“Modernized” E-rateCoping with the New Processes

eRate 360 Solutions, LLCRich Larson and Kasey Oakley

JSU-CORE E-rate Forum – Houston Cole Library Thursday, October 9, 2014

Disclosure

• This presentation includes a number of presentation slides from USAC’s FY 2015 applicant training• For the complete set of presentation

slides, go to:http://www.usac.org/about/tools/TrainingArchive/trainingDetails.aspx?eid=223

Major Processing Steps

• Preliminary: CIPA Compliance and Planning• Bidding, Evaluation and Selection:

Form 470 and RFP• Funding Request: Form 471• Post-commitment: Forms 486, 472,

474, Document Retention

Preliminary - CIPA Compliance

• No changes from last yearBUT• Greater E-rate focus on Broadband,

may be more compliance reviews

Preliminary - Planning

• Technology Plan no longer required, but need for planning never greater• Fiscal impacts –Voice funding phase-out–Ineligible services (Categories 1 and 2)–Category 2 budget–Discount %s (good or bad for you?)

Preliminary - Planning

• Fiscal impacts – Category 1–Ineligible services: includes web hosting,

email, voice mail, directory assistance, text messaging, custom calling services, DID, inside wire maintenance–Wireless data plans: very difficult to

maintain eligibility–Voice funding phase-out: discount being

reduced 20% each year until …

Preliminary - Planning

• Fiscal impacts – Category 2–Ineligible items– includes:

Circuit cards, interfaces, gateways, antennas, servers, software, storage devices, telephone and video components, VoIP components

–NEW Eligible Item: Managed Internal Broadband Services (Managed WiFi)

–Category 2 Pre-Discount Budget

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 8

• What are Category Two budgets?

• Which entities have budgets?

• How much is my budget?

• Can my budget change from year to year?

• What period of time does my budget cover?

• How are services counted against my budget?

• How do I allocate costs for shared services?

• Examples

Category Two Budgets

Overview

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 9

• Each school or library receiving Category Two support in FY2015 and/or 2016 will have a five-year budget for Category Two products and services (those that distribute broadband within schools and libraries).

– Category Two products and services include Internal Connections, Managed Internal Broadband Services, and Basic Maintenance of Internal Connections.

– Products and services ordered in excess of an entity’s Category Two budget will not receive E-rate discounts.

– “Budgeting” does not apply to Category One services (those that connect broadband to schools and libraries).

Category Two Budgets

What are Category Two budgets?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 10

• Each individual school and each library outlet or branch has a pre-discount budget.

• School districts or library systems may not average their costs across multiple school or library budgets.

• Non-instructional facilities (NIFs) – including school NIFs with classrooms and administrative buildings – do not have pre-discount budgets.

– If a NIF is essential for the effective transport of information to or within an school or library, the applicant must allocate the NIF costs to one or more of the entities benefiting from the service.

Category Two Budgets

Which entities have Category Two budgets?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 11

• SCHOOL: Multiply the total number of students at the school by $150, with a minimum of $9,200 if the school has fewer than 62 students.

• LIBRARY: Multiply the total area in square feet – including all areas enclosed by the outer walls of the library and occupied by the library – by $2.30, with a minimum of $9,200 if the library is less than 4,000 square feet.

Category Two Budgets

How much is my budget?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 12

• FOR EACH SCHOOL AND LIBRARY - For FY2016 and after:

Your pre-discount budget in is decreased by commitments approved for that entity starting with FY2015 commitments.

Includes your application and any other application with your entity number, such as on a consortium application

• Your pre-discount budget could go up or down in FY2016 if your student count or square footage changes.

Category Two Budgets

Can my budget change from year to year?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 13

• For existing schools: If your student count decreases in subsequent funding years, you do not need to repay the fund for money disbursed in excess of the five-year budget in years when your student count was higher.

• For new schools: If you overestimate your student count and exceed the five year pre-discount budget based on your actual student count, you must return any funds in excess of the allowable budget to USAC.

Category Two Budgets

Can my budget change from year to year (cont’d.)?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 14

• The pre-discount budget calculation is for a five-year period, starting with the first funding year in which you receive Category Two support.

– However, you can apportion your pre-discount budget in a manner that best meets your needs. You could spend all of it in FY2015, spend 1/5 each year, or any other combination up to your total.

• If you do not receive any E-rate support for Category Two service in FY2015 or FY2016, and if the FCC discontinues the Cat 2 funding, the Two-in-Five rule will apply to your Category Two commitments in FY2017.

Category Two Budgets

What period of time does my budget cover?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 15

• Any funding commitments that include your entity as a recipient of service in FY2015 count against your pre-discount budget for that entity.

• If no funding has been distributed on a funding request, you can file an FCC Form 500 to return the funding to USAC.

• If entities are sharing the service, we will need specific information so that we know how to apply the returned funds to specific entities.

Category Two Budgets

How are services counted against my budget?

Category Two Budgets I Fall 2014 E-rate Program Applicant Trainings 16

• On the FCC Form 471, you indicate how funding should be allocated among entities sharing services.

• Your allocation can be:

– Straight-line (all entities share the cost equally)

– Proportional (based on student count/square footage of each entity)

– Specific (you specify each entity’s share)

Category Two Budgets

How do I allocate costs for services shared by entities?

Bidding, Evaluation and Selection

• You can File Form 470 NOW using the existing online Form 470–OK for “MTM” or “Tariff” services–Block 1, Item 2: Choose "FY2014: July 1,

2014 through June 30, 2015" from the dropdown menu.–Block 2: If you are not sure of the correct

service type to choose, post for that service in both service types.

Bidding, Evaluation and Selection

• You can File Form 470 NOW (cont’d)– Item 13: In the box: “If you are requesting

services for a funding year for which an FCC Form 470 cannot yet be filed online, include that information here." indicate that this Form 470 is for FY2015 requests.–Certify online – no paper certs.–File before approved FY 2015 Form 470 is

released or you will lose this 470.

Bidding, Evaluation and Selection

• New Form 470 - few changes– Addition of “Managed Internal Broadband

Services” to Internal Connections–No technology plan certification–Document retention certification – documents

must be retained for 10 years

• TIP: When Form 471 Item 21 Excel Templates are available, require bidders to submit using the templates.

Bidding, Evaluation and Selection

• Limited exemption(s) from filing 470:–When ordering commercially available,

business-class Internet access services IF:1. the pre-discount cost for each entity served is

$3,600 or less annually, and2. the bandwidth provided is at least 100 Mbps

down and 10 Mbps up–Using a Preferred Master Contract (PMC)• No PMCs designated for FY 2015 – FY 2016?• State Master Contracts (SMCs) are not PMCs

Bidding, Evaluation and Selection

• TIP: On 470 and RFPs, require bidders to offer Lowest Corresponding Price (LCP). – Proposed pricing for services and equipment is

the same as “similarly situated non-residential customers for similar services.”

– Regardless of bids, service provider invoices must adhere to LCP rules.

– Service Providers are held accountable for compliance with LCP – not you! Don’t hesitate to hold their feet to the fire.

Bidding, Evaluation and Selection

• Other rules for RFPs and for bidding, evaluation, and selecting winning bids are unchanged.• Document Retention now 10 years

from last date to receive service.

The NEW Form 471

• Must submit 471 online, but can certify with paper (to obtain a PIN)

• Form has been overhauled• Item 21 embedded in the form• “Progressive disclosure” – only shows screens

pertinent to your application per information you provide while filling out the form.– E.g.: schools only see school-related fields

The NEW Form 471

• Continuous backup of your input, and warning of clock-out after 25 minutes.

• All entities entered once, then accessed via pick list as needed for FRNs.

• Excel templates to be used to prepare and upload Block 4 info, Item 21 information (e.g.: parts data for Internal Connections).

• Dropdown menus for Item 21 services.

Form 471 – Blocks 1, 2, & 3

• Block 1 - Billed Entity Info:–Same as FY 2014 (good!)

• Blocks 2 and 3: Not used (better!)But your luck just ran out …

Form 471 – Block 4Recipients of Service

• List all entities receiving services–You can enter Entity #s one at a time OR

copy/paste information onto SLD’s Excel template and upload to your 471–SLD data base will provide entity name, NCES

or FSCS, urban/rural (U/R)• SLD to determine U/R per new rules• Error message will indicate if U/R cannot be

determined and why (e.g.: bad zip?)

Form 471 – Block 4Recipients of Service

• List all entities (cont’d.)–Lack of State LEA and School ID won’t

derail your application, but best to enter–Alternative Discount:• Can mix NSLP, CEP, survey within district• NOTE: Surveys cannot be extrapolated.

Form 471 – Block 4Recipients of Service

• List all entities (cont’d.)–# of Students – for this part of Block 4,

INCLUDE PART-TIME STUDENTS (OK to double-count students)–“Student Count Estimated” primarily

for new entities to enable Cat 2 budget (TIP: Estimate slightly high – you can give back via Form 500)

Form 471 – Block 4Recipients of Service

• Discount Calculation–One %age for the entire District, except

Category 2: Max discount is 85%, not 90%–Calculated off-line –only totals are on 471–Total # of Students – • for this part of Block 4, ONLY FULL-TIME

STUDENTS – NO DOUBLE COUNTING• Students at NIFs-with-classrooms are included

Form 471 – Block 4Recipients of Service

• Discount Calculation (cont’d.)–Eligible Students:• Can supplement NSLP with your own

survey and direct certifications for students not returning NSLP• Survey results cannot be extrapolated -

“What you see is what you get.”• CEP is alternative to NSLP and survey

Form 471 – Block 4Recipients of Service

• Discount Calculation (cont’d.)– CEP (Community Eligibility Program )• School must have at least 40% of students directly

certified to qualify for CEP• Apply national multiplier (1.6) to directly certified

population to determine # of NSLP eligible students• Schools are capped at 100% NSLP eligible

– You can choose NSLP, survey, or CEP for each school in your district for maximum discount – BUT DOCUMENT FOR PIA

Form 471 – Block 4Recipients of Service

• Discount Calculation (cont’d.)–Urban or Rural?• SLD provides U/R designation for each

school (NIFs are excluded).• 50% rule: If more than 50% of all

schools are designate Rural, district is Rural – otherwise, district is Urban.–Remember, NIFs don’t count for U/R

Form 471 – Block 4Recipients of Service

• Discount Calculation (cont’d.)School District:1. Calculate Total # of Students for the district.2. Calculate Total # of NSLP Eligible Students

for the district.3. Calculate %age of Eligible Students4. Determine urban/rural status of district5. Look up discount rate in discount matrix

Form 471 – Block 4Recipients of Service

• Discount Calculation (cont’d.)Independent School - same algorithm as school district.Consortium – simple average of consortium members.Library - CAUTION:– % of eligible students - use % for school district

where main branch is located.– Urban/Rural – for each outlet, use U/R of district in

which outlet located, then apply “greater than 50%” rule to determine U/R for entire system.

Form 471 – Block 4Recipients of Service

• Questionaire–1-2 questions re Internet Access–2-3 questions re Wide Area Network–You will only see questions relating to

your entity type (library or school)

Form 471 – Block 5Details of Services and Costs

Most items same as last year, BUT …• Item 21 inserted into the 471• SLD provides Excel templates to upload

Item 21 detailed information.• New service types in Item 11:–Category 1: Voice Services (phase out)–Category 2: Managed Internal Broadband

Form 471 – Block 5Details of Services and Costs

Eligible Services List (ESL)• Reduced from 49 pages to 6 pages• Deals only with eligible items – does not

explain what is not eligible• Glossary being moved to SLD web page• For information previously in ESL,

contact Client Service Bureau

Form 471 – Block 5Details of Services and Costs

Bundled Services• FCC order in May 2014• You must cost allocate INELIGIBLE non-ancillary

components such as:– Telephone handsets– VoIP handsets– Computers– Cell Phones

• Failure to do so can result in denial of the entire FRN

– Tablets– Netbooks– Laptops– Wireless data plans(?)

Form 471 – Block 5Details of Services and Costs

• Items 10 thru 20 – only minor changes:– Item 11: New service types– Item 16a: You can enter multiple Billing

Account Numbers– Item 19d: New item for info regarding

contract extensions– Item 20j: Adjustments to discount %age

for Voice FRNs.

Form 471 – Block 5Details of Services and Costs

• Multi-year Contracts:–File full information in FY 2015–Subsequent years: “greatly simplified”

information for FRNs–Contracts limited to 5 years–Rules to be fleshed out for FY 2016

Form 471 – Block 5Details of Services and Costs

Item 21 – Embedded in 471• Excel templates to be available to

prepare Item 21a, b, c, or d of the form in advance of the filing window

• TIP: Form 470 & RFPs: When requesting bids, require bidders to submit bids using templates (if available) or the applicable Item 21 info format.

Form 471 – Block 5Details of Services and Costs

Item 21 – Embedded in 471 (cont’d.)• Services entered line-by-line– Enter all info – system won’t accept your

471 with open info items–Cost columns must add up to corresponding

part of Item 20–Pull-down menus for Type of Service, Type

of Connection, Type of IC, Type of Product, etc.

Form 471 – Block 5Details of Services and Costs

Item 21 – Embedded in 471 (cont’d.)• Recipients of services/products:–Category 1 (Item 21a): pull-down

menu for each service line item–Category 2 (Items 21b, c, d): • Table to allocate costs to each entity• Can use Excel templates and upload

Form 471 – Block 5Details of Services and Costs

Item 21 – Embedded in 471 (cont’d.)• Allocations to entities: “Methodology

must be based on tangible criteria and reach a realistic result.”• Three general methods:–Straight line (equally among entities)–Quantities: enrollment, square feet, etc.–Actual service or product purchased

Form 471 – Block 5Details of Services and Costs

Item 21 – Embedded in 471 (cont’d.)NIFs and Category 2• A NIF can only receive Category 2 funding if it

is essential for the effective transport of information to or within any school or library outlet.

• You must allocate the NIF costs to the entities benefiting from the service (which counts against the entity’s Cat 2 budget

Form 471 – Block 5Details of Services and Costs

Category 2 Pre-Discount reconciliation – FRN requests vs. Budget on Block 4• Totals Cat 2 Pre-Discount costs on THIS 471 ONLY

and compares to budget for each entity• If you exceed budget for an entity, you must

revise FRNs – cannot submit if over budget• Important: This does not include other Cat 2

requests on other 471s (including Consortium 471s filed by another party)

Form 471 – Block 6Certifications

• Basically same as last year• Item 31: Document Retention now

10 years from last date to receive service.

BEARs and SPIs

• Starting in FY 2016, BEAR payments to be made directly to applicants

• BEAR/SPI filing deadlines:–The latter of 120 days after the last day to

receive service or the date of the FCC Form 486 notification letter. –Applicants can request and automatically

receive a single one-time 120-day extension of the invoicing deadline.

Any questions? Please feel free to:

– call us at 888-535-7771 or email us:Rich – ext.102 (rlarson@erate360.com )Kasey – ext.100 (koakley@erate360.com )

–visit our website at www.erate360.com

Thank you from eRate 360 Solutions!

A member of the E-Rate Management Professionals Association