FY 2015 E-rate • • • • • • • Funding: just how much funding is available? Determining your discount ESL – Reductions, Eliminations, Additions Category 2 budgets and Wi-Fi Contracts and SAP Consortia and Direct Connections Forms Form Review Team Form Review Team FY 2015 Funding Cap • $2,400,000 • $1,000,000 • $3,400,000 Cap Internal Connections Funding Funding available for FY15 and FY16 • We don’t know what will happen after FY16 – Could be a continuation of the same – Could revert back to what we were – Could be a totally new game Simplifying Discount Calculations New Discount Principles • Discounts are calculated for the organization as a whole. • Discount rates do not change based on which entities within a district/system are receiving service. • Libraries derive their discount from the NSLP eligibility of the district in which the main outlet is located. • Consortia continue to use simple average of member discounts. • Rural status is determined at the district/system level and only if more than 50% of schools or libraries are rural. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 5 Revised Discount Matrix Note lower top discount rate for Category Two services. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 6 Simplifying Discount Calculations School Districts • All schools in the school district get the same discount. – Simplifies process by not having to calculate multiple discount rates for different groups of schools. – When eligible, Non-Instructional Facilities (NIFs) get the same discount as the schools in district. – Single schools within a district never get their own discount rate, even if they are the only school receiving that service. – Urban/Rural status based on all of the schools in the district (not including NIFs). Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 7 Simplifying Discount Calculations Libraries and Library Systems • Libraries get their discount based on the percentage of student eligible for the NSLP in the school district in which the main outlet is located. – No longer calculate discount based on all districts in which library system has outlets. • Libraries calculate their own urban/rural status based on their own outlets. Therefore, the library system’s discount may not match the school district’s discount rate. – Bookmobile and kiosks count as library outlets. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 8 Simplifying Discount Calculations Non-Instructional Facilities (NIFs) • By definition, NIFs are neither schools nor libraries. • NIFs get the discount of the school district or library system, regardless of the entities they serve. • NIFs with classrooms, like all other entities in the school district or library system, get the same district-wide discount. • NIFs don’t get an urban/rural status – NIFs get their discount from the district/system, regardless of their physical location and are not counted in the urban/rural determination. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 9 School District Calculations School District Discount Example • School District A (10 schools) – Total student population 3,000 students – Total students eligible for NSLP = 1,000 students – All but one of the schools are located in urban areas, so district = urban – 1,000 students eligible for NSLP/3,000 students = 33% eligible Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 10 School District Calculations School District Discount Example • School District A Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 11 Discount Calculation Exceptions Urban or Rural; Well, which is is? • The Census Bureau identifies two types of urban areas: • Urbanized Areas (UAs) of 50,000 or more people; • Urban Clusters (UCs) of at least 2,500 and less than 50,000 people. • “Rural” encompasses all population, housing, and territory not included within an urban area. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 12 Discount Calculation Exceptions Exceptions to Discount Calculations • Voice Services Phase Down – All voice service (POTS, Centrex, VOIP, cellular voice, etc.) are subject to 20 percentage point reduction per year from your regular discount • FY 2015 = Regular discount – 20% • FY 2016 = Regular discount – 40% etc. • Category Two Top Discount – Top discount rate = 85% instead of 90% Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 13 Advanced Discount Calculations One School; Three Discounts • ABC Charter High School – Total student population = 1,000 – Total student population eligible for NSLP = 800 = 80% students eligible for NSLP Category One Discount = 90% Category One Discount for Voice = 70% (90 - 20) Category Two Discount = 85% Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 14 Pause for a moment….. • Questions • Ready for Eligible Services List? Eligible Services Overview • Eligible Services List (ESL) – Category One • • • • Broadband Voice Services Eliminated Services Eligibility Limitations – Miscellaneous • Lit and Dark Fiber • Pricing Transparency – Category Two • Internal Connections • Eliminated Internal Connections • Managed Internal Broadband Networks • Basic Maintenance of Internal Connections • Bundling Order Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 16 Eligible Services Draft Eligible Services List • Went from 49 pages to 6 • Focus support on Broadband • Phase down of Voice Services • Eliminates outdated legacy services and other former Priority One services Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 17 ESL – Category One Eligible Data transmission services and Internet Access • ATM • Frame Relay • Broadband over Power Lines • ISDN • OC-1, OC-3, OC-12, OC-n • Cable Modem • DSL • DS-1, DS-3 • Ethernet • Fiber (Lit and Dark) • MPLS Eligible Services I Fall 2014 E-rate Program Applicant Trainings • Satellite Services • SMDS • Telephone Dialup • T-1, T-3, Fractional T-1 • Wireless Service (e.g. microwave) 18 ESL – Category One *NEW* Eligible Voice Services Subject to Phase Down • Centrex • Satellite telephone service • Circuit capacity dedicated • Shared telephone service to providing voice service • Wireless telephone • Interconnected VoIP service including cellular voice • Local, long distance, 800 service • POTS – Excludes data and text messaging • Radio Loop Eligible Services I Fall 2014 E-rate Program Applicant Trainings 19 ESL – Category One *New* Eliminated outdated legacy services and other former Priority One services • Paging • Custom calling services • Directory assistance charges • Direct inward dialing • Text messaging • Inside wire maintenance • 900/976 call blocking *New* Eliminated services that do not provide broadband • E-mail • Web hosting • Voice mail Eligible Services I Fall 2014 E-rate Program Applicant Trainings 20 ESL – Category One Eligibility Limitations for Data Plans, Air Cards and Mobile Hotspots for Portable Devices • Support is limited to those cases where individual data plans are the most cost-effective option for providing internal broadband access for portable mobile devices • Funding is considered not cost-effective when users can already access the Internet through internal wireless broadband networks • Exceptions may include library bookmobiles or where there is a very small number of students or patrons Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 21 ESL – Category One Eligibility Limitations for Data Plans, Air Cards and Mobile Hotspots for Portable Devices • Eligibility requirements: – Must be able to demonstrate either that installing a Wireless Local Area Network (WLAN) is not physically possible or – Must be able to provide a comparison of the costs to implement an individual data plan versus WLAN solution • “The cost comparison may be established through the competitive bid process of seeking and comparing bids on both WLANs and individual data plans.” Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 22 ESL – Category Two Eligible Internal Connections • *NEW*Subject to the Category Two five-year budget approach – Access points – UPS – Cabling – Wireless LAN Controllers – *NEW* Caching – Improvements, upgrades and software necessary to support eligible broadband internal connections components – Firewalls – Network switches – Routers – Racks Eligible Services I Fall 2014 E-rate Program Applicant Trainings 23 ESL – Category Two *NEW* Formerly Eligible as Internal Connections • The following are no longer eligible for E-rate support: o Circuit Cards/Components o Storage Devices o Interfaces o Telephone Components o Gateways o Video Components o Antennas o Voice over IP components o Servers o Video over IP components o Software Eligible Services I Fall 2014 E-rate Program Applicant Trainings 24 ESL – Category Two *NEW* Managed Internal Broadband Services (e.g. Managed Wi-Fi) • Subject to the Category Two five-year budget approach • Services provided by a third party – Operation – Management – And/or monitoring of eligible broadband internal connection components • The third party may manage the school or library’s equipment or provide the equipment as part of a lease Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 25 ESL – Category Two Basic Maintenance of Internal Connections *NEW* Subject to the Category Two five-year budget approach Support for basic maintenance of eligible internal connections such as – Repair and upkeep of hardware – Wire and cable maintenance – Basic tech support – Configuration changes Support for BMIC is limited to actual work performed under the contract Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 26 ESL - Miscellaneous Miscellaneous • Eligible Charges – Taxes, surcharges and other similar reasonable charges – Lease fees to rent or lease eligible components – Shipping charges – Training – Installation and configuration • *New* Installation may be provided by a third party Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 27 Pricing Transparency Increasing Pricing Transparency • Transparency requirements for both E-rate recipients and vendors begin in FY 2015 • Provides greater visibility into pricing and technology choices by peers • Improves analyses performed by the Commission, state coordinators and third parties regarding the program’s effectiveness and potential improvement of cost-efficient purchasing • Help identify best practices for purchasing and reducing waste Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 28 Bundling Order The Bundling Order - DA 14-712 • On May 23, 2014, the FCC issued the Bundling Order effective for FY 2015 and forward • Applicants must cost allocate non-ancillary components including, but not limited to, end user devices such as: – Tablets – Telephone handsets – VoIP handsets – Netbooks – Computers – Laptops – Cell Phones Eligible Services I Fall 2014 E-rate Program Applicant Trainings 29 Bundling Order Tech Plans • No longer required as part of e-rate Eligible Services I Fall 2014 E-rate Program Applicant Trainings 30 Pause for a moment….. • Questions • Determine your C2 budget? 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. – There is no budget for Category One services (those that connect broadband to schools and libraries). Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 32 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 a school or library, the applicant must allocate the NIF costs to the entities benefiting from the service while the costs for ineligible services to a NIF should be allocated out. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 33 Category Two Budgets How much is my budget? • The pre-discount budget for a school is calculated by multiplying the total number of students at the school by $150, with a minimum of $9,200 if the school has fewer than 62 students. • The pre-discount budget for a library is calculated by multiplying 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. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 34 Category Two Budgets How much is my budget (cont’d)? • Remember that the budget is PRE-DISCOUNT. • For example, for a school with 1,000 students: – At the 85% discount rate (the maximum discount rate for Category Two), the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $127,500. – At the 50% discount rate, the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $75,000. – At the 20% discount rate, the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $30,000. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 35 Category Two Budgets How do I allocate costs for shared services? • 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) Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 36 Category Two Budgets Example 1 • My school has 200 students. How do I calculate my Category Two pre-discount budget? – 200 students x $150 per student = $30,000. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 37 Category Two Budgets Example 2 • My school has 100 students and a Category Two pre-discount budget of $15,000. I plan to use the entire amount for FY2015. If we get 20 additional students for FY2016, how does this impact my pre-discount budget? Calculate the budget each year using the total number of students that year. – In FY2016, 120 students x $150 per student = $18,000. – Subtract the pre-discount amount used in FY2015 to determine the amount available in FY2016. Subtract $15,000 budget used in FY2015 from $18,000. – Available pre-discount budget for FY2016 is $3,000. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 38 Category Two Budgets Example 3 • My school district has three schools – School A with 25 students, School B with 50 students, and School C with 75 students. How do I correctly allocate a shared service with a pre-discount cost of $300? Straight line Proportional by students Specific (e.g., usage) A = $100 A = 25/150 x $300 = $50 A uses 30% = $90 B = $100 B = 50/150 x $300 = $100 B uses 15% = $45 C = $100 C = 75/150 x $300 = $150 C uses 55% = $165 $300 $300 $300 Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 39 Category Two Services • Eligible Broadband Internal Connections Components – Access points used in a wireless local area network (WLAN) environment or a wired local area network (LAN) – Antennas, cabling, connectors, and related components used for internal broadband connections – Caching – Firewall services and components – Switches – Routers – Racks – Uninterruptible Power Supply (UPS)/Battery Backup – Wireless controller systems – Software supporting each of the components on this list used to distribute high-speed broadband throughout school buildings and libraries Category Two Services • Eligible Managed Internal Broadband Services – Services provided by a third party for the operation, management, and monitoring of eligible broadband internal connections components are eligible managed internal broadband services (e.g., managed Wi-Fi). – E-rate support is limited to eligible expenses or portions of expenses that directly support and are necessary for the broadband connectivity within schools and libraries. Eligible expenses include the management and operation of the LAN/WLAN, including installation, activation and initial configuration of eligible components, and onsite training on the use of eligible equipment. – 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. Category Two Services • Wi-Fi; Minimum of 3 options: 1. Managed solution where a service provider owns, manages, monitors, installs and maintains the Wi-Fi equipment. The school or library leases the equipment as a managed service. 2. The school or library purchases the equipment but hires a service provider to manage, monitor, install and maintain the equipment, but the school or library retains ownership. 3. The school or library purchases the equipment and performs all related management, installation and maintenance of the equipment. Pause for a moment….. • Questions • Ready for Contracts and SAP? Contracts What do I need in place prior to filing FCC Form 471 for contractual services? • Applicants should have a signed contract or legally binding agreement prior to filing the FCC Form 471. – Contract must be signed and dated on or before the FCC Form 471 certified postmark date – Legally Binding Agreement is acceptable when the applicant can demonstrate written offer and acceptance exist. Verbal offer and/or acceptance is not allowable. • Applicants are required to comply with state and local procurement rules in addition to FCC rules Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 44 Competitive Bidding Exemptions When is the FCC Form 470 not required? • Applicants are exempted from the competitive bidding rules when ordering business-class Internet access services, if: – the pre-discount cost is $3,600 or less annually, and – the bandwidth provided is at least 100 Mbps downstream and 10 Mbps upstream – service and price are commercially available • Applicants seeking Category Two equipment are exempt from filing the FCC Form 470 if they purchase from PMC – The FCC has not yet designated any contracts as PMC – State master contracts and nation-wide contracts are not the same as preferred master contracts Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 45 Simplified Application Process (SAP) Do I have to file FCC Form 471 annually? • Yes, FCC Form 471 must be filed annually. There is no multi-year FCC Form 471. • A simplified application process will be available for applicants who have a multi-year contract. They will not be required to complete a full FCC Form 471 during the subsequent contract years. – Must complete a full FCC Form 471 the first year you apply for discounts for that contract using the new FCC Form 471 – Indicate on the FCC Form 471 you have multi-year contract the first year you apply using the new FCC Form 471 Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 46 Simplified Application Process (SAP) Do I have to file FCC Form 471 annually? (cont’d) – Contract cannot be longer than 5 years – Required to provide basic information during the subsequent contract years – Does not guarantee funding in the subsequent years – Required to explain changes to funding (e.g., discount change, services, etc.) Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings 47 Direct Connect 207. In the interest of promoting access to highspeed broadband connections in the simplest and most efficient manner possible, we take action that we allow rural schools and libraries eligible for E-rate support to establish direct connections for the purpose of accessing high-speed broadband services. In many rural communities, a library with low bandwidth may be in close proximity (e.g., across the street) to a school with significantly higher bandwidth and could be easily added to the school WAN. We find that allowing these connections will afford some schools and libraries that presently lack access to high-speed broadband the opportunity to quickly and efficiently benefit from such connections. Dark Fiber Lit Fiber Microwave We recognize that it will likely be necessary to waive some of our rules to allow E-rate support for such connections. We therefore encourage applicants to file waiver requests for the purpose of seeking E-rate support for such direct connections. Dark Fiber Lit Fiber Microwave Category 1 services Include Equipment as a managed service Pause for a moment….. • Questions • Ready for Lunch?