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March 13, 2017


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 37 for FY 2016 was released last Thursday, March 9th, for a total of $29.4 million. Roughly 108 FCDLs were issued in Wave 37. Cumulative national funding through Wave 37 is $2.34 billion. Wave 38 is scheduled to be released on Thursday, March 16th.

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
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.

Upcoming 2017 E-Rate Deadlines:

March 17 Form 486 deadline for FY 2016 funding committed in Wave 21. More generally, the Form 486 deadline is 120 days from the FCDL date or the service start date (often July 1st), whichever is later.  This means that Form 486 deadlines for funding commitments received in later waves will follow at roughly one week intervals, including the following March and April deadlines:

Wave 22                03/21/2017
Wave 23                03/28/2017
Wave 24                04/04/2017
Wave 25                04/11/2017

Applicants missing these (or earlier) deadlines should watch carefully for “Form 486 Urgent Reminder Letters” (actually emails directing the applicants to EPC News Feed items). The Reminders will afford applicants with 15-day extensions from the date of the emails to submit their Form 486s without penalty (see USAC News Brief of November 4th and our summary above).

April 13th Last day for applicants to file a Form 470 while fulfilling the required 28 day waiting period prior to submitting the Form 471.
May 11th Last day for applicants to file a Form 471 within the filing window. The window closes at exactly 11:59:59 EDT.

On March 7th, U.S. Senators Richard Blumenthal and Edward Markey led a group of twelve Democratic Senators to write a letter to the FCC citing their concerns with the new Commission’s retraction of the, “E-Rate Modernization Progress Report” as we mentioned in our newsletter of February 6th. This is in addition to U.S. Senator Bill Nelson’s criticism of the FCC’s retraction of the progress report.

The U.S. Senators cite the 2014 Modernization Orders as responsible for an increase in fiber connectivity (especially in rural areas), the availability and utilization of funding for Wi-Fi networks, as well as financial security for the neediest schools and libraries.

USAC’s Schools and Libraries News Brief of March 10, 2017, provides the following Top 10 Window Tips for FY 2017:

  • Familiarize yourself with the application process
  • Create and/or delete users in your organization’s EPC account
  • Review the process and requirements to apply for newly eligible fiber
  • Run an open and fair competitive bidding process
  • Wait your 28 days
  • Review your contracts
  • File your FCC Form 471
  • Retain and file all program-related documentation
  • Prepare for USAC’s review of your application
  • Know where to go for help.