PDE Submits Category 2 Reform Comments to FCC

August 27, 2019

Attached: PDE Category 2 NPRM Initial Comments Aug 2019 (1)

In mid July, the FCC released a Notice of Proposed Rulemaking (NPRM), seeking public comments on the E-rate Category 2 initiative.  As you know, the Category 2 program began in FY 2015 and included a guaranteed per-pupil (or per sq. foot for libraries) pre-discount cap for a period of five years.  C2 replaced the former underfunded Priority 2 program which relied on the 2/5 rule which stated that each building could only apply for P2 funds two out of every five years.  The FCC released the NPRM, asking for input on whether the new Category 2 program should be made permanent (in lieu of returning to the 2/5 rule), and how the program could be further improved.

Based on your input and experience working with PA schools and libraries over the last five years, the Pennsylvania Department of Education submitted the attached comments to the FCC.  The outline of our comments is below.  In general, we believe the Category 2 initiative is a vast improvement from the old Priority 1 program, and should be continued.  However, we recommend specific improvements such as setting C2 budgets at the district level instead of building level, increasing the per-student amount to $250/student, increasing the minimum floor for small schools and libraries to $30,000, and eliminating the proration requirement for multi-year maintenance agreements.

Reply comments are due September 3, after which time the FCC will review all comments submitted and then release an Order outlining the final rules for the Category 2 program for FY 2020 and beyond.  Until that Order is released, we don’t know what the budgets will be, whether they are being reset for everyone in FY 2020, or any other details.  It is our hope that the FCC will act quickly and have the final rules available by no later than December.

As always, please let me know if you have any questions.

PDE Category 2 Reform Comments Outline

I. Make the Category 2 Program Permanent.
II. Make Any and All Changes to the Category 2 Program Effective Beginning in Funding Year 2020.
III. Simplify the Category 2 Budget Calculations to the Fullest Extent Possible.

  • Calculate Category 2 Budgets at the BEN-Level Instead of School or Library Level
  • Reset All Applicants’ Category 2 Budgets Starting in FY 2020 and Create a Uniform 5-year Budget Cycle for All Applicants
  • Permit 5-year E-rate Discounts, Thus Enabling Stable 5-year Category 2 Budget Levels
  • Adjust Category 2 Multipliers Only Once Every 5 Years and Not Annually for Inflation
  • Increase School Category 2 Budgets to $250/Student, and Set All Library Budgets at $5/Sq. Foot
  • Increase Minimum Budget Floor to $30,000 for Single-School or Single-Library BENs and Establish Multi-School Formula to Determine Minimum BEN-Wide Category 2 Budget

IV. Take Advantage of Downstream Efficiencies that Can be Realized by Moving to BEN-Level Category 2 Budget Calculations.

  • Eliminate Building-to-Building Equipment Transfer Limitations
  • Eliminate Building-by-Building Allocation of Category 2 Equipment/Services on Form 471

V. Reform Category 2 Eligible Services to Remove Inefficiencies

  • Eliminate Queen of Peace “Equivalent” Bidding Requirements for Schools that Have Standardized on a Manufacturer
  • Simplify Form 470 by Eliminating Separate Category 2 Sub-Categories
  • Allow Upfront Funding of Multi-Year Manufacturer Support Agreements
  • Eliminate Requirement to Pro-Rate Pre-Paid, Multi-Year Manufacturer Support Services Agreements
  • Eliminate Cost Allocation Requirement for Cabling and Data Distribution

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

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