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Chad Poppell, Secretary FETC 2015 1 Impacts of the FCC E-rate Modernization Process Lauren Harris.

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Presentation on theme: "Chad Poppell, Secretary FETC 2015 1 Impacts of the FCC E-rate Modernization Process Lauren Harris."— Presentation transcript:

1 Chad Poppell, Secretary FETC 2015 1 Impacts of the FCC E-rate Modernization Process Lauren Harris

2 Overview 2 Overview of changes Changes to the eligible services list Discounts Urban/rural Category Two budgets Consortium Cost allocation Cost effectiveness & lowest corresponding price compliance Simplified multi-year contracts & competitive bidding exemption 471 process

3 FCC E-rate Modernization July 23, 2013 – E-Rate Notice of Proposed Rulemaking December 23, 2013 – FCC seeks comment on information collection February 7, 2014 – FCC seeks focused comment on Modernization May 23, 2014 – Order (Cost Allocation) July 11, 2014 – FCC vote on E-rate Modernization July 23, 2014 – Report & Order, Further Notice of Proposed Rule Making (FNPRM) July 23, 2014 –August 12, 2014 – Staff White Paper & Fiber Maps October 2014 – Errata 1-3 released October 27, 2014 – Final FCC Forms 470 & 471 Approved October 29, 2014 – Final ESL released December11, 2014 – FCC vote on Second E-rate Modernization Order December 22, 2014 – Second E-rate Modernization Order Released January 5, 2015 – § 54.502 and changes to FCC Form 471 effective via Federal Register January 14, 2015 – Funding Year 2015 application window opens 3

4 Implementation Dates July 23, 2014 – Report and Order Released August 19, 2014 – Published in Federal Register Effective dates – Varied – July 1, 2014 – September 18, 2014 – Upon OMB approval of related FCC forms – FY 2016 January 5, 2015 – § 54.502 and changes to FCC Form 471 4

5 What Was Impacted? – Appeals Process – Bundling Services – Categories / Priorities – Cost Allocation Requirements – Dates & Deadlines – Definitions (eligible services, eligible users, etc.) 5

6 What Was Impacted? – Dark and Lit Fiber – Discounts & Calculations – Eligible Services & Locations – Funding Caps & Floors – Online Filing requirement – Process for Applicants – Streamlining USAC/FCC Processes – Consortium Applications 6

7 Chad Poppell, Secretary CHANGES TO ELIGIBLE SERVICES 7

8 Eligible Services List (ESL) Changes to ESL structure – Restructured ESL to Categories One & Two – Focus support on services and components needed for broadband connectivity within schools and libraries – Eliminates other services and components beginning in Funding Year 2015, including Voice Phase out over five years Flash cuts in both Categories 8

9 Services & Components Eligible Services List (ESL) released Oct. 29, 2014 Flash cut starting Funding Year (FY) 2015 – Web hosting, voice mail, and email – P2 voice-related components (“Telephone Components” in past ESLs): Paging, directory assistance charges, text messaging, custom calling services, direct inward dialing, 900/976 call blocking, and inside wire maintenance plans 9

10 Flash Cuts & Definition Changes Some components and services in flash cut categories of service still eligible under different terms or in different sections, e.g.: – “Interfaces, Gateways, Antennas” section flash cut Exception for antennas is outlined in ESL Order – “Cable Modem” appears under Category One Digital transmission services and Internet access services 10

11 Category One Services Eligible for Support VoiceData Centrex Circuit capacity dedicated to providing voice service Interconnected VoIP Local, long distance, 800 service Plain Old Telephony System Radio Loop Satellite telephone service Shared telephone service Wireless telephone service including cellular voice  Excludes data and text messaging Asynchronous Transfer Mode Broadband over Power Lines Cable Modem DSL DS-1, DS-2, DS-3 Ethernet Fiber (Lit and Dark) Frame Relay Integrated Services Digital Network OC-1, OC-3, OC-12, OC-n Satellite Services SMDS Telephone Dialup T-1, T-3, Fractional T-1 Wireless Service (e.g. microwave) (Effective Funding Year 2015) 11

12 Category Two Components Eligible for Support Components eligible for Priority Two support: Access points Cabling Caching Firewalls Network switches Routers Racks Uninterruptable power supply/Battery back-up Wireless Local Area Network (WLAN) Controllers Improvements, upgrades and software necessary to support eligible broadband internal connections components (Effective Funding Year 2015) 12

13 Services and Components No Longer Eligible for Support Category One (Priority One)Category Two (Priority Two) Services and telephone components that were listed as eligible in the former Priority One category: 900/976 call blocking Custom calling services Direct inward dialing Directory assistance charges Email Inside wire maintenance plans Paging Text messaging Voice mail Web hosting Components included in these former Priority Two entries: Circuit Cards/Components Data Protection (all except for firewall and uninterruptible power supply/battery back-up) Interfaces, Gateways, Antennas (other than as specified in this Order) Servers (other than servers necessary for caching) Software (other than the software that supports eligible broadband internal connections) Storage Devices Telephone Components Video Components Voice/video IP components (that had been listed in the Data Distribution entry (Effective Funding Year 2015) 13

14 Clarification on Multi-Protocol Label Switching (MPLS) MPLS explicitly eligible for Category One support FCC E-rate Definition: MPLS allows providers to create a single integrated network infrastructure that can be used to provide multiple services to the enterprise customer, and many service providers use MPLS in their networks to facilitate Internet protocol (IP) transport. 14

15 Clarification on MPLS Seek funding for MPLS based on the type of provider they select to provide the service – If telecommunications carrier provides MPLS, select the telecommunications service category on the FCC Form 471. – In all other cases, the applicant should select the Internet access category on the form. 15

16 Clarification: Distance Learning Video Conferencing and Interactive Television Although no longer highlighted in the ESL itself, telecommunications transmission and Internet access used for these purposes remains eligible. 16

17 Clarification: Distance Learning Video Conferencing and Interactive Television FY 2015 ESL cautions: – Only the underlying transmission providing access to distance learning, video conferencing and interactive television are eligible. – Components that have been ineligible in prior years remain ineligible including non-telecommunications components: Scheduling services Services for creation Maintenance and storage of content, and Charges for distance learning or video conferencing utilities such as web meetings or online collaboration solutions 17

18 Caching A caching service, or caching equipment or components, including servers that provide caching, are eligible for funding. – Eligible in tandem with Category Two Internal Connections 18

19 Caching Previous ESLs defined a “caching service”: – “…a special high-speed storage mechanism at the border of a network and the Internet that holds frequently accessed Internet information, thereby reducing retrieval times for information often requested from the Internet.” Now define caching as: – “A method that stores recently accessed information. Caching stores information locally so that the information is accessible more quickly than if it must be transmitted across a network from a distance.” 19

20 Antennas FY 2015 ESL clarifies the eligibility of antennas: – If used in and in conjunction with the internal connections needed to enable high-speed broadband connectivity within schools and libraries, are eligible. – As integral part of the Local Area Network (LAN) or Wireless Local Area Network (WLAN) are eligible for Category Two funding, because they are subsumed by or essential to the components necessary to distribute internal broadband services within a school or library. 20

21 ESL Format Significant updates to structure of ESL Removes: – “Special Eligibility Conditions” section – Glossary – Descriptions of conditions impacting eligibility – Descriptions that provide extra information pertaining to certain services 21

22 Cellular Data Plans FY 2013 & 2014 applications Retroactive application of: – Clarifications in Seventh Report and Order – FY 2015 ESL – May 2014 Order Going forward: – Cost allocate bundled devices – Document cost effectiveness – Avoid duplicative use 22

23 Eligible Service Lists Any Questions? 23

24 Chad Poppell, Secretary DISCOUNTS 24

25 July Report and Order To make the E-rate application process and other E-rate processes fast, simple and efficient – Simplify discount rate calculations by: Requiring a district-wide discount rate Modifying the definition of urban and rural Addressing changes to the national school lunch program (NSLP) Modifying the requirements for applicants using surveys (disallows extrapolation) 25

26 Discounts Discounts are 20 ‐ 90 percent or 20-85 percent of eligible costs, depending on category of service. Discount level for a school or library depends on: – Level of economic need (poverty indicator), – Urban or rural designation of district where located, and – Category of service (max discount, phase-down discounts). 26

27 Discounts Schools and Districts: – District All schools in the school district get the district discount, even if they apply individually or are the only recipient of service. Weighted average of schools in district. – Independent schools, not part of a district Calculate discounts based on own student population Determine urban/rural status based on physical address 27

28 Discounts Libraries and Library Systems: – Based on the district-wide discount of the school district in which the main outlet is located. Applicants no longer calculate discount based on all districts in which library system has outlets. – Calculate urban/rural status based on outlet locations. A library system’s discount may not match the school district’s discount rate. Bookmobile and kiosks count as library outlets. 28

29 Discounts Consortia: Calculate discount based on the simple average of their consortia members. Consortia members are listed at their district-wide discount rate, even if only some schools in the district participate in the consortium. – Only consortia entities can get a discount that doesn’t come straight from the discount matrix. – All funding request numbers (FRNs), regardless of the entities served, get the same consortia-wide discount rate. 29

30 Discounts Voice Services Phase Down – All voice service are subject to a 20 percentage point reduction per year from your regular discount for the next five years. FY 2015 = Regular discount – 20 percent FY 2016 = Regular discount – 40 percent etc. Category Two Top Discount – Top discount rate = 85 percent instead of 90 percent 30

31 Discounts 31

32 Discounts for Category One vs Category Two Category One Telecom – Reduces by 20 percent annually, starting FY 2015 to phase-out INCOME percent of students eligible for National School Lunch Program FY 2014 (past year) FY 2015FY 2016FY 2017FY 2018FY 2019 UrbanRuralUrbanRuralUrbanRuralUrbanRuralUrbanRuralUrbanRural < 120250500000000 1-1940502030010000000 20-34506030401020000000 35-496070405020300100000 50-7480 60 40 20 0000 75-10090 70 50 30 10 00 32

33 Discount Mechanisms 1.National School Lunch Program (NSLP) 2.Community Eligibility Program (CEP) 3.Surveys 4.Other recognized poverty indicators 33

34 Discount Mechanisms Community Eligibility Provision (CEP) – – Accepts USDA national CEP multiplier 1.6 x Direct Certification – Number of eligible students in a CEP school cannot exceed the total number of students in that school 34

35 Discount Mechanisms Community Eligibility Provision (CEP) – – CEP applicants will not be required to calculate their discount rate every year Use the calculation that they use during the course of a four-year CEP cycle. – If, during the four-year cycle, a school’s percentage of identified students increases may use the higher percentage in determining USDA reimbursement. – If the percentage of identified students decreases school may continue to use the original percentage for the remainder of the four-year eligibility period. 35

36 Discount Mechanisms Surveys Surveys continue to be valid, though you can no longer extrapolate based on results. If you send out a survey to each student, and you only get responses from half, and only half of those are eligible, then you can only report 25% of your students as eligible for NSLP. Starting in FY 2015, you can use NSLP applications as your survey instrument, because you can no longer extrapolate the results. 36

37 Discounts Any Questions? 37

38 Chad Poppell, Secretary URBAN/RURAL 38

39 Urban/Rural Urban/rural status – Based on most current U.S. Census Bureau data – Determined for the entire school district or library system, instead of for individual schools or libraries – More than 50 percent of the entities in a district/system must be rural for district/system to be classified as rural 39

40 Updated Definition of Rurality “The Census definition classifies a particular location as rural or urban based on population density and geography, and other criteria involving non-residential development.” U.S. Census urban areas and urbanized clusters with populations under 25,000 receive rural designations 40

41 Impacted Urban Clusters & Urbanized Areas 41 U.S. Census Bureau American Fact Finder

42 Impacted Urban Clusters & Urbanized Areas 42 U.S. Census Bureau American Fact Finder

43 Rural Urban Any Questions? 43

44 Chad Poppell, Secretary CATEGORY TWO BUDGETS 44

45 Funding Category Two $1 billion target for Category Two through FY 2020 Funding based on per-entity (not per-building) budget – Five year budget cycle, counting from first commitment – Budget is for pre-discount costs – Can be used any time over five years – Still use the district-wide discount – Apply each year of desired funding – No budget for a Non-Instructional Facilities (NIF) or a NIF with classrooms 45

46 Funding Category Two Can your budget change? Yes –It may increase if… –Student count or square footage increases –Population increases to 25,000 (libraries) –It may decrease if… –Student count decreases 46

47 Funding Category Two What happens if your budget changes? Existing schools: – 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. – Decrease total budget for remainder of five year budget cycle based on actual student count. New schools: – Return any funds in excess of the allowable budget to USAC. – Decrease total budget for remainder of five year budget cycle based on actual student count. 47

48 Funding Category Two 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. The FCC has committed to using the budget-based approach for funding Category Two support through FY 2019. 48

49 Funding Category Two Category Two Calculation - Budget Cap & Floor – Per entity (not building) – $9,200.00 floor – Schools/ Districts use per student (x $150.00) – Libraries use per square foot (x $2.30 or $5.00) 49

50 Funding Category Two My school has 200 students. How do I calculate my Category Two pre-discount budget? – 200 students x $150 per student = $30,000. My library is 3,500 square feet. How do I calculate my Category Two pre-discount budget? – 3,500 square feet x $2.30 per square foot = $8,050. – However, there is a $9,200 floor. Since the result of the calculation is less than $9,200, the pre-discount budget is $9,200. 50

51 Funding Category Two The budget is PRE-DISCOUNT. For example, for a school with 1,000 students: – At the 85% discount rate (the maximum discount rate for Category Two), the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $127,500. – At the 50% discount rate, the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $75,000. – At the 20% discount rate, the school will have a pre-discount budget of $150,000, but may receive E-rate discounts of up to $30,000. 51

52 Funding Category Two 52 My school district has three schools – School A with 25 students, School B with 50 students, and School C with 75 students. How do I correctly allocate a shared service with a pre-discount cost of $300? Straight line A = $100 B = $100 C = $100 $300 Proportional by students A = 25/150 x $300 = $50 B = 50/150 x $300 = $100 C = 75/150 x $300 = $150 $300 Specific (e.g., usage) A uses 30% = $90 B uses 15% = $45 C uses 55% = $165 $300

53 Budgets Any Questions? 53

54 Chad Poppell, Secretary CONSORTIUM 54

55 Consortium Consortium – definition revised to include: “…health care providers eligible under subpart G, and public sector (governmental) entities, including, but not limited to, state colleges and state universities, state educational broadcasters, counties, and municipalities, although such entities are not eligible for support.” (¶182) 55

56 Consortium Authority via Letter of Agency (LOA) or statute for Form 470, differs from Form 471 Clarifies that applicants can authorize a consortium lead to act on their behalf for multiple years, and need not reaffirm that authorization every funding year Must be clearly outlined in LOA. 56

57 Consortium LOAs All LOAs (single year or multi-year) must include the following: – Name of the person filing the application – Name of the person authorizing the filing of the application – Specific time frame the LOA covers – Signature and date – Title of an official who is an employee of the entity authorizing the filing of the application – Type of services covered by the LOA 57

58 Consortium Discounts Discounts and Category Two budgets 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) Can still distribute discounts among members based (at least proportionately) on their individual discounts. 58

59 Applying Consortium Discounts My consortium has three schools – School A with 25 students, School B with 50 students, and School C with 75 students. How do I correctly allocate a shared service with a pre-discount cost of $300? Straight LineProportional by StudentSpecific (e.g., usage) A = $100A = 25/150 x $300 = $50A uses 30 percent = $90 B = $100B = 50/150 x $300 = $100B uses 15 percent = $45 C = $100C = 75/150 x $300 = $150C uses 55 percent = $165 $300 59

60 Chad Poppell, Secretary COST ALLOCATION REQUIREMENTS 60

61 May 23, 2014 Order Cost allocation of bundled equipment is required once again – “E-rate applicants must deduct the value of ineligible components bundled with eligible services unless those ineligible components qualify as “ancillary” to the eligible services under the Commission’s rules.” 61

62 May 23, 2014 Order Ancillary - An ineligible component is ‘ancillary’ if a price for the ineligible component cannot be determined separately and independently from the price of the eligible components, and the specific package remains the most cost-effective means of receiving the eligible services, without regard to the value of the ineligible functionality. Definition: Something is ancillary if it is providing necessary support to the primary service or component. 62

63 Cost Allocation Based on eligibility: – Location Facilities, buildings, classrooms – Use Educational Supporting educational activities – Users Students Staff/ support staff involved in educational activities 63

64 May 23, 2014 Order Justification for rescinding 2010 Clarification: – Not enough clarification/ limitations on types of equipment or services that could be bundled – Potential for breach of gift rules – Concerns that E-rate funding was “…paying for more than just eligible services.” – Potential to use to circumvent other cost allocation requirements 64

65 Cost Allocation Any Questions? 65


67 July Report and Order To maximize the cost-effectiveness of spending for E-rate supported purchases – Adopt transparency measures to encourage sharing of cost and connectivity data – Emphasize that providers must offer the lowest corresponding price. 67

68 Lowest Corresponding Price (LCP) LCP applies to both bids and charges – “The LCP rule prohibits an E-rate provider from “charg[ing]” E-rate applicants a price higher than the lowest price that provider charges to non-residential customers who are similarly situated to a particular school, library, rural health care provider or consortium that purchase directly from the service provider.” 68

69 Lowest Corresponding Price (LCP) Onus is on provider to comply with LCP requirement in bidding and billing practices. USAC is instructed to maintain a public database of pricing to encourage compliance Applicants are encouraged to report infractions  Consider building verbiage for LCP compliance into procurement and contractual documents 69

70 Cost Effectiveness Any Questions? 70


72 July Report and Order To make the E-rate application process and other E-rate processes fast, simple and efficient – Streamline the application process by: Simplifying the application process for multi-year contracts Easing the signed contract requirement Removing the technology plan requirement Requiring electronic filings Enabling direct connections between schools and libraries 72

73 Preferred Master Contracts Preferred Master Contracts – – Preferred master contracts are master contracts designated by the FCC as Preferred Master Contracts that offer eligible entities nationwide opportunities to obtain excellent pricing for Category Two equipment. – Required to include Category Two equipment available on a preferred master contract in their bid evaluations if it is the same equipment the applicant sought on its FCC Form 470 – State master contracts and nation-wide contracts are not the same as preferred master contracts – None identified yet 73

74 Competitive Bidding Exemption Exempting low-cost, high-speed business-class broadband Internet access from the competitive bidding requirements – $3,600.00 annual threshold per school or library – 10Mbps ↑ and 100Mbps ↓ minimum – Applicants must be eligible for E-rate support in each of the years funding is sought 74

75 Multi-Year Contracts Applicants must be eligible for E-rate support in each of the years funding is sought Services must be eligible for support in each such year Multi-year contract for E-rate supported services that is no longer than five years Changes in the requested services or to the terms and conditions under which those services are provided are within the scope of the establishing FCC Form 470 and the applicable contract. 75

76 Multi-Year Contracts First year: applicants must file a complete FCC Form 471 in the first year of a multi-year contract that is eligible for this streamlined review Subsequent years: provide only basic information – identifying the applicant – confirming funding request is a continuation of a FRN from a previous year based on a multi-year contract – identifying and explaining any changes to their application (e.g. discount rate, membership of a consortium, or services ordered) 76

77 Simplified Multi-year Contracts & Competitive Bidding Exemption Any Questions? 77

78 Chad Poppell, Secretary ONLINE APPLICATIONS 78

79 Filing Process To make the E-rate application process and other E- rate processes fast, simple and efficient – Direct USAC to adopt additional measures to improve the administration of the program by: Speeding review of applications, commitment decisions and disbursements Modernizing USAC’s information technology systems Adopting open data policies Improving communications with E-rate applicants and providers 79

80 Filing Process FCC Form 471 – Online filing only for FCC Form 471 – The entity’s pre-discount and post-discount Category Two budget will be automatically calculated from information entered in other fields. – Applicant entities may have to manually input budgets at points in online application. 80

81 Filing Process FCC Form 471 – Additional data collected (Block 5 - level), e.g.: Internet Access (not required on consortia applications) 1.Does the school district (or school, if not part of a district) have Internet access of:  less than 100 Mbps per 1,000 users (students and staff)  at least 100 Mbps per 1,000 users, but less than 1Gbps per 1,000 users  at least 1 Gbps per 1,000 users 81

82 Filing Process FCC Form 471 – Additional data collected (Block 5 - level), e.g.: Wide Area Networking or WAN (not required on consortia applications) 1.How many of the schools have Wide Area Networking connections that are scalable to 10 Gbps? 2.Indicate how many schools have LAN/WLAN capacity and coverage in the following areas:  Completely sufficient to support the educational or library activities conducted there  Mostly sufficient to support the educational or library activities conducted there  Sometimes sufficient to support the educational or library activities conducted there  Rarely sufficient to support the educational or library activities conducted there  Not sufficient to support the educational or library activities conducted there 82

83 Filing Process FCC Form 471 – Additional data collected (Block 5 - level), e.g.: Wide Area Networking (not required on consortia applications) For those schools that do not have sufficient LAN/WLAN capacity and coverage to support the educational objectives or library activities conducted at that location, is the reason (check all that apply): 83 1.Equipment too costly 2.Installation too costly 3.Broadband connection speed to building is too slow 4.Inadequate local area network (LAN) services/internal networks and wiring 5.Outdated equipment 6.Lack of training and technical support 7.Inconsistent service/frequent outages and down time 8.Physical structure or layout of building(s) 9.Other: _________________

84 Filing Process FCC Form 471 – Additional data collected (Block 4 - level), e.g.: State local education agency (LEA) ID State school ID Number of students that attend full time or part time An indicator of whether the school is a charter school An indicator of whether the entity is tribal An indicator of any alternative discount mechanisms that are used, such as the Community Eligibility Option under the National School Lunch Program (NSLP) 84

85 Filing Process Templates will be available for applicants to prepare parts of the form: – Templates will be specific to type of recipients of service or Item 21. – Formatting and dropdowns will be embedded to make uploads easier. – Modification of data (e.g., stripping headers and saving as *.CSV files) not required. 85

86 Filing Process Any Questions? 86


88 July Report and Order To make the E-rate application process and other E- rate processes fast, simple and efficient – Simplify the invoicing and disbursement process by: Allowing direct invoicing (BEAR) Adopting an invoicing deadline 88

89 Reimbursements & Invoicing BEAR payments are now processed by electronic transfer payments directly to applicant accounts. – Effective FY 2016 – Applicants provide account info to USAC – “…payments will not be made to consultants...” – “…service provider will be required to certify…” 89

90 Extensions “…Single one-time invoicing extension for any given funding request, provided the extension request is made no later than what would otherwise be the deadline for submitting invoices: the latter of 120 days after the last day to receive service, or the date of the FCC Form 486 notification letter.” Applicants may “…Request and automatically receive…” one extension per FRN. 90

91 Appeals Appeals must be filed first with USAC. After USAC denies appeal, then file with FCC. Appeals for invoicing deadline extensions: – “…We expect the Bureau and USAC to deny any requests or appeals seeking an invoicing deadline extension of more than 12 months after the last date to invoice.” Waiver requests made directly to the FCC. 91

92 Document Retention 10 Years From last day of service Applied across the board Digital records recommended USAC indicates that online record system is planned for future funding years. 92

93 Questions? 93

94 Craig J. Nichols, Secretary 94 REVIEW

95 What Changed? Priority One becomes Category One Priority Two becomes Category Two All school buildings and programs share the districtwide discount Voice services will be phased down by 20 percent per year for the next 5 years Cost allocation requirement for bundled devices 95

96 What Changed? First ever budget limitations on Category Two Flat-rate calculations for Category Two budget over 5 years = Schools: $150 per student Libraries: $2.30 per sq. ft. or $5.00 per sq. ft. Ninety percent discount becomes 85 percent max discount in Category Two Document retention increased from 5 to 10 years BEAR payments become direct from USAC in 2016-17 E-rate applications and correspondence 100 percent paperless by 2017-18 96

97 What Changed? Requirement to amortize Category One special construction charges in excess of $500,000 over multiple years suspended for four years Allows payment of non-discounted portion of non-recurring construction costs over multiple years Equalizes treatment of dark and lit fiber Permits self-construction, adds 10% match to state funding Mandates equitable broadband rates from High Cost/ CAF providers Annual cap: $3.9 billion adjusted annually for inflation Category Two annual funding target: $1billion Urban/ rural definition based on decennial U.S. Census with allowance for small urban clusters and urbanized are 97

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