1. © 2010 Verizon. All Rights Reserved. PTE14787 10/10 Verizon and E-rate: Committed to Education October 28, 2010 Presenters: Carlton Baker, Verizon - Strategic Initiative Manager Curt McClead, Verizon - Strategic Initiatives Janet Perkins, The Academy for Advanced Telecommunication and Learning Technologies - TAMU

2. 2 PROPRIETARY STATEMENT This document and any attached materials are the sole property of Verizon and are not to be used by you other than to evaluate Verizon’s service. This document and any attached materials are not to be disseminated, distributed, or otherwise conveyed throughout your organization to employees without a need for this information or to any third parties without the express written permission of Verizon. The Verizon and Verizon Business names and logos and all other names, logos, and slogans identifying Verizon’s products and services are trademarks and service marks or registered trademarks and service marks of Verizon Trademark Services LLC or its affiliates in the United States and/or other countries. All other trademarks and service marks are the property of their respective owners.

3. 3 Agenda IntroductionCarlton Baker Market Perspective Janet Perkins FCC Updates and StatusJanet Perkins Verizon: Committed to EducationJanet Perkins ResourcesCarlton Baker

4. Welcome Carlton Baker Strategic Initiative Manager

5. 5 Welcome and Introduction Janet Perkins, Master in Educational Psychology E-rate and Funding Resource Guidance via The Academy for Advanced Telecommunications and Learning Technologies at Texas A&M University Memberships and Boards include  Consortium for School Networking (CoSN),  United States Distance Learning Association (USDLA)  Internet 2  Association for Communications Technology Professionals in Higher Education (ACUTA)  Texas Center for Education Technology (TCET)  Irving Independent School District Foundation Board National Presenter at ~ 1,000 conferences/workshops in areas of funding  Collaboration and collaborative networking  Strategic technology planning and sustainably models  Emergency Preparedness - Safety and Security  Federal funding, Private and other Public Funding  Distance Learning Understanding and compliance to Universal Service Fund programs for Education, Healthcare, Consortium, and Homeland Security

6. © 2010 Verizon. All Rights Reserved. PTE14787 10/10 Market Perspective Janet Perkins Funding Contractor

7. 7 Educational Regulatory Mandates “No Child Left Behind” (NCLB) Initiative –Assists low-performing schools to help improve teacher quality & increase parental choice The "Children’s Internet Protection Act“ (CIPA/CHIP Act) –Internet Safety policies w/technology protection The Health Insurance Portability and Accountability Act (HIPAA) Family Educational Rights and Privacy Act (FERPA) –Federal protection of student records privacy Source: NCE Statistics & US Dept. of Education

8. 8 Trends Mobility – Mobile Phones, PDAs, Blackberry, smart phones –Twitter, Flickr, etc. Virtual World/Expanded Environments/Foreign Model & Research Recruitment, Retention, and Improved Services –Data analysis, Web Resources, Data Warehousing, etc. Safety and Security – Physical and Network –Employee and Student Records, Administrative Data, Redundancy and Disaster Recovery –Mass Communications, Safety and Security, Identification and Access Control systems, Two-way Radios, Policing, and RFID Evolution of Communication and Learning –Wikis, Flickr, Blogs, Facebook, Myspace, YouTube, etc. Collaboration – Regional and State Networkers –Content & “middleware” providers »Data, software applications, collaboration tools Source: National Center for Educational Data

9. 9 K-12 2011 Challenges Budget Shortfalls Reduced operational costs Address gaps in teachers & administrative resources Increased enrollment Increased demand on student performance, experience, and results Provide professional development & certification Manage campus access and safety Source: Digital Center for Education 2010

10. © 2010 Verizon. All Rights Reserved. PTE14787 10/10 FCC Updates and Status

11. Fund Year 2011 Updates Fund Year 2011 (Year 14): 7/1/2011-6/30/2012 Unsure of Application Window –May open early January instead of November/December »Preparing online system for new Form 471 »Recent FCC Changes –Expected to close Mid March 2011 Big Changes - Audit Program Revamped –No audits during the E-rate Window –Mostly off site –Program Quality Assurance (PQA) » Measures accuracy of payment to applicant and vendor » Most off site –Beneficiary and Contributor Audit Program (BCAP) »Determines if program rules follows 11

12. 12 FCC 6th Report: New Eligible Service Dark Fiber –Leased, Lit or Dark, eligible in Telecom or Internet Access Category (must light immediately) Providers –Common Carriers; State, Regional or Local Networks; Utilities, or Private Companies for voice, video or data – CIPA Compliance Conditions of Eligibility –Building of new fiber networks off school property –Installation (non-recurring) charges are eligible from school building to edge of school property »Unclear whether NRC costs can be bundled with MRC –Modulating electronics must be provided by the applicant and cannot be bundled with the cost of the service –Maintenance Ineligible –Purchase of excess capacity for future growth –Unbundled modulating equipment, leased or purchased –Construction beyond the property line Selection of Solutions should be –“ Apples to apples” comparison –Consider Total Cost of On-going Service (beyond the lease payments) Applicants Applying for Fiber –On Form 470, post for fiber or fiber-based services in both IA and Telecomm categories –On Form 471, file in either Telecom or Internet Access depending on type of provider selected 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

13. 13 Waiver Now Permanent FCC 6th Report: Order Waiver for Community Use of E-rate Services Schools may open their facilities to the general public to use E-rate supported services after school hours –Schools decide whether or not to provide such access –Service must primarily be for educational purposes –Schools cannot purchase additional services to support community use –Use must be incidental and not increase E-rate costs –Community use is limited to non-operating hours and only on campus –School personnel and students must have priority –Schools may not charge for use of services or facilities purchased through E-rate though they may charge a fee to offset ineligible costs (e.g., security, additional electricity, etc.) 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

14. 14 FCC 6th Report: Order EDU 2011 Pilot Program EDU 2011 – $10M Funded Pilots in FY 2011 Goals –Support innovative and interactive off-premise wireless device connectivity for schools and libraries –Gather information about issues affecting such use which can later be used for permanent rules –Strong preference given to those already implementing such programs –Competitive bidding rules waived for applicants who have legally binding agreements with existing providers –Other rules may be waived to the extent necessary to run the program –CIPA continues to apply Application –Description of current program –All costs associated with the program –Technology Plans –Explanation of CIPA compliance –Internal policies and procedures for Acceptable Use –Curriculum objectives –Student performance data collected on effectiveness and evaluation 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

15. 15 EDU 2011: How to Apply How to Apply –Two-step application process »FCC will publish due dates for first part of application process in a public notice »Applicants will then submit detailed information about their programs directly to the FCC »Applicants must then also apply for E-rate following the regular E-rate rules and timeframes FCC will select winners and will notify USAC –These applicants will not be required to cost-allocate Internet Access provided off-site – Applicants must still pay non-discounted share 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

16. 16 FCC 6th Report and Order: Additional Changes Educational Entities with Residential Campuses –Able to receive support for connections to the dormitories of schools that serve students facing unique challenges –Where 35% of population are eligible for NSLP The cap on E-rate funding, currently set at $2.25B per year indexed to inflation –The inflation adjustment for FY 2011 would an increase the cap by 1%, up $22.5M. –Fund Year 2011 ~$2,270,250,000 billion 2009 NPRM did not include guidance to the Extent to which online safety must be taught – may be left to each school –New CIPA Order should be released – should contain details of implementation requirements »Will likely be effective July 1, 2011 »Must address social networking »Be Aware - Vendors may claim they are FCC approved to provide training or that you are required to purchase their products to be compliant – Not So! Source: Action by the Commission September 23, 2010, by Report and Order (FCC 10-175)

17. 17 FCC 6th Report and Order: Technology Plan Changes Fund Year 2011 – Technology Plan no longer required for Priority One (Telecom and Internet Access) Still required for Priority Two services (Internal Connections and Basic Maintenance of Internal Connections) Changes to Form 470: –If P2 services already included in current tech plan, plan covers at least part of the upcoming funding year, then NO new tech needed prior to posting –If new P2 services requested are not in tech plan, then must have a written plan prior to posting Form 470 –Applicants citing a State-filed Form 470: »Not needed prior to posting of state-filed Form 470 –No longer need budget in plan 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

18. 18 New Form 470: Rule Changes Form 470 –New Question on Applicant Demographics: »Public, Private, Charter, Tribal, Head Start, or State Agency »Many unused questions removed (i.e., Item 7a-c - MTM/contract/Multi- year contract check boxes, Items 8b, 9b, 10b, 11b - BEAR/SPI preference, Item 15a, 15 F - Necessary resources) –Identify all Consultants »Consultants will be assigned a Consultant Registration Number (CRN) »Must be provided on form, consultant contact info and names –All applicants must continue to use the Form 470 process –New Form 470 will be available for use for FY 2011 »New form currently awaiting OMB approval »Applicants that file Forms 470 prior to effective date do not need to re- file »Applicants that file Form 470 after the effective date MUST use the new form 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

19. 19 New Rules: Disposal of Equipment Disposal or resale is permitted after five years after installation date –Applicants may receive payment or other consideration in return for disposal –Applicants are not required to use equipment for five years, nor are they required to dispose of equipment after five years. –No notification to USAC is needed, but update your asset registers –This does not change the requirement to report transfers of equipment made less than three years from purchase 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

20. 20 Fair and Open Competitive Bidding Rules Clarified New Order codifies that competitive bidding process –Must be fair and open –All potential bidders must have access to the same information and treated in the same manner –Additions or modifications to the Form 470/RFP must be communicated in a uniform manner –Applicant relationship with the service provider that unfairly influences the outcome of the competition or provides them with “inside” information is prohibited –Vendors cannot »Assist in the preparing, signing and submitting of Form 470 »Be listed as the contact on the Form 470 »Prepare applicants’ Form 470 or participate in the bid evaluation or vendor selection process in any way »Cannot not handle the competitive bidding process for an applicant 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

21. 21 Competitive Bidding Rules Clarification (cont’d) Gifts –Service providers and potential service providers may not provide gifts –Exceptions mirror Federal Government regulations 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

22. 22 SPIN Changes Pre-commitment SPIN changes –Corrective SPIN changes only (i.e., data entry errors) Post-commitment SPIN changes –Operational SPIN changes »Must have legitimate reason to change, such as Breach of Contract or provider unable to perform and »Must select provider with next highest point value in evaluation 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

23. 23 Telecommunications Services and Telecommunications: Priority One (a.k.a. P1) Shared Service to Facilities – Data Across Property Lines No longer requires Technology Plan Telecomm Services –Wireless, Cellular, Text Messaging/Paging –Basic Telephone, Long Distance, Voicemail –Data lines, ISDN, Frame Relay, Ethernet –Wide Area Network Services »No End User Equipment (handsets) »Leased (cannot be purchased) »Installation and Configuring  Strict cost limitations (~$500,000 capital per year) »Taxes and Fees –Lit Fiber –Dark Fiber (new) »In 2 categories in ESL »Telecomm Services ONLY provided by an eligible common carrier  On Form 470/471 as Telecommunications Services »Telecommunications can be provided by non-telecommunications carriers via fiber in whole or in part  On Form 470/471 as Telecom or Internet Access

24. 24 Interconnect Voice over IP – P1 or P2 *All services are “conditional” until approved by the SL Product or ServiceP1P2Eligible or Ineligible VoIP Equipment (switch, router & related equipment) XConditionally Eligible Call ManagerNAXConditionally Eligible Voice MailXXConditionally Eligible Client LicensesXXConditionally Eligible Voice GatewaysXXConditionally Eligible Broadcast ServerXXConditionally Eligible Control ServerXConditionally Eligible HandsetsXIneligible Archive ServerXIneligible

25. 25 Verizon Metro Ethernet with Network Configured Equipment About Metro Ethernet with Network Configured Equipment 1 Metro Ethernet with Network Configured Equipment solution aligns with the E-rate Priority 1 requirements. Highlights of the service include: Same service provider Maintenance is the responsibility of the service provider No transfer of ownership or lease-purchase option Initial capital costs cannot exceed certain thresholds On-site components cannot be used for any other purpose The local network is not dependent on the equipment Must allow sharing of facilities 1 Available in select areas of VA, MD, DC, PA, DE, NY, NJ, MA, RI, CT, TX, FL and CA.

26. 26 Wireless Services & Products CategoryProduct or ServiceEligible – Ineligible P1Wireless Data Service, WAN VPN & Portal Electronic Devices, Personal Communications Services (PCS) - Telephone Service, Tunneling to eligible sites ONLY Conditionally Eligible P2LAN – Wireless Access Points*Conditionally Eligible P1NAC/NIC/NID (EVDO) & Mi-Fi (gateway)Conditionally Eligible P2Masts, Antennas, Cabling – LANConditionally Eligible P1Point to Point WANConditional P1Technical Support – as a component of service – basic maint. ONLYConditional P1Mobile Devices, Personal Digital Assistant (PDA), Netbooks, Cellular Instruments Ineligible P1Two Way RadioIneligible P1End-point Security, Wireless IA Applications, Wireless IA service and data charges for a service that is solely dedicated to access an ineligible functionality (i.e., cellular data circuits used to support GPSs on busses or student attendance) Ineligible

27. 27 Internet Access – Priority One (a.k.a. P1) Dial-up and Broadband Access Wireless Internet Access –Ineligible: Wireless Internet Access Applications, Wireless Internet Access service and data charges for a service that is solely dedicated to access an ineligible functionality (i.e., cellular data circuits used to support GPSs on busses or student attendance) Text Messaging/Paging E-mail Web hosting Remains eligible –Functionality of discussion boards, instant messaging, Homework Hotlines and chat –Ineligible: Content, including searching of databases such as grade books, encyclopedias etc.; Support for applications necessary to run online classes or collaborative meetings IP and Voice over IP (VoIP) Telephony Should not be used as WAN –SLD funds the conduit to the Internet –NOT content on the Internet –No Computers/laptops/or netbooks

28. 28 Web Hosting – Content Products Either as P1 or P2 SLD Defines: Web hosting service that provides a means for a school or library to display content on the Internet. Funding is limited strictly to web hosting functions. CategoryProduct or ServiceEligibility P1 or P2Domain Name Registrations & Email Service, Basic firewalls that are bundled w/ IAConditionally Eligible P1Web Site Hosting & Traffic – Bandwidth - Basic ConduitConditionally Eligible P1 or P2Disk Space for storing applicant provided contentConditionally Eligible P1 or P2File Transfer Protocol (FTP) to upload files or web interfaceConditionally Eligible P1Intranet web hosting providing private web pages to authorized users ONLY. Enhanced Firewalls, Intrusion Detection and Prevention Devices and Anti-Virus and Anti-Spam software Ineligible P1Content, on-line collaboration tools - Software applications, end-user file storage, intranet web hosting, content editing features * cost allocation applies – (Computers (end user equipment) Ineligible P1 or P2RoutersConditional P1 or P2Distribution EquipmentConditional *All services are “conditional” until approved by the SLD

29. 29 Text Messaging/Paging Services – Notification Services P1 Paging Services –Paging services when integral, immediate, and proximate to the education of students located at eligible locations –Example – paging services used by a bus driver delivering students to school, a library staff member in a mobile van, and teachers on field trips. CategoryProduct or ServiceEligible – Ineligible P1 or P2Radio SignalEligible P1 or P2Paging ReceiverEligible P1 or P2Voice mail or voice messages, text, numericEligible

30. 30 Internal Connection – Priority Two – P2 School infrastructure purchases Components necessary to deliver voice, video, Internet and e-mail Must be on school property Limited use at administrative buildings »SLD funds items that get the information to the classroom or library »NO end-user equipment such as telephones (this includes IP telephones) or laptops

31. 31 Basic Maintenance of Internal Connections (IC) Basic Maintenance of Internal Connections –Maintain necessary and continued operation of eligible internal connection components at eligible locations. »Ex: Repair and upkeep of eligible hardware, wire and cable maintenance. –Rule of thumb: »Funds basic technical support of eligible hardware. »NOT end-user support such as a student calling a help desk for technical assistance.

32. 32 Warranties Ineligible –Unbundled Warranties »Separately priced warranties allows for broken equipment to be fixed or replaced –Scheduling services –Online backup solutions Eligible –Manufacturers warranties of no more than three years and included in the equipment purchase are eligible. –Funding requests for routine maintenance will continue to be funded. 6th Report and Order I 2010 Schools & Libraries Fall Applicant Trainings

33. Verizon: Committed to Education

34. 34 National Expertise One of the Largest Telecommunications Service Providers to Education Customers in the U.S. –4,000+ education clients –Will provide ~$372M during Fund Year 2010 (July 1, 2010 thru June 30, 2011) »Telecommunications and Internet access products and services to support academic, administrative, mobility and safety solutions –Alternative Funding Assistance »E-Rate assessments via strategic technology planning »Grant identification and resource development –Purchase Options »Volume Pricing »Multiple Year Contracts: Lease/Purchase »Month to Month/Tariff »National (MiCTA) or State Procurement Contracts  Website: http://www.verizonbusiness.com/us/govt/cust_sol/education/micta/http://www.verizonbusiness.com/us/govt/cust_sol/education/micta/

35. 35 Verizon Foundation Funding opportunities –Literacy –Digital Divide: Computer literacy for underserved communities –Economic Development: School to work, welfare to work, entrepreneurship, training –People with Disabilities: Creating innovative methods to participate in the educated workforce –Education/Scholarships: Programs that support K-12, teachers, college-bound students –Community Development: Local technology programs that support the diverse communities Verizon Foundation Awards ~$60 Million in Grants to U.S. annually

36. 36 Thinkfinity.org Verizon Foundation’s comprehensive online resource for educators and the literacy community –Introduced 3,650 new resources –Established a Thinkfinity.org presence in more than 1,700 schools –Launched a pilot after-school program in Boston, Chicago and Washington D.C. –Boosted employee volunteer participation by 68% and total volunteer hours 11% –Funded 58 grants devoted to literacy achievement »More than 3,600 teachers were trained on improving literacy skills »More than 21,600 students received literacy instruction Commercial-free and accessible anytime from anywhere at no cost by visiting www.thinkfinity.orgwww.thinkfinity.org

37. © 2010 Verizon. All Rights Reserved. PTE14787 10/10 Resources and Contact Information Carlton Baker Strategic Initiative Manager

38. 38 Verizon Business E-rate Resources Carlton Baker – Strategic Initiative Mgr. –972-550-4096 Office –817-905-0861 Cell –carlton.baker@verizonbusiness.comcarlton.baker@verizonbusiness.com SI Team: –Don Spaulding – Sr. Specialist – East »315-532-0207 Cell »donald.e.spaulding@verizonbusiness.com donald.e.spaulding@verizonbusiness.com –Tom Thompson – Sr. Specialist – West »714-393-2728 Cell »tom.t.thompson@verizonbusiness.comtom.t.thompson@verizonbusiness.com –Curt McClead – Sr. Specialist – Mid-Atlantic »919-623-6111 Cell »curt.mcclead@verizonbusiness.comcurt.mcclead@verizonbusiness.com –Tom Bostick – MicTA Contract »678/259-1464 Office »770/309-0651 Cell »Tom.bostick@verizonbusiness.com Janet Perkins – TAMU Contractor for E-rate & Other USF Programs & Funding Assistance –214/629-0236 Cell –lperkinsjanet@verizon.net E-rate Centers – Customer Billing & Service Issues: »East & Mid Atlantic  Harrisburg, PA – 800/547-5474 - Hours of Operation: Mon. – Fri., from 8 a.m. till 5 p.m. EST »West  Newbury Park, CA – 866/483-8858  Hours of Operation: Mon. – Fri., from 8:30 a.m. till 5 p.m. PST »VzB/VSSI/VNIC for CPE:  Donna Kuhn - 610/407-2233 Office  donna.l.kuhn@verizonbusiness.com »VzB/VSSI/VNIC for Internet Access; E-rate; Rural Health Care Programs & MRV Data Administration  Jeannine Tabb - jeannine.tabb@verizonbusiness.com  312/260-3120 Office Evonia Bennett – Settlements Admin-Manager –evonia.v.bennett@verizon.comevonia.v.bennett@verizon.com

39. 39 Questions? 39