February E-rate Update

February 19, 2019

~ 36 Days Until the Form 471 Deadline ~
~ 8 Days Remain to File 470 (technically) ~

Good morning, E-raters!  We are in the heart of E-rate season, with only 36 days to go until the March 27 Form 471 deadline.   If you haven’t focused on E-rate yet for FY 2019, don’t waste another day!

FCC Issues Category 2 Report

Last week the FCC issued their much-anticipated Category 2 Staff Report that was required by the 2014 E-rate Modernization Order to provide an analysis of the first four years of the C2 program.  Unfortunately, the Report did not contain any announcement or decision about the fate of the Category 2 budget cycles or budget multipliers so we remain unsure what the rules will be for FY 2020 and beyond.  However, the Report did provide a glowing review of the success of the C2 budgeting process and recommends that it continue instead of reverting back to the old 2/5 rule.  The Report did not comment on the sufficiency of the C2 budget multiplier (currently $156.23/student), but did state that the minimum C2 budget amount of $9200 may be insufficient for the smallest schools/libraries, and the per square foot amount of $2.39 for non-urban libraries may be too low.  I expect the next step will be for the FCC to release a Notice of Proposed Rule Making (NPRM) to seek formal comments on specific proposals related to the future of Category 2.  Looking into my crystal ball, I believe applicants will likely have the remainder of their 5-year C2 budgets, and applicants needing new C2 budgets (because they started in FY 2015) will have them replenished – BUT, we don’t know at what funding levels.

FCC Extends Large Special Construction Amortization Rule

Since FY 2015, applicants with large special construction (Category 1 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 was slated to sunset and applicants were going to be required to request the E-rate portion of these large, one-time charges over 3-years.  The FCC has recently issued a 1-year extension of the amortization requirement, and is seeking comments about whether to remove the amortization requirement entirely.  This FCC decision doesn’t impact a large number of applicants, but certainly is welcome news for anyone that is building a new network with a one-time large build-out cost.  Please note:  The rule which allows applicants to pay the non-discounted share of the costs over 4 years was never slated to sunset.  Example:  $1,000,000 special construction cost and a 60% E-rate discount.  Applicant can pay the vendor the applicant share of 40% ($400,000) over 4 years (if they indicated they wanted this option on the 470), and they can apply for the 60% ($600,000) in E-rate funding in the first year of the contract, thus making new networks more affordable.

Time Running Out to Post 470s

If you haven’t done so already, it’s time to post any last minute Category 2 Form 470s or PEPPM mini-bids for new equipment, or Category 1 Form 470’s for services needing a new contract or MTM services (must be filed annually).  The very last day that you can post a 470 is February 27, but this only leaves the final day of the Form 471 window – March 27 — to evaluate your bids, obtain local approvals, sign contracts, upload contracts and complete the 471.  Please don’t wait another minute to file your Form 470!

Form 471 Webinars This Week

If you would like a tutorial on filing a Form 471 for Category 1 and/or Category 2, please plan to attend one of the webinars being conducted this Wednesday and Thursday at 1:00.  Registration and details at:  http://e-ratepa.org/?p=29211.

Category 2 Inflation Adjustment Expected Soon

Last year the FCC announced the Inflation Adjustments to the Category 2 budget multipliers around this time, so we’re expecting an announcement soon.  I’ll send a message to the listserve as soon as we receive the news.

Happy filing!  Hope to see you on the Form 471 webinars this week.

– Julie

Julie Tritt Schell
PA E-rate Coordinator
717-730-7133 – o

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