e-rate 2.0 overview

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

E-RATE OVERVIEW

What is E-Rate? What is Changing?


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

Leader: 2014 Wired & Wireless Magic Quadrant


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


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


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

4 Aug

3 Sep

18 Sep

17 Oct

5 Jan

21 Mar

1 Apr

1 Jun

WHAT CHANGED?E-Rate Modernization Order

Category 2Specific Changes


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


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 attachments will be

public* Per Draft ESL. Subject to change.


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


Category 2 products*

-Network switches-Routers-Wireless LAN Controllers-Access Points used in LAN/WAN environment-Cabling, connectors, and related components -Racks that support eligible internal connections components-Uninterruptible Power Supply (UPS)necessary for basic power protection for eligible equipment

-Caching-Firewalls-Software necessary to support this list of eligible broadband internal connections components, including Client Access Licenses for LAN/WLAN networks-Improvements and upgrades to components on this list of eligible broadband internal connections

*Per Draft ESL – Subject to Change

Eligible Broadband Internal Connections Components

Notes: (1) Functionalities listed above that can be virtualized, and equipment that combines eligible functionalities, like routing and switching, are also eligible(2) A manufacturer’s multi-year warranty for a period up to three years and provided as an integral part of an eligible component, without a separately identifiable cost, may be included in the cost of the component.



Services provided by a third party for the operation, management, and/or monitoring of eligible broadband internal connections components.

For example, managed internal broadband services may include services necessary to manage and repair the LAN/WLAN network, such as diagnostic services, 24-hour network monitoring, or helpdesk support.In some managed 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 it for them.


Eligible Managed Internal Broadband Services(e.g. Managed WiFi)




Basic Maintenance of Eligible Broadband InternalConnections Components

E-rate support is available for basic maintenance and technical support appropriate to maintain reliable operation when provided as a component of 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


Aruba Product Eligibility*

Access Points Controllers Switches

ClearPassCentralAirwave**?

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

Category 1Specific ChangesThat will indirectly affect Category Two


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

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


E-rate Modernization Order

Discounts calculated district-wide Document retention increased to 10-Years from last date

of install Contract signature requirements eased Applicants can receive BEAR disbursements directly from

USAC Manufacturers eligible products database program will

be terminated Invoice deadline extensions will be automatically granted

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


USAC Applicant Training

Philadelphia - Tuesday, October 7, 2014

Minneapolis - Monday, October 13, 2014

New Orleans - Thursday, October 16, 2014

Portland - Tuesday, October 28, 2014

Los Angeles - Thursday, October 30, 2014

St. Louis - Tuesday, November 4, 2014

Orlando - Tuesday, November 11, 2014


USEFUL LINKS

USAC Website

www.usac.org/sl

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/sl



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

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

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

THANK YOU

Dan Rivera

The PSC Group

[email protected]

e-rate 2.0 overview

Technology

erate process esl

eligible services available

funding years

aruba networkshq

eligible functionalities

rights reservedleader

supportconfidential

estimatedcat1 services