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E-Rate 2.0 - General Changes

by Tyler Wantulok on December 2, 2014

E-Rate 2.0 Overview of Changes

With the 1st year of E-Rate 2.0 completed, we are updating our information from what we've seen and learned over the past year to help inform school districts, libraries and providers on how to best leverage funding for the 16/17 year. We've added a quick summary to our blog of how the 1st year went for E-Rate 2.0. 

The Good: 

  1. All Levels Funded: All discount levels funded for Category 2. For the 1st time in the history of E-Rate, all funding levels were funded for Category 2 services. These services include; Firewalls, switches, wireless, cabling, caching servers and 3rd party support
  2. Processing Time Increased: Timeline of funding was dramatically increased as schools began receiving funding shortly after the July 1st deadline.
  3. Early Bird Option: USAC allowed districts to began acquiring equipment on April 1st. This allowed schools to get ahead of the game to ensure their upgrades were completed before the 2015/16 school year started. 

The Bad:

  1. Dividing the Dollar: Although the $150/student formula is a good start, we still believe this doesn't scale down to the smaller rural schools like it should. Technology costs per student are not flat as consolidation and economy of scale allows larger school districts to spread this money further.
  2. Phone Service Reduction: The continued reduction in phone services covered in Category 1 create funding challenges for districts that have counted on that discount for years.
  3. Per Student Cap for High Discount Applicants: For those high NSLP (Free and Reduced Lunch Count) districts that have been routinely taking advantage of Category 2 funding in the past did not have a per student cap. This cap has drastically reduced how much funding these districts could take advantage of.

Watch our most recent Webinar about E-Rate in 2016!

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 With the new year coming up, changes are being made to the 2016 E-Rate funding, newly called E-Rate 2.0. Along with these new changes are new rules and changes in features for schools. We are really hoping to utilize this funding for many of our clients, especially in the Priority 2 category. 


FCC Proposed Erate Changes
Back in December of 2013, the FCC (Federal Communications Commission) appointed Tom Wheeler as Chairman. He was determined to make changes to E-Rate and better the funding procedures. By March of this year, the FCC sent out a public notice looking for feedback on proposed E-Rate changes. In July 11th of this year the FCC voted to adopt proposed E-Rate reforms.
We have provided a series of information to help you better understand the new aspects of E-Rate funding.

New Funding Model
$2 billion have been implemented over the next two funding years. This is a very exciting injection for the program, and it will be used to install and manage Wi-Fi in the nation’s schools and libraries. Funding will be distributed at a pre-discount rate of $150 per student over a five-year period contract for schools. For libraries, there will be a pre-discount rate of $2.30 per square foot. This is the biggest change going on with the new E-Rate rules. This funding model will be a two-year trial, and if it is not successful, the FCC will re-examine the program.
Another new aspect is that managed services will also be eligible for funding under E-Rate 2.0. Each district can use $30 of the $150 discount rate per year, per student up to five years. Managed Services are especially essential for the small districts who have limited staff and struggle with managing IT systems.

Discounts for Libraries
Another great aspect in E-Rate funding changes are more funding for libraries. The discount for libraries work like this:
• Library systems with multiple branches in one public school district:
o Will use the address of the central outlet or main administrative office in order to        determine which district the system is in.
• When applying as library system:
o Use the school district’s discount application to the central outlet or main office.

Decreases in Voice Services
On the downside to new funding, the money will be moving to other places. Some Priority 1 services will no longer be considered essential for broadband connectivity and will no longer be eligible to receive. Because E-Rate 2.0 is increasing funding for Wi-Fi support with equipment and LAN, the FCC has limited funding for voice services. Support for all voice services, including VoIP, will decrease by 20% each year until each applicant’s support is phased out, starting in 2015.

Want to know more details of Ineligible services? Click Here!

Long-Term Advantages
Although voice services are unfortunately losing funding, the FCC is increasing funding in other areas. A very exciting new feature is that all schools will have access to Priority 2 funding. As said before, there is a $1 billion annual fund for Wi-Fi equipment, and on top of the $150 per student budget, there is also $9,200 per building minimum. This ensures that no applicant will receive disproportional funding. They will also be implementing streamlining procedures in order to make the application process easier.

The FCC is hoping the new budget will increase better connectivity with internet, WAN connections, and internal connections.

Internet Connectivity Goals for Schools
The short-term goal of internet connectivity for schools is to have 1 Gbps access per 1,000 users. The long-term goal of connectivity is to have at least 100 Mbps per 1,000 users. The measurement will be at the district level for school districts, and at the school level for schools not part of a district.

Priority 1 and 2 Specific Changes will be discussed here: Priority 1 | Priority 2
Questions? Call a Pine Cove Consultant! We are here to make your life easier by answering any specific questions you might have, and giving all the information you need in order to get started with E-Rate funding.

Pine Cove cannot be of any assistance in helping you to fill out your form 470, nor provide any information that could in any way affect the competitive bidding process. 

E-Rate 2.0 Slide Share

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