Embed Size (px)
Citation preview
MASBO December Bi-Monthly
Maximize & Understanding Your 2018 E-Rate Funds
Presented by Suzanne McLaughlinVice-President & General ManagerCustom Computer Specialists, Inc.
Permissible Actions:
• Service Providers can host, sponsor, or conduct E-rate training, as long as they do not provide any gift that exceeds the gift exceptions
• Service Providers cannot provide demonstrations of, or help with preparation or completion of forms, or determining the services listed on the FCC Form 470 and/or RFP.
Conferences and Training Sessions
• Introductions• E-Rate Program Overview and Current State• Category Two Budgets• E-Rate Process • Deadlines and Key Dates• Requirements for Participation• Fiber-Optic Product and Services• Questions and Answers
Agenda
Included in your Packet:
• Copy of Today’s Presentation• Preparing for E-Rate Audits (Separate PowerPoint)• Process Flow Chart• FY 2018 Eligibility List
Packets
E-Rate Program Overview and Current State
• Erate funds steady through Year 5 of Erate Reform 2.0• FCC is currently reviewing responses of the FCC’s inquiries regarding usage of Category 2
budgets. • 2018 Eligible Services List has been released (included in your packet) – overall no changes.• Districts are looking to install a fiber network in increased bandwidth and connectivity• Category 2: Now is time to apply. Districts should take a fresh look at what is available.
Historically, Districts have leveraged Category 1 to increase bandwidth going into the Schools, but also need to now evaluate bandwidth requirements within the School
• Erate Productivity Center (EPC) has created challenges:o Issues with system has slowed down processo Delays in funding commitments
• Filing Window (For 471): No date as of yet – most likely January to March
Where Does the Program Stand Today?
• FY2018 USAC Administrative Window is now open• During the Administrative Window, applicants can review their profile data
in EPC for accuracy, and should update student enrollment as well as the number of students eligible for free/reduced lunch.
• All applicants should be checking their profile information and verifying that all the following information is correct:• Any new schools have been added to the site list• Any schools that will be closing as of July 1, 2018 have been removed• The enrollment and NSLP information has been updated to reflect the correct
numbers• Any school name changes or address corrections have been made
Where Does the Program Stand Today? (Con’t)
• FISCAL YEAR 2018 (FY 2018)• July 01, 2017 – Jun 30, 2018
• ERATE FUNDING YEAR 2018 (FY 2018)• July 01, 2018 – June 30, 2019• Preparation begins Fall 2017• Note: Also referred to Program Yr21 (21st year of the
Erate Program)
E-Rate Nomenclature
• Congress wrote the Telecommunications Act of 1996.• Part of this act directed the FCC to establish and
oversee the E-rate program.
• The FCC sets rules and policies for the program through “Orders”. • These orders determine how USAC administers
the day-to-day operations of the E-rate program.
• USAC develops procedures, such as how to process applications.• USAC’s procedures are reviewed and approved
annually by the FCC.
Who Makes the Rules?
CONGRESS FCC USAC
Product and Services Eligible for E-Rate
Category One (C1)
Data Transmission Services and Internet Access
Category Two (C2)
Internal Connections, Managed Internal Broadband Services, and Basic
Maintenance of Internal Connections
*Category One has implications for Category Two
For Services within the BuildingFor Services up to the Building
Product and Services Eligible for E-Rate
CATEGORY ONE EXAMPLES CATEGORY TWO EXAMPLES
Leased lit fiber Access points
Ethernet Switches
Multi-Protocol Label Switching (MPLS) Routers
OC-1, OC-3, OC-12, OC-n Supporting software used to distribute high-speed broadband
Satellite Service Installation, activation, and initial configuration
• Every year, the FCC publishes the Eligible Services List, which governs the eligibility of products and services in the upcoming funding year.• FCC issues a Public Notice attaching a draft eligible services list and seeking
comments on it
• FCC reviews comments received, then issues an order with the final list
• Some examples of products and services include:
Note: A copy of the Eligible Services Lists can be found in your packet
• Support for Basic Maintenance of eligible Internal Connections, such as:
o Maintenance Renewals for Licensing and software updates only
o Repair and upkeep of eligible hardware
o Wire and cable maintenance
o Configuration changes
o Basic technical support
o Software upgrades and patches
• Cost ($) for BMIC limited to actual work performed
Advantages of Basic Maintenance
• Funding is capped at $3.99 billion:
o The cap is adjusted annually for inflation.
o $1 billion funding target for “Category Two” funding.
• Once per year, the FCC may direct USAC to roll over unused funds from prior funding years into the next funding year.
E-rate Program Bucket
• Elementary and secondary schools and school districts• Public, private, charter, parochial, and Tribal, are types of schools
and school districts.• Non-traditional facilities (Pre-K, Head Start, juvenile justice, and
adult education) are eligible if they fit their state’s definition of elementary/secondary education.
• Look up non-traditional facility eligibility on USAC’s website.• If a School receives an endowment, it cannot exceed $50m
Who Can Get the Discounts?
• Discounts range from 20% to 90% for Category 1 services and from 20 to 85% for Category 2 services.
• Discounts are calculated using three pieces of information:
o Poverty level
o Urban or rural status
o Service type
Your E-Rate Discount
• The E-rate program uses the National School Lunch Program (NSLP) to determine poverty level.
• Alternative Discount Mechanisms can also be used
o Example: Sibling Matching
• Discounts depend on the percentage of students who are eligible for NSLP.
Your E-Rate Discount
• Discounts are calculated for the school district not for individual schools.
• Library system members must use the NSLP calculation from the school district of the main branch’s location.
• Schools that are members of school districts use their district’s average.
• An independent school or library: An independent school calculates its NSLP figures based on its own student population, and an individual library uses the NSLP figure for the school district in which it is located.
Your E-Rate Discount
• Nationwide program to reduce NSLP paperwork burden.
• Schools must have at least 40% of their students directly certified to qualify for CEP.
• All students eat free, but this does not mean they are counted as eligible for E-Rate purposes. Must still determine eligibility percentage.
• Schools apply national multiplier (1.6) to directly certified population to determine NSLP eligible population.
• Schools are capped at 100% NSLP eligible for purposes of determining the E-Rate discount.
Community Eligibility Program (CEP)
• Urban or rural status is based on 2010 census data.
• Check your status on USAC’s website.
• School districts are considered rural if more than 50% of its schools are rural.
• Library systems are considered rural if more than 50% of its branches are rural.
Discounts: Urban or Rural Status
Discounts: Categories of Service and Voice Phasedown
CATEGORY ONE
UP TO 85%
Your discount depends on what type of service you are purchasing:
• Up to 10% for FY2018
UP TO 90%
CATEGORY TWO
VOICE SERVICES
Look up your Discount:
Category One Discount Levels Category Two Discount Levels
INCOME% of students eligible for NSLP
URBANDISCOUNT
RURALDISCOUNT
URBANDISCOUNT
RURALDISCOUNT
Less than 1% 20% 25% 20% 25%
1% to 19% 40% 50% 40% 50%
20% to 34% 50% 60% 50% 60%
35% to 49% 60% 70% 60% 70%
50% to 74% 80% 80% 80% 80%
75% to 100% 90% 90% 85% 85%
Voice Service Discount for FY2018 (last year):
• For FY 2018 – only applicants at a 90% discount level will be eligible for support at 10%
Category Two Budgets
• USAC calculates a C2 budget for each individual school or library branch.
• The budget for one entity cannot be shared with other entities.
• The school or library can receive discounts on the cost of C2 services up to its C2 budget amount. It can:
o Spend the budget over a five-year period,
o Use the entire budget in one funding year,
o Allocate over five different funding years,
o Spend the budget on one, two, or all three of the C2 service types.
Five-Year Category Two (C2) Budget
• The C2 budget is re-calculated every year.
• More students in a school or expansion of the library results in a budget increase.
• Fewer students in a school or downsizing in a library results in a budget decrease.
o If the C2 budget decreases below funding already spent for the five-year period, the school or library does not have to reimburse USAC for the discount on the difference between the budget and the pre-discount amount.
• The C2 budget multiplier is adjusted each year for inflation.
Five-Year Category Two (C2) Budget
• Minimum budget of $9,412.80
o If the budget calculation results in a value less than $9,412.80, the school or library’s pre-discount budget is set at the minimum budget
• Remaining C2 Budget = (Pre-discount budget) – (Pre-discount amounts committed in prior funding years)
What’s my Five-Year C2 Budget? FY2017
• NIFs are school buildings with no classrooms or library buildings not open to the public (e.g., administrative buildings). NIFs do not have C2 budgets.
o If the NIF is essential for the transport of the services to a school or library, the entities benefiting from the services must allocate the costs from their budgets.
o If the NIF receives services for itself, those costs must be allocated out of the funding request.
• An Annex Building is an extension of a given School and should be tied to that School.
• Read the C2 Budget Tool User Guide and check the Category Two Budget Tool and using your entity number on the USAC Tools website.
o Applicants can return unused committed funds from prior funding years using the FCC Form 500.
Other Category Two Budget Information
• Many tools are available on USAC’s website to help enable you in tracking and managing for Erate filings: http://www.usac.org/sl/tools/default.aspx
• Key tools:
o Search Commitments
o FRN Status Tool
o Program Deadlines
o Category Two Budget Tool
o Search for BEN Information
o Search for the SPIN
Tools
EPC Training Videos
http://www.usac.org/sl/about/outreach/online-learning.aspx#webinars
• EPC is the E-rate account management and application portal for applicants, service providers and consultants.
• In EPC you can:
o File most program forms
o Maintain a list of your related entities (e.g. individual schools for districts, library branches for library systems, and consortium members for consortia)
o Update your entity information (e.g. contact information and entity information such as student counts and square footage)
o Add additional users on your organization’s account and assign them rights (permissions) to file forms.
E-Rate Productivity Center:
E-Rate Process
• Call our Client Service Bureau at call (888) 203-8100 to set up an account in EPC and make sure your school or library has a Billed Entity Number (an ID number assigned by E-rate).
Request services(FCC Form 470),
run a competitive bid process, and select a vendor
Request funding(FCC Form 471)
and undergo application review
Confirm the start of services and status of CIPA compliance
(FCC Form 486)
Request reimbursements (FCC Form 472)
OR receive discounts
(FCC Form 474)
1. 2. 3. 4.
How to Apply:
• The FCC Form 470 opens the competitive bidding process and notifies potential bidders of the types and quantities of services that you need:
• Posted to the USAC website• Potential vendors review forms and submit bids to you• Only an authorized representative of the applicant can prepare,
sign, or submit the FCC Form 470
• Who is your Authorized Representative?
About FCC Form 470 (Request for Services):
• Requests for Proposals (RFPs) may be created to describe specific needs and circumstances in more detail.
• We use “RFP” and “RFP document” generically to refer to any supplemental document that helps to describe the requested services or provides more information that is not in the FCC Form 470.
• For most types of funding requests, you are not required to issue an RFP unless your state or local procurement rules or regulations require it.
• If you issue an RFP and/or an RFP document, all of these documents must be attached to the FCC Form 470 you submit in EPC.
Request for Proposals (RFPs):
• Not everyone is required to file an FCC Form 470• Multi-year contracts :
o You do not need to file a new FCC Form 470 if the contract is still in effect and the costs/services are still within the terms of the establishing FCC Form 470.
o NOTE: You do still need to file a new FCC Form 471 requesting E-rate support each funding year.
FCC Form 470 Exemptions
• Low-cost, high-speed Internet• You do not need to file an FCC Form 470 for Internet access if your
service meets ALL of the following conditions
o It is commercially available, business class Internet access.
o It offers minimum speeds of 100 Mbps download / 10 Mbps upload.
o The pre-discount price — including any one-time charges —is $3,600 or less annually per entity (school or library).
FCC Form 470 Exemptions
• Competitive bidding is a formal process to choose the vendors/service providers who provide your products and services
• Describe your desired services and requirements using FCC Form 470 (and RFP if applicable).
• Service providers read your documents and bid on your services.
• Wait 28 days then compare the offers you receive.
• Select the most cost-effective bid using price of the eligible products and services as the primary factor
What is Competitive Bidding?
• In your FCC Form 470 and RFP, you must describe the desired products and services you need with sufficient specificity for service providers to be able to submit responsive bids.
• All potential bidders must have access to your FCC Form 470, RFP, and RFP documents.
• Be prepared to accept bids and answer questions.• You must select the most cost-effective bid.
Competitive Bidding Requirements
• The competitive bidding process must be open and fair.
• "Open" means that information shared with one bidder must be shared with all.
• "Fair" means that bidders must be evaluated fairly and equally.
• 28-Day Waiting Period
• FCC Form 470 and any RFPs (if applicable) must be posted on the USAC website for a minimum of 28 days.
• The end of the 28-day period is when you are allowed to review bids and select vendors — your allowable contract date (ACD).
Competitive Bidding Requirements
Only After the 28-Day Window, can you…
Evaluate the bids you received
• Use a bid evaluation matrix
1. 2. 3. 4.
Choose your service provider(s)
• Notify the winner
Sign a contract or legally binding agreement
• Upload the contract into EPC
File the next form (FCC Form 471)
• In order to evaluate incoming bids, create a Bid evaluation matrix.
• Develop evaluation criteria or factors to assess the bids.
• Assign each evaluation criterion or factor a point value or percentage.o The Price of the eligible products and services must be the most heavily
weighted factor — the “primary factor” — in your evaluation.
• The vendor who receives the most overall points or the highest percentage is the winner.
More on Evaluating Bids
Sample Bid Evaluation Matrix
• Evaluate your bids using a matrix, filled in with your chosen factors and point values.
• Vendor #3 wins
Factor Points Available Vendor 1 Vendor 2 Vendor 3
Price of the ELIGIBLE products and services 50 20 50 40
Prior experience w/vendor 20 20 0 20
Prices for ineligible services, products and fees 15 10 5 15
Flexible Invoicing: FCC Forms 472 or 474 10 0 10 10
Local or in-state vendor 5 5 0 5
TOTAL 100 55 65 90
Sample Bid Evaluation Matrix
Sample Bid Evaluation Matrix
• If you receive only one bid, and it is cost-effective, you may accept it.
• Document your decision with a memo or email for your records.
• If you did not receive any bids, you can solicit bids.
• Reach out to vendors in the area.
• Ask your current service provider to submit a bid or to send you an email that they are willing to continue to provide service at your current level and cost.
Zero Bids or One Bid
• Your application for funding identifies:o The services you chose
o The service provider(s) you selected and their Service Provider Identification Number (SPIN)
o The eligible schools/libraries that will receive the services
o The cost of your chosen services
o Your discount level to calculate your funding request
o Your current connectivity speed
• USAC recommends communicating with your service provider:o If you need help completing technical details
o To notify them of your desired invoicing method
About FCC Form 471 (Request Funding)
• Item 21 attachments now embedded in the FCC Form 471 and are needed prior to submitting application. Application cannot be filed without completed Item 21.
• Item 21 Attachment consists of FRN line items listing all requested products and services.
• Templates are available for download from USAC for ease of upload
• Your Service Provider familiar with Erate should be able to provide a completed Item 21 template for upload for services they will provide
Item 21 Upload
• E-rate funds may only be used to pay for services and products used by eligible entities for an eligible purpose (i.e., a primarily educational purpose).
• If a product or service has both eligible and ineligible functions, the cost of the ineligible functions must be allocated out of a funding request.
• Form 470 responses would include the breakdown from the Service Providers
• A cost-allocation requires a clear delineation of costs.
• The cost-allocation must be based on a reasonable, tangible basis that reaches a realistic result.
• Cost-allocations must be supported by documentation.
Cost Allocation: General Information
• After submitting FCC Form 471, your application goes into review.
• Program Integrity Assurance (PIA) is the group at USAC that reviews your application and makes decisions on funding.
Application Review: Program Integrity Assurance (PIA)
• When PIA’s review is complete, you and your service provider receive a notification with decisions about your funding.
• The notification is called the Funding Commitment Decision Letter (FCDL).
• Your FCDL will show:• Approved funding amounts
• Modified or denied funding amounts
• Next steps
• FCDLs are delivered via EPC and you will also receive an email.• Go to the Notifications section of EPC and generate the letter.
Funding Decision
• Notifies USAC that your eligible services have started or been delivered.
• File FCC Form 486 after you’ve received your FCDL or your services have started, whichever is later. Form must be filed within 120 days
• Many applicants start service on July 1, the first day of the funding year.
• Confirms your status under the Children’s Internet Protection Act
About FCC Form 486 (Start Services)
• CIPA is a law with specific requirements for entities that receive E-rate discounts on Internet access.
• CIPA compliance includes:o Internet safety policyo Technology protection measure/filtero Holding one hearing or meeting (with reasonable public
notice) on the Internet safety policyo (For schools only) education for students on Internet
safety with focus on social networking, chat rooms, and cyberbullying.
Children’s Internet Protection Act (CIPA) Compliance
About Invoicing (FCC Forms 472/474)
INVOICING (FCC FORMS 472 AND 474)
BEAR Method SPI Method
• FCC Form 472, Billed Entity Applicant
Reimbursement (BEAR) Form
• Applicant files this form after paying for the
services in full to request reimbursement from
USAC for the discount amount.
• FCC Form 474, Service Provider Invoice
(SPI) Form
• Service provider files this form after billing
the applicant for the non-discount share to
request reimbursement from USAC for the
discount amount.
• You or your service provider invoices USAC to receive funding.
• Applicants can choose their method of invoicing.
When To File
• Calculation of invoice deadline:• 120 days after the last date to receive
service or 120 days after the date of the FCC Form 486 Notification Letter, whichever is later
• If the calculated deadline falls on a weekend or federal holiday, the deadline is 11:59 PM ET on the following business day
When To File
• File after services are delivered and paid • Applicants – pay in full for services first
• Service providers – bill applicants for their non-discount share first
• You can choose the frequency
• File before the invoice deadline• Generally, October 28 for recurring services
• Generally, January 28 for non-recurring services
When To File
• Invoice deadline extension requestso File requests using the link at the top of the online BEAR Form
• Applicants log in to the BEAR Form• Service providers log in to the E-File System and then choose
the “472 BEAR Form” link
• Request must be filed ON OR BEFORE the invoice deadline date
• Filers can receive one 120-day extension of the time to file• Late or second requests will not be accepted, absent a
waiver from the FCC
Invoicing Requirements
• If you choose to invoice via the BEAR Form, USAC will send the payment via electronic transfer directly to your organization’s bank account.
• First, you must provide your banking information on FCC Form 498 to obtain an Applicant 498 ID.o This form is available in the school or library’s EPC
profile under “Related Actions” if your account administrator assigned you rights to access this form.
About FCC Form 500 (Funding Adjustments)
• Requests specific changes to your funding commitments after USAC issuesyour FCDL, such as:
o The contract expiration date listed on FCC Form 471.
o The service start date listed on FCC Form 486.
o The cancellation or reduction of a Funding Request Number (FRN).
o The request to extend the deadline for delivery of non-recurring services.
• Form 500 for Category 2 (C2) funding reductionso If you do not use all of your C2 funding commitment, submit FCC Form 500 to
release unused funding back to your five-year C2 budget.
o USAC will assume you are using your commitment unless you file this form.
Deadlines and
Key Dates to Remember
Deadlines
http://www.usac.org/sl/tools/deadlines/Default.aspx
• This tool was designed to explain and help you calculate deadlines for universal service forms and actions
• Some deadlines are fixed, some depend on other dates or actions, and some can be extended. The consequences of missing a deadline are not always the same
Pre-Commitment Deadlines
• Use the Deadlines Tool on our website to help determine your deadline.
• FCC Form 470 o Post to the USAC website no later than 28 days before the
last day of the FCC Form 471 filing window.
• FCC Form 471 o File only during the application filing window (exact dates
vary each year).
o File by 11:59 PM EDT on the last day of the filing window.
Post-Commitment Deadlines
• FCC Form 486o Deadline is 120 days after service start date or 120 days after the
date of the FCDL — whichever is later.
• FCC Forms 472 and 474 (invoicing)o Deadline is 120 days after the last day to receive service or 120
days after the date of the FCC Form 486 Notification Letter —whichever is later.
o For most applicants these dates are October 28 (for recurring services) and January 28 (for non-recurring services) following the close of the funding year.
Post-Commitment Deadlines
• Invoice Deadline Extensionso You can request and receive one 120-day extension of the invoice
deadline.
o The request must be submitted on or before the original invoicedeadline.
o You do not need to provide a reason for your request.
Other Requirements
SPIN Changes• Corrective SPIN Changes:
• These are limited to correcting data entry errors, such as listing the wrong SPIN on a funding request
• State Replacement Contract SPIN changes
• Operational SPIN changes
• Operational SPIN changes allowed, but
• Must have legitimate reason to change, such as Breach of Contract or provider unable to perform; and
• Must select provider with next highest point value in evaluation
o If only single bidder, then can select new provider consistent with state and local rules and submit a statement explaining only one or no bids were received.
Service Substitutions• Service substitutions encompass changes in the technical components
(whether products or services or both) specified in the FCC Form 471 Funding Request. Applicants who file service substitution requests must still comply with the deadlines for the FCC Form 486.
o (i) The service or product has the same functionality;
o (ii) The substitution does not violate any contract provisions or state or local procurement laws;
o (iii) The substitution does not result in an increase in the percentage of ineligible services or functions; and
o (iv) The applicant certifies that the requested change is within the scope of the controlling FCC Form 470, including any associated Requests for Proposal, for the original services.
Service Substitutions
• A service substitution request must be received or postmarked by the last day to receive service for that FRN. Last day to receive service is:
o June 30 of the relevant funding year for recurring services, and
o September 30 that follows the close of the funding year for non-recurring services.
• Service Substitutions may be submitted via Email through the EPC Portal
Equipment Disposal And Transfer• Equipment Disposal:
o Applicants can dispose of obsolete equipment for payment or other consideration, but no sooner than five years after the equipment is installed.
• Equipment Transfer:
o Applicants can transfer equipment under the following conditions:
o Three years after the date of purchase, equipment can be transferred to other eligible entities.
o Equipment can be transferred from a closed location to other eligible entities within three years of the date of purchase. USAC must be notified of these transfers
o Equipment cannot be transferred for money or anything of value for five years after the last day of service.
Document Retention
• You must keep all documentation for 10 years from the last date of service.o For multi-year contracts this means 10 years from the contract
expiration date
• Keep all records such as:o Competitive bidding documentation
o Contracts
o Forms
o Proof of payment and delivery
o All other matters relating to the program
Document Retention
• For an exhaustive list of E-rate documentation, refer to the E-rate Program Binder.
• Documents can be retained in hard or soft copy.
• Label and organize documents so that you can easily locate them.
Fiber-Optic Options
Fiber Options
• Leased Lit Fiber: A fiber-based broadband service where the service provider owns and manages the network, and the E-rate applicant pays a recurring fee to have data transported over the network.
• Leased Dark Fiber (including IRUs): The E-rate applicant leases a portion of a provider-owned and maintained fiber network and separately pays to have that fiber lit in order to transmit information over that fiber.
• Self-Provisioned Network: Complete applicant ownership of a high-speed broadband network. The applicant hires a vendor to construct the network or a portion of the network, and thereafter owns and maintains that network or portion.
Note: Although included as a fiber option, applicants may seek support for self-provisioned networks using technologies other than fiber.
Erate Eligible Fiber and Self Provisioned Network ChargesApplicants may request E-rate support for the following charges (by type of service):
• Maintenance and operations charges
• Special construction charges• Network equipment
Leased Lit Fiber Leased Dark Fiber Self Provisioned Networks
• Monthly recurring charges
• Special construction charges
• Basic installation charges
• Recurring dark fiber lease or IRU payments
• Maintenance and operations charges
• Special construction charges
• Basic installation charges• Network equipment
Special ConstructionSpecial construction refers to the upfront, non-recurring costs associated with the installation of new fiber to or between eligible entities.
Applicants may seek funding for special construction charges in connection with leased lit fiber, leased dark fiber, and self-provisioning.
Special construction charges eligible for Category One support consist of three components:
1. construction of network facilities; 2. design and engineering; and 3. project management.
Note: The term “special construction” does not include Network Equipment necessary to light fiber, nor the services necessary to maintain the fiber. Charges for Network Equipment and fiber maintenance are eligible for Category One support as separate services, but not as special construction.
Special Construction Overview
Special construction charges do not include:
• Charges for Network Equipment necessary to light fiber (i.e., modulating electronics and other equipment necessary to make a C1 service functional), or maintenance and operations (M&O) of the fiber.o If seeking bids for Network Equipment and/or M&O in relation to Leased Dark Fiber
service, bids for these services must be requested on the same FCC Form 470 as the Leased Dark Fiber service.
o Funding requests for network equipment and M&O costs associated with lighting Leased Dark Fiber must be included in the same FCC Form 471 that requests support for the Dark Fiber Lease or IRU.
Timing• General Rule: E-rate support is only available for leased dark fiber (with
and without special construction) that is lit, and self-provisioned networks that are constructed and used, in the same funding year.
• Limited Exceptions For Special Construction:o Special construction charges incurred up to six months prior to the beginning of the
funding year are eligible for support if:o Construction begins after selection of a service provider pursuant to a valid competitive bidding
process;o A Category One recurring service depends on the installation of the infrastructure; and o Actual service start date is after the start of the funding year.
Note: Applicants that start construction early, before a funding request is approved, assume the risk that the request will be denied.
Special Construction Overview
• Milestone Paymentso Applicants may submit invoices for special construction
charges at any point during the funding year
Note: Applicants may not receive E-rate support for any recurring charges incurred before the start of the funding year (i.e., July 1).
Special Construction Overview
To be eligible for E-rate discounts for special construction charges –whether for leased lit fiber, leased dark fiber, or a self-provisioned network – special construction must be completed in time for the fiber to be lit (or for a self-provisioned network involving another technology to be in use) by the end of the relevant funding year (i.e., June 30). If this June 30 deadline is not met, the special construction charges will not be eligible for support under program rules.
Installment Plan
Applicants may request to pay their non-discount share of special construction costs in installments over up to four years.
• Applicants must have indicated interest in an installment payment option on their FCC Form 470.
• Service providers are not obligated to offer an installment option.
Applicants that do enter an installment payment arrangement must provide details about the payment plan in their special construction FRN, including: (a) the total amount financed; (b) the term of the agreement; and (c) the annual interest rate.
Installment Plan for Special Construction
• If a service provider chooses to offer an installment payment plan, they must disclose all material terms, including the interest rate and the term of the payment plan.o Payment plans may not exceed four (4) years.
o Interest and finance charges are not E-rate eligible charges and must be deducted from the funding request.
• Remember: The installment payment option is available for the applicant’s non-discount share of special construction charges only, not the total cost of a special construction project.
Additional Discount to Match State Tribal Funding for Special Construction
• If a state provides eligible schools and libraries with funding for special construction charges for high-speed broadband that meets the FCC's long-term connectivity targets, the E-rate program will increase an applicant's discount rate for these charges up to an additional ten percent to match the state funding on a one-to-one dollar basis. State funding can be funds authorized directly by a state legislature or provided by one or more state agencies.
• For Tribal schools and libraries, the E-rate program will also match special construction funding provided by states, Tribal governments, or other federal agencies.
Additional Discount to Match State Tribal Funding for Special Construction
• State Match Eligibility Requirements:o The broadband service must meet the FCC's long-term targets.
o The funding must be from an eligible source.
o The terms and conditions associated with the state funding must not conflict with E-rate rules.
o The total amount of support, including matching funds, may not exceed 100 percent of the cost of the project.
o State match funds may not be applied to any other cost – applicants should create separate funding requests on their FCC Forms 471 for special construction.
Seeking Competitive Bids by submitting the FCC Form 470
• Applicants initiate the required competitive bidding process by submitting the FCC Form 470 in E-rate Productivity Center (EPC).
• In EPC, the FCC Form 470 has a drop-down menu of eligible services; applicants must select the services for which they would like to seek bids.
Fiber Specific Competitive Bidding Rules
• Leased lit fiber: If an applicant is only interested in seeking bids for leased lit fiber, they may do so by posting an FCC Form 470 in EPC that only specifies leased lit fiber as the requested service. (Utilize the “Leased Lit Fiber” drop-down option in EPC when submitting the FCC Form 470.)
• Leased dark fiber: Program rules require applicants considering a Leased Dark Fiber solution for their connectivity must also request bids for a Leased Lit Fiber solution. (Utilize the “Leased Dark Fiber and Leased Lit Fiber” drop-down option in EPC when submitting the FCC Form 470.)
Fiber Specific Competitive Bidding Rules
• Self-provisioned network: Applicants that are considering a Self-Provisioned Network solution for their connectivity needs to must also request bids for services provided over third-party networks. (Utilize the “Self-Provisioned Network and Services Provided Over Third-Party Networks ” drop-down option in EPC when submitting the FCC Form 470.)
FCC Form 470 and Requests for Proposals (RFPS)
• The FCC Form 470 and requests for proposals (RFPs) should provide enough information to solicit comprehensive proposals from service providers, but not so much information that the applicant states or implies a preference for a particular connectivity solution, a particular construction route, or particular method of construction.
• If posting an RFP for multiple service types make certain that your RFP:o Addresses all of the broadband solutions services for which you are seeking bids.
o Does not indicate a preference for one broadband solution over another.
Cost-Effectiveness Requirement
• Applicants are required to demonstrate that they selected the most cost-effective service offering.
• When an applicant considers bids for the fiber options, the cost-effectiveness analysis should include:o A comprehensive explanation of the cost breakdown of the chosen service option
over the other available service options.
o An evaluation of the expected useful life of the facility, and compare the combined upfront and recurring costs associated with the service.
o If considering a leased dark fiber options, this would include, for example, comparing the charges associated with leasing the fiber, costs for any modulating equipment, and M&O costs with the cost of leased lit fiber options over a comparable period of time.
Cost-Effectiveness for Fiber Service Options
• The comparison time period must be defensible and aligned with the applicant’s anticipated use of the assets.
• Decisions must have a tangible basis and the result should be reasonable.
• Include explanations on any assumptions made during the evaluation, such as expected useful life, frequency of equipment refreshes, etc.
Cost-Effectiveness for Fiber Service Options
• Service Specific Considerations for Cost-Effectivenesso Self-Provisioned Networks: Consider all costs of owning, operating, and
maintaining a network (e.g., recurring fees for maintenance and operations, network equipment, equipment refreshes).
o Leased Dark Fiber: Consider all of the costs of leasing, lighting, maintaining, and/or operating the dark fiber.
o Leased Lit Fiber: Comparison should project demand for bandwidth over the comparison period and how costs of bandwidth may vary over time.
Preparing Your Funding Request
Applicants will be asked to provide an explanation of the cost effectiveness of their service selection.
• Provide line item level details on any charges related to the service.
• Work with your service provider to understand and be able to explain the reasonableness and need for any associated costs. Examples:o Pole make ready cost (aerial)
o Large number of splices
o Large quantity of hand holes or vaults (buried)
• Provide a map utilizing GIS data as part of the cost-per-foot evaluation.
• Communicate the time frame when the investment of USF will yield cost savings.
Cost-Allocation Fiber
Subject to the same cost-allocation requirements as all E-rate eligible services and funding requests:
• E-rate funds may only be used to pay for services and products used by eligible entities for an eligible purpose (i.e., a primarily educational purpose).
• All costs associated with fiber installed for use by an ineligible entity or for an ineligible purpose must be allocated out of a special construction funding request.
• Includes all costs above and beyond what would be incurred if only the fiber required to serve the applicant were installed.
Cost-Allocation Fiber
• A cost-allocation requires a clear delineation of costs.
• Must be based on a reasonable, tangible basis that reaches a realistic result.
• Cost-allocations must be supported by documentation.
Reminder: All fiber and facilities installed as part of a self-provisioned network must be owned by eligible schools/libraries and may not be used by other entities (i.e., resold). Limited exception per program rules for consortia
Cost-Allocation Fiber
Special construction charges are only eligible for support if the new fiber is lit by the end of the funding year:
• Excess fiber strands (i.e., fiber strands that are not lit for the applicant’s use in the same FY) may be installed for the applicant’s exclusive future use.
• Cost of the fiber strands not lit within that FY must be allocated out of the funding request.
• Remaining special construction charges need not be cost-allocated.
• Recurring charges of using the excess fiber strands will be eligible for support in the funding year that they are lit for the applicant’s use.
Cost-Allocation: Fiber Examples• Example 1: Leased lit fiber or leased dark fiber provider installs 12-strands
in fiber run to a large school district hub and wants to add 36 additional
strands for its own ineligible use, resulting in additional labor costs (e.g.,
splicing) and plant costs (e.g., larger termination boards, additional
handholes).
Result: Cost of 36 additional fiber strands and all associated incremental increases in costs (e.g., the additional labor/outside plant costs) above what would be incurred if only the 12-strands of fiber were installed must be allocated out of the applicant’s special construction funding request.
Cost-Allocation: Fiber Examples
• Example 2: School district seeks to install 48 strands of fiber in a self-provisioned network, only plans to light 12 strands within the FY. The remaining 36 stands will be reserved for the applicant’s exclusive future use.
Result: Applicant must allocate the cost of the excess fiber strands out of the funding request, but no portion of the remaining special construction costs.
Cost-Allocation: Fiber Examples
• Example 3: School district seeks to install 48 strands of fiber in a self-provisioned network that will be used by the school district, the State Department of Social Services, and a non-profit organization.
Result: Funding request denied. Self-provisioned networks must be owned by eligible schools and libraries, which may not resell E-rate-supported services and products.
Cost-Allocation: Fiber Examples
• Example 4: The applicant is an E-rate consortium comprised of schools and municipal entities. It seeks to self-provision a network that will be owned entirely by the schools, but will also be used by the municipal entities.
Result: The cost of all fiber strands used by the municipal entities must be allocated out of the funding request, as well as any additional special construction costs incurred because of the installation of those fiber strands (e.g., any increased labor charges, increased plant costs, 100% of the costs of any laterals built to the municipal entities).
Special Construction Funding Request Information
• Tips for entering responses to the highlighted fields when submitting an FCC Form 471 seeking special construction support.
• Total Project Plant Route Feet - This measure only accounts for newly deployed fiber, and should not include any existing fiber. (e.g., If the total project covers 150,000 feet but 5,000 feet is existing infrastructure that will be spliced to the newly deployed fiber, the response to this field would be 145,000 feet.)
Special Construction Funding Request Information
• Average Cost Per Foot of Outside Plant - This will equal the “Total Special Construction Charges” divided by “Total Project Route Feet.” (See the example from Item 1: If total special construction charges are $5,000,000.00, then the response in this field should be $5,000,000.00/145,000 feet = $34.48/foot.)
• Total Strands - This is the total number of strands installed at the time of construction. (If the build is segmented into a backbone segment with a 48 strand cable and a lateral segment with a 12 strand cable, then the response for this field would be 60 strands. You can provide additional explanation in the Narrative field.)
Special Construction Funding Request Information
Special Construction Funding Request Information
• Number of E-rate Eligible Strands - This is the total number of strands that (a) will be lit within the current funding year and (b) are for the exclusive use of eligible E-rate entities. (See the example from Item 3. If 12 strands are being lit in the backbone segment and 8 strands in the lateral segment for the exclusive use of the E-rate eligible entities, then the response to this field would be 20 strands.)
Network Equipment Funding Request Information
• If you do not see an option in the drop-down menu that describes your equipment within the “Type of Fiber Network Equipment”, use the “Other” choice and enter the description in the “Enter the Type of Fiber Network Equipment” field. This will provide USAC with an accurate description of the equipment and help to streamline the review process. (For example, if your Network Equipment is a “Transceiver” use the “Other” choice and enter the description of “Transceiver.”)
Installation Period (all C1 Non-Recurring Charges)
• Installation of all Category One non-recurring services (including special construction charges) may begin six months prior to the July 1 start of the funding year (i.e., or after January 1) if the following conditions are met:o Construction begins after selection of the service provider pursuant to a
valid competitive bidding process.
o A Category One recurring service must depend on the installation of the infrastructure.
o The actual service start date for that recurring service is on or after the start of the funding year (July 1).
Service Delivery Deadlines (Recurring Charges)
• To be eligible for E-rate discounts for recurring charges related to an eligible Category One service, the service must be in use by the end of the relevant funding year (i.e., June 30). If this June 30 deadline is not met, the recurring charges will not be eligible for support under program rules. There is no extension available for recurring charges.
Service Delivery Deadlines (Recurring Charges)
• Applicants may not receive E-rate support for any recurring charges incurred before the start of the funding year (i.e., July 1).
• Applicants may only receive E-rate support for recurring charges for leased lit fiber services delivered within the funding year.
• Applicants may not receive E-rate support for recurring charges for leased dark fiber until the fiber is lit.
• Applicants may not receive E-rate support for recurring charges associated with a self-provisioned network until the network is constructed and is in use.
Service Delivery Deadlines (Special Construction Charges)
• Applicants may only request E-rate support for special construction charges related to leased lit fiber and leased dark fiber if the fiber is lit within the same funding year (i.e., by June 30) as the funding request.
• Applicants may only receive E-rate support for special construction charges for a self-provisioned network if the network is constructed and is in use by the end of the same funding year as the funding request.
Special Construction Deadline Extension
• Applicants may request a one-year extension to complete special construction and light the fiber (or use a self-provisioned network if another technology is employed), if the applicant can demonstrate that construction was unavoidably delayed due to weather or other reasons. Examples of circumstances causing unavoidable delay include:o Unforeseen weather event or pattern resulting in saturated or frozen
ground, which prevents work;
o Natural disaster causing an unavoidable delay;
o Scheduled delivery of required plant components do not arrive;
o USAC issues an FCDL too late for applicant to complete special construction and light fiber by the end of funding year.
Special Construction Deadline Extension
• Note: To obtain a one-year extension based on an unforeseen, unavoidable construction delay, applicants must submit an extension request to USAC before the end of the funding year (i.e., June 30).
Service Provider Role During Application and Review Process
• After the competitive bid process has concluded and a contract is entered into, service providers can:o Assist applicants in preparing their FCC Form 471/Funding Request(s).
o Speak directly to and respond to Program Integrity Assurance (PIA) questions. (Applicants should still be aware of any correspondence.)
o Assist with explaining why your service offering is cost-effective and providing any required cost-allocation documentation. Service providers can request confidentiality of their data. (See, e.g., 47 C.F.R. §§ 0.457 and 0.459.)
o Work with the applicant to provide sufficiently detailed responses to PIA information requests.
Plan for PIA
• Applicants will be asked to explain why the service offering they selected is the most cost-effective solution. Be ready to:• Provide specifications for special construction solutions and invoice-level detail on associated costs.• Explain the reasonableness and need for the costs, such as:
o Directional boring (buried)o Galvanized conduit (buried)o A large number of fusion splices o A large number of handholes, vaults (buried)o Installation of new poles (aerial)o Expensive make ready costs (aerial)
• Confirm build route with GIS data as part of cost-per-foot evaluation.• State when a capital investment made by USF will yield cost-savings.• Respond to questions about whether all costs have been considered (e.g., maintenance and
operations, Network Equipment).• Reminder: Vendors may assist applicants with preparing funding requests and responding to PIA
questions, and may speak directly with PIA reviewers.
How to Get Help
• Client Service Bureau (CSB)o 1-888-203-8100
o Submit a Question
• SL News Briefs
• Tip Sheets
• USAC website
• www.usac.org/sl
Contact Information
Thank you!
Robert Hamel
Public Sector Specialist
Office: 401-775-1198 | Cell: 401-330-7499
Suzanne McLaughlin
Vice President and General Manager
Office: 401-775-1286| Cell: 401-378-2994
Questions and Answers
