Updates and Changes for E-rate FY 2019

October 31, 2018

~ Need C2 Training?  Register at:  http://e-ratepa.org/?page_id=745 ~

On the October 19 ‘E-rate for PA Veterans’ webinar, we discussed the updates and changes to the E-rate program for Funding Year 2019.  This message is a synopsis of those changes.  If you haven’t started to think about Funding Year 2019 – now is the time!

Form 471 Filing Window Dates

– USAC has not yet announced the official dates, but has strongly hinted that the Form 471 filing window will open on January 10, 2019 and close on March 20, 2019.  This is an even shorter window than last year so it’ss important to begin your FY 2019 planning/bidding process as soon as possible so you don’t run out of time.  For a suggested FY 2019 bidding/filing timeline, see the chart at the bottom of this message.

FY 2019 “Administrative Window”

– The “Administrative Window” is the window before the 471 window, during which time schools must update their enrollment and NSLP/CEP% data in each school’s EPC profile.  The Admin Window is currently open and is expected to close on January 7, 2019.  GREAT NEWS!  Like last year, PDE’s Bureau of Food and Nutrition has agreed to provide us with the “unofficial” enrollment and NSLP/CEP% data that each school has entered into the PEARS system during the month of October.  I expect to be able to send to you this unofficial PDE data set by mid-December and you’ll then have a few weeks to update your schools’ EPC profiles while the Admin Window is still open.  If you want to update their profiles now, you certainly may, but it will be much easier if you wait until I send you the data in December (which will then likely match what PIA uses to review your Form 471 discount data information).

Form 470 Changes for FY 2019

  • You may recall that last year the Form 470 contained confusing drop-down options for applicants seeking Internet Access services.  The FY 2019 Form 470 has been modified, but not improved.  Essentially:

– If you want Internet delivered over Fiber Transport, you must select “Leased Lit Fiber with or without Internet” and then explain in the narrative that you’re seeking Internet and at what bandwidth.

– If you are seeking Internet via a different mode of transport (cable modem, DSL, etc.), then you must select “Internet Access and Transport Bundled – Non-Fiber

  • C2 Network Equipment & C1 Maintenance/Operations — applicants previously used the “Other” category to bid these items.  Now they each have their own C1 drop down that must be used.

Large Special Construction (installation) Amortization Rule

– Since FY 2015, applicants with large special construction (C1 network installation costs) that exceeded $500,000 were able to request the full E-rate portion in the first year of the contract.  Beginning in FY 2019, this rule is slated to sunset and applicants will be required to request the E-rate portion over 3-years.  We have discussed our concerns with this provision with the FCC but there is no guarantee they will act.  Please note:  The rule which allows applicants to pay the non-discounted share of the costs over 4 years is not going away.   Example:  $1,000,000 special construction cost and a 60% E-rate discount.  Applicant can pay $400,000 over 4 years (if they indicated they wanted this option on the 470), but will have to apply for the $600,000 in E-rate funding over 3 years ($200,00/year for 3 years).

Important – Timing of FY 2019 PEPPM Mini-Bids

If you intend to use the PEPPM Mini-bid system as the procurement vehicle for your FY 2019 Category 2 equipment purchases, NOTE THAT YOU CANNOT RELEASE A PEPPM MINI-BID TO VENDORS UNTIL I SEND YOU THE NEW PRODUCT LINE/AWARDED VENDOR LIST WHICH WON’T BE UNTIL AT LEAST JANUARY 2, 2019.  Why?  The current PEPPM contract expires at the end of 2018 and the next contract will not become available for use until January 2, 2019.  Thus, no mini-bids can be issued to the new awarded vendors until at least that date.  The Form 471 filing deadline is expected to be March 20, which means that, assuming your PEPPM procurement is conducted in early January, your C2 contracts will have to go to your school boards in late January or February.  Yes, it’s going to be a very compacted bidding/contract approval/contract signing window this year.

Big *Big* Year for Category 2

FY 2019 is the final year to apply for Category 2 funding for applicants who first received Category 2 funding in FY 2015.  Under the current program, applicants should have a 5-year cycle to apply for their Category 2 funding, with Year 1 being the first year the applicant is committed C2 funding, beginning with FY 2015.  If an applicant has not yet utilized any of their C2 budget, FY 2019 is the last year they can “opt-in” to the C2 funding initiative and still be apply for the funding over a 5-year cycle.  However… the FCC has not said – definitively – whether the Category 2 initiative will extend beyond FY 2019 (that announcement is expected to be known by January 2019).  Therefore, my advice for PA applicants is to utilize as much of their Category 2 budgets as possible in Funding Year 2019, while we know with 100% certainty that the Category 2 budgets are in effect and will be funded at the current levels.  Need C2 training?  Register for the C2 webinars at: http://e-ratepa.org/?page_id=745.

Category 2 Year Budget Calculations

To calculate your remaining Category 2 budget for each school, use this formula:  [($153.47 x # students enrolled for each school building) -- the pre-discount amounts that were approved for each school since FY 2015].  The result will be the remaining Category 2 budget for each school.   How do you determine the C2 budgets that have already been used for each school?  Use this USAC tool:  https://sltools.universalservice.org/portal-external/budgetLookup/.

Special Construction Charges for All Types of Fiber Funding Requests

If you will be applying for any build-out (special construction) of fiber (be it lit, dark or self-provisioned), I strongly encourage you to review USAC’s Fiber Training slides, at: http://usac.org/_res/documents/sl/training/2017/Fiber-Options.pdf as they contain a very good explanation of the very strict rules related to competitive bidding, bid evaluation, what amounts USAC will pay for when additional (excess) fibers are put in the trench along with the fibers needed by the school or library.  Please note that if you apply for special construction charges, you should expect to receive a voluminous amount of PIA review (contact me if you want a copy of what applicants and their service providers were required to answer in FY 2018).

Funding Year 2019 Suggested Timeline:

Step: Timeline:
Post Form 470 in EPC to competitively bid all new/expiring contracts (unless using the PEPPM mini-bid option for C2) Now – end of November
Update enrollment/NSLP data in school EPC profiles Now – January 7.  But consider waiting for the unofficial PDE data to be available in mid-December
Conduct bid evaluation Early January
Issue PEPPM C2 Mini-Bids to vendors (if using this option) Early January (bid evaluation at end of January)
Obtain school board approval February board meetings (no later)
Sign vendor contracts By End of February
Create Contract Records in EPC/upload signed contracts Late February/Early March
Submit Form 471 Early March
Earliest applicants can purchase C2 equipment April 1, 2019
Funding Commitment Letters (FCDLs) issued End of April – Sept 1 (goal)
File Form 486 Upon receipt of FCDLs – Oct 28, 2019
Earliest that FY 2019 BEARs or SPIs can be submitted to USAC July 1, 2019

Julie Tritt Schell

PA E-rate Coordinator
717-730-7133 – o
717-730-9060 – f

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