plan Eliminated

Competitive Bid Exemptions

Electronic Filing Requirement

Category 2Specific Changes

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E-Rate Modernization Order (E-rate 2.0)

Change in Nomenclature Priority 1, now Category 1Priority 2, now Category 2

$2 Billion Additional Funds for FY2015 & FY2016

– Category 2 has annual target budget of $1B; Keyword “Target”

5-Year Category 2 Budget Maximum for Applicants

– Schools: $150/student ; Libraries: $2.30/sq.ft

– Rolling Budget, eliminates 2-in-5 rule

Flexible spending patterns

Subscription-based pricing

Fresh start in FY2015

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E-rate Modernization Order (E-rate 2.0)

School # of Students

Pre-Discount Cat2 Budget

Post-Discount Cat2 Budget

Elementary School

500 500*150 = $75,000 $63,750

Middle School 750 750*150 = $112,500 $95,625

High School 1000 1000*150 = $150,000

$127,500

Cont. HS 50 50*150 = $9,200 (floor)

$7,820

District Office 0 $0 (NIFs don’t qualify) $0 (NIFs don’t qualify)

Category Two Budget ExampleSample School with a Discount Rate of 85%

CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved

E-rate Modernization Order (E-rate 2.0)

NEW DISCOUNTING

Category 2 maximum discount

reduced to 85%

FASTER RESPONSE

Target FCDL issue date of

Sept.1 of each funding year

FUNDING FLOOR

Establishes a funding floor of

$9,200 in Category 2 support

ADDS & REMOVES

(+) Managed internal

broadband eligible in FY2015

(Managed LAN & WLAN)*

(--) Voice & Video components

removed from Cat-2 in

FY2015 ESL

PRICING TRANSPARENCY

Item 21 embedded in Form

471* Per Draft ESL. Subject to change.

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E-rate Modernization Order (E-rate 2.0)

PREFERRED MASTER CONTRACTSBureau will designate specific national contracts as “Preferred Master Contracts”Allows applicants to bypass the Form 470 filing requirementFor equipment purchases only; no labor services

EARLY INSTALLATIONS

Category 2 installations can begin on April 1 of

funding year

Eliminate RFP process

Choose pre-negotiated contracts

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Aruba Product Eligibility*

Access Points Controllers Switches

ClearPassCentralAirwave**?

*Per Draft ESL. Subject to change. ** When purchased as a managed service.

Category 1Specific Changes

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E-rate Modernization Order

Voice services being phased down beginning FY201520-Point reduction each year. FY2015 max discount 70%, FY2016 max discount 50%, etc.

Legacy telephone features eliminatedPaging, Text, Directory Assistance, Inside wire maintenance

Email, Web Hosting, Voice Mail eliminated

Wireless Data Plans and Air Cards eligible in certain circumstances only

Only eligible when proven to be most cost-effective way to connect students

General Program Changes

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E-rate Modernization Order

Discount Method Modified Discounts are District-Wide Urban/Rural status now determined for entire school district or library system New rules for Discount Surveys

Document retention increased to 10-Years from last date of

install Contract signature requirements eased Appeals must be filed with USAC first Applicants can receive BEAR disbursements directly from

USAC Invoice deadline extensions will be automatically granted

one-time for 120-DaysNo other extensions will be granted

CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved

IMPORTANT LINKS

USAC E-Rate Modernization Resources

http://www.usac.org/sl/tools/modernization-order/default.aspx

FCC (E-Rate Specific) Website

http://www.fcc.gov/guides/universal-service-program-schools-and-libraries

E-Rate Modernization Order

http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0723/FCC-14-99A1.pdf

Draft ESL

http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0804/DA-14-1130A1.pdf

http://www.usac.org/about/tools/TrainingArchive/SeriesDetails.aspx?ID=150

ULTIMATE GUIDE TO MODERNIZING

CLASSROOM WI-FINovember 18, 2014

Speaker: Keith Parsons

THANK YOU

Dan Rivera

The PSC Group

dan@thepscgroup.com