FCC Makes Changes to FY 2010 Eligible Services List
Message Posted December 10, 2009

~ Please note major webhosting changes ~

Last week the FCC released the FY 2010 Eligible Services List and unlike previous years when there were few, if any, changes, the new ESL does contains some modifications. Please read the webhosting eligibility section carefully before signing any multi-year contracts for webhosting this year.

Web Hosting

In recent years, the number of vendors claiming their web-based applications are E-rate eligible has exploded and USAC did not disagree with their claims. The FCC, however, apparently did not agree and has (again) narrowed and clarified the eligibility of webhosting. The following features are now expressly ineligible:

- any type of interactive application feature that would allow for blogging
- any application features involving data input or retrieval including searching of databases for grades, student attendance files, or other reports

- software applications
- end-user file storage
- content editing features
- posting of content created by third party vendors

Therefore if you are applying for webhosting for FY 2010, you should ask your vendor what the new eligibility percentage for their service is under the FY 2010 ESL. And expect additional questions from PIA this year about your webhosting request.

*** Important: The FCC also has requested comments on several services for future years where they tentatively conclude that no webhosting should eligible for funding, or, alternatively, should only be eligible as a Priority 2 service. Therefore it is extremely important that if you can't pay or don't want to pay for the cost of your webhosting service without E-rate funding, you should not sign any contract that would continue after June 30, 2011.

Video on-Demand Servers/Video Content Storage

The FCC clarified that Video Content Storage is ineligible. And while Video-on-Demand Servers (VODS) perform video content storage (ineligible), there are aspects of VODS that are eligible, such as the data distribution functions. The FCC warns, however, that if “applicants are using other products or services to transport video or information throughout their school or library buildings, the portion of a video on-demand server that also provides this capability will be considered duplicative and ineligible.”

Voice over IP Services (VoIP)

The FCC clarified that interconnected VoIP is an eligible service under either the Telecommunications or Internet Access categories (the Commission hasn't decided whether VOIP is a telecommunications service or an information service). Surprisingly, the FCC's ESL Order also states that if applicants are JUST using interconnected VOIP service, they are not required to comply with CIPA.

Unbundled Equipment Warranties

The FCC concluded that unbundled warranties are ineligible. We have many unanswered questions pertaining to this surprise announcement so please stay-tuned as we seek clarification from the FCC about what they consider to be unbundled warranties.

Additional Clarifications to 2010 ESL:

Eligible:
- Ethernet
- Wireless LAN controllers
- Virtualization software

Ineligible:
- E-mail archiving (either as service or equipment)
- Telephone broadcast messaging
- Power distribution units
- Softphone software
- Interactive white boards

Future Funding Year Proposed ESL Changes:

Ineligible:
- Separately priced firewall services
- Anti-virus and anti-spam software
- Scheduling services for video teleconferencing
- Web hosting (except perhaps as Priority 2)
- Certain wireless Internet access applications (e.g., emergency information, tracking, and GPS services on school buses)

If you have any questions pertaining to the new ESL, please let me know. I will share more information about the unbundled warranty issue as it becomes available.

-- Julie