Everything You Need to Know About E-Rate This Year

February 28, 2020

At the start of the 21st century, when the calendar flipped from ’99 to ’00, just over half of all American adults used the internet. Today, that number has risen to over 90 percent, and over 96 percent own a cellphone (not to mention those still getting by on a landline!)

In this context, getting—and staying—connected is vital to just about any sector. The education system included. If today’s school districts want to succeed, accessing digital tools, resources, and communities is essential to staying current. Likewise, if students want to get by in the modern world, it’s critical that their teachers have access to the relevant resources to prepare them for it, and that students themselves learn how to navigate these connections and optimize their online experience in a safe environment. 

Fortunately, this necessity is recognized with the Schools and Libraries Program, better known as the E-rate program. In 1996, the Federal Communications Commission (FCC) introduced the E-rate program to help American schools and libraries get affordable telecommunications and internet access. At the time, only 14 percent of K-12 classrooms had internet access. Since its inception, the E-rate program has helped connect over 96 percent of schools to the internet.

Funded by fees charged to interstate and international telecommunications companies, the E-rate provides discounts of between 20 and 90 percent on certain supplies and services, based on several qualifying factors. 

Navigating the E-rate system and meeting the right criteria and deadlines can be challenging, but there are a few important things to know that can make the whole process run a little smoother.

Where to Start

The application process is notoriously frustrating. If you’ve received E-rate funding in the past, it can involve juggling reports and payments from previous applications, implementing current funding, and thinking through future opportunities.

Fortunately the Universal Service Administrative Co. (USAC)—who implements E-rate for the FCC—has a handy flowchart that can help you quickly visualize the process and figure out where to start. While the official window for E-rate funding applications runs January 15 to March 25 in 2020, if you look at the flowchart, you’ll see that you need to start thinking about it weeks before. That’s because of Form 471 that’s due in that window, and before that, you need to submit a Form 470 which opens bidding on the services you need, accept bids for 28 days, and then evaluate and select the bids. Only after selecting a provider can you submit Form 471. 

If you missed the window this year, don’t worry, it’s never too early to start planning for next year, in which case you’ll be ahead of the game.

Jar of coins labeled education

The E-Rate Timeline

Basically, the E-rate process includes identifying your connectivity needs, finding a service provider to meet them, applying to E-rate for a discount on those services, receiving the service, and then invoicing USAC for those services.

More specifically, the applicant is usually required to select the most cost-effective option when reviewing bids. A more expensive bid might be deemed acceptable if they offer specific things you need that no other bidder does, but cost-effectiveness still needs to be the primary factor when evaluating them.

Once you’ve selected the service provider and submitted your Form 471, your application will be reviewed. During this time, Program Integrity Assurance (PIA) reviewers at USAC may have questions about your application, and you’ll have 15 days to respond to those questions.

If and when your application is approved, USAC will send you a Funding Commitment Decision Letter (FCDL) detailing their decision and any specific conditions. Usually USAC funding decisions are made fairly quickly, and in “waves,” where several are announced at once.

From there, you can start working with your service provider to start services and address any stipulations outlined in the FCDL. Once the service starts you submit Form 486 which notifies the USAC you are receiving service. Form 486 must be filed within 120 days of receiving the FCDL, or after services start, whichever is later.

After your For 486 is processed, and your service is concluded and paid for, you can begin invoicing USAC. For this step, if you’ve paid the service provider in full, you submit an invoice yourself for reimbursement. Other times, the service provider will provide discounted services to you, in which case they’ll submit an invoice for reimbursement.

In reality, the process is often more complicated than this. You may need deadline extensions, disagree with a USAC decision, submit corrections to your application, or any other number of things. 

Who’s E-Rate Eligible

First and foremost, to be eligible for E-rate, you must meet the definition of a school or library outlined by E-rate. If you’re unsure of your status, your state department of education or  state library may be able to help. Sometimes facilities that fall outside of the traditional definition may qualify as well. These can include school residential facilities, administrative buildings, or non-traditional educational facilities like juvenile justice or adult education, among others.

Eligible schools can expect to receive between discounts of between 20 and 90 percent on eligible services. That percentage is decided by two main factors: location (rural or urban) and the poverty level (based on the number of students eligible for the National School Lunch Program, or NSLP).

What’s Eligible

The USAC releases a list of eligible E-rate services for the year ahead before the Form 471 application window. It’s advisable to review the list before filing Form 470 to ensure the services you’re accepting bids on are eligible.

There are two main categories for eligible services: Category One covers data transmission services and/or internet access; Category Two covers internal connections, managed internal broadband services, and basic maintenance of internal connections.

Some examples of specific Category One eligible services include: cable modems, ethernet, and dial-up internet. Category Two services, on the other hand, could cover things like routers, hardware repair, and even software upgrades. In both cases, E-rate might help cover the cost of installation, activation, monthly fees, and a wide range of other associated costs.

Almost as important as what is covered by E-rate is what isn’t. Not all internet-related needs are eligible, and it’s important to understand that before starting your application. Take content filters: A necessary tool for any school that’s connected to the internet, content filters are not eligible for E-rate discounts. That’s because they aren’t part of actually getting connected, they just keep you safe once you are. They don’t just keep you safe, though, they also keep you CIPA compliant, and E-rate applicants must prove they’re CIPA compliant before being approved for any discounts.

How E-Rate Helps

If you’re wondering whether it’s worth the trouble—why it’s important for schools to be connected through telecommunications and internet access—there is compelling research that shows it has positive effects for students, teachers, and schooling in general. There has been over 20 years to look at the effects of internet connectivity in the classroom, and so far it’s been observed to contribute to higher academic success, and just as importantly, more positive attitudes about school. 

E-Rate’s Future

With nearly 25 years of helping American schools and libraries connect to the internet, E-rate has undergone some significant changes over the years. From budget timelines to eligible services, some changes have been significant, while others more subtle.

And experts do anticipate more changes in the coming years, some of which include eliminating the need to spread high construction costs out over a number of years, a reevaluation of the current five-year budget cycle, and an updated eligible services list as new technologies and trends arise.

When you think about how the program’s spending cap increased from $2.4 billion to $3.9 billion in 2015, though, while E-rate may change, there’s a clear need for it.

Topics: CTO, District Budget

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