FCC Proposes HUGE Changes to E-rate
Message Posted May 20, 2010
Today the FCC released a Notice of Proposed Rule Making (NPRM) (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-83A1.pdf) containing the largest proposed reforms ever made to the E-rate program. Below is a very abridged summary of the proposals which may be implemented as early as FY 2011. It is obvious the FCC has embraced many of the numerous suggestions submitted by the applicant community over the last three years and I believe you will be surprised and pleased with most of them. These are just proposals at this point, and they obviously will be fine-tuned over the next few months as questions and suggestions are submitted. Commenters will have 30 days to submit comments to the FCC after it is published in the Federal Register (which we expect to be soon), and then an additional 15 days after that to submit reply comments. Comments may be filed electronically by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/. All filings related to this NPRM shall refer to CC Docket No. 02-6 and GN Docket No. 09-51. As clarifications are made to the proposals, I will keep you posted.
1) Technology Planning Requirements: Proposes to eliminate the separate technology planning requirement for applicants only requesting Priority 1 funding (telecom and internet) that are otherwise still subject to state technology planning requirements. Proposes to retain technology planning requirement for applicants requesting Priority 2 funding. Seeks comment on whether to continue requiring 3rd party approval of technology plans.
2) Form 470/Competitive Bidding: Proposes to eliminate the Form 470/28-day bidding requirement for Priority 1 funding for those applicants subject to public procurement requirements. Applicants NOT subject to public procurement requirements and ALL applicants requesting Priority 2 funding would continue to be required to follow the current Form 470 bidding process. NOTE: The NPRM is unclear whether entities not required to bid telecom and internet services under state law also are exempt from the Form 470 process.
3) Revisions to Form 470 and Form 471: Proposes to make all E-rate forms and documents (such as SPIN change requests) available for online submission, and applicants should be able to save, retrieve, and edit previously filed applications and use these forms as the basis for future funding requests. Shorter and improved Forms 470 and 471 will be proposed in the next few weeks.
4) Prohibited Bidding Conduct: Proposes a list of prohibited competitive bidding behaviors with some of the new and most notable: a) Applicant employees or board members may not serve on any board of any type of telecommunications, Internet access, or internal connections service provider that participates in the E-rate program in the same state; b) Service providers may not offer or provide gifts, including meals, to employees or board members of the applicant; c) Once a contract for products or services is signed by the applicant and service provider, a different service provider may not circumvent the bidding process and offer a new, lower price for the same products and services.
5) Discount Calculations: Proposes to revise discount rules so that schools will calculate a single district-wide discount by using the average discount rate for the entire school district rather than the weighted average for each school building. For example, applicants would no longer list building enrollment and NSLP data on Block 4, but rather would list the total enrollment for the district and the total NSLP eligibility. That overall NSLP eligibility figure would then be compared against the discount matrix to determine the school district’s discount for priority one and priority two services. All schools and libraries within that school district would then receive the same discount rate.
6) Definition of Rural: Proposes to adopt a new definition of “rural area” for the purpose of determining whether an E-rate applicant qualifies for the rural discount. Under the new definition, an area will be considered rural based on the methodology and locale codes used by the National Center for Education Statistics (NCES), also known as urban-centric locale codes. Any school or library that is within a territory that is classified as “town-distant,” “town-remote,” “rural-distant,” or “rural-remote” by an NCES urban-centric locale code will be considered rural for purposes of calculating its E-rate discount level. The FCC is seeking comment on how to administer the new rule when districts have both rural and urban schools. NOTE: Many district-owned and leased buildings are not in the NCES database and we will bring this to the attention of the FCC.
7) Portable Internet Access Service: Proposes to provide E-rate funding for wireless Internet access service used with portable learning devices that are used off school premises. Requirement of the Children's Internet Protection Act (CIPA) would apply to all Internet access, including that used off-campus. The FCC seeks several comments on this proposal, including: a) What safeguards should be imposed so that the Internet access is solely used for educational purposes? b) Should recipients of funding be required to have policies and procedures in place to against the risk of non-educational use at home? c) Should residents of these students' households be permitted to use E-rate funded connectivity for educational purposes, because, for example, such use may be fundamental to promoting digital literacy skills for both the students and the other household members who support the child’s educational experience? d) Will such remote connectivity result in an increase in depend for wireless connectivity and, if so, how will that affect the funding cap? Is such use consistent with the educational purposes requirement of the E-rate statute? We seek comment on whether providing E-rate funds for wireless Internet access to portable devices in offsite locations would result in increased demand for wireless connectivity in the E-rate program, and if so, how that would affect other requests for E-rate funding, given the overall annual funding cap. e) Should access be limited to a trial basis by, for example, capping the number of monthly service contracts per school district or some other method of allocating funding?
8) Lease of Fiber from any Provider: Proposes to remove the requirement that lit fiber must be leased from an eligible telecommunications provider, and proposes to permit the leasing of fiber where the provider does not provide the modulating electronics, as long as the applicant lights the fiber immediately.
9) Expanding Access for Residential Schools that Serve Unique Populations: Proposes to allow schools serving students with medical needs, cognitive, or behavioral disabilities with residential areas on their grounds to receive E-rate funding to their residential areas. The FCC seeks comment whether such funding should be limited only to schools whose operating expenses are funded, in whole or in part, with state or federal funds.
10) Changes to Priority 1 Eligible Services: The FCC seeks comment on whether certain services, such as dial-up Internet access and voice telephone services, should continue to be funded and instead target additional funding toward higher bandwidth services.
11) Providing Internal Connections Funding to More Applicants: The FCC wishes to provide internal connections funding to more schools and libraries and at the same time ensure a predictable amount of internal connections funding each year. To accomplish these goals, they seek comments on several proposals:
a) Per Student Cap Per District - Allocate funding for internal connections based on a per student cap per school district, to which the applicant’s discount rate would then be applied. To ensure that a predictable amount of funding is available, a defined amount of funding would be set aside. The 2/5 rule would be eliminated. For example, if the cap were set at $15 per student, a school district that has 20,000 students would have a cap of $300,000 in internal connections funding. If the district were eligible for a 40% discount, it would be eligible to receive up to $120,000 for internal connections each year. The FCC also seeks comment on whether there should be a minimum amount for which a school, library, or school district is eligible, not tied to the number of students, but instead would be provided to an eligible facility, and what that amount should be.
b) Basic Maintenance Elimination or Reform - Eliminate support for basic maintenance for internal connections. If it isn't eliminated the FCC seeks comment on proposals to cap the overall amount available for basic maintenance, or provide a per-student cap per school district for the funding year. They also propose to limit funding for maintenance to actual expenses for repair and maintenance (labor and parts) by allowing applicants to seek E-rate funds for basic maintenance for internal connections in the funding year following the funding year in which they sought and received repairs on internal connections.
c) Set Aside Defined Amount of Internal Connections - Proposes to set aside a certain amount of the $2.25 billion cap that would specifically be dedicated to internal connections, even if it means not funding all Priority 1 requests.
d) Revising the Discount Matrix for Internal Connections Funding - Proposes to adjust the discount matrix so the maximum discount available would be less than 90% (some have proposed 70 or 75% would be the maximum).
e) Other Proposed Changes: The FCC also proposes to eliminate the 2/5 rule, and require schools to submit applications for internal connections by school district, not by individual school. Schools that operate independently from a school district, however, such as private schools and some charter schools, should still apply for discounts individually.
12) Indexing the Annual Funding Cap to Inflation: Proposes to index the E-rate program funding cap to the rate of inflation, on a prospective basis, so that the program maintains its current purchasing power in 2010 dollars. In order to maintain predictability, however, we propose that during periods of deflation, the funding cap will remain at the level from the previous funding year. The proposal would NOT adjust the current cap to adjust for inflation since the program began in 1998.
13) Disposal of Equipment: Proposes to allow schools and libraries to dispose of equipment under the following conditions: (1) the equipment has exhausted its useful life but no sooner than five years after the equipment is installed; (2) the equipment is formally declared to be surplus by the school board, information technology officer, or other authorized body or individual; (3) the school or library notifies USAC within 90 days of disposal and keeps a record of the disposal for a period of five years following the disposal; and (4) the disposal process fully complies with state and local laws, where applicable.
-Julie
717-730-7133 - o
717-730-9060 - f
jtschell@comcast.net
www.e-ratepa.org
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