E-rate for Beginners

1. E-rate for Beginners Easy as 1, 2, 3 Presented by: Julie Tritt Schell Pennsylvania E-rate Coordinator October 2011

2. What is E-rate? • Telecommunications Act of 1996 established “Universal Service Discount Program for Schools and Libraries” • Annual $2.25 billion program ($2.29 with inflation) • Provides 20-90% discounts on eligible services • Fund made up from charges on your phone bills • FCC sets policy/USAC-SLD runs the program • What is my E-rate discount? • 2 factors used to determine discount

3. 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 • Residential facilities of school eligible beg. FY 2011 • Non-instructional facilities (such as admin bldgs) are eligible • Cannot have endowment exceeding $50 million

4. E-rate Discounts: Poverty • Based on National School Lunch Program Eligibility • Eligibility based on % of students whose family’s income is less or equal to 185% of federal poverty level • Doesn’t matter if school serves lunch or participates in NSLP • Nonpublic schools use their own students’ data • NSLP data at www.e-ratepa.org • Don’t participate in NSLP? Income survey method available

5. E-rate Discounts: Location • Urban/Rural defined by Counties • Uses Metropolitan Statistical Area data • Many seem misclassified • List of Rural counties on PA E-rate website – www.e-ratepa.org • Under “discount calculations’

6. Discount Matrix for Single School/Library

7. Discount Calculations by Entity • Schools • Use straight matrix discount • Districts • Use weighted average of schools’ individual discounts • Consortium • Use simple average of members’ discounts

8. Alternative Measures to NSLP • Participation in these programs also qualifies: • TANF • Medicaid • Food Stamps • Supplementary Security Income • Federal public housing assistance (section 8) • Low Income Home Energy Assistance (LIHEAP) • Can conduct family survey • (whether you participate in NSLP or not) • Not acceptable - Title 1, feeder schools method, principal’s estimate

9. So Much Demand, So Little Money • Funding Priorities needed because demand exceeds cap of $2.29 billion • Priority 1: Telecommunications and Internet Access • All approved-inside the window-likely to be funded • 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

10. Eligible Telecom Services (P1) • Basic Telecom Services • Local, long distance, voice mail, cell, paging, centrex • Advanced Telecom Services • T-1, PRI, ISDN, lit fiber, dark fiber, etc. • Leased WANs • Vendor equipment located on customer premises • Installation of eligible telecom services • Including most taxes and surcharges and custom calling features • Hosted VOIP (can also be under Internet Access)

11. Ineligible Telecom Services • 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, admin fees • Paper statement fees

12. Internet Access (P1) • Eligible: • Basic conduit access • E-mail service • Laptop aircard service • Basic webhosting • Blackberry/data services • Hosted VOIP • Ineligible: • Filtering • AntiVirus/AntiSpam • Website creation tools

13. Eligible Internal Connections (P2) • Network and phone wiring • Routers • Switches, hubs • Certain network servers • Video codecs • VOIP equipment • System operating software • For eligible equipment only • Wireless access points • Private branch exchange (PBXs) • Installation • Limited maintenance • Only for actual work performed • Software/patches/online support

14. P2: To Apply or Not to Apply? FY 2004 – down to 81% FY 2005 – down to 80% FY 2006 – down to 86% FY 2007 -- down to 81%FY 2008 -- down to 87%FY 2009 -- down to 77%FY 2010 – all requests funded FY 2011 – down to 90% so far

15. Questions? Who is eligible? What is eligible? How to discounts?

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

17. Step 1: Technology Plan! • Beginning with FY 2011, E-rate will not require technology plan for Priority 1 services • Priority 2 requests must have approved technology plan containing these 4 criteria • Goals and Strategies for using technology • Needs Assessment • Professional Development • Evaluation • Must be “written” before Form 470 is filed and must cover full 12 months of NEXT funding year • 3 year max • Nonpublic tech plan approvers on SLD website

18. Step 2: Competitive Bidding • All E-rate services must be competitively bid • Every year unless under a multi-year contract that was bid under E-rate rules initially MTM services • Even… • if no competition in your area

19. How? Must Use Form 470 • Must file a Form 470 online • 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 24 close = Feb 24 deadline) • Don’t wait this long • Be sure to list services in correct category • If unsure, post in several categories Read the Instructions!

20. Online Form 470

21. 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

22. 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 • all winning and losing bids • bid evaluation matrix • all correspondence between applicant and all vendors (winning and losing)

23. Step 3: Bid Evaluation • What should you do if you receive no bids? • Document via an email or file memo that no bids were received • Existing Services: can continue to receive services from existing service provider • New Services/Procurement: Solicit bid from willing vendor (who is not your brother-in-law) • Make sure price is cost-effective

24. Step 4: Filing the 471 • Form that requests discounts (funding) • Filed by entity that actually pays the bills • Shows discount calculations • Lists which 470 was used to bid services, provides contract signing dates, contract amounts • Must be filed by close of 471 filing window • FY 2012 window dates: Not Yet Announced • Will likely be first week in January – mid March

25. Step 4: Item 21 Attachments • Item 21 attachments provide descriptions of actual services • Because no space to do so on the 471 • Must have separate description for each FRN (funding request/Block 5) • Detailed list of products with associated prices that add up to funding request • List # of lines, speed, and description of service • File online or on paper (online preferred) • Beginning FY 2011, Item 21 attachments MUST be submitted by Form 471 deadline • Keep 471 Security Code to access Online Item 21 Attachment system

26. Step 5: PIA Review • Program Integrity Assurance (PIA) Review • Checks for rule compliance • Eligible services • Eligible entities • Appropriate discount • Nearly all applicants receive PIA contact

27. Step 5: SLD Mails FCDL • FCDL = Funding Commitment Decision Letter • Tells you which funding requests (block 5’s) of Form 471 are approved or denied • Provides information for the next form -- Form 486 • Can appeal if you don’t agree with your decision

28. Step 6: Applicant Files Form 486 • Must be postmarked no later than: • 120 calendar days after the Service Start Date featured on the Form 486 or • 120 calendar days after the date of the Funding Commitment Decision Letter whichever is later. • Signifies that it’s OK for SLD to pay any invoices • Lists who approved tech plan (if required) • Certifies CIPA compliance

29. CIPA • Childrens’ Internet Protection Act • Any applicant receiving Internet access or Internal Connections funding must: • Have a board-approved Internet Safety Policy • Filter Internet going to all computers/devices • Requires schools’ Internet Safety Policies include "... educating minors about appropriate online behavior, including interacting with other individuals on social networking websites and in chat rooms and cyberbullying awareness and response." • This means that schools will be required to teach online safety to students as a prerequisite to receiving E-rate funding • Effective July 1, 2012

30. How Do You Get E-rate $? • Two choices • Discounts on bills (your vendor invoices USAC) or • Reimbursement process (applicant pays bills in full, then invoices USAC) • Applicant submits Form 472 – BEAR Form for reimbursement • Must select one method or the other for entire year • Can be different choice for each funding request

31. eCertification/PINs • E-rate PINs can be used to file E-rate forms online • PIN assigned to a person and is specific to that entity while employed at that entity • Not given to an entity • No way to request a PIN • Must sign a paper certification of a 470, 471 or 486 • SLD will mail them a PIN in a small white mailer • Can still submit these forms online, but cert page must be signed and mailed to USAC • PIN then may be used to 470, 471, 486, and BEAR Forms

32. Paying Your Share • Applicants required to pay non-discounted portion of cost • Cannot be waived by the vendor • Vendor cannot provide a “grant” • Funding must be in budget or draft budget • Must keep all invoices and copies of cancelled checks for 5 years after last day to receive service

33. Can You Request Extensions? • Depends on the form and requirement • Form 470 – no • Form 471 – no • Form 486 – no • but they will send a reminder letter and you can then file if you missed the original deadline • Form 472 BEAR – yes. Must be submitted by original deadline • Service delivery – recurring services – no • Services must be delivered between July 1 – June 30 • Service delivery – non-recurring services – yes • Installations and equipment purchases have until Sept 30 • If applicant needs more time, they must request extension prior to Sept 30 • PIA inquiries – yes • If you cannot provide the info by the deadline, you may request extension, but it may not be granted

34. Resources to Remember • SLD web site: www.usac.org/sl • SLD Help Desk: 888-203-8100 • PA E-rate listserve • E-mail me name/e-mail address to subscribe • jtschell@comcast.net • PA E-rate website: www.e-ratepa.org