Transcript Priority 2 Funding: An Applicant’s Guide

The New E-rate
Overview of Changes
Presented by:
Julie Tritt Schell
PA E-rate Coordinator
August 4 and 11, 2014
Agenda
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Framework for Reform
Connectivity Goals
Discount Calculation Changes
Priority 1 Changes
Priority 2 Changes
Invoice Changes
Program Streamlining
Measures
Cost Effectiveness Efforts
Increased Accountability
Further Notice of Proposed
Rulemaking
Important Reminders
Julie Tritt Schell, PA E-rate Coordinator - August 2014
• Long presentation, broken
down into sections
• Questions will be taken at the
end of each section
• Can be asked in the chat box
or using your microphone
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History of E-rate Reform
• In July 2013, FCC released Notice of Proposed Rule Making
(NPRM) seeking comments on various proposed reforms
• In December 2013, Tom Wheeler became FCC Chairman,
vowing to modernize E-rate
• In March 2014, FCC issued Public Notice seeking more focused
comments on proposed E-rate reforms
• On July 11, 2014, FCC voted 3-2 to adopt proposed reforms
• On July 23, 2014, 162+ page Order was released, providing
details on E-rate program changes
Julie Tritt Schell, PA E-rate Coordinator - August 2014
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The Big Picture...
• Focus E-rate on funding broadband connectivity to buildings
and inside buildings of ALL schools and libraries
• Accomplish program overhaul without increasing the funding
cap
• How? By making hard choices, like
– Eliminating or phasing-out certain services and equipment
– Establishing P2 funding caps per student
• Order also tries to provide some streamlining measures to
make the program easier
Julie Tritt Schell, PA E-rate Coordinator - August 2014
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Internet
WAN Connections
Internal Connections
CONNECTIVITY GOALS
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Internet Connectivity Goals
• Schools: Internet access of at least 100 Mbps per 1,000
students and staff (users) in the short term and 1 Gbps
Internet access per 1,000 users in the long term
– Measurement will be at the district level for school districts and school
level for schools that are not part of a district
• Libraries: Internet access for libraries that serve fewer than
50,000 people of at least 100 Mbps and at least 1 Gbps for
libraries that serve 50,000 people or more
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WAN Broadband Connectivity Goals
• Schools: Dedicated data service scalable to 10 Gbps per 1,000
students in the long term
– FCC assumes that in most cases, a 1 Gbps fiber connection can be
readily scaled to 10 Gbps with upgraded networking equipment.
• Libraries: If libraries are connected by a WAN, the measure
will be the total number of libraries that have a connection
capable of providing a data service scalable to at least 10
Gbps
• There are no short term WAN connectivity goals
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Internal Connections Goals
• No goals set at this time because more information is needed
• FCC staff will conduct a survey of schools and libraries to
determine the sufficiency of their LAN/WLAN capacity and
coverage
• Specific goals will be developed at a later time
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District Wide Discount Calculations
Library Discount Calculations
Rural/Urban Classification
Income Surveys
Community Eligibility Provision of NSLP
DISCOUNT CALCULATION CHANGES
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District-Wide Discount Calculations
• All discounts for both Priority 1 and Priority 2 will be calculated on a
district-wide simple average basis
Formula: Total district NSLP eligible students / total district
enrollment
• The district-wide NSLP% is then applied directly to the Discount
Matrix (along with the urban/rural status) to determine the
District’s discount that will be used for all buildings
– This is identical to how libraries currently calculate their E-rate discounts
• All districts will now have a straight, district-wide discount taken
directly from the discount matrix (i.e., 20, 40, 50, 60%, etc.)
• Districts will be permitted to add buildings after a FCDL is issued
• For nonpublic schools and other entities that have multiple schools,
those entities should use this formula to determine their discount
using all E-rate eligible students that fall under their financial or
operational control
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District-Wide Discount Calculations
• Example:
School
Rural/
Urban
Enrollment
NSLP Eligibility
Plainfield Elementary
U
50
45
Jacksonville Middle School
U
105
43
Newville High School
R
275
116
Total
U
430
204
204/430 = 47.4% NSLP eligibility
Discount Matrix for Urban 35% - 49% NSLP Eligible = 60%
District-Wide Discount for All Schools = 60%
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District-Wide Discount Calculations
INCOME
Measured by % of
students eligible for
NSLP
If the % of students in
your school that
qualifies for the NSLP...
URBAN LOCATION
Discount
RURAL LOCATION
Discount
...and you are in an
URBAN area, your
discount will be...
...and you are in a
RURAL area, your
discount will be...
Less than 1%
20%
25%
1% to 19%
40%
50%
20% to 34%
50%
60%
35% to 49%
60%
70%
50% to 74%
80%
80%
75% to 100%
90%
90%
• 204/430 = 47.4%
NSLP eligibility
• 35% - 49% Urban
District-Wide Discount for All Schools, P1/P2 Services/Equipment = 60%
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Library Discount Calculation
• Library systems that have branches or outlets in more than
one public school district will use the address of the central
outlet or main administrative office to determine which public
school district the system is in
• Use school district’s discount applicable to central outlet or
main office when applying as a library system or on behalf of
individual libraries within that system
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New Urban/Rural Definition
• No more county classifications
• 2010 U.S. Census will be used instead
• Urban applicants are those with addresses in an “urbanized area” or
“urban cluster”
– Urbanized area has 50,000 or more people in a densely settled core of census
tracts
– Urban clusters are adjacent to an urbanized area and have at least 2,500 people
• All areas that are not considered “urban” are classified as rural
• Rural/urban status of majority of buildings (physical addresses) will be
used for entire district
– Question asked of FCC: What if a district has two buildings, and one has a rural
address and the other has an urban address?
• Full list of urban areas are at
http://www2.census.gov/geo/ua/ua_st_list_all.xls.
– If your town is NOT on this list, then it is considered rural. (subject to verification
with FCC)
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Surveys
• Income survey results can no longer be extrapolated
• Discounts will only be based on the income surveys actually
collected
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Community Eligibility Provision
• CEP is a new program that derives estimates of the NSLP eligible
population from existing data from other income-based programs
― Income NSLP eligibility applications are not collected
• Schools that have an Identified Student Percentage of 40% or more
can qualify (similar to Direct Certification)
— CEP schools must offer both free breakfast and free lunch daily to all
students
• Schools opting into the CEP under the National School Lunch
Program will use the 1.6 multiplier as is currently permitted by
USDA and other federal programs
– The previous FCC guidance that CEP schools must use the NSLP data
from the year before they opted into CEP has been repealed
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Community Eligibility Provision
• PDE NSLP file that’s released each January should contain NSLP
eligibility figures that already include the 1.6 multiplier
– That data will then be used on the Form 471, Block 4 discount
calculation worksheet
– CEP schools must retain back-up calculations which may be requested
during PIA and audits
• CEP-based discount rate can be used for 4 years, even if NSLP
eligibility decreases
– Discount rate can be increased if NSLP eligibility increases
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Questions about Discount
Calculation Changes?
Priority Name Change
Newly Ineligible Services
Phase out of Voice Services
Wireless Data Plans
Bidding Exemption for Certain Bundled Internet Service
Bundled End-User Equipment
PRIORITY 1 CHANGES
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Priority 1 Overview
• Traditional Priority 1 will be called Category 1
• Category 1 will fund broadband connectivity and Internet
access to buildings
• Category 1 services will be funded first before Category 2
equipment and services are funded in order to ensure there is
enough funding available to cover all Category 1 funding
requests
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Priority 1 Service Eligibility Changes
• Beginning in FY 2015, paging, webhosting, certain telephone
service components and e-mail will no longer be eligible
• Beginning in FY 2015, all voice services will begin to be phased
out by 20 discount percentage points/year
– This includes cellular voice, local and long distance, PRI service, and
hosted VOIP service
– No voice services will be eligible beginning with FY 2019
• Cellular data and mobile cellular broadband services subject
to strict cost effective scrutiny
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Voice Phase Out Schedule
Voice Discount Will Be:
If Your
District or
Library’s
Discount is:
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
20%
No Funding
No Funding
No Funding
No Funding
No Funding
25%
5%
No Funding
No Funding
No Funding
No Funding
40%
20%
No Funding
No Funding
No Funding
No Funding
50%
30%
10%
No Funding
No Funding
No Funding
60%
40%
20%
No Funding
No Funding
No Funding
70%
50%
30%
10%
No Funding
No Funding
80%
60%
40%
20%
No Funding
No Funding
90%
70%
50%
30%
10%
No Funding
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Wireless Data Plans
• Cellular data plans and mobile broadband services (such as
wireless services to an iPad or aircards) are no longer eligible
in buildings that have Wi-Fi access
• In buildings without Wi-Fi: These services are only eligible
upon a showing that individual data plans are the most cost
effective option for providing internal broadband access for
portable mobile devices
– Must prove either that installing a WLAN is not physically possible, or
provide a comparison of the costs of individual data plans vs. installing
a WLAN solution
– Be prepared for extensive cost effectiveness review from PIA
• Library bookmobiles are an exception to heightened review
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Voice Telephone Service Components
• Ineligible as of FY 2015:
–
–
–
–
–
–
Directory assistance charges
Text messaging
Custom calling services
Direct inward dialing (DIDs)
900/976 call blocking
Inside wire maintenance plans
• All such charges must be deducted from both the pre-discount cost
included on the Form 471 and all associated vendor or applicant
reimbursement invoices (SPIs and BEARs) for 2015 invoices
• Such charges do NOT have to be deducted for FY 2013 or 2014
BEARs or SPIs
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Bidding Exemption for Bundled Internet
• “Commercially available” bundled Broadband/Internet packages
that cost less than $300 per month per building (prediscount) can
be purchased without first posting a Form 470
– Minimum speed must be 100 mbps downstream and 10 mbps upstream
– Cost must be based per building and cannot be averaged across multiple
buildings
– Annual cost of $3600 must include all equipment and installation charges
and monthly recurring charges
• Presumably applies to small schools and libraries that wish to
purchase cable modem or FIOS-type bundles
• Applicants still must submit an annual Form 471 to request funding
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Priority 1 Bundled Equipment Limitations
• Beginning in FY 2015, equipment is prohibited from being
bundled at no cost with an eligible service
• This includes free cellular phones, iPads/tablets, and VOIP
equipment
• Applicants will be required to perform a cost allocation to
remove the value of the ineligible equipment from the prediscount price claimed for the annual service costs
• Previously signed contracts are not grandfathered
• This rule resulted from an FCC Order in May 2014 and is not
technically in July Reform Order
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Questions about Priority 1
Eligibility Changes?
Priority Name Change
National Funding Amounts
Discount Matrix Change
Budgets for Funding Requests
Service/Equipment Eligibility Changes
April 1 Installations
Preferred Master Contracts
Technology Plans
PRIORITY 2 CHANGES
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Priority 2 Overview
• Traditional Priority 2 will be now be called Category 2
• Category 2 will fund Wi-Fi and related infrastructure and
equipment
• Category 1 services will be funded first in order to ensure
there is enough funding available to cover all Category 1
funding requests
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Priority 2 Discount Matrix Changes
• Maximum Category 2 discount will change from 90% to 85%
• All other discount bands will remain the same
NSLP Eligibility
Urban
Rural
Less than 1%
20%
25%
1 – 19%
40%
50%
20 – 34%
50%
60%
35 – 49%
60%
70%
50 – 74%
80%
80%
75 – 100%
85%
85%
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Priority 2 Annual E-rate Funding Targets
• At least $1 billion will be available each year in FY 2015 and
FY 2016 for Priority 2 funding
• Intent is to have $1 billion available for FY 2017, 2018, and
2019 as well
– Funding will come from phase out of voice services and tightening of
certain USAC administrative procedures
• Should not enough funding be available to cover an entire
discount band, pro-ration will be applied using the NSLP
percentage (100% NSLP funded first, then 99%, 88%, etc.)
• FCC Chairman: “All schools and libraries will have access to P2
funding once every 5 years.”
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Priority 2 Predictability
• Unfortunately, not all applicants will be funded in the year in
which they apply
• There is no provision to allow applicants to spend funds and
be reimbursed in a later year
• Intent of FCC to connect at least 10 million students each year
in FY 2015 – FY 2019
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Category 2 Funding Budgets
• Each school building will be permitted to apply for a prediscount cap of $150 per student, or a minimum building cap
of $9200, over a rolling five year basis
• Each library building will be permitted to apply for a prediscount cap of $2.30 per square foot or a minimum building
cap of $9200, over a rolling five-year basis
– Square footage shall include areas off-limits to the public.
• Money is allocated per building (not on a district-wide basis),
and applicants cannot move funding from one school to
another
• Annual application is required and funding approval is subject
to available funds each year
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Category 2 Funding Budget Example
School
Enrollment
Budget
Multiplier
5-Year
Budget Cap
Plainfield Elementary
50
$150
$9,200*
Jacksonville Middle School
105
$150
$15,750
Newville High School
325
$150
$48,750
• The Budget Cap is the pre-discount price, not the E-rate
eligible price. E-rate discounts will then apply on top of the
budget cap.
•
* Although 50 x $150 = $7,500, the minimum floor is invoked because school
has less than 62 students
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Category 2 Funding Budgets (Cont’d)
• If an applicant requests less than the maximum budget
available for a building in a single year, the applicant may
request the remaining balance in subsequent funding years of
a 5-year cycle
• No look-back provision for applicants funded in years prior to
FY 2015
• All competitive bidding requirements will continue to apply
and applicants can only apply for what they need
• After 2 years, the per-pupil/per building/per square foot
formula will be reviewed and will likely continue through FCC
action or administrative procedure
• Do NOT apply for more than your cap in a single year!
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Priority 2 Eligibility Changes
• Beginning in FY 2015, Priority 2 eligible services will become
focused solely on Wi-Fi and building infrastructure and
networking
• Certain equipment and services will be permanently eligible
• Other equipment and services will be eligible for FY 2015 and
2016 and may sunset unless FCC extends eligibility for FY 2017
and beyond
• Beginning in FY 2015, no voice or video equipment will be
eligible
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Category 2 Permanently Eligible Items
•
•
•
•
•
•
•
•
•
•
Wireless Access Points
Wireless Controllers
Routers
Switches
Firewall Equipment
Internal Cabling
Racks
UPS to support eligible equipment
Cloud functionality of this equipment
Software that supports eligible equipment
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Category 2 Eligibility in FY 2015 and 2016
• Caching Servers and Software – NEW!
• Managed Internal Broadband Services (MIBS) – NEW!
– Services which cover the operation, management, or monitoring of a
LAN or WLAN
– Includes managed Wi-Fi
– Could have a contract that a vendor manages, operates and maintains
network; or,
– School could own the equipment, but have a vendor manage it for
them
• Basic Maintenance Services for eligible equipment
– Defined as: “But for the maintenance at issue, the internal connection
would not function and serve its intended purpose with the degree of
reliability ordinarily provided in the marketplace to entities receiving
such services”
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Category 2 Eligibility in FY 2015 and 2016
• Applicants are allowed to apply for up to $30 per year/per
student for these ‘managed’ or ‘maintenance services’
• Services are slated to sunset at the end of FY 2016 unless FCC
extends eligibility
– Exception to Sunset: Applicants that received funding approval in FY
2015 and/or FY 2016 for these items may continue to obtain funding
for FY 2017-FY 2019
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Category 2 - Non-Instructional Facilities
• Non-Instructional Facilities (NIFs) are not eligible for
equipment unless the NIF has classrooms or the NIF houses
the WAN/WLAN central equipment (such as the network
operations center)
• For Network Operations Centers (NOCs), applicants must
allocate a portion of each school’s $150 budget toward the
purchase of such equipment
– Details on how this will be implemented will be given later
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Category 2 – New Schools
• New schools may estimate the number of students who will
be attending the new school and seek funding based on that
estimate
• However, if an applicant overestimates the number of
students who enroll in that school, it must return to USAC by
the end of the next funding year any excess funding based on
the actual number of enrolled students
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Category 2 – Students In Multiple Schools
• Students who attend multiple schools, such as those that
attend CTC or Intermediate Units part-time, may be counted
by both schools in order to ensure appropriate LAN/WLAN
deployment for both buildings
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Category 2 Early Installation
• Eligible equipment may be purchased and/or installed on or
after April 1 prior to the beginning of the funding year
• This provides maximum amount of time during the summer to
complete the necessary work
• Disbursements will not be made until on or after July 1
• General rule still applies that applicants cannot apply for
retroactive funding for equipment purchased and installed in
years prior to the funding year
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Preferred Master Contracts
• FCC staff is empowered to designate certain equipment
contracts that offer excellent nationwide pricing as “Preferred
Master Contracts”
– May allow such contracts to be exempted from the Form 470
competitive bidding requirement and/or
– May require applicants to include the preferred master contract in
their bid evaluations even if the PMC is not submitted as a bid in
response to the applicant’s Form 470
– PMC designations must be reevaluated every two years
• No additional information is known at this time about these
contracts or when they will be designated
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Technology Plan Requirement Changes
• Beginning in FY 2015, the technology plan requirement will be
repealed entirely
• This means there is no federal technology plan requirement
for Priority 1 or Priority 2 funding
• I am working with PDE to revise Comprehensive Planning
questions in light of this repeal
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Questions about Priority 2
Changes?
Letters of Agency
Discount Calculations
Clarification on Member Discount Benefits
Priority of Application Processing
CHANGES FOR CONSORTIA
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Letters of Agency
• The LOAs requirement has been expanded to now require
signed LOAs from all consortium members prior to posting a
Form 470
• Previously, the rules only required LOAs to be signed prior to
submitting the consortium Form 471
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Discount Calculations
• Consortia will continue to use the simple average of each
member’s discount, BUT
• Each school district member’s discount will be calculated usig
the new district-wide simple average
• Example:
Consortium Member
District-Wide Shared Discount
Apple School District
50%
Blueberry School District
60%
Watermelon School District
80%
50 + 60 + 80 = 190
190 / 3 = 63% Consortium Discount
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Clarification on Member Discount Benefits
• FCC clarified that consortia leads must “strive to ensure” that
each school and library in a consortium receive the full benefit
of the discount to which it is entitled
• In other words, each district is still entitled to their district
discount when receiving consortium-purchased services
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Priority of Application Processing
• State and regional consortium applications for broadband
services will be prioritized for processing
– This actually began with FY 2014 applications and has reversed the
historic trend of late review and funding of these applications
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Direct Invoicing of Applicants for BEARs for FY 2016 Invoices
Stringent Invoice Deadline Extension Procedures
INVOICING CHANGES
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New Strict Invoicing Deadlines
• One 120 day invoice deadline extension will be granted if the
request is made on or before the original invoice deadline (which is
typically October 28 following the funding year)
– Reason will not be required
• Late invoice deadline extension requests will not be granted by
USAC
• Requests for extensions made after invoice deadline must be
requested via a waiver request to the FCC
– FCC will only grant requests where applicants can prove truly
extraordinary circumstances to justify a waiver
• Purpose of New Procedure: Unused funds will be able to be deobligated more quickly to be used to make other funding
commitments
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Direct Invoicing
• Beginning in FY 2016, applicants can submit BEARs directly to
USAC without requiring service provider approval
• USAC will send funds directly to applicants using electronic
funds transfer (EFT)
• Applicants will need to provide bank account information to
USAC in order set up EFT arrangements
• Payments will be made only to schools and libraries and not
to consultants
• Not effective for FY 2013, 2014 and 2015 invoices
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Multi-Year Contract Streamlined PIA Review
Electronic Forms Filing
September 1 deadline for FCDLs for fundable applications
STREAMLINING MEASURES
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Multi-Year Contract Application Streamlining
• Multi-year contracts with a term of five or less years will have
a streamlined review after first year of PIA review
– FRN must be for the same services but may include changes to
services that are permitted under the establishing Form 470 and
contract
• Applicants will only be required to provide basic information
identifying the applicant and FRN, and identify and explain
any changes to the discount rate, the membership of a
consortium or the services ordered
• Applicants must still apply each year and funding
commitments will be made year-by-year
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USAC Efficiencies
• USAC will try to issue all FCDLs for workable FRNs by September 1st
of each funding year
– Workable FRN means that all information has been submitted, and there
is no investigation or audit of the applicant, service provider or consultant
associated with the FRN
• IT systems overhaul will be done as a long-term project
– Includes online portal with pre-populated information for forms
completion
– Electronic access to non-confidential information including both forms
information and supporting documentation submitted to USAC in a format
that can be used with application programming interfaces (APIs)
– Open source code will be shared where feasible which would allow thirdparty systems to directly enter application data
• Plain language communications in a simple, direct, and userfriendly manner
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Electronic Filing Requirement for Forms
• All forms submitted to USAC and all notifications sent by USAC
will be required to be filed electronically as of Funding Year
2017
• Some but not all forms may be required to be electronically
submitted in 2015 and 2016
• USAC is undertaking an IT Modernization Process to upgrade
and enhance online experience
–
–
–
–
471 changes for FY 2015
Integration of Item 21 into Form 471 for FY 2015
Major overhaul for FY 2016/17 including Applicant Portal
Support for multiple web browsers, etc.
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Appeals
• All appeals, except for requests of waiver of FCC rules, must
first be filed with USAC
• Requests for rule waivers should continue to be filed directly
with the FCC because USAC does not have authority to waive
FCC rules
• Considered a streamlining measure because there will be
fewer appeals submitted to the FCC and shorter wait time to
receive appeal decision
– USAC metric is to process 90% of appeals within 90 days
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Questions about Invoicing
Changes and Streamlining
Measures?
Data Collection
Price Transparency
Document Retention
COST EFFECTIVENESS EFFORTS &
INCREASED ACCOUNTABILITY
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Expanded Data Collection
• FY 2015 Form 471 will be modified to require applicants to
report information to measure progress toward meeting
connectivity goals
– The Order is not specific but it appears that WAN circuit information
will be required per building and possibly per circuit
• All data collected will be made publicly available
• FCC also will work with schools and libraries to develop
network measurement methods to gather data on network
usage and performance
• FCC and USAC will develop best practices and benchmarks
regarding network utilization, network architectures, network
performance, network optimization and management
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Pricing Transparency
• The FCC intends to publish more information about prices paid by
applicants for E-rate services, especially broadband, Internet access
and equipment
• Intent is to try to force reductions in prices
• Item 21 information will be standardized to provide meaningful
information that is easy to compare across applicants
– Will be made public in electronic format in bulk data files and/or through
publicly available application processing interfaces (APIs)
– Such information will be considered non-confidential unless an applicant
can certify that the disclosure of price information violates a statute,
regulation or court order
– New contracts cannot contain self imposed prohibition on price disclosure
unless required by state law or court order
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Expanded Document Retention Rules
• The document retention requirement has been expanded
from 5 years to 10 years from the last date to receive service
or service delivery deadline, whichever is later
• Example: For FY 2015, the last date to receive service is June 30, 2016.
All documents related to FY 2014 must be kept through June 30, 2026
• For multi-year contracts, contract documentation and bids
must be kept 10 years from the last date of service under the
contract
– Example: A 5 year contract started July 1, 2015 expires June 30, 2020.
All documents related to this contract must be kept through June 30,
2030
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Document Retention – To Do
• Amend your E-rate document retention policy
• Alert your business office to keep all winning and losing bids,
bid evaluations, contracts, vendor bills, cancelled checks,
must be kept for 10 years from the end of the funding year
• Electronic records storage is permissible
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Questions about Price Cost
Effectiveness and Increased
Accountability?
Additional Comments Requested on Various Issues
FURTHER NOTICE OF PROPOSED
RULEMAKING
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Further NPRM on Several Issues
• Issues in FNPRM
–
–
–
–
Seek more data on growth of Internet and Broadband
Seek suggestions for definition of and incentives for consortia
Seek alternative methodologies for allocating P2 support for libraries
Seek data on need for permanent funding increase
• Initial Comments due 9/15/2014
– Replies to Comments due 9/30/2014
• Next Order due to be released within next 6 months and likely
will be focused on Priority 1
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Reminders....
• FY 2015:
– Inform business office of elimination of E-rate funding for paging,
webhosting, email and telephone service components beginning in FY
2015, and phase-out schedule for voice services, beginning in FY 2015
– Recalculate your E-rate discounts for district-wide simple average
– Determine if you will need C2 equipment/services
• FY 2014: File 486s
– Deadline is 120 days after FCDL data or October 28, 2014, whichever is
later
• FY 2013: File Form 472/BEARs by October 28, 2014
– No automatic extension
– Tightened approvals for deadline extension requests
• FY 2012: File Form 472/BEARs by October 28, 2014
– Automatic 1-year extension granted to all FRNs
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Questions?