Calculating the Category 2 Budget

Beginning in FY2015, requests for Category Two (C2) products and services, which include internal connections, managed internal broadband services, and basic maintenance of internal connections, are limited to a pre-discount five-year budget based on the number of students in a school.

C2 budgets are pre-discount. That is, the pre-discount cost of the products and/or services approved for E-rate discounts is charged against the C2 budget.

For planning purposes, USAC also provides the "post-discount" budget amount – the cost to the applicant of the C2 products and services after the E-rate discount is applied.E-Rate discount rates for Category 2 are calculated just as for Category 1 services with the exception of 90% eligible entities. The highest C2 discount rate is 85%.

Calculating Category 2 Budget

To calculate a school's C2 budget, the number of students in a school is multiplied by a specific dollar figure. That dollar figure is adjusted each year for inflation. If the calculation for a school results in a figure lower than a minimum dollar amount – the "budget floor" – the C2 budget for that school is set at that budget floor. The budget floor is adjusted each year for inflation.

The total number of students is the total of the number of full-time students and the maximum number of part-time students ("peak part-time students") at the same time during the school day. Students attending after-school activities or after-school events and students who attend a virtual class that originates at a school but who are not on the school premises cannot be included in the student counts.

Schools include part‐time students in their student count only when those students regularly increase the maximum number of students on the school premises at the same time during the school day.

  • Example 1: A high school has 100 full‐time students, 50 part‐time students that attend classes in the morning, and 25 part‐time students that attend classes in the afternoon. The school should report a maximum of 50 part‐time students. This would result in a C2 budget calculation of $22,500, or (100+50) full‐ and part‐time students x $153.47 per student.
  • Example 2: A vocational school has no full‐time students, 100 students in the morning and 100 different students in the afternoon. The school should report a maximum of 100 part‐time students. This would result in a C2 budget calculation of $15,000, or (0+100) full‐ and part‐time students x $153.47 per student.

 C2 budget calculations can change from funding year to funding year, as student counts go up or down and takes into consideration previously committed C2 funds.

  • For FY2018, USAC can make commitments on the difference between the C2 budget for that funding year and the total pre-discount amount for all C2 commitments made for FY2015 through FY2017.
  • If the total of your C2 commitments for FY2015 through FY2017 exceeds the C2 budget calculated for FY2018, USAC cannot make C2 commitments for FY2018.

 Category 2 Budgets for a Library or Library System: 

USAC’s C2 Budget Tool will assist in determining the current Category 2 budget for each entity.

Starting in FY2015, requests for Category Two (C2) products and services, which include internal connections, managed internal broadband services, and basic maintenance of internal connections, are limited to a pre-discount five-year budget based on the square footage of the library.

C2 budgets are pre-discount. That is, the pre-discount cost of the products and/or services approved for E-rate discounts is charged against the C2 budget.

For planning purposes, USAC also provides the "post-discount" budget amount – the cost to the applicant of the C2 products and services after the E-rate discount is applied.

Calculating Category 2 Budget

E-Rate discount rates for Category 2 are calculated just as for Category 1 services with the exception of 90% eligible entities.

The highest C2 discount rate is 85%.

To calculate a library's C2 budget, the square footage of the library is multiplied by a specific dollar figure. That dollar figure is adjusted each year for inflation. If the calculation for a library results in a figure lower than a minimum dollar amount – the "budget floor" – the C2 budget for that school or library is set at that budget floor. The budget floor is adjusted each year for inflation.

A Category Two budget must be spent by the specific library it was calculated for. The funds cannot be shifted or averaged across library systems.

In order to calculate the C2 budget for your Library, first determine the Institute of Museum Services (IMLS) locale code for site. You can locate your IMLS code by contacting your state library or IMLS, or by downloading and reviewing the .CSV files from the FY 2014 Public Library Survey (PLS) featured on the PLS Data and Reports page on the IMLS website.

NOTE: Total the square footage for all floors occupied by the library and enclosed by the outer walls of the library, including non-public areas. Do not include patios or other outdoor spaces such as parking lots unless they are enclosed by the outer walls of the library.

  • For more urbanized libraries – those with an IMLS locale code of 11, 12, or 21 – multiply the total square footage of the library by $5.12 (for FY2017).
  • For all other libraries – those with all other IMLS locale codes – multiply the total square footage of the library by $2.35 (for FY2017).
  • If the calculation results in a C2 budget of less than $9,412.80, the C2 budget for the library is $9,412.80 (for FY2017).

Second, use the C2 Budget Tool to determine the total pre-discount amount for all C2 commitments made for FY2015 through FY2017 for the library. This number is in the field labeled "Approved Pre-Discount" in the detailed search results for the library.

 Finally, subtract the total pre-discount amount for FY2015 through FY2017 from the calculated C2 budget for FY2018. USAC can make commitments on pre-discount C2 costs up to that net amount.

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