E-Rate 2.0


On July 23rd, the FCC released a landmark update to the E-Rate program with the 7th Report and Order. Two billion dollars in added funding over the next two E-rate cycles, focused on internal school connections, will ensure that all students have the type of digital learning environment that prepares them to thrive in the world of today and tomorrow. Schools and School districts should prepare plans immediately to lever-age this funding to create 21st century classrooms capable of supporting one-to-one and one-to-many student to device environments.

E-Rate Program Highlights:

The commitment of $1 Billion per year dedicated to internal connections and Wi-Fi connections into the classroom is a win-win for students, schools and service providers. The results of the E-rate have been nothing short of phenomenal. In just over a decade and a half almost every school in the nation now posses a broadband connection. Through modernization, the FCC hopes to bring faster connections to school’s front door but also scale these building connections internally in the building to provide robust connectivity to every device in school. Major E-rate modernization changes include:

  • Revamping the “Priority” systems, now divided into 2 classes of service.
  • Category 1 – Internet Access and WAN (traditional voice services are being phased out, services to be eliminated beginning with FY2015: paging, e-mail, voice mail, and web hosting)
  • Category 2 – LAN/WLAN
  • Maximum amount of discount for Category 2 (Internal Connections) will be 85%, Category 1 will continue to use the traditional discount matrix, with the exception of voice services being “phased down” – being reduced by 20% per Funding Year until fully eliminated for every applicant at every discount rate.
  • School districts will be responsible for paying at minimum 15% of the cost for internal connections. Discount calculations are still based on student participation in NSLP (National School Lunch Program).

Funding allocation formula for school districts:


Example—5,000 (Student enrollment) X $150 X 70% (Discount Rate) = $525,000 for 2015-2019.

District must file using the whole district shared discount rate beginning in FY2015. Applicants can file per entity but must use the shared discount rate for the entire district.

  • Separate budgets apply to each individual school site
  • Eligible NIFs do not have pre-discount budgets; the applicant must allocate NIF costs to one or more of the entities that will benefit from the service.
  • MAXIMUM discount that can be received for Category 2 is 85%.
  • Managed wireless will be eligible for Category 2 support. Applicants can enter into multiyear contracts, for up to 5 years. Support will only be committed for one year at a time. Applicant’s that are in multiyear contracts will have the option to file a streamlined 471 application after the initial 470/471 application process.
  • Competitive bidding will still be required for managed wireless.
  • Eligible managed Wi-Fi expenses include the management and operation of the LAN/WLAN, including installation, activation, and initial configuration of eligible components, and onsite training on the use of eligible equipment. Eligible managed Wi-Fi expenses do not include a managed voice service, for example.
  • USAC (Universal Service Administrative Company) will commit or deny ALL workable requests by Sept 1st of the funding year.
  • Applicants can begin the install of Category 2 equipment on April 1st.
  • Transparency: Item 21 attachments will begin to be accessible to the public from USAC’s website beginning with the 2015 year. Applicants and service providers will not be required to disclose past year’s information.
  • All documents and applications will be digital. Invoicing will be streamlined and reimbursement to the applicant will be paid directly to the applicant when using the BEAR process.
  • Invoice extension – applicants are allowed to request and automatically receive a single one-time 120-day extension of the invoicing deadline.


A part of each applicant’s funding must be spent on managed services.

  • NO – The E-Rate program is technology neutral. The FCC doesn’t show preference for one type of technology over another. Applicants can request funds that best suit their needs and environment. The E-Rate program is voluntary for K-12 Schools in the US.

There is a set budget for Managed Internal Broadband Services of $30 per year/per student.

  • NO – Pre-Discount budgets are set at $150 per student. This budget is for 5 years and can be requested in many ways. Think of the site Pre-Discount budget allocation as a debit card account. Each funding request is deducted from the balance.

Only poor schools/districts get funded and should apply.

  • NO – First time dedicated funds for Internal Connections have been available, $1B each year for 2 years dedicated for Internal Connections/Category 2. “You can’t win if you don’t play” – budget limits, fewer eligible services will make the available budget go far-ther. Funding part of a discount band as far as funds will allow.

Schools can pool funding allocation and distribute where they want.

  • NO – Each individual school has a Category 2 budget. Districts may not average their costs across multiple schools. Non-Instructional Facilities (NIF) do not have a C2 budg-et, eligible services must be deducted from sites they serve. Cat 2 Pre-discount budgets will be auto calculated and tracked on the new 471 application.

Basic Maintenance of Internal Connections is dropped.

  • NO – But it is subject to the Category 2 five-year budget. The $150 per student pre-discount budget is the TOTAL amount allowed per site for 5 years for ALL Category 2 services, including BMIC. Support includes: repair and upkeep of hardware, wire and cable maintenance, basic tech support, configuration changes. Limited to ACTUAL work performed under the contract

Schools must purchase Wi-Fi with E-Rate this year because that is the focus of the Modernization order.

  • NO – All components on the Eligible Service List can be requested in any combination. While high-speed Wi-Fi classroom connectivity has been the driving factor, many Inter-nal Connections components are critical to deployments. If a school district has recently deployed Wi-Fi, they many have needs for cabling, POE or other eligible components.

Schools where everyone eats Free lunch can’t participate in E-Rate. OR The school does not participate in NSLP and can’t use E-Rate.

  • NO – CEP (Community Eligibility Program) schools can participate. Alternative Dis-count methods are available. Program offered by NSLP, direct certification into program, no forms to fill out. CEP sites will be auto calculated on the 471 application. Schools that don’t participate in National School Lunch Program are also eligible. USAC has guid-ance for Alternative Discount Methods.