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SLD Releases FY 2011 Demand Estimate to FCC
Message Posted April 19, 2011

The SLD has released their demand estimates for Funding Year 2011 and demand has increased significantly (by 10.1%). Demand for FY 2011 totals $4.31 billion, although this figure is likely to be reduced as applications are denied and duplicate requests are eliminated. Below is a more granular look at the nationwide and Pennsylvania figures, with an analysis for Priority 2 funding.

A few notes:

1) Demand for Priority 1 services (telecommunications services and Internet access) is $2.173 billion, an increase of 6.6% from last year.

2) Demand for Priority 2 services (internal connections and basic maintenance of internal connections) is $2.137 billion, an increase of 13.8% from last year.

-- Demand for 90% Priority 2 funding is $1.008 billion, which is about the same as last year.

-- Demand for 80-89% Priority 2 funding is $1.087 billion, which is 35.6% higher than last year.

Analysis P1: The funding cap for FY 2011 is $2.25 billion + $20 million inflation = $2.27 billion. So there is funding to cover all Priority 1 requests (although at an increase of 6% each year, there may come a year when there isn't enough funding available to cover all of the Priority 1 demand.)

Analysis P2: Will there be enough funding to cover the 90% Priority 2 requests? Priority 1 plus 90% Priority 2 demand = $3,180,888,703. If the FCC rolls over unused funding from prior years (as they have in the previous three funding years, there should be enough funding to cover the 90% P2 requests. At this time, USAC is reporting there is $400 million available in used funds, and that figure may increase to $500 or $600 million. What is unknown is whether the FCC will use a portion of those funds to cover the 80% P2 FRNs for FY 2010 (a petition is pending at the FCC requesting them to do so), whether they will roll over all of the unused funds, or keep the unused funds in reserve for future years or future initiatives. Assuming the FCC rolls over all of the available unused funds to FY 2011, I would expect that Priority 2 funding may reach below 90%, but only slightly.

3) A total of 44,139 Form 471s were received (1426 more than last year), which included 134,548 FRNs. 98.5% of applications were filed online (same as last year) and 80.9% of Form 471s were certified online as well (nearly the same as last year).

4) In Pennsylvania, 5757 FRNs were filed (nearly identical to last year), by 1274 different entities (13 more than last year). In fact, only 6 public school districts did not apply, which represents a non-participate rate of about 1.2% which is one of the lowest - if not the lowest - in the nation. Although 6 PA school districts did not apply, each of these districts indirectly receives E-rate funding through their participation in their IU's Regional Wide Area Network E-rate applications. Thus, 100% of PA public school districts participates in E-rate. In 2010, Pennsylvania's non-participation rate was 1.4%, with 2% in 2009 and 5% in 2008.

5) Pennsylvania applicants have requested $157,601,755.17, an increase of more than $45 million from FY 2010. Pennsylvania applicants have requested $72,256,215 for Priority 1 services (an increase of $638,044), and $85,345,539 for priority 2 services/equipment.

6) The nationwide breakdown by service category, compared with FY 2010, is provided below. A more detailed breakdown of the SLD’s demand estimates for FY 2011 is available at: http://www.usac.org/_res/documents/sl/pdf/FY2011-Demand-Estimate-Letter.pdf

FY 2010 FY 2011
Telecommunications Services $1,573,277,342 $1,628,229,642
Internet Access $464,919,094 $544,654,792
Internal Connections $1,614,967,662 $1,862,267,687
Maintenance of Internal Connections $262,780,293 $274,790,404
Total Demand $3,915,944,392 $4,309,942,527

Julie Tritt Schell
PA E-rate Coordinator

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

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