“Modernized” E-rate
Coping with the New Processes
eRate 360 Solutions, LLC
Rich Larson and Kasey Oakley
JSU-CORE E-rate Forum – Houston Cole Library
Thursday, October 9, 2014
Disclosure
• This presentation includes a number
of presentation slides from USAC’s
FY 2015 applicant training
• For the complete set of presentation
slides, go to:
http://www.usac.org/about/tools/TrainingArc
hive/trainingDetails.aspx?eid=223
Major Processing Steps
• Preliminary: CIPA Compliance and
Planning
• Bidding, Evaluation and Selection:
Form 470 and RFP
• Funding Request: Form 471
• Post-commitment: Forms 486, 472,
474, Document Retention
Preliminary - CIPA Compliance
• No changes from last year
BUT
• Greater E-rate focus on Broadband,
may be more compliance reviews
Preliminary - Planning
• Technology Plan no longer required,
but need for planning never greater
• Fiscal impacts
–Voice funding phase-out
–Ineligible services (Categories 1 and 2)
–Category 2 budget
–Discount %s (good or bad for you?)
Preliminary - Planning
• Fiscal impacts – Category 1
–Ineligible services: includes web
hosting, email, voice mail, directory
assistance, text messaging, custom calling
services, DID, inside wire maintenance
–Wireless data plans: very difficult to
maintain eligibility
–Voice funding phase-out: discount
being reduced 20% each year until …
Preliminary - Planning
• Fiscal impacts – Category 2
–Ineligible items– includes:
Circuit cards, interfaces, gateways, antennas,
servers, software, storage devices, telephone
and video components, VoIP components
–NEW Eligible Item: Managed Internal
Broadband Services (Managed WiFi)
–Category 2 Pre-Discount Budget
Category Two Budgets
Overview
• What are Category Two budgets?
• Which entities have budgets?
• How much is my budget?
• Can my budget change from year to year?
• What period of time does my budget cover?
• How are services counted against my budget?
• How do I allocate costs for shared services?
• Examples
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
8
Category Two Budgets
What are Category Two budgets?
• Each school or library receiving Category Two support in
FY2015 and/or 2016 will have a five-year budget for Category
Two products and services (those that distribute broadband
within schools and libraries).
– Category Two products and services include Internal
Connections, Managed Internal Broadband Services, and
Basic Maintenance of Internal Connections.
– Products and services ordered in excess of an entity’s
Category Two budget will not receive E-rate discounts.
– “Budgeting” does not apply to Category One services
(those that connect broadband to schools and libraries).
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
9
Category Two Budgets
Which entities have Category Two budgets?
• Each individual school and each library outlet or branch has a
pre-discount budget.
• School districts or library systems may not average their costs
across multiple school or library budgets.
• Non-instructional facilities (NIFs) – including school NIFs with
classrooms and administrative buildings – do not have prediscount budgets.
– If a NIF is essential for the effective transport of
information to or within an school or library, the applicant
must allocate the NIF costs to one or more of the entities
benefiting from the service.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
10
Category Two Budgets
How much is my budget?
• SCHOOL: Multiply the total number of students at the
school by $150, with a minimum of $9,200 if the school
has fewer than 62 students.
• LIBRARY: Multiply the total area in square feet –
including all areas enclosed by the outer walls of the
library and occupied by the library – by $2.30, with a
minimum of $9,200 if the library is less than 4,000 square
feet.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Category Two Budgets
Can my budget change from year to year?
• FOR EACH SCHOOL AND LIBRARY - For FY2016 and after:
Your pre-discount budget in is decreased by
commitments approved for that entity starting with
FY2015 commitments.
Includes your application and any other application with
your entity number, such as on a consortium application
• Your pre-discount budget could go up or down in FY2016
if your student count or square footage changes.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Category Two Budgets
Can my budget change from year to year (cont’d.)?
• For existing schools: If your student count decreases in
subsequent funding years, you do not need to repay the
fund for money disbursed in excess of the five-year
budget in years when your student count was higher.
• For new schools: If you overestimate your student count
and exceed the five year pre-discount budget based on
your actual student count, you must return any funds in
excess of the allowable budget to USAC.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Category Two Budgets
What period of time does my budget cover?
• The pre-discount budget calculation is for a five-year
period, starting with the first funding year in which you
receive Category Two support.
– However, you can apportion your pre-discount budget in a
manner that best meets your needs. You could spend all of
it in FY2015, spend 1/5 each year, or any other
combination up to your total.
• If you do not receive any E-rate support for Category Two
service in FY2015 or FY2016, and if the FCC discontinues
the Cat 2 funding, the Two-in-Five rule will apply to your
Category Two commitments in FY2017.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Category Two Budgets
How are services counted against my budget?
• Any funding commitments that include your entity as a
recipient of service in FY2015 count against your prediscount budget for that entity.
• If no funding has been distributed on a funding request,
you can file an FCC Form 500 to return the funding to
USAC.
• If entities are sharing the service, we will need specific
information so that we know how to apply the returned
funds to specific entities.
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Category Two Budgets
How do I allocate costs for services shared by entities?
• On the FCC Form 471, you indicate how funding should
be allocated among entities sharing services.
• Your allocation can be:
– Straight-line (all entities share the cost equally)
– Proportional (based on student count/square footage
of each entity)
– Specific (you specify each entity’s share)
Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings
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Bidding, Evaluation and Selection
• You can File Form 470 NOW using the
existing online Form 470
– OK for “MTM” or “Tariff” services
– Block 1, Item 2: Choose "FY2014: July
1, 2014 through June 30, 2015" from
the dropdown menu.
– Block 2: If you are not sure of the correct
service type to choose, post for that
service in both service types.
Bidding, Evaluation and Selection
• You can File Form 470 NOW (cont’d)
– Item 13: In the box: “If you are requesting
services for a funding year for which an
FCC Form 470 cannot yet be filed online,
include that information here." indicate
that this Form 470 is for FY2015 requests.
– Certify online – no paper certs.
– File before approved FY 2015 Form 470 is
released or you will lose this 470.
Bidding, Evaluation and Selection
• New Form 470 - few changes
– Addition of “Managed Internal Broadband
Services” to Internal Connections
– No technology plan certification
– Document retention certification –
documents must be retained for 10 years
• TIP: When Form 471 Item 21 Excel
Templates are available, require
bidders to submit using the templates.
Bidding, Evaluation and Selection
• Limited exemption(s) from filing 470:
– When ordering commercially available,
business-class Internet access services IF:
1. the pre-discount cost for each entity served is
$3,600 or less annually, and
2. the bandwidth provided is at least 100 Mbps
down and 10 Mbps up
– Using a Preferred Master Contract (PMC)
• No PMCs designated for FY 2015 – FY 2016?
• State Master Contracts (SMCs) are not PMCs
Bidding, Evaluation and Selection
• TIP: On 470 and RFPs, require bidders to offer
Lowest Corresponding Price (LCP).
– Proposed pricing for services and equipment is
the same as “similarly situated non-residential
customers for similar services.”
– Regardless of bids, service provider invoices must
adhere to LCP rules.
– Service Providers are held accountable for
compliance with LCP – not you! Don’t hesitate to
hold their feet to the fire.
Bidding, Evaluation and Selection
• Other rules for RFPs and for bidding,
evaluation, and selecting winning
bids are unchanged.
• Document Retention now 10 years
from last date to receive service.
The NEW Form 471
• Must submit 471 online, but can certify
with paper (to obtain a PIN)
• Form has been overhauled
• Item 21 embedded in the form
• “Progressive disclosure” – only shows
screens pertinent to your application per
information you provide while filling out
the form.
– E.g.: schools only see school-related fields
The NEW Form 471
• Continuous backup of your input, and
warning of clock-out after 25 minutes.
• All entities entered once, then accessed
via pick list as needed for FRNs.
• Excel templates to be used to prepare and
upload Block 4 info, Item 21 information
(e.g.: parts data for Internal Connections).
• Dropdown menus for Item 21 services.
Form 471 – Blocks 1, 2, & 3
• Block 1 - Billed Entity Info:
–Same as FY 2014 (good!)
• Blocks 2 and 3: Not used (better!)
But your luck just ran out …
Form 471 – Block 4
Recipients of Service
• List all entities receiving services
– You can enter Entity #s one at a time OR
copy/paste information onto SLD’s Excel
template and upload to your 471
– SLD data base will provide entity name,
NCES or FSCS, urban/rural (U/R)
• SLD to determine U/R per new rules
• Error message will indicate if U/R cannot
be determined and why (e.g.: bad zip?)
Form 471 – Block 4
Recipients of Service
• List all entities (cont’d.)
–Lack of State LEA and School ID won’t
derail your application, but best to
enter
–Alternative Discount:
• Can mix NSLP, CEP, survey within district
• NOTE: Surveys cannot be extrapolated.
Form 471 – Block 4
Recipients of Service
• List all entities (cont’d.)
–# of Students – for this part of Block 4,
INCLUDE PART-TIME STUDENTS (OK to
double-count students)
–“Student Count Estimated” primarily
for new entities to enable Cat 2
budget (TIP: Estimate slightly high –
you can give back via Form 500)
Form 471 – Block 4
Recipients of Service
• Discount Calculation
– One %age for the entire District, except
Category 2: Max discount is 85%, not 90%
– Calculated off-line –only totals are on 471
– Total # of Students –
• for this part of Block 4, ONLY FULL-TIME
STUDENTS – NO DOUBLE COUNTING
• Students at NIFs-with-classrooms are
included
Form 471 – Block 4
Recipients of Service
• Discount Calculation (cont’d.)
–Eligible Students:
• Can supplement NSLP with your own
survey and direct certifications for
students not returning NSLP
• Survey results cannot be extrapolated “What you see is what you get.”
• CEP is alternative to NSLP and survey
Form 471 – Block 4
Recipients of Service
• Discount Calculation (cont’d.)
– CEP (Community Eligibility Program )
• School must have at least 40% of students
directly certified to qualify for CEP
• Apply national multiplier (1.6) to directly
certified population to determine # of NSLP
eligible students
• Schools are capped at 100% NSLP eligible
– You can choose NSLP, survey, or CEP for each
school in your district for maximum discount
– BUT DOCUMENT FOR PIA
Form 471 – Block 4
Recipients of Service
• Discount Calculation (cont’d.)
–Urban or Rural?
• SLD provides U/R designation for each
school (NIFs are excluded).
• 50% rule: If more than 50% of all
schools are designate Rural, district is
Rural – otherwise, district is Urban.
–Remember, NIFs don’t count for U/R
Form 471 – Block 4
Recipients of Service
• Discount Calculation (cont’d.)
School District:
1. Calculate Total # of Students for the
district.
2. Calculate Total # of NSLP Eligible Students
for the district.
3. Calculate %age of Eligible Students
4. Determine urban/rural status of district
5. Look up discount rate in discount matrix
Form 471 – Block 4
Recipients of Service
• Discount Calculation (cont’d.)
Independent School - same algorithm as school
district.
Consortium – simple average of consortium
members.
Library - CAUTION:
– % of eligible students - use % for school district
where main branch is located.
– Urban/Rural – for each outlet, use U/R of district
in which outlet located, then apply “greater than
50%” rule to determine U/R for entire system.
Form 471 – Block 4
Recipients of Service
• Questionaire
–1-2 questions re Internet Access
–2-3 questions re Wide Area Network
–You will only see questions relating to
your entity type (library or school)
Form 471 – Block 5
Details of Services and Costs
Most items same as last year, BUT …
• Item 21 inserted into the 471
• SLD provides Excel templates to upload
Item 21 detailed information.
• New service types in Item 11:
– Category 1: Voice Services (phase out)
– Category 2: Managed Internal Broadband
Form 471 – Block 5
Details of Services and Costs
Eligible Services List (ESL)
• Reduced from 49 pages to 6 pages
• Deals only with eligible items – does not
explain what is not eligible
• Glossary being moved to SLD web page
• For information previously in ESL,
contact Client Service Bureau
Form 471 – Block 5
Details of Services and Costs
Bundled Services
• FCC order in May 2014
• You must cost allocate INELIGIBLE nonancillary components such as:
– Telephone handsets
– VoIP handsets
– Computers
– Cell Phones
– Tablets
– Netbooks
– Laptops
– Wireless data plans(?)
• Failure to do so can result in denial of the
entire FRN
Form 471 – Block 5
Details of Services and Costs
• Items 10 thru 20 – only minor changes:
– Item 11: New service types
– Item 16a: You can enter multiple Billing
Account Numbers
– Item 19d: New item for info regarding
contract extensions
– Item 20j: Adjustments to discount %age
for Voice FRNs.
Form 471 – Block 5
Details of Services and Costs
• Multi-year Contracts:
–File full information in FY 2015
–Subsequent years: “greatly simplified”
information for FRNs
–Contracts limited to 5 years
–Rules to be fleshed out for FY 2016
Form 471 – Block 5
Details of Services and Costs
Item 21 – Embedded in 471
• Excel templates to be available to
prepare Item 21a, b, c, or d of the form
in advance of the filing window
• TIP: Form 470 & RFPs: When requesting
bids, require bidders to submit bids
using templates (if available) or the
applicable Item 21 info format.
Form 471 – Block 5
Details of Services and Costs
Item 21 – Embedded in 471 (cont’d.)
• Services entered line-by-line
– Enter all info – system won’t accept your
471 with open info items
– Cost columns must add up to
corresponding part of Item 20
– Pull-down menus for Type of Service, Type
of Connection, Type of IC, Type of Product,
etc.
Form 471 – Block 5
Details of Services and Costs
Item 21 – Embedded in 471 (cont’d.)
• Recipients of services/products:
–Category 1 (Item 21a): pull-down
menu for each service line item
–Category 2 (Items 21b, c, d):
• Table to allocate costs to each entity
• Can use Excel templates and upload
Form 471 – Block 5
Details of Services and Costs
Item 21 – Embedded in 471 (cont’d.)
• Allocations to entities: “Methodology
must be based on tangible criteria and
reach a realistic result.”
• Three general methods:
– Straight line (equally among entities)
– Quantities: enrollment, square feet, etc.
– Actual service or product purchased
Form 471 – Block 5
Details of Services and Costs
Item 21 – Embedded in 471 (cont’d.)
NIFs and Category 2
• A NIF can only receive Category 2 funding
if it is essential for the effective transport
of information to or within any school or
library outlet.
• You must allocate the NIF costs to the
entities benefiting from the service (which
counts against the entity’s Cat 2 budget
Form 471 – Block 5
Details of Services and Costs
Category 2 Pre-Discount reconciliation –
FRN requests vs. Budget on Block 4
• Totals Cat 2 Pre-Discount costs on THIS 471
ONLY and compares to budget for each entity
• If you exceed budget for an entity, you must
revise FRNs – cannot submit if over budget
• Important: This does not include other Cat 2
requests on other 471s (including Consortium
471s filed by another party)
Form 471 – Block 6
Certifications
• Basically same as last year
• Item 31: Document Retention now
10 years from last date to receive
service.
BEARs and SPIs
• Starting in FY 2016, BEAR payments to be
made directly to applicants
• BEAR/SPI filing deadlines:
– The latter of 120 days after the last day to
receive service or the date of the FCC Form
486 notification letter.
– Applicants can request and automatically
receive a single one-time 120-day extension
of the invoicing deadline.
Thank you from
eRate 360 Solutions!
A member of the
E-Rate Management Professionals Association
Any questions? Please feel free to:
– call us at 888-535-7771 or email us:
Rich – ext.102 (rlarson@erate360.com )
Kasey – ext.100 (koakley@erate360.com )
–visit our website at www.erate360.com