E-rate consortium applicants will often choose to file separate applications for groups of members with the same discount rate rather than filing consolidated applications at average discount rates. Doing so greatly simplifies the process of apportioning E-rate discounts to the individual consortium members.
Consortium member discount rates were not an issue in the first and second ECF windows (ECF-1 and ECF-2) * because there were sufficient funds, with 100% reimbursements, to meet all valid requests and funding.
ECF-3, as my father was fond of saying, is a “different kettle of fish.” Demand in the third application window is expected to exceed the remaining ECF funding. In this situation, funding, although still at the 100% reimbursement level, will be available only to applicants in the higher discount rate bands based on the following matrix (see our newsletter of March 28th).
Funding availability for individual applicants will depend upon their individual discount rates as adjusted for urban and rural status. Funding for consortium members, particularly those at different discount rates, will depend upon how USAC calculates and prioritizes consortium discounts.
To understand the problem, consider the example of a small, three-member, urban consortium with two members at 90% and one member at 50%. Traditionally, that consortium would have an average discount of 77%. The ECF-3 question is where would that consortium fall within the FCC’s funding prioritization scheme?
At present, the answer is uncertain. There are several possibilities, namely:
- At 77%, the consortium would rank above the 75% rural applicants but below the 80% urban applicants. This could mean that a 50% discount urban consortium member would be funded when 75% or 65% rural applicants would not.
- The FCC’s unstated rule might be that only priority matrix discount rates apply. As such, the “77%” consortium would not qualify as 80% and thus must be considered as 60%, the next lowest urban discount band, for prioritization purposes.
- The FCC might instruct USAC ignore the consortium average and instead look within the consortium and prioritize each member based on their own individual discount (assuming funding requests can be allocated accordingly).
Pending further guidance — probably unlikely at this stage in the application window — we encourage consortium applicants to avoid mixed-discount applications either by filing separate applications at different discount rates or, at a minimum, filing separate FRNs for different discount rates. As illustrated below, this can be done within consortium applications that include fields for recipients of service. We also recommend making full use of the Narrative fields.
