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Significant Changes to E-rate Eligible Services
Draft Eligible Services List Shows Numerous Changes from Previous Years
Message Posted September 30, 2003

** I attended an E-rate Training Workshop in DC last week with the SLD and unlike previously uneventful annual trainings, this one was much different. Significant changes were made regarding eligible services (described below); procurement, competitive bidding and contract; and technology plans. Because each of these topics is large and important in itself, I will send the updates in separate messages. **

Although it's not yet available on the SLD's website, a draft version of the new eligible services list was released during the training. Some items have become eligible and others have moved from the eligible to the ineligible list.

These are the major changes:

PREVIOUSLY ELIGIBLE, NOW INELIGIBLE

* Dark Fiber
The SLD defines dark fiber as "fiber optic cable for which the service provider has not provided modulating electronics." This previously was an eligible service, and one which many PA applicants have been successful in receiving E-rate discounts on. Now the FCC has said that they 'are unsure whether unlit dark fiber is a telecommunications service and that pending resolution of this issue, it is not eligible for funding.' We do not expect it will become eligible, and we are seeking guidance on whether they will permit the restructuring of existing contracts so they can remain eligible for discounts, and how they intend to treat FRNs still under review for Year 6 and invoices that have not been paid for Years 5 and 6.

Clearly, this ruling could be devastating for many districts and dark-fiber service providers as long-term contracts have been signed. As soon as more information and clarifications are released, I will pass them along.

* VOIP
The SLD's new list states that, "the FCC has yet to determine whether VoIP is a telecommunications service or an application provided over an unregulated information service. Pending resolution of this issue, VoIP service is not eligible for funding." However, the draft version states that equipment that supported voice or video over IP would remain eligible in the internal connections category.

PREVIOUSLY INELIGIBLE, NOW ELIGIBLE

* Firewalls
The SLD defines firewalls as "a hardware and software combination that sits at the boundary between an organization’s network and the outside world" would become eligible for support, either as a service or when purchased as an internal connection. We believe this change is the result of heightened concerns about network security. However, a standalone proxy server would remain ineligible because it was deemed "not necessary to transport information."

* Voice Mail
The draft list clarified that voice mail service would become eligible in either the Telecommunications Services or Internet access categories, and that voice mail equipment could be purchased in the Internal Connections category. In addition, voice mail features purchased as part of a PBX are also eligible. End-user products such as answering machines" would not be eligible under this definition.

* Web Hosting
Web hosting is now eligible for E-rate discounts, whether it is bundled as part of a package or an optional service. This does not include the creation of modification of web content.

* Cellular Service for Everyone
Previously, you were only permitted to receive E-rate discounts on administrators and teachers' cellular service. The FCC clarified that starting with Year 7, all cellular users in the district or library system would be eligible, including bus drivers, security personnel, technology directors, nurses, and athletic directors. We have asked for clarification on this new ruling, particularly with regard to contracted bus drivers who are technically not employees of the district, but are contracted through a central bus company.

IMPORTANT OTHER CLARIFICATONS


* Technical Support/Basic Maintenance
The language on Maintenance and Technical Support has been changed to stress that only "basic maintenance services are eligible." Specifically "end user support is not eligible. Network management services, such as monitoring of bandwidth, are not eligible." Although the term "basic" is obviously a relative term, this change is apparently meant to curb an attempt by applicants and vendors to incorporate a growing variety of professional support services under the banner of eligible technical and maintenance support.

* Other Clarifications
The updated eligible services list also is expected to clarify the eligibility of UPS, storage, and file server products, and to further define what the FCC means by a duplicate service prohibition, although the SLD suggested that "redundancy" and "load balancing" are likely to be included. We expect the SLD to say that if the same service is going to the same building or same population, it is presumed to be duplicate. If you do have two of the same service, we strongly suggest you identify this need in your technology plan and to spell it out in your Item 21 attachments as to why it is not a duplicate service, and rather is essential to bringing internet access into your classroom.

Julie Tritt Schell

jtschell@comcast.net
(717) 730.7133 (voice)
(717) 730.9060 (fax)

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