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Caution: PIA Internet Access Question
Message Posted March 30, 2007

The SLD's Program Integrity Assurance (PIA) staff have begun sending a new inquiry to applicants who are requesting Internet Access which asks what that Internet bandwidth is being used for.  The correspondence (shown below) gives 6 specific examples of what they think the bandwidth might be being used for, and asks the applicant to indicate what percentage of bandwidth is being used for each function.  BE EXTREMELY CAREFUL when answering this question as not all of the examples on the list are E-rate eligible.   

I have provided below a copy of their correspondence, and listed beside each function whether it is eligible or not eligible, according to the SLD.  If you don't know exact percentages, use a reasonable guess.  But be aware that if you are using your Internet Access bandwidth for any of the ineligible functions, PIA will require you to do a cost allocation to remove a proportionate share of your request. 
And if the total percentage you list in the 'ineligible' functions equals 30% or more, the entire request will be denied under the 30% rule.

Why are they asking this question?  The SLD is cracking down on entities that are listing their WAN services under the Internet Access category to evade the rule which requires that such services must be provided by an Eligible Telecom Provider.  In addition, the SLD contends that even
video over IP (for videoconferencing or streaming video, for example) is not eligible, however the State E-rate Coordinators are in discussions with the SLD and the FCC on this issue as we strongly disagree. 

So, how do you know if your Internet Access requests are compliant with this rule?  In my opinion, there are two tests. 
1) Do each of your connections a) touch the public internet space (cloud), or b) do they connect directly to other buildings? (Answer should be a.)
2) Is the service being used for
only basic internet conduit, web-based e-mail, and/or Voice over IP? (Answer should be yes).

The SLD addressed this issue in detail in their July 21, 2006 Newsbrief where they stated, "… the
Internet Access category of service is “limited to the provision of ‘basic conduit access’ to the Internet.” … However, basic conduit access does not include advanced functions such as direct exchange of data or video between applicant sites or the transport of point-to-point connectivity of data or video applications that are to be provided only by eligible telecommunications carriers."  The entire Newsbrief on this topic is at: http://www.universalservice.org/sl/tools/news-briefs/preview.aspx?id=32.

PIA Internet Access Question:

        We are currently in the process of reviewing your Form 471 application(s) XXXXX and/or the documentation you provided. Please indicate the specific type of connections that will be utilized with your Internet access funding request.

Access to the World Wide Web _________%  ELIGIBLE
Internet-based e-mail _________% ELIGIBLE
Virtual Private Network (VPN) services _________% NOT ELIGIBLE
Videoconferencing and/or Distance Learning _________% NOT ELIGIBLE
Direct connectivity between school or library sites _________% NOT ELIGIBLE
Interconnected Voice over IP (VoIP) services _________% ELIGIBLE
Other (please specify) _________% LIKELY NOT ELIGIBLE

Note: services that go beyond basic conduit access to the Internet are not eligible for funding. This includes Virtual Private Network services, videoconferencing, and direct connectivity between school or library sites. If you will be utilizing any of these capabilities with your Internet access connection, or other features that go beyond basic conduit access to the Internet, you may be able to receive partial funding for the eligible portion of use (such as access to the World Wide Web and Internet-based e-mail) if you provide a cost allocation that subtracts ineligible uses.

********

Remember, if the total of the percentages in the red Not Eligible categories is equal to or greater than 30%, the entire request will be denied.

If you have any questions pertaining to this issue, please contact me at jtschell@comcast.net.

-- Julie

Julie Tritt Schell

717-730-7133 - o
717-730-9060 - f
jtschell@comcast.net
www.e-ratepa.org
Penn*link

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