Category Two Budget Tool Update:
E-Rate Central staff noticed something interesting in the Category Two Budget this past week. USAC’s EPC Category Two Budget Tool was reporting budgets that did not align with $150/student or $2.30/$5 per square foot of a library. For example, the school shown below, with 727 students based on prior year calculations of $150/student, would have a C2 budget amount of $109,050. USAC’s tool, however, is reporting a C2 budget of $110,140.50
After inquiring with USAC and doing some additional research, it was determined that USAC is now applying a 1% inflation factor to budget calculations. As per the 2nd E-rate Modernization Order:
97. Category Two Costs. We find that the $1 billion annual target budget set for category two services in the E-rate Modernization Order is sufficient to provide the E-rate support needed for a five-year deployment of LANs and WLANs. In July, we stated that the question of available funds for these five-year budgets was closely linked with the long-term funding for the E-rate program.238 We therefore applied the five-year budgets to applicants that received E-rate support for category two services in funding years 2015 and/or 2016, pending resolution of the program’s overall funding needs. Having now extended these category two applicant budgets for all applicants for three additional funding years, we reaffirm the funding level for the E-rate support for category two budgets, based on the analysis set out in the E-rate Modernization Order.239 We also index the category two budget target and the applicant budgets to inflation.
The calculations are as follows for the example above:
| Funding Year |
Students |
Base Per Student
Category 2 Budget |
Inflation Factor |
Post-Inflation Adjustment Per Student
Category 2 Budget |
Total
Category 2 Budget |
| 2015 |
727 |
$150 |
N/A |
$150 |
$109,050 |
| 2016 |
727 |
$150 |
1% |
$151.50 |
$110,140.50 |
| 2017 |
727 |
$150 |
1.3% |
$153.47 |
$111,572.69 |
The inflation factor applies to both school and library budgets. For FY 2016 the new effective Category Two budget is: $151.50/student for schools, $2.32/ sq.ft or $5.05/ sq.ft for libraries, and a Category Two budget floor of $9,292.00 for FY 2016*.
On March 13th, 2017, the FCC issued the new inflation factor for FY 2017 of 1.3%. For FY 2017 the new effective Category Two budget is: $153.47/student for schools, $2.35/ sq.ft or $5.12/ sq.ft for libraries, and a Category Two budget floor of $9,412.80.
*We initially reported the 1% increase as applicable to FY 2017 based on the most recent update to USAC’s Category Two Budget Tool. We have confirmed with the FCC that the 1% is applicable to FY 2016 and the 1.3% is applicable to FY 2017 Category Two budgets. We have updated the chart and summary above accordingly.
Form 486 Urgent Reminder Letters Update Continued:
Last week in our newsletter of March 6th, we reported that USAC had experienced difficulties issuing the Form 486 Urgent Reminder Letters and sent erroneous Urgent Reminder Letters to applicants with certified Form 486s. USAC has stopped sending Urgent Reminder Notices until the bug has been fixed. In the interim, USAC began issuing retractions of the erroneously issued Urgent Reminder Letters.
The USAC notice identified the erroneously cited FRNs, which the previous email had cited as being not yet certified, and requested applicants to ignore the previous email. If you received this notice or if you are unsure of any FRN’s 486 status, log into EPC and verify its current status.