E-rate Update - SLC Provides Answers on FCC Order
Message Posted June 16, 1998
SLC RELEASES INITIAL INFORMATION ON FCC DECISION
The Schools and Libraries has just released a ten point question and answer piece on the FCC's recent decision to cut E-rate funding and change the funding year. We expect additional information to be forthcoming. Some highlights:
-- The SLC sounds confident that if you are not in the 80-90% categories, your internal connections WILL NOT be discounted. (See #5) (If your school/library is eligible for less than an 80% discount, it appears very doubtful that you will see any funding on requests for internal connections. Applicants in this situation should review any contracts they may have signed related to internal connections. In workshops and meetings over the past year, we have recommended that such contracts
include language protecting the applicant in case funding was not forthcoming. Now is the time to review this language, particularly if you can't afford to pay 100% of the cost.)
-- You WILL be able to extend contracts and tariffed arrangements for telecommunications services and Internet services through 06/30/1999 (SLC format!) without penalty. Details on this procedure will be forthcoming. (See #6)
-- The SLC will be instituting a Summer Database where you can list a summer number for your contacts at their website. It is designed to accommodate school personnel that may not be at the school number over the summer. (See #9)
-- Applications for round 2 will NOT begin July 1, 1998, as previously expected. Instead, they will begin sometime in late Fall. Application packets will be sent to every school district, non-public school, and library 2-4 weeks before the round begins. (See #10)
-- Julie
FCC REVISES 1998 E-RATE FUNDING AND TIMING
WHAT CHANGES MEAN FOR SCHOOL AND LIBRARY APPLICANTS
Following several weeks of intense debate in Congress and at the Federal Communications Commission, the FCC last Friday released its decision concerning 1998 funding for the E-rate and a new schedule for deploying those funds. The following questions and answers provide basic information about the FCC's decision. More detailed explanations of each aspectØincluding how funds will be allocated and how the new schedule will workØwill be released by the Schools and Libraries Corporation over the coming days. In addition, applicants should be aware that additional congressional action on the E-rate remains a possibility.
1. What was the FCC's recent decision about the E-rate?
On Friday, June 12, the Federal Communications Commission voted to set funding for the 1998 E-rate program at $1.925 billion over an 18-month period ending June 30, 1999.
2. Wasn't funding for the E-rate supposed to be $2.25 billion a year?
$2.25 billion was the annual cap for the program, the most that could be collected from the telecommunications industry and provided as discounts to schools and libraries. The FCC has stated that it wants to meet the needs of schools and libraries without causing consumer phone bills to rise. It believes that this revised funding level will accomplish this for 1998.
3. Is $1.925 billion enough to fund all of the applications the SLC has received?
We will not know until all applications are processed and reviewed, but our initial estimates show the total requests for applications received within the 75-day window for 1998 at $2.02 billion. Our goals for allocating funds are now to assure that all approved school and library applicants see benefits of the E-rate; to make certain that greatest benefits go to those
in greatest need; and to maximize available funding in most equitable and manageable way.
4. So how will the SLC now allocate these funds?
The FCC decision also re-ordered our allocation process. Approved requests
for telecommunications services and Internet access will be funded first. Remaining funds will then be allocated to approved requests for internal connections beginning with those from neediest applicants (for example, those with 90% discounts, then 80%, and so on).
5. Does this mean that if I'm not one of those 80-90% applicants, my internal connections probably won't get funded this year?
Until all applications are completely reviewed, we won't know precisely how far the funds will stretch, but we are not optimistic about being able to meet many applicants' internal connections needs. Therefore, we encourage all applicants to begin considering alternate or additional sources of funding for internal connections.
6. How does the 18-month year work?
Originally, the 1998 program year was to have ended December 31, 1998. The FCC has now directed the SLC to extend approved 1998 telecommunications and Internet access discounts through June 30, 1999, and to allow those with approved internal connections discounts to take until June 30, 1999 to expend these funds. Applications for the 1999 program year will begin being accepted in late fall 1998, with funding commitments in place before the new program year begins on July 1, 1999. More details about the 18-month transition, including the process for extending contracts through June 30, will be available soon.
7. What are the reasons for adopting this 18-month cycle?
The FCC and SLC want the E-rate program year to more closely reflect applicants' fiscal years, which typically begin July 1. In addition, because of all the uncertainties of this initial application cycle, we wanted to give applicants sufficient time to implement 1998 projects and develop their applications for 1999. This 18-month cycle makes 1998 a transitional year; funding will be annual beginning in 1999.
8. Will this decision change the rules regarding retroactivity? Will discounts for qualified pre-existing contracts still be retroactive to January 1, 1998, or the service start date, whichever is later?
The rules regarding retroactive discounts will not change under this new plan.
9. When will we know what our funding commitment will be for 1998?
The SLC is moving ahead with processing of all applications. As you know, problem resolution and program integrity review can be time-consuming. In addition, the FCC decision requires SLC to make significant adjustments in our processing and computer systems. We hope to provide an exact schedule for funding commitments in the near future. Meanwhile, we urge applicants to continue monitoring your phone, fax, and e-mail for contacts from our review staff. (If you will not be reachable during some portion of the summer, we will collect alternate contact information for you via the Summer Contact data base available on the SLC Web site within the week.)
10. When will applications begin being accepted for 1999?
The SLC expects to begin accepting applications for 1999 late this fall-NOT July 1, 1998, as originally planned. Application guidance materials are being revised and updated now and will be made available over the next several months. Application packages will be distributed to school districts, library systems, and non-public schools two to four weeks in advance of the application launch date.
Julie L. Tritt
Executive Policy Specialist
Office of Educational Technology
Pennsylvania Department of Education
333 Market Street, 10th Floor
Harrisburg, PA 17126
Tel: (717) 787-5820
Fax: (717) 787-7222
00jtritt@psupen.psu.edu
www.state.pa.us
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