FCC Proposes Category 2 Changes & Seeks Comments

July 12, 2019

Attached: C2 NPRM – FCC-19-58A1 – July 2019

Attached: NPRM C2 Summary Chart

This week the FCC released the long-awaited Notice of Proposed Rule Making (NPRM) on the E-rate Category 2 program. The good news is that the FCC proposes to take the 5-year “C2 test” period and make it permanent (and not revert to the old 2/5 system), as well as extend the eligibility of MIBS, caching and basic maintenance services. Unfortunately, the NPRM does not provide an answer to the biggest question — what funding will be available in FY 2020 for applicants that first used C2 funding in FY 2015. In order to develop those rules, the FCC is seeking comments on a long list of questions/issues, for which I have summarized the most significant ones below. (I am delighted to report that many of the ideas for which they seek comment were submitted by PDE in October 2017, see the footnotes!) After the comment period, the FCC will review the submissions and develop final rules for implementing C2 budgets in FY 2020, and any other changes they’d like to make to the program. Hopefully, that Order will be released this fall.

Attached is a summary chart of the NPRM that correlates back to the NPRM by paragraph. The actual NPRM is only about 13 pages long and I encourage you to read it and consider submitting comments, even if only to provide input on a single question or issue. Let me know if you’d like to do this and I’ll help you navigate how to submit to the FCC’s ECFS comment system. Comments will be due 30 days after the NPRM is published in the Federal Register, which is expected to be within the next week or so.

Summary of Major Questions in NPRM:

1. FCC proposes to keep the current $150/student (adjusted for inflation) budget multiplier.

– Should the minimum budgets for small schools and libraries be increased to $25,000? (¶ 20)

– Should the rural library budget multiplier be increased (perhaps to match the urban library $5.00/sq. ft. multiplier)? If so, submit specific data and examples to support the need. (¶ 21)

2. Should budgets be administered on a districtwide basis? Would libraries benefit from a system-wide budget? (¶ 24)

– If district-wide budgets are adopted should the equipment transfer rules within a district be eased? (¶ 27)

3. Should the student count and square footage in the first year of a five-year cycle be used for all five years to ease administration of the budgets?

– Or are there significant advantages to having the budgets rise (or fall) depending on student population or square footage each year? (¶28)

– Should a presumption be established that the student counts verified in one of the last four funding years are still accurate for the purposes of setting a category two budget, absent an effort by the applicant to increase the student count? (¶ 28)

4. Should 5-year budgets be allocated on a “rolling” basis or should there be fixed, 5-year periods for everyone (e.g., FY 2020-2024, FY 2025-2029, etc.)? What are the costs and benefits of either proposal? (¶ 32)

5. Should all C2 budgets be reset as of FY 2020? (¶ 35)

6. What are best ways to transition from the existing C2 budget rules following the five-year test period, to the new rules?

– Should the current rules be extended for one year, without modification, so that FY 2020 will be used as a bridge to transition to the final rules? (¶ 36)

– What are the best ways to reduce applicant confusion and provide for simplified administration of the C2 budgets as we move beyond funding year 2019?

7. Are there additional services that should be eligible for category two funding or any other issues regarding category two eligible services that the FCC should consider? (¶18)

If you have any questions, please let me know.

– Julie

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


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