Presentation on theme: "E-rate Survival 2011: The New, The Old The Good, The Bad"— Presentation transcript:
1 E-rate Survival 2011: The New, The Old The Good, The Bad Presented by:Julie Tritt SchellPennsylvania E-rate CoordinatorFebruary 2011
2 Agenda Changes in 6th Order New SPIN Change Rules New Gift Rules Changes to Eligible ServicesAnticipated Filtering RulesBREAKAudits/PQA InitiativeNew Forms 470 and 471
3 6th Report and Order FCC released Order September 28 Biggest changes to E-rate since program began in 1998Future Order may address:Revision to the definition of RuralChanges to the discount calculation methodologyChanges to the manner in which P2 funding is distributedNext NPRM will not be issued in Spring as previously expectedLet’s Review 6th Order major changes…
4 New SPIN Change RulesBeginning with FY 2011: “An applicant may not change to a different service provider for a particular funding year after a service provider has been selected through the competitive bidding process unless (1) there is a legitimate reason to change providers (e.g., breach of contract or the service provider is unable to perform); and (2) the newly selected service provider received the next highest point value in the original bid evaluation, assuming there was more than one bidder.”
5 New SPIN Change Rules Why? What does this mean? Some vendors were abusing lax SPIN change rules and not bothering to participate in 470 bidding processWhat does this mean?Can no longer switch vendors because of lower priceMust select vendor that received the next highest point value in the original bid evaluation, assuming there was more than one bidderIf only one original bidder, an applicant may select a substitute service provider that satisfies its needs most effectively and efficientlyAn applicant will not be required to initiate another competitive bidding process by submitting a new Form 470Split FRNs when transitioning to new service is acceptableCan submit new 470 in mid-year if you want to switch for any other reason or want to sign new multi-year contract
6 Gift Restrictions Effective January 2, 1011 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 vendor source per funding year
7 Exceptions to Gift Restrictions Exception for charitable contributionsService 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 decisionsException for personal giftsThere 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
8 Who is Subject to Gift Restrictions? Service providersAll service providers with current or possible future E-rate relationship to applicantAll individuals who are on the governing boards of such an entity (such as members of the board of directors); andAll employees, officers, representatives, agents, or independent contractors of such entities
9 Who is Subject to Gift Restrictions? ApplicantsAll individuals who are on the governing boards of such entities (such as members of a school board)All employees, officers, representatives, agents, consultants or independent contractors of such entities involved on behalf of such school, library, or consortium with E-rateIndividuals 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; andAny staff of such entities responsible for monitoring compliance with the E-rate Program
10 Presumably, affected staff includes, but is not limited to, school business officials, superintendents, technology directors, school board members, and library directors – anyone who has any role in procurement, E-rate, or technology planning
11 Other Important Gift Details 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 limitRules are always applicable, not just during the time period when the competitive bidding process is taking placeState and local restrictions regarding gifts also still applyIf more stringent than federal requirements, violation of state or local provision constitutes a violation of the FCC rule
12 Does P1 vs P2 Matter?If an applicant only applies for Priority 1 Services, gifts received from E-rate vendors that only sell Priority 2 equipment/services are not subject to the $20/$50 ruleIf an applicant opts to apply for Priority 2 equipment/services for the first time, the applicant must have been in compliance with the E-rate gift rules for the six months preceding the posting of the Form 470Vendor-sponsored trinkets, gifts, raffle-prizes, and hospitality suites at conferences ARE included in the Gift Rule restrictions
13 Disposal, Repayment, Tracking Disposal of Gifts: Applicants may dispose of the gift in order for the value of the gift to not be counted toward the $20/$50 rule, but must be done so immediatelySuch disposal should be recordedRepayment of Value of Gifts: Applicants may repay to the vendor the retail value of the gift so the gift is not counted toward the $20/$50 rule if repayment is made immediately following the gift donationSuch repayment should be recordedBoth vendors and applicants must keep an annual record of the value of all gifts received and donated during each year (July 1 - June 30)Such records may be requested during an audit or USAC investigation
14 Gift Examples Gifts OK Gifts NOT OK Coffee and donuts at a presentationMeal at presentationDoor Prize: Ball cap worth $20 or lessDoor Prize: $30 gift cardCertificate or plaque presented at conferenceGold watch given as thank you giftTravel, food or lodging at conference, even if you are speaking on behalf of the providerPens handed out a conference worth $20 or lessConference giveaways: any item exceeding $20 in value (e.g. book bag or briefcase)Holiday present to sibling, not reimbursed by company, paid with own fundsCustomer Appreciation meal/gift exceeding $20
15 Gift Examples Gifts OK Gifts NOT OK Joe Applicant gets $18 lunch from Larry, the Cable Guy. No other meals or gifts during the year from anyone employed by, or representing, the Cable Company.No Rule Violation = Total gift below $20 and $50 threshold.Joe Applicant gets $12 lunch from Larry, the Cable Guy three times during the year. (Total: $36 total). Larry’s boss, takes Joe to lunch for $18. (Total from Cable Company: $54).Rule violation = exceeded $50 thresholdJane Applicant wins mousepad at a conference from Internet R Us. (Value = $8)Jane Applicant also receives $15 box of chocolates from Internet R Us.No Rule Violation = Both below $20 and did not exceed $50 threshold.Jane Applicant wins a wireless mouse and mousepad at a conference from Internet R Us. (Value = $24 +$8)Rule violation: One gift exceeded $20 threshold.
16 Gift Examples Gifts OK Gifts NOT OK Joe Applicant attends a conference and picks up a free ballpoint pen and stress ball from a company he’s never heard of. No further gifts are given.No Rule Violation = Total gift below $20 and $50 threshold.Joe Applicant is invited to a customer appreciation lunch at a seminar. Meal value = $22Rule violation = exceeded $20 thresholdJane Applicant received a bag of peaches in the summer from a provider.Value of peaches = $10No other gifts are given by anyone from that company for the rest of the year.No Rule Violation = Below $20 and did not exceed $50 threshold.Jane Applicant is invited to speak at a conference regarding services she gets from a provider. The provider offers to pick up travel costs.Rule violation: Total gift exceeded $20 threshold.
17 Gift Examples Gifts OK Gifts NOT OK Joe Applicant (district discount 43%) attends a conference and is taken to lunch by Polycom. Lunch costs $25.No Rule Violation = Applicant does not apply for Priority 2 funding and Polycom does not provide Priority 1 services.Jane Applicant (district discount 72% but one 90% building will apply for video codecs in FY 2011 for the first time ever) receives a free ipod from Polycom at a conference in November 2010.Rule Violation = iPod over $20 value, gift was given less than 6 months before 470 was posted.Jane Applicant (district discount 72% but one 90% building will apply for video codecs in FY 2012 for the first time ever) receives a free ipod from Polycom at a conference in November 2010.No Rule Violation = Although iPod over $20 value, gift was given more than 6 months before 470 was posted.
19 FCC EDU: Off-Campus Wireless Pilot Called ‘EDU’ – E-rate Deployed UbiquitouslyNew pilot program that will provide funding for off-campus wireless connectivity through mobile devicesCompetitive grant$10 million in FY2011Schools and libraries were eligiblePreference given to those already implementing such programs Pilot will gather more information about issues affecting such use which can later be used for permanent rules4 PA applicants; 80 nationwideWinners should be announced by JulyEXPECT THIS TO EXPAND IN FUTURE YEARS
20 Funding Cap Increased to Inflation Since the program's inception, E-rate funding has been capped at $2.25 billionBeginning in FY 2010, the cap will increase for inflation, based on the Department of Commerce's Gross Domestic Product numbersFY 2010 cap will increase to $2,270,250,000$20.25 millionThe cap will not decrease in event of deflation and will be in addition to any rollover funds from previous years' undisbursed funding
21 Eligible Residential Locations Beginning with FY 2011, residential locations within eligible schools will be eligible if they serve:tribal studentschildren with physical, cognitive, or behavioral disabilitiesjuvenile justice students, orresidential 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 eligibleResidential locations of cyber school students or employees are NOT eligible
22 Change to Tech Plan Rules Beginning with FY 2011, budget no longer required as part of tech planBeginning with FY 2011, E-rate will only require written or approved tech plans if applying for Priority 2 funding (internal connections or basic maintenance)If only applying for P1, Item 26 on Form 471, check off the box that says:“I certify that no technology plan is required by Commission rules.”
23 Community Use of Services Schools may now permit general public to use the schools’ Internet access during non-school hours – at the schoolUntil February 2010, such Internet access was only permitted to be used by K-12 students and staff for educational purposes only, putting many schools and most vocational technical schools in a difficult positionIn February 2010, the FCC permitted such usage on a temporary basis3 conditions for community use of school facilities:Usage is permitted only during a school’s “non-operating” hours or summer School may not request E-rate funding for a higher level of service than would be required for educational purposesSchools may not charge for the use of the Internet access, but may charge reasonable fees to cover overhead costs from individuals that use the schools' services and facilitiesOrganizations using a schools' services are permitted to recover related costs (e.g., “curriculum development and presentation costs”) from attendees
24 Community Use of Services School not required to open facilitiesInternet filtering rules must remain intact during useNew rule in no way permits schools to share their bandwidth with other ineligible entities, such as an off-site after-school program at the YMCA or community centerAlso does not permit partially eligible entities, such as a Diocesan office that provides services to both schools and the church, to stop cost allocating the ineligible portion of Internet use
25 Lit Fiber EligibilityCan be leased from telecommunications provider (such as Verizon, Comcast, Sunesys, PenTeleData, Sting, etc.)ORBeginning 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 470Vendors must light fiber
26 Dark Fiber Eligibility Beginning in FY 2011, applicants may lease dark fiber from any provider (including non telecom carrier)Such as Nittany Media, Adams Cable, IUs, electric companies, etc.Conditions:E-rate will not pay for the building of new fiber networks off school propertyInstallation (non-recurring) charges are eligible from school building to edge of school propertyUnclear whether NRC costs can be bundled with MRCModulating electronics must be provided by the applicant and cannot be bundled with the cost of the serviceThis equipment is eligible for Priority 2 fundingPurchase of fiber still not eligible
27 Transfer of EquipmentOLD and UNCHANGED: E-rate funded equipment must remain at approved site for 3 full years after installationAfter which it may be moved to another eligible location, providing documentation is retained describing transferIf school or library closes, equipment may be moved to another entity, regardless of discountMust send letter to SLD outlining closing of school and transfer of equipmentMust keep documentation regarding transfer for 5 yearsNEW: After 5 years, equipment may be disposed of or soldDisposal does not need to be reported to USACProceeds from sale do not need to be returned to USAC
28 Basic Maintenance of Equipment Beginning in FY 2011, maintenance severely curtailedEligible:Bundled manufacturer warranties up to 3 yearsCannot have a separate priceSoftware, patches, online supportCan be invoiced at beginning of year for whole year, regardless of actual usageActual labor and break-fix costCan only be invoiced after service usedIneligible:Unbundled warranties, insurance-type warranties, including traditional Smartnet
29 Unbundled Break/Fix Maintenance Reimbursement amountUSAC will only pay for cost of actual work performed (which includes labor, equipment fix, or if it is beyond repair, equipment replacement)Calculation of funding request for parts/fix/labor: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 repairsContract:Must separately identify cost of maintaining E-rate eligible equipment from E-rate ineligible equipmentMay not mix E-rate eligible maintenance services with other ineligible services (such as help desk or monitoring services)
30 Cisco SmartnetDue to new E-rate restrictions, Cisco has completely revised pricing structure for E-rate purchases.CiscoBASE = software, patches, tac supportIncluded with 1st year of purchase priceAfter 1st year, applicants will be required to post 470 and apply for this service separately (expected to be 80% of Smartnet cost)
31 Cisco Smartnet Cisco Advanced Replacement = next-day Included for 3 years with purchase priceAfter 3rd year, applicants will be required to post 470 and apply for this service separately.E-rate will then only pay if advanced replacement/labor is actually used. Will not pay for full annual price.
32 Questions? FCC EDU Lit/Dark Fiber eligibility Transfer of equipment Technology plansCommunity use of servicesBasic maintenance/SmartnetAnything dealing with eligible services?
33 Changes to CIPA Law New CIPA Law passed October 2008 In Nov 2009 NPRM, FCC did not include guidance on the extent to which online safety must be taught -- likely leaving this up to each school to decideCIPA Order should be released in coming months that will contain details of implementation requirementsWill likely be effective beginning July 1, 2011
34 Changes to CIPA LawInternet Safety Policies will be required to 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."Essentially means that schools must educate students related to online safety in order to receive E-rate fundingIf you haven’t done so already, amend your Internet Safety Policies now and include this training in your curriculumLaw will NOT be retroactiveDon’t be fooled by companies that claim they are FCC-approved to provide this training or that you are required to purchase their product in order to be compliant
35 Filtering: Who, What and When New CIPA Order likely to answer these key questions:School-owned computers used off-campus using private InternetAnticipated: MUST FILTERSchool-owned computers used off-campus using District’s InternetStudent/teacher owned computers used on-campus but using District’s InternetStudent/teacher-owned computers used on-campus but using personal Internet (aircard)Anticipated: NO FCC REQUIREMENT TO FILTERBUT: This should be addressed in your District’s acceptable use policy
36 Big Changes to AuditsFor last 3 years, FCC Inspector General required Attestation Audits of E-rate applicantsAttestation audits are most severe type of auditAudit program being revampedAttestation audits replaced with PQA Audits and Program Compliance AuditsProgram Compliance Audits – largest of auditsWill begin around April 2011Conducted mostly off-siteWill determine if you followed program rules
37 PQA: Program Quality Assurance 20-60 PQA Audits per quarterRequest sent to the entity's contact person via and is based solely on a single invoice that has been paid by USACProof of non-profit statusProof of eligible school or library statusList of endowmentsList of all entities receiving servicesList of specific services that corresponds to invoiceDollar amount of invoice paid by USACCopy of invoice showing discount appliedCopy of check showing reimbursement from vendor, including cancelled check or bank statementTech plan approval letter(s)
38 Document RetentionRules require all applicants to retain ALL E-rate and related documents for 5 years from last day of service in a particular funding year (which is basically 6.5 years)If auditor visits in 4 years, and documents are missing, it could be the basis to recover all funding from that funding yearDocument and keep everything remotely related to E-rateLike what?
39 Documents to Retain Tech plan and approval letter Proof of date tech plan “written”Consultant agreementsRFP and proof of publication dateAll vendor correspondenceWinning and losing bidsProfessional development sign-in sheetsBid evaluation documentationProof of authorization to sign E-rate formsFiltering records and paymentsNSLP forms and enrollment recordsNotification to vendor when changing service providersAUP and proof of public meetingSigned contractsBudgetsPurchase ordersPacking slipsAsset or inventory recordsInstallation recordsAll vendor invoicesFront and back of checks as proof of payment to vendor (non-discounted share)Proof of receipt of payment from vendor (BEAR checks)Soon: Proof that you are educating students about online safety
40 Reminders... Last possible day to post 470 = February 24 Last possible day to post 471/Item 21 attachments = March 24School closings: Build-in no liability clauses for school building closuresCalculating pre-discount price: If your vendor charges USF fee, be sure to calculate using 15.5% USF rate
42 Changes to Form 470 New Question: Applicant Demographics: PublicPrivateCharterTribalHead StartState AgencyYou must check at least one optionYou may check multiple options
43 Changes to 470Applicants must identify any and all consultants that assisted with the preparation of each formConsultants will be assigned a Consultant Registration Number (CRN)This number must be provided on the formForm field should populate with contact info for that consultantAlso must identify actual consultant employee’s name(s)
44 Changes to 470I certify that, if required by Commission rules, all of the individual schools and libraries receiving services under this form are covered by technology plans that do or will cover all 12 months of the funding year, and that have been or will be approved by a state or other authorized body, or an SLD-certified technology plan approver, prior to the commencement of service ORI certify that no technology plan is required by Commission rules. (new)
45 Form 470 – Deleted FieldsT/MTM or contract information (Current Items 7a – 7c)
46 Form 470 – Deleted FieldsSPI/BEAR/No preference (Current Items 8b, 9b, 10b, and 11b)
47 Form 470 – Deleted FieldsBasic Telephone Service (Current Item 14)
48 Form 470 – Deleted FieldsNecessary Resources (Current Items 15a-15f)
49 Form 470 – Deleted FieldsPhone numbers and prefixes (Current Item 16c)
53 Changes to Form 471 New Question: Applicant Demographics: PublicPrivateCharterTribalHead StartState AgencyYou must check at least one optionYou may check multiple options
54 Changes to 471Applicants must identify any and all consultants that assisted with the preparation of each formConsultants will be assigned a Consultant Registration Number (CRN)This number must be provided on the formForm field should populate with contact info for that consultantAlso must identify actual consultant employee’s name(s)
55 Changes to 471I certify that, if required by Commission rules, all of the individual schools and libraries receiving services under this form are covered by technology plans that do or will cover all 12 months of the funding year, and that have been or will be approved by a state or other authorized body, or an SLD-certified technology plan approver, prior to the commencement of service ORI certify that no technology plan is required by Commission rules. (new)
56 Changes to Form 471 Block 4: Discount Calculation Worksheet Libraries must now provide urban/rural and student count information on the worksheetCertain entity-level data added or requested in a different formatBlock 6: Certifications and SignatureSome certification language changedConsultant as authorized person checkbox added
57 Changes to Form 471 Block 2: Impact of Services Ordered BEFORE ORDER column removed“AFTER ORDER” columns to complete:Individual schools and school districts complete the “Schools” columnLibraries and library consortia complete the “Libraries” columnConsortia complete one or both as appropriate depending on the consortium members
58 Changes to Form 471Block 2: Impact of Services Ordered – Items 7a through 7gNumber of students (schools) or patrons (libraries)Number of (class)rooms with telephone serviceNumber of drops (direct Internet connections)Number of (class)rooms with Internet accessNumber of computers or other devices with Internet accessNumber of dial-up (<56K) Internet connectionsDirect broadband services (next slide)
59 Changes to Form 471 __ < 200 kbps __ 10 – 25 mbps Block 2: Impact of Services Ordered – Item 7gDirect broadband services: Number of buildings served at the following speeds:__ < 200 kbps __ 10 – 25 mbps__ 200 kbps – 1.5 mbps __ 25 – 50 mbps__ 1.5 – 3 mbps __ 50 – 10 mbps__ 3 – 10 mbps __ > 100 mbps
60 Changes to Form 471Block 4: Discount Calculation Worksheet (continued)Schools must also include the following information if applicable (more than one may apply):Pre-kindergartenHead StartAdult EducationJuvenile JusticeEducational Service Agency (ESA)Dormitory
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