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September 21, 2015


The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7810), or through our Contact Us web form. Additional E-rate information is located on the E-Rate Central website.

Wave 18 for FY 2015 will be released on Friday, September 25th. Funding for FY 2015 is available for both Category 1 and Category 2 services at all discount levels. Cumulative funding for FY 2015 as of last week is $1.80 billion.

Wave 66 for FY 2014 will be released on Wednesday, September 23rd. Funding for FY 2014 is available for Priority 1 services only. Priority 2 funding has been denied at all discount levels. Cumulative funding for FY 2014 is over $2.27 billion.

The FCC released the final version of the FY 2016 Eligible Services List (“ESL”) (DA 15-1012) dated September 11, 2015. For the most part, the final ESL tracks the earlier draft version (see our newsletter of May 25, 2015). As was the case last year, the 2016 ESL itself is in a streamlined, condensed format, and should be read in conjunction with the explanatory Order.

The following changes and clarifications are of note:

  1. Form 470s and RFPs for Category 1 fiber systems must always cover lit fiber options. The final ESL adds an explicit note requiring that applicants seeking “…bids for special construction of dark fiber or self-provisioned broadband networks must also seek bids for lit fiber service and fully consider all responsive bids.”
  2. “Self-provisioned” broadband networks are eligible as of FY 2016, subject to certain safeguards. Most importantly, an applicant seeking E-rate support for a privately-owned network must be able to demonstrate that it is the most cost-effective option.
  3. Funding for a self-constructed network is available only if the system is built and used within the same funding year. Larger applicants with multi-year private network plans presumably will have to request funding in phases, each of which must be shown to be cost-effective.
  4. The ESL limits eligible “Network Equipment” to “modulating electronics and other equipment necessary to make a Category One broadband service functional.”  However, the FCC declined to identify a list of such equipment. To do so, the FCC argued, “could be unnecessarily limiting.”  Instead, the FCC indicated that it “will continue to assess the services and equipment sought by applicants and may revisit this issue for future funding years.”  In the interim, this argument suggests a broad, rather than a narrow (as many had assumed), definition of eligible Category 1 “Network Equipment.”  It will be interesting to see how USAC will interpret this guidance during next year’s PIA review.
  5. Applicants with existing dark fiber or self-provisioned networks “will not be required to seek new bids for a lit fiber service in order to receive funding to upgrade or refresh their Network Equipment or to re-contract for maintenance and operation contracts.”
  6.  Only “basic” firewall service or equipment is eligible. The FCC explicitly rejected requests to designate all firewall services — or any additional network security services — as eligible.
  7. Managed Internal Broadband Services (“MIBS”), which became eligible in FY 2015, remains broadly defined as third-party “operation, management, and monitoring” of Internal Connections. USAC has informally clarified that this does not include the Basic Maintenance of Internal Connections (“BMIC”) that is another subset of Category 2 and is subject to separate restrictions. MIBS can, however, cover equipment owned and installed by a third party. As such, the third party would be responsible for the maintenance of eligible equipment leased to the applicant.
  8. The FCC declined to revise (restore, add, or clarify) other aspects of product and service eligibility including the phase-out of voice discounts, the strict cost-effectiveness of wireless data plans, and redundant services for network reliability. Such changes were deemed “beyond the scope of the Bureau’s authority to annually revise the ESL.”

Upcoming E-Rate Training and Deadlines:

September 30th Service delivery deadline for FY 2014 non-recurring (e.g., installation) services. Requests to extend this service delivery deadline, due to circumstances beyond the applicants’ or service providers’ control, must be submitted on or before the September 30th deadline
October 2nd USAC will conduct the first of this fall’s eight regional applicant training sessions in Washington, DC. Although registration (including the waiting list) for this session is full, copies of the training materials should be available online a day or two before this first session. The remaining seven USAC training sessions will occur approximately weekly from October 8th through November 16th. The full USAC training schedule is available online. Registration at this point is assured only in Albuquerque and Portland.
October 28th Invoicing deadline for FY 2014 recurring services. Applicants filing Form 472 reimbursement forms must allow time for these “BEARs” to be pre-acknowledged by the applicable service providers before the forms can actually be submitted. Requests to extend this invoicing deadline must be submitted on or before the October 28th deadline.
October 29th First Form 486 deadline for certifying the start of service (and CIPA compliance, if applicable) for FRNs approved for FY 2015 on or before July 1, 2015 (i.e., in Waves 1-6). On a going forward basis, the Form 486 deadline is 120 days from the later of the FCDL approval date or the start of service date.

Changes to the USAC Reference Section:

USAC updated sections in the on-line Reference pages of the Schools and Libraries website. While some changes are clearly editorial or grammatical, others are related to E-rate 2.0 updates. It is worth the time to review these changes. While not all inclusive, the changes include the sections covering: non-traditional student eligibility tables (you should check for your state); educational service agency (ESAs, LEAs, ESUs, BOCES and the like) roles (e.g. USAC must now verify, rather than the former “determine”, that the agency provides elementary or secondary education as defined by that state); Billed Entity Numbers; Urban/Rural status; the definition of educational purpose for schools and libraries; cost allocations for services; and ancillary use. 

The S&L News Brief of September 18, 2015, discusses the process for updating a certified FCC Form 470, if necessary. The News Brief notes that such updates may include correcting ministerial and clerical errors in certain fields and/or uploading additional RFP documents. However, applicants cannot edit service descriptions on the Form, nor can any additional RFP information be added that would affect the scope of services listed. Applicants cannot remove an RFP document after the certification of the Form 470. The News Brief also covers editing the application’s nickname, adding an RFP document, changing the main contact person, and editing the technical contact’s information.