E-rate training workshop for beginners funding year 2012

1. E-rate training workshop for beginners funding year 2012 Presented by Julie Tritt Schell PA E-rate Coordinator Fall 2011 Happy 15th Birthday, E-rate!

2. Agenda • History and Program Administration • Applicant and Services Eligibility • Step-by-Step Program Requirements and Forms • Additional Rules • Morning break, if needed • Questions at end of each section • Lunch from 12 -12:30 • * What does this mean?

3. Who is Here? • School Districts • IUs • Charter Schools • AVTSs • Non-public Schools • Libraries • Superintendents/Asst Supt • Business Managers • Technology Directors • Vendors • Consultants • Who is brand new to E-rate? • Who NOT on PA E-rate listserve?

4. What is E-rate? • Telecommunications Act of 1996 established “Universal Service Discount Program for Schools and Libraries” • Annual $2.25 billion program, adjusted for inflation • Funding years named for the year in which they begin • FY 2012 = July 1, 2012 – June 30, 2013 • Provides 20-90% discounts on eligible services • Fund made up from charges on your phone bills • Not a typical grant program

5. Who Administers E-rate? • FCC • Federal Communications Commission • Created program and sets rules and policy • USAC • Universal Services Administrative Company • Created by FCC to run E-rate and other universal service programs • Pays invoices • SLD • Schools and Libraries Division • Entity within USAC that runs E-rate • Makes no policy decisions

6. What is Julie’s Role? • Under contract with PDE to serve as PA E-rate Coordinator • Provide outreach and training to schools and libraries in PA • Represent PA before federal policymakers • Maintain PA E-rate website and listserve • Act as resource when E-rate administrator can’t help

7. Who is Eligible? • Public libraries eligible for LSTA funding • Public and private K-12 schools • For-profit schools not eligible • Pre-k eligible in PA (age 3+) • Head Start entities eligible in PA but only if operated by a public school entity • Cannot have endowment exceeding $50 million

8. Eligible Residential Locations • Residential locations within schools serving (beginning with FY 2011): • tribal students • children with physical, cognitive, or behavioral disabilities • juvenile justice students, or • residential schools where 35% or more of their students are eligible for NSLP  • Schools can be public or private and both Priority 1 and Priority 2 services are eligible • Residential locations of cyber school students or employees are not eligible

9. www.e-ratepa.org

10. Fair Warning! • E-rate is not a short, easy process • Read listserve messages • Read form certifications • Be prepared for an audit • Stay organized! – USE THE BOX or BINDER!

11. What Services are Eligible and ineligible? Eligible Services List in Binder*

12. Funding Priorities • FCC established funding priorities because demand always exceeds cap of $2.29 billion • Priority 1: • Telecommunications and Internet Access • All ‘services’ that are leased, and nothing that is purchased • All approved-inside the window-likely to be funded, regardless of discount level • Priority 2: • Internal Connections and Basic Maintenance of IC • Funds go first to neediest applicants (90% discount level), then to others in order of discount until funds are exhausted

13. P1: Eligible Telecom Services • MUST be provided by an Eligible Telecommunications Provider (ETP) • Local, long distance, voice mail, cell, paging, Centrex, T-1, PRI, frame relay, ISDN, etc. • Installation of eligible telecom services (if included on your application) • Including most taxes and surcharges and custom calling features • Hosted VOIP* (also eligible under Internet) • Lit fiber service (also eligible under Internet Access)*

14. P1: Ineligible Telecom Services • Sharing of bandwidth to ineligible entities • 900 calls • Payphone service • Cost of not-publishing phone numbers • Cost of additional directory listings • End user equipment (phones, beepers, cell phones, fax machines, etc.) • Late fees or finance charges • Paper statement fees • Cost recovery fees • Property tax fees

15. P1: Internet Access • Ineligible: • Filtering • Any remote access outside school property to Internet • Broadcast messaging services • AntiVirus/AntiSpam • Ineligible webhosting features: • content, website development costs, searchable databases or content, student attendance reporting, and grade books • Eligible: • Basic conduit access • Hosted E-mail service • Laptop aircard access • Basic webhosting, including: • discussion boards, blogging, instant messaging and chat • Firewall fees – if part of standard vendor service • Blackberry/data services • (be sure to post separately from telecom on 470) • Lit fiber service • Dark fiber service

16. Equipment Eligible to be Bundled* • Called On-Premise, Priority 1 Equipment • Permitted if bundled with service from Telco or ISP • Must tell SLD make/model of equipment • Must certify to TN Test: • No applicant ownership – ever • No exclusive use • LAN functions without use of equipment • Service provider maintains equipment • Not applicant • (Answers on PA E-rate website)

17. Lit Fiber Eligibility • Can be leased from telecommunications provider (such as Verizon, Comcast, Sunesys, Sting, etc) OR • Beginning in FY 2011, can be leased from any other provider (such as electric company, cable company, regional network, etc) • Post in both telecom and internet category on Form 470

18. Dark Fiber Eligibility • Beginning in FY 2011, applicants may lease dark fiber from any provider, with conditions: • E-rate will not pay for new fiber networks off school property • Installation (non-recurring) charges eligible from school building to edge of school property • Modulating electronics must be provided by the applicant and cannot be bundled with the cost of the service • This equipment is eligible for Priority 2 funding

19. Dark Fiber Eligibility, cont. • Fiber must be lit immediately • Excess fiber that is not lit is not eligible • Network maintenance costs are eligible • Service should be posted in both telecom and internet access categories • Apples-to-apples comparison should be done to ensure that leasing dark fiber is most cost effective method of delivering service

20. P2: Eligible Internal Connections • Wireless access points • Private branch exchange (PBXs) • Firewalls • Installation of eligible internal connections • System operating software • For eligible equipment only • Network and phone wiring • Routers • Switches, hubs • Certain network servers • e-mail, DHCP, firewall, DNS • Video codecs • VOIP equipment • GBICs and modulating electronics to light fiber

21. P2: Ineligible Internal Connections • Network management s/w • Curriculum software • Phones, beepers, aircards • Salaries of school or library staff • Filtering software • Personal computers • FAX machines • Asbestos removal • Cameras • Electrical wiring • Teacher training • Security wiring • Servers for storage

22. P2: Basic Maintenance • Beginning in FY 2011, maintenance severely curtailed • Eligible: • Bundled manufacturer warranties up to 3 years • Cannot have a separate price • Software, patches, online tech support • Actual labor and break-fix cost • Ineligible: • Unbundled warranties, insurance-type warranties, including Smartnet (portion of Smartnet eligible)

23. P2: Basic Maintenance • Contract: • Must separately identify cost of maintaining E-rate eligible equipment from E-rate ineligible equipment • May not mix E-rate eligible maintenance services with other ineligible services (such as help desk or monitoring services) • Calculation of funding request: • Must be based on an estimated number of maintenance hours per year for eligible equipment, based on current life of equipment and history of needed repairs • Reimbursement amount • Break/fix - USAC will only pay for cost of actual work performed (which includes labor, equipment fix, or if it is beyond repair, equipment replacement) • Software patches/Online tech support – 100%, no documentation needed

24. 2/5 Rule* • An entity may only receive discounts 2 out of every 5 years for internal connections • Doesn’t include basic maintenance • Applies at the building level, not district level • If central equipment is purchased for NOC, each building receiving benefit of that equipment receives a strike • Plan accordingly to maximize discounts • “Strikes” related to FCDL, not 471 or invoices • Can cancel FRN to get strike (year) back, but not after funding has been disbursed • Hint: Don’t use a strike (year) for a $500 piece of equipment

25. Transfer of Equipment* • E-rate-funded equipment must remain at approved site for 3 full years after installation • After which it may be moved to another eligible location • Documentation must be retained describing transfer • If school or library closes, equipment may be moved to another entity, regardless of discount • Must send letter to SLD outlining closing of school and transfer of equipment • Must keep documentation regarding transfer for 5 years • After 5 years, equipment may be disposed of or sold • Disposal does not need to be reported to USAC • Proceeds from sale do not need to be returned to USAC

26. Should I Apply for P2 Funding? • Year 1 -- funded to 70% • Year 2 – all funded • Year 3 – down to 82% • Year 4 – down to 87% • Year 5 – down to 81% • Year 6 – down to 70% - significant rollover funds • Year 7 – down to 81% • Year 8 – down to 80% • Year 9 – down to 86% • Year 10 – down to 81% - $650M rollover • Year 11 – down to 87% - $600M rollover • FY 2009 – down to 77% - $900M rollover • FY 2010 -- all funded - $1.15B rollover + inflation

27. Questions about Applicant or Service Eligibility Issues?

28. APPLICATION FLOWCHART

29. General Framework Apply Approval! Bid Plan Pay Full Invoices USAC Pays Applicant ReceiveServices Pay Discounted Invoices USAC Pays Vendor

30. Step 1: Technology Plan (maybe?)* • Required if applying for P2 funding • Must include four SLD technology plan criteria • Goals and Strategies for using technology • Needs Assessment • Professional Development • Evaluation • Must align with funding requests and bidding documents • Must be “written” before 470 is filed • Must cover full 12 months of NEXT funding year (include dates!) • 3 year max

31. Technology Plan Approvals* • Must be approved by SLD “Certified” approver • Public schools – PDE approves • PDE requires submission by Sept. 30 for plans expiring June 30, 2012 • Status of LEAs’ tech plans in binder • Nonpublic schools – Various entities approve • List in binder and on SLD website • CAIU will approve if no organization on the SLD list represents your entity • Libraries: Approved by Commonwealth Libraries

32. QUESTIONS ABOUT TECHNOLOGY PLANS?

33. Step 2: Competitive Bidding • All E-rate services must be competitively bid • Before any contract is signed • If multi-year contract is signed, then there is no requirement to bid the remaining years of the contract • Every year for all month-to-month services • Even if no competition in your area or if bidding under state law • Bidding via E-rate does not exempt you from bidding under state law • Can be done simultaneously • Only exception is if someone bid it for you (consortium application, PEPPM contract)

34. How? Must Use Form 470* • File online to begin procurement process • All 470’s posted on SLD web site • Cannot select vendor until 29th day after 470 is posted • But must have Form posted on web at least 29 days before the Form 471 window close (example: March 15 close = Feb 16 deadline) • Don’t wait this long • File 470 by Thanksgiving, if possible • eCertify! (or mail certification page to SLD if you don’t have PIN) Read the Instructions!

35. Competitive Bidding: Form 470 • Must be fair and open process • Provide as much detail as possible so bidders can respond • Be sure to post in proper category • If unsure, post in multiple categories • File single or multiple 470s (up to you) • Review Checklist before submitting your 470*

36. New Form 470 • New 470 removes many of the unused features and questions • MTM/contract/multi-year contract checkboxes • BEAR/SPI preference question • Ineligible entities section • Necessary resources checkboxes • Area codes and phone pre-fixes section • Added item for consultant registration number

37. APPLICANTS CANNOT... • Have a relationship with service providers that would unfairly influence the outcome of the competition • Furnish service providers with inside competitive information • Provide information or grant meetings to only some bidders • Have ownership interest in a service provider’s company competing for services • Violate applicant’s own regulations or policies • Violate gifts rules

38. APPLICANTS CAN... • Have pre-bidding discussions with potential bidders as long as that doesn’t lead to one bidder having “inside” information • Attend product demonstrations • Encourage and seek vendors to bid • Do research to determine what cost-effective solutions are available

39. Service ProviderS CAN... • Offer neutral technical assistance on development of technology plan • Cannot exert undue influence on applicant's ability to conduct a fair and open competitive bidding • Answer general questions about the products and services they sell in response to applicant inquiries • Assist with Form 471 Item 21 attachment • Provide information to applicants to assist with responding to PIA questions but applicant must respond to PIA • Provide assistance with service substitutions and other post-commitment activities but applicant must certify

40. Service providers cannot... • Help prepare Form 470 • Help write or provide RFP to applicant • Be a contact person on Form 470 • Sign any applicant forms • Be involved with bid evaluation in any way • Provide funding for the applicant's non-discount portion or waive the applicant's non-discount portion • Coerce or pressure the applicant to use a specific Service Provider • Provide gifts to applicants that violate the gift restrictions

41. Gift Restrictions • All gifts from service providers to applicants are prohibited except for: (1) Modest refreshments that are not offered as part of meal (e.g., coffee and donuts provided at a meeting) and items with little intrinsic value intended for presentation (e.g., certificates and plaques); and (2) Items that are worth $20 or less (e.g., pencils, pens, hats, t-shirts, and other items worth less than $20, including meals), as long as those items do not exceed $50 per employee from any one source per funding year

42. Exceptions to Gift Restrictions • Exception for charitable contributions • Service providers can continue making charitable donations to E-rate eligible entities in the support of schools – including, for example, literacy programs, scholarships, and capital improvements – as long as such contributions are not directly or indirectly related to E-rate procurement activities or decisions • Exception for personal gifts • There is an exception for gifts to family and personal friends when those gifts are made using personal funds of the donor (without reimbursement from an employer) and are not related to a business transaction or business relationship

43. Who is Subject to Gift Restrictions? Service providers • All service providers with current or possible future E-rate relationship to applicant • All individuals who are on the governing boards of such an entity (such as members of the board of directors); and • All employees, officers, representatives, agents, or independent contractors of such entities

44. Who is Subject to Gift Restrictions? Applicants • All individuals who are on the governing boards of such entities (such as members of a school committee) • All employees, officers, representatives, agents, consultants or independent contractors of such entities involved on behalf of such school, library, or consortium with E-rate • Individuals whose work in any way relates to E-rate forms and technology plans; • Individuals who prepare bids, communicate or work with E-rate service providers, E-rate consultants, or with USAC; and • Any staff of such entities responsible for monitoring compliance with the E-rate Program

45. Other Important Details Re Gifts • Aggregate value of all gifts to an E-rate applicant, from any employees, officers, representatives, agents, independent contractors, or directors of the service providers, are considered when computing the $50 annual limit • Rules are always applicable, not just during the time period when the competitive bidding process is taking place • State and local restrictions regarding gifts also still apply • If more stringent than federal requirements, violation of state or local provision constitutes a violation of the FCC rule

46. Common Questions about 470 • You are allowed to change your mind and not purchase a service that is listed on Form 470 • You are not required to meet with any vendor before, during or after the 470 bidding period • If you meet with a vendor during the bidding period, fairness requires that you meet with any other vendor that contacts you. • Smartphone service should be posted under both the Telecom and Internet service categories • When contacted by a vendor, you must indicate your willingness to receive a proposal for services listed on Form 470

47. Let’s look at the form 470 http://www.sl.universalservice.org/menu.asp

48. Get 470 Information Immediately! • Posted 470 available immediately on SLD web site to view • Online 470 shows: • Posting date of application • Earliest date that your contract can be signed and thus 471 submitted • Date that certification page was received at the SLD • SLD also sends this info in Receipt Notification Letter*

49. Step 3: Bid Evaluation* • After 470 is posted for at least 28 days, review all bids received for all services • Create bid evaluation matrix • Price of eligible services/components MUST be the most heavily weighted factor* • Keep documentation of criteria used to select vendor • Keep all winning and losing bids • Keep bid evaluation matrix • Retain all correspondence between applicant and all vendors (winning and losing)

50. What can be considered? • Can consider other criteria in bid evaluation. Examples: • History with vendor • Cost of ineligible items • New vendors’ cell phones • Quality of proposed solution • MBE/WBE preference • Cost to switch vendors • Staff time • References • Cannot consider “free services”