Craig J. Nichols, Secretary

E-RATE TRAINING

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FT. LAUDERDALE, FLNOVEMBER 13, 2013

Craig J. Nichols, Secretary2

E-RATE101INTRODUCTION TO THE USAC

SCHOOLS & LIBRARIES PROGRAM

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About the Program

The universal service Schools and Libraries Program, commonly known as “E-rate,” helps ensure that schools and libraries can obtain telecommunications and Internet access at affordable rates.

From USAC Schools & Libraries Website

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E-rate Organizations

Federal Communications Commission (FCC), an independent U.S. government agency, established and oversees the E-rate program

Universal Service Administrative Company (USAC), a not-for-profit, administers the E-rate program along with three other programs

Schools and Libraries Division (SLD) is the part of USAC with responsibility for E-rate

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Overview of E-rate Program

Congress directed the FCC to establish the E‐rate Program in 1996

Began January 1998

The FCC sets rules and policies through orders

USAC develops procedures for specific actions, such as how to process applications

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Total Awarded by Year Over Program Lifetime

2013

2010

2007

2004

2001

1998

$0.00

$500,000,000.00

$1,000,000,000.00

$1,500,000,000.00

$2,000,000,000.00

$2,500,000,000.00

$3,000,000,000.00

$3,500,000,000.00

Florida Annual TotalNational Annual To-tals

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Florida Funding Commitments

Funding Year State Total National Total % Nat. Total SLD Reports

2013 $28,395,731.45 $1,007,525,400.19 2.8% Wave 24

2012 $121,836,638.01 $2,791,208,202.96 4.4% Wave 66

2011 $79,146,455.19 $2,628,959,307.00 3.0% Wave 102

2010 $84,328,640.53 $3,060,668,414.23 2.8% Wave 114

2009 $117,762,271.52 $2,675,197,377.03 4.4% Wave 95

2008 $87,696,446.40 $2,521,891,741.91 3.5% Wave 81

2007 $97,098,467.19 $2,419,751,226.10 4.0% Wave 81

2006 $67,964,640.67 $1,962,130,234.06 3.5% Wave 61

2005 $66,328,922.97 $2,067,600,427.53 3.2% Wave 67

2004 $62,469,016.73 $2,180,640,515.62 2.9% All Waves

2003 $65,201,616.36 $2,629,689,455.04 2.5% All Waves

2002 $55,619,854.05 $2,189,472,317.16 2.5% All Waves

2001 $56,939,963.35 $2,181,345,923.20 2.6% All Waves

2000 $58,969,309.69 $2,076,769,534.20 2.8% All Waves

1999 $91,350,429.03 $2,137,243,271.72 4.3% All Waves

1998 $49,409,144.95 $1,694,398,812.78 2.9% All Waves

[Last Update: 11/06/2013]

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Overview of E-Rate Program

TimelineCommitments are made by funding

year (FY), which runs from July 1 through the following June 30

USAC refers to the funding year as the year in which most services will begin, e.g., FY2013 is July 1, 2013 to June 30, 2014.

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Overview of E-Rate Program

Budget

The FCC capped program funding at $2.25 billion per year, until 2010 when the FCC began to adjust the cap annually for inflation

Once a year, the FCC is required to roll over all funds that are collected and are unused from prior funding years to the next full funding year

FY 2013 Funding:• $2.25B + $130M = $2.38B + $450M = $2.83B

– FY 2013 Demand: $4.986B

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Eligible Entities

Who is eligible for E-Rate funding?

• K-12 schools and school districts

• Non-traditional facilities (conditionally by state)

  Head Start Pre-kindergarten Adult Education Juvenile Justice

State   Facilities Students Facilities Students Facilities Student

s

FloridaYes, if part of a public school district or a stand-alone facility recognized by the state

 

Yes Yes Yes Yes Yes Yes

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Eligible Entities

Libraries and library systems

Consortia – groups of eligible entities that band together to aggregate demand and negotiate prices• Panhandle Area Educational Consortium (PAEC)

• Northeast Florida Educational Consortium (NEFEC)

• Heartland Educational Consortium (HEC)

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Discounts

Discounts are 20‐90 percent of eligible costs

Discount level for a school or library depends on:

I. Level of economic needII. Urban or rural location of the school or library

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Calculating Level of Student Economic Need

I. Public schools and librariesPercentage of students who are eligible for National School Lunch Program (NSLP)

• For a school: the school• For school district: weighted average of

schools in district• For a library: the school district in which the

library is located• For a library system: average of libraries in

system

II. Private and non-traditional schools Alternative discount mechanisms

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Calculating Level of Student Economic Need

Applicants must obtain third party verification of economic need calculations

• NSLP:– http://www.fldoe.org/edtech/erate/worksheets.asp

• Alternative Discount Method – it depends– “Umbrella” or Administrative organization– State E-rate Coordinators

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Urban/Rural Status

• Based on Metropolitan Statistical Area (MSA) data

• USAC website contains rural information by state:

Urban/Rural Status

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Discount Matrix

INCOME% of students eligible for

NSLP

URBAN LOCATIONDiscount

RURAL LOCATIONDiscount

If the % eligible is... ...and you’re in an URBAN area, your discount will be...

...and you’re in a RURAL area,

your discount will be...

Less than 1% 20% 25%

1% to 19% 40% 50%

20% to 34% 50% 60%

35% to 49% 60% 70%

50% to 74% 80% 80%

75% to 100% 90% 90%

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Eligible Services

Must be used for educational purposes

• Delivered to eligible locations and used for eligible purposes

– Customary work activities of school or library employees and customary activities that occur on school or library property are presumed to fall under the definition of educational purposes

• Non-traditional facilities and students may be eligible• Use outside of campus not eligible, with some

exceptions

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Eligible Services

Priority 1: Connectivity• Telecommunications Services• Internet Access• Telecommunications

Priority 2: Internal Infrastructure• Internal Connections• IC Maintenance

FY 2013 Eligible Services List

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Priority 1: Telecommunications Services

Includes:• Local and long distance wired telephone service• Interconnected Voice over Internet Protocol (VoIP) (can also

be Internet Access)• Cellular phone service, including text messaging and

voicemail• Centrex service• Digital Subscriber Line (DSL), Primary Rate Interface (PRI),

T-1, T-3, and satellite services

TIP: Must be provided by a telecommunications carrier – defined as “a company that offers telecommunications services on a common carriage basis”

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Priority 1: Internet Access

Includes: • Basic conduit access to the Internet• Selected services that are an integral component

part of an Internet access service• Some other services designated as eligible by the

FCC (e.g., interconnected VoIP, email service, web hosting)

Does not include: • Content• Equipment Purchases• Other services beyond basic conduit access

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Priority 1: Telecommunications

Lit or dark fiber provided by any entity, including non-telecommunications carriers• If provided by non-telecommunications carrier, must

place in Internet Access category on Form 471 Dark fiber eligible as long as it is lit immediately

• Modulation electronics not eligible• Installation cost eligible within property line

Leased lit fiber provided by both telecom and non-telecom carriers • Modulating electronics & all installation costs eligible

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Priority 2: Internal Connections

Includes: • Routers, switches, hubs, and wiring• Eligible products are located at the applicant site • Must be considered a necessity to transport information to

classrooms or publicly accessible areas of a library

Does not include:• Services that extend across a public right-of-way beyond the

school or library facility• Most software• Redundant services or components• Security

TIP: Starting with FY2005, Two-in-Five Rule

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Priority 2: Maintenance

Includes: • Repair and upkeep of eligible products• Services include maintenance of hardware, wire, and

cable, along with basic technical support and configuration changes

Caveats:• Products – must be eligible for discounts in order for

their associated repair and upkeep services to be covered

• Repair and upkeep – services must be for actual work performed and parts repaired or replaced

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Priority 2: Maintenance

Unbundled warranties or fixed price contracts – • Not eligible for reimbursement• Exception

– If ineligible portions can be cost-allocated

– Does not apply to software upgrades and patches, including bug fixes and security patches and online and telephone-based technical assistance and tools

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Annual Applicant E-rate Process

Step 1: Technology Planning Step 2: Competitive Bidding (Form 470) Step 3: Selecting Service Providers Step 4: Applying for Discounts (Form 471) Step 5: Application Review Step 6: Starting Services (Form 486) Step 7: Invoicing (Form 472 or 474)

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Annual Applicant E-rate Process

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STEP 1: TECHNOLOGY PLANNING

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Technology Plans – P2 Services Only

A technology plan must contain the following four elements:1) Goals and strategies for using technology to improve education

or library services2) Needs assessment3) Staff training4) Evaluation plan

Should cover period of not more than three years Must be approved by USAC‐certified Technology Plan

Approver (TPA)• Final draft must be submitted before Form 470 filed and approved

before start of services or Form 486 file date, whichever is earlier• FDOE is Florida TPA; contact Dale Peace at Dale.Peace@fldoe.org

or 850-245-9826

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STEP 2: COMPETITIVE BIDDING

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Form 470 – Requesting Services

Opens competitive bidding process• Annually for MTM and tariffed services; once for multi-year

contracts Notifies potential bidders of the types and quantities

of services that you need Must be posted on the USAC website at least 28 days

before filing the FCC Form 471 Request for Proposal (RFP) or other supplemental

documents also may be issued – must be available for at least 28 days• If applicant has both 470 & RFP, bidding cannot be closed

until 470 or RFP 28 day clock ends, whichever is later

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Form 470 – Requesting Services

Response Letter Form 470 Receipt Notification Letter (RNL): issued

by USAC to the applicant that summarizes the information provided in the FCC Form 470

Allowable Contract Date (ACD): the date that marks the end of the 28‐day waiting period

If you notice mistakes, use the RNL to make allowable corrections immediately

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Competitive Bidding Restrictions

No one other than applicant or its authorized representative should prepare, sign or submit Form 470 or certification

Form 470 must describe desired products and services with sufficient specificity to enable all interested parties to submit bid responses

All potential bidders must have access to your Form 470, RFP (or other supplemental documents describing the procurement, if you have them)

You must evaluate all incoming bids fairly and equally

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STEP 3: SELECTING SERVICE PROVIDERS

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Competitive Bidding – Evaluation Matrix

The price of the eligible products & services must be the most heavily weighted factor in your evaluation of bidsFactor Points

Available Vendor 1

Vendor 2

Vendor 3

Price of ELIGIBLE products/services

30 15 30 25

Prior experience w/vendor

20 20 0 20

Prices for ineligible services, products, fees

25 20 15 25

Flexible invoicing: Forms 472 or 474

15 0 15 15

Local or in-state vendor

10 10 8 7

Total 100 65 68 92

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STEP 4: APPLYING FOR DISCOUNTS

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Form 471 – Ordering Services

Application Window• USAC in D.C.: FY2014 window will open in mid-January & close in mid-

March• Must be received or postmarked by 11:59 pm EDT on the date the

application window closes

Identifies chosen service providers and eligible services, costs, contract info (if applicable) • Item 21 Attachment: detailed description of services

Identifies the eligible schools and libraries that will receive services

Calculates how much support you seek for the funding year using your discount calculation information

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Form 471 – Ordering Services

Response Letter Form 471 Receipt Acknowledgement Letter (RAL): a letter

issued by USAC to the applicant and service provider that summarizes the information provided in the Form 471

Allows you to correct ministerial & clerical errors until Funding Commitment Decision Letter (FCDL) is issued – review carefully!

Allowable & non-allowable corrections:http://www.usac.org/sl/applicants/step02/clerical-errors.aspx

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STEP 5: APPLICATION REVIEW

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Application Review & Funding Commitments

PIA ReviewsProgram Integrity Assurance (PIA) is the

USAC group that reviews and makes funding decisions on program applications

• Verifies eligibility of the school and library entities, entity discount levels, and services requested

• Gives you an opportunity to make allowable corrections to your form

• In some cases, asks for additional documentation and verification of your compliance with program rules

– Deadlines for responding

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Application Review & Funding Commitments

Funding Commitment Decision Letter (FCDL)Following application review, USAC issues this

letter to both applicant and service provider. It contains decisions on funding requests and next steps

• Approve• Deny• Modify

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STEP 6: STARTING SERVICES

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Form 486 - Begin Receiving Services

Notifies USAC that your eligible products and/or services have started or been delivered and invoices for those services can be processed and paid

Provides name of the TPA that approved your technology plan (if applicable)

Reports your status of compliance with Children’s Internet Protection Act (CIPA)—a law with specific requirements on Internet safety policies

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Form 486 – Begin Receiving Services

Response LetterForm 486 Notification Letter: A letter

issued by USAC to applicant and service provider after an Form 486 has been processed.

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STEP 7: INVOICING

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Invoicing USAC

1. Billed Entity Applicant Reimbursement (BEAR) Form 472: filed by applicant after services have been paid in full

OR

2. Service Provider Invoice (SPI) Form 474: filed by service provider after the applicant has been billed for the non‐discount portion of eligible services

TIP: Applicants can choose their method of invoicing; service providers cannot force applicants to use a particular method. Cannot change forms once the first form is filed in a given funding year

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Invoicing USAC

Response Letters BEAR Notification Letter: A letter issued by USAC

to the applicant with a copy to the service provider after a BEAR is processed

SPI Notification Letter: A letter issued by USAC to the service provider

Quarterly Disbursement Report: A letter issued to the applicant detailing all invoicing activity (BEARs and SPIs) during the previous quarter

Money disbursed to service provider for both forms

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Deadlines

Application Deadlines

Tech Plan ‐ Drafted before the competitive bidding process and approved on or before the date when you begin receiving services or at the time you file the Form 486, whichever date is earlier

Form 470 ‐ Posted at least 28 days before the filing of the Form 471, keeping in mind the Form 471 application filing window opening and closing dates

Form 471 and Item 21 Attachment ‐ Received or postmarked no later than 11:59 PM ET on the day of the close of the Form 471 application filing window (exact window dates will be posted on our website)

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Deadlines

More Deadlines

Form 486 ‐ Received or postmarked no later than 120 days after the date of the FCDL or the service start date, whichever is later

Form 472/ Form 474 ‐ Received or postmarked nolater than 120 days after the date of the Form 486Notification Letter or the last date that the applicant canreceive service from the provider in the funding year at issue,whichever is later

Appeals ‐ Received or postmarked no later than 60 days afterthe date of USAC's decision letter

Tech Plan ‐ Drafted before the competitive bidding process and approved on or before the date when you begin receiving services or at the time you file the Form 486, whichever date is earlier

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Document Retention

For a period of at least five years from the last date of service, all applicants & service providers must retain documents and related receipt & delivery records relating to:

• Technology plans• Pre-bidding• Bidding• Contracts• Application process• Invoices• Provision of services• Any other matters related to the E-rate program

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QUESTIONS?