January 9, 2015<\/p>\n
The FCC has released the full details of their E-rate 2.1 Order (available at http:\/\/transition.fcc.gov\/Daily_Releases\/Daily_Business\/2014\/db1219\/FCC-14-189A1.pdf<\/a>) that was adopted on December 11, 2014.\u00a0 The Order provides a few clarifications to the 2.0 Order, adopts additional changes for FY 2015, and announces several additional Category 1 changes for FY 2016.\u00a0 All of the changes are outlined below.<\/p>\n FY 2015 Changes and Clarifications<\/strong>(listing at the top the information that has not been sent to the listserve):<\/p>\n 1.\u00a0 5 Year Category 2 Budget Approach:<\/strong>\u00a0Managed internal broadband services, caching service and servers and maintenance of eligible equipment will now be eligible for the next 5 years.\u00a0 Previously, the FCC stated these services and the budget approach would be in effect only for two years subject to later review.<\/p>\n 2.\u00a0 Mixed Voice\/Data Circuits:<\/strong>\u00a0 The FCC clarified the cost allocations required when a circuit is used for both voice and data due to the voice services phase down of discounts.\u00a0 More specifically:<\/p>\n a)\u00a0 For circuits dedicated solely to voice service, including PRIs, SIP trunks, and VoIP provider circuits, the full cost of the dedicated circuit is subject to the voice services phase down.<\/p>\n b)\u00a0 For services that dedicate a portion of a data circuit to voice service, (e.g., voice channels on a T-1 circuit or dedicated bandwidth for VoIP traffic using a virtual local area network) the cost of the dedicated \u00a0portion of the circuit must be cost allocated and subject to the voice services phase down.<\/p>\n c)\u00a0 For voice applications that run over a data circuit but do not require any dedicated circuit capacity, the applicant is not required to cost allocate any portion of the data circuit cost for voice services.<\/p>\n 3.\u00a0 Category 2 Budgets\/Part Time Students:<\/strong> The FCC clarified that part-time students can be included in the Category 2 budget count of students only when they increase the maximum number of students on school premises at the same time.\u00a0 Therefore, for CTCs that have half time students in the morning and half time students in the afternoon, they cannot count both sets of students.<\/p>\n 4.\u00a0 One-time Construction Charges<\/strong>:\u00a0 From FY 2015 through FY 2018, applicants may seek E-rate funding on the total one-time special construction costs in a single year rather than having to follow the current policy of spreading these costs, when they are $500,000 or more, over three or more years.\u00a0 In other words, if your non-recurring costs are $600,000, you can request discounts on the full cost in a single year instead of having to amortize over three years.<\/p>\n 5.\u00a0 DID Blocks and Other Ancillary Voice Services:<\/strong>\u00a0 The FCC did NOT adopt our request to make DID blocks and other ancillary voice services E-rate eligible during the phase out.\u00a0 Therefore, you will still need to be sure to deduct the cost of DID blocks from your Form 471 and BEAR invoices.<\/p>\n 6.\u00a0 Clarification on Cost-Effectiveness of Wireless Data Plans:<\/strong>\u00a0 In addition to library bookmobiles, the FCC notes for the first time that there may be other circumstances such as small libraries and small schools<\/strong> with high connectivity costs, where individual data plans or air cards for mobile devices may be the most cost-effective solution.<\/p>\n a)\u00a0 Applicants must compare the cost of wireless data plans to all relevant costs of other options.\u00a0 This includes the costs of other options to obtain Internet and connectivity to the building in addition to <\/strong>the cost \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 of deploying wireless infrastructure inside<\/strong> the building.\u00a0 The July 2014 Order stated that only the costs of deploying wireless networks inside buildings should be compared to the wireless data plan costs.<\/p>\n b)\u00a0 An applicant may not consider whether it is likely to receive Category 2 E-rate funding when analyzing the cost-effectiveness of data plans or air cards for mobile devices.<\/p>\n While this clarification is somewhat encouraging, I continue to urge you to proceed cautiously in this area, and if you decide to apply for wireless data plans, this request should be submitted on a stand-alone Form 471 application.\u00a0 You should be prepared for an arduous PIA cost-effectiveness review.<\/p>\n 7.\u00a0 Annual E-rate Funding Cap Increase:<\/strong>\u00a0 The annual E-rate cap was increased by $1.5 billion to $3.9 billion.\u00a0 Any unused funding from prior years, now set at $1.575 billion, will be added to the annual cap.\u00a0 As I mentioned previously, this should be enough funding to cover all Category 1 and 2 requests, regardless of discount level.<\/p>\n 8.\u00a0 Relief on the Rural Definition:<\/strong>\u00a0 The FCC changed their definition of urban so that schools and libraries located in \u201curban clusters\u201d with 25,000 or more people and \u201curbanized areas\u201d (areas with populations of 50,000 or more) as urban.\u00a0 All other areas will be rural.\u00a0 This is great news for more than 100 school districts in PA!\u00a0 \u00a0To see your urban\/rural status, use the USAC Urban\/Rural Look-Up Tool at:\u00a0 https:\/\/sltools.universalservice.org\/portal-external\/urbanRuralLookup\/<\/a>.<\/p>\n 9.\u00a0 Urban Library Category 2 Budget Increase:<\/strong> The per square foot allowance was increased to $5.00 per square foot for libraries located (1) in urbanized areas within principal cities with a population over 100,000; and, (2) in areas outside of a principal city, but within an urbanized area with a population of over 250,000. These libraries have a locale code of 11, 12 and 21 as assigned by the Institute of Museum and Library Services (IMLS).\u00a0 This change results in a net increase of $9.8 million to the Category 2 pre-discount cap for PA libraries.\u00a0 To see a list of affected PA libraries, go to:\u00a0 https:\/\/e-ratepa.org\/?p=5321<\/a>.<\/p>\n * * *<\/p>\n FY 2016 Changes:<\/strong>\u00a0 <\/strong>The remaining changes, outlined below, do not take effect until FY 2016 (or later) in large part because they require procurement and\/or contract provisions deemed too late to apply to FY 2015.<\/p>\n 1.\u00a0 Amortization of Non-Discounted Installation Charges:<\/strong>\u00a0 Applicants will now be permitted to pay the non-discounted portion of installation charges over up to four years.\u00a0 To take advantage of this option, applicants must include this request in their bids on their Form 470s (and presumably in any associated RFPs).\u00a0 Similarly, service providers supporting this option \u2014 which they are not required to do \u2014 must specify all installment payment terms (including interest rates, if applicable) in their bids.\u00a0 (Note: finance charges are not E-rate eligible).<\/p>\n 2.\u00a0 Equalizes the Eligibility of Leased Lit and Leased Dark Fiber:<\/strong>\u00a0 Currently, special construction charges for dark fiber \u2014 covering the cost of installing fiber from an applicant\u2019s property line to the carrier\u2019s existing distribution network \u2014 are not eligible.\u00a0 As of FY 2016, such special construction charges will become eligible.\u00a0 Additionally, to further equalize the two services, Category 1 support will be provided to cover the modulating electronics necessary to light leased dark fiber.\u00a0 To ensure that an applicant fairly compares dark fiber with other options, the new Order requires that proposals be solicited for lit fiber solutions as well.<\/p>\n 3.\u00a0 Building and Owning Fiber:<\/strong>\u00a0 In probably the biggest change for FY 2016, the FCC is going to permit, under \u201climited circumstances,\u201d applicants to \u201cself-construct\u201d (i.e., build and own) their own fiber systems (or portions thereof).\u00a0 In order to ensure that such solutions are cost effective, the self-construction provision includes several \u201csafeguards\u201d including requirements for (a) including both requests for a services-based solution and a self-construction solution on the same Form 470 or posting a separate Form 470 for self-construction only after receiving no bids on a services-only posting,\u00a0(b) building and use within the same funding year, and (c) securing \u201call of the resources necessary to make effective use of the services.\u201d\u00a0 More information likely will be coming on this issue in the coming months.<\/p>\n 4.\u00a0 Additional Discounts for State Match:<\/strong>\u00a0 E-rate will provide an additional discount of up to 10% on installation charges if matched by the applicant\u2019s state.\u00a0 Since the extra matching discount applies only to installation charges, applications utilizing the match must include separate FRNs for the recurring and non-recurring portions.\u00a0 Apparently, this matching provision is available only to applicants in \u201crural, Tribal, and other unserved areas.\u201d\u00a0 The additional discount is available only for broadband systems meeting the long-term bandwidth connectivity targets (which are very steep).<\/p>\n If you have any questions, please don’t hesitate to contact me at jtschell@comcast.net<\/a>.<\/p>\n — Julie<\/p>\n Julie Tritt Schell 717-730-7133 – o penn*link<\/p>\n\n
\nPA E-rate Coordinator<\/p>\n
\n717-730-9060 – f
\njtschell@comcast.net<\/a>
\nwww.e-ratepa.org<\/a><\/p>\n