The eligibility of school bus Wi-Fi and hotspots in FY 2026 is no longer an issue. The FCC resolved that issue two weeks ago when it voted 2:1 to terminate the eligibility for both services and released an amended Eligible Services List (“ESL”) for FY 2025 (see our newsletter of October 6th). Attention now switches to the draft Eligible Services List for FY 2026 for which comments are due this Wednesday, October 15th.
Although we would not be surprised to see a number of comments bemoaning the loss of bus Wi‑Fi and hotspot eligibility, the only comments that the FCC are likely to consider are those for which it has expressly requested comment — BMIC and MIBS — two service categories that have historically been the source of applicant confusion.
Normally, when the FCC issues a request for comment on an issue, we try to simplify the request in our newsletter. Here, we think it may be more useful to see the full introductions of the two FCC requests to help readers better understand the breadth of the issues, particularly for BMIC.
For FY 2026, the Bureau proposes to modify how eligible software and other remote configuration services are categorized in the ESL. In the 2010 Sixth Report and Order, the Commission restricted E-Rate funding for basic maintenance of internal connections (BMIC) services to situations where “the service would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace” but for the maintenance. Shortly thereafter, the Bureau clarified that in order for applicants to be reimbursed for BMIC services, invoices needed to be submitted “for work actually performed, as opposed to invoicing in advance for estimated work that in some circumstances may never be performed.” The Bureau went on to say “fixed BMIC contracts will continue to be eligible for funding, but only for the work that is actually performed under the contract.” However, the Bureau also clarified that “reimbursement is permitted for some other types of BMIC without an applicant having to demonstrate that work was performed.” “Services such as software upgrades and patches, including bug fixes and security patches, and online and telephone-based technical assistance” were eligible, but need to be requested each funding year, requiring pro-ration of multi-year contracts for these BMIC software-based services. On the other hand, we allow multi-year software and licenses for internal connections to be requested in the first year along with the associated equipment. As a result, software-based licenses and services are treated differently depending on whether they are categorized as BMIC or internal connections, even when they are bundled or a hybrid software service. The differing treatment of these services in funding requests has created confusion and resulted in applicants risking competitive bidding violations when they were unable to make the proper distinction when requesting these services in their FCC Form 470s. To alleviate this confusion, the Bureau proposes to revise the FY 2026 ESL to treat all currently eligible software- or remote-based services, including bug fixes, security patches, software-based technical assistance, and configuration changes the same and have applicants request all software- and remote-based services with the internal connections equipment that they support. We seek comment on this proposal and any additional changes that may be needed to the FY 2026 ESL.
We also seek comment on whether changes should be made regarding managed internal broadband services (MIBS). Applicants have been confused regarding the eligibility of these services and how MIBS differ from BMIC services, which is the proper category for those seeking E-Rate support for actual maintenance – e.g., physical repairs to a piece of equipment, which may be reimbursed for only actual work hours performed. When adopted, the Commission noted that MIBS could “provide substantial benefits and cost savings to many schools and libraries, particularly small districts and libraries without a dedicated technology director available to deploy and manage advanced [local area networks] quickly and efficiently.” Are there any substantial benefits for funding MIBS? If so, please describe the benefits. Are there any cost savings and efficiencies for funding MIBS? If so, please describe the cost-savings associated with MIBS. Please provide information on the applicants that see the greatest benefits from MIBS. Should we more narrowly define MIBS so that there is no overlap with BMIC services? If so, we seek comment on what items should be included or excluded from MIBS. We seek comment on how we can provide greater clarity in differentiating between MIBS and BMIC services in the ESL. We also seek comment on whether these changes should be made for the current funding year or for future funding years.
The draft ESL and public comment period for FY 2026 is running about two weeks behind recent years’ schedules. Even if the FCC incorporates some of the suggested BMIC/MIBS comments submitted, we are unlikely to see a final ESL for FY 2026 until mid-November. This may be well after many applicants will have filed, or will have wanted to file, their Form 470s for FY 2026. For those, we offer the following BMIC/MIBS advice:
- FY 2026 will be the first year of the new Category 2 budget cycle. Plan ahead. If it appears likely that you can use your entire budget on equipment purchases over the five-year cycle, maybe there is no sense in applying for BMIC or MIBS.
- If you do need to apply for either BMIC or MIBS in FY 2026, but are unsure which category applies, list both in your Form 470. That way, regardless of how PIA interprets your resulting funding request, you will have a supporting Form 470. Here is how the Form 470 supports listing both:
