FCC Order Provides E-rate Cost Allocation Relief/Bidding Exemption

August 2, 2023

At its July 20, 2023 public meeting, the FCC adopted an Order that expands E-rate access for Tribal libraries, but more importantly, provides much-welcome relief in key program areas, most of which impact all applicants.

  • C2 Bidding Exemption Threshold for All Libraries - Establishes a Category 2 Form 470 bidding exemption for all libraries (not schools) where the total pre-discount price is $3,600 or less per library per funding year.  A C2 funding request will be eligible for this exemption only if the total cost per library is $3,600 or less; and the cost cannot be averaged across a number of libraries.  For example, if a library system requests C2 support for 3 libraries, the amount of funding for each library must be $3,600 or less to be eligible for this exemption from filing the Form 470.
  • 10% Ineligible Internet Usage Safe Harbor - Establishes a 10% ineligible usage safe harbor for all applicants which says that cost allocation is not required when ineligible usage of Internet is limited to 10% or less of total usage.  This change is a huge relief for our Career Technology Centers that offer adult education classes, schools that operate child-care and health care centers, etc. as they no longer have to worry about whether a nominal amount of their Internet usage is being used for technically ineligible purposes.  “As a means of providing a safe harbor, we adopt a presumption that if at least 90% of an applicant’s requested Internet service is being used for eligible purposes, the remaining ineligible use of the Internet service will be presumed to be ancillary and, therefore, cost allocation is not required.”
  • Repeal of C2 NIF Cost Allocation Requirement for Shared Equipment – Repeals the current rule for all applicants which says that the non-instructional facility (NIF) usage of shared Category 2 equipment is ineligible and must be cost-allocated from your E-rate funding request.  This generally applied to a district switch or wireless controller located in an administrative building or data center.  Unfortunately, C2 equipment that is solely used by the NIF will continue to be ineligible (for example, WAPs in admin buildings).
  • Full Eligibility for Data Network Cabling – The FCC clarified for all applicants that structured cabling in a building may be connected to ineligible equipment such as security cameras, voice equipment, smoke detectors, etc.  As long local area network is primarily serving an eligible purpose (i.e., distributing broadband throughout a school or library building), the full cost of the cabling is eligible.  However, networks that are dedicated to an ineligible purposes, such as security networks or voice networks, remain ineligible.

The FCC also adopted a Further Notice of Proposed Rule Making  (FNPRM) that seeks comments on a wide array of other E-rate reforms for which we have been advocating for many years.  After it is published in the Federal Register, I will send a separate summary and explain how you can submit comments to the FCC.

If you have any questions, please e-mail me at jtschell@comcast.net!

– Julie

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


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