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E-Rate Central & E-Rate Exchange E-Rate Overview, Update, and Key Issues Lower Hudson RIC November 3, 2004 11/1/04.

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Presentation on theme: "E-Rate Central & E-Rate Exchange E-Rate Overview, Update, and Key Issues Lower Hudson RIC November 3, 2004 11/1/04."— Presentation transcript:

1 E-Rate Central & E-Rate Exchange E-Rate Overview, Update, and Key Issues Lower Hudson RIC November 3, /1/04

2 E-Rate Central & E-Rate Exchange Workshop Agenda Brief overview of E-rate program What’s new for FY 2005 Review of new Form 470 and Form 471 Selected topics –Basic maintenance –WANs –Compliance issues LHRIC consortium issues

3 E-Rate Central & E-Rate Exchange General Framework 20-90% discounts on three types of services: –Telecommunications –Internet Access –Internal Connections (Networking) Annual applications for funding –Annual cap of $2.25 billion – plus roll-over –Priority 1: Telecom and Internet Access – Full funding –Priority 2: Internal Connections – Allocated funding Basic SLD overview –http://www.sl.universalservice.org/overview

4 E-Rate Central & E-Rate Exchange Eligible Services Telecommunications –Basic telephone (local, long distance, and mobile) –Advanced telecom (Centrex, T-1, WANs, etc.) Internet access (not content) Internal Connections –Network wiring –Servers, routers, hubs, switches –PBXs and key systems

5 E-Rate Central & E-Rate Exchange Important source of technology funding (FY 1998 – 2004) – $13.1 billion nationwide – $1.9 billion for NYS Time-consuming, bureaucratic, and confusing program – Forms 470, 471, 472, 479, 486, and 500 – Service eligibility and discount rate issues – Long lead time, competitive bidding procedures – Strict application review process – Additional procedures for consortiums – Program may not be for everyone Funding freeze status E-Rate Opportunities and Issues

6 E-Rate Central & E-Rate Exchange Basic E-Rate Cycle Pre-Commitment Form 470-Describes services required (fall) -Posted on SLD Web site Form 471-Calculates allowable discount rate (winter) -Requests funding for specific services -Requires billing or contract documentation PIA-Detailed SLD review of applications (spring/summer) -Often requires additional documentation

7 E-Rate Central & E-Rate Exchange Basic E-Rate Cycle Post-Commitment Form 486-Confirms use of approved services (summer) -Certifies tech plan and CIPA compliance -Appeals and SPIN Changes as required Funding Alternatives (throughout year) SPI -Service provider discounts bills (Form 474) -Schools pay only undiscounted amount BEAR -Discounts reimbursed after the fact (Form 472) -Based on actual bills paid

8 E-Rate Central & E-Rate Exchange Critical Deadline Issues Form 470 (Allowable Contract Date) 28 days after SLD posting Form 471Filing window closes 2/4/2004 PIA or invoice review inquiries7 day response cycle Tech plan and CIPA complianceService start date (usually July 1) Form days after service start or FCDL (often October 29) Service deliveryJune 30 or September 30 (unless extended) Invoices (BEARs or SPIs) 120 days after last day of service or 486 notification (often October 28) Appeals (SLD or FCC) 60 days after decision

9 E-Rate Central & E-Rate Exchange Benefits of Filing Online Available for Form 470, Form 471, and Form 486 Provides check on field information Direct entry or interview mode Important: Must use electronic signature or mail signed certification page to SLD

10 E-Rate Central & E-Rate Exchange What’s New for FY 2005 Increased focus on waste, fraud, and abuse –New compliance rules and procedures –1000 site visits All new forms –New formats –Revised and expanded certifications –Clarified rules on technology plans and budgets New “2 in 5” rule on Internal Connections Contracts and LOA requirements “NCES” Codes and FCC Registration Numbers

11 E-Rate Central & E-Rate Exchange Site Visits: Purpose “Robust after the fact physical site review to help curb waste, fraud, and abuse.” –Evaluate procurement process –Review deployment results “Enhanced outreach to the school and library community.” –Identify new outreach requirements –Identify “best practices”

12 E-Rate Central & E-Rate Exchange Site Visits: Process Random selection based on recent invoices Applicant notification 1-2 weeks before visit –SLD will provide list of documentation required Visits will be “short and focused” –Target is one-day review Key “audit” issues –Competitive procurement practices –Applicant invoicing –Equipment installation and use –Other resources

13 E-Rate Central & E-Rate Exchange New “2 in 5” Rule for IC Internal Connections funding is available only for two years of any five year period –FY 2005 is the first year –Limitation is on an individual entity/site basis Restriction excludes basic maintenance –Maintenance becomes a new category of service –Leasing is NOT excluded Planning considerations –Shared services count for all included entities –Any amount counts for the year — 1¢ or $1 million

14 E-Rate Central & E-Rate Exchange Contracts and LOAs Contracts must be signed and dated by both parties –Quotes are not sufficient without covering contract letter –Multi-year tariffs may be treated as contracts Letters of Agencies (“LOAs”) required before filing –For consultants and consortium members –Should be service specific –Should not be for longer than a two year period

15 E-Rate Central & E-Rate Exchange “NCES” Codes and FRNs ID codes required on FY 2005 Form 471 –NCES Codes for public schools –FSCS Codes for libraries –PSS Codes for private schools –No guidance yet for separate administrative sites (“NIFs”) FCC Registration Numbers required for all entities –Required under the Debt Collection Improvement Act –Needed for implementation of FCC “red light” rule –Not used on FY 2005 forms, but technically required by 11/1/04 –At least one/applicant; maybe one/site –Awaiting further SLD/FCC guidance

16 E-Rate Central & E-Rate Exchange What’s New for FY 2005, cont. Form color for FY 2005 is BLUE Ms. Smith has retired

17 E-Rate Central & E-Rate Exchange Form 470: Purpose Identifies applicant Describes services needed Must wait 28 days after filing –Select vendors and sign contracts –File Form 471

18 E-Rate Central & E-Rate Exchange New on Form 470 Service descriptions required for RFP BEAR/SPI preferences New basic maintenance category New certifications Authorized person’s employer identification Relaxed minimum process standards for paper filings

19 E-Rate Central & E-Rate Exchange Form 470: Block 2 Examples

20 E-Rate Central & E-Rate Exchange Item 20: Tech Plan Must have a plan before filing –EETT or five components –Covering the year –Covering all types of E-rate services –Including budget: revenues and expenses Must have an approved plan before services start –Generally by July 1, 2005 –Approval good for up to three years

21 E-Rate Central & E-Rate Exchange Item 21: Procurement Services must be competitively bid –Form 470 posted for at least 28 days Selection must be cost-effective –Price must be primary factor Records must be kept for five years

22 E-Rate Central & E-Rate Exchange Bid Assessment Matrix

23 E-Rate Central & E-Rate Exchange Item 22: Purpose Services must be for educational purposes Restrictions on resale or transfer “Free services” prohibition to assure applicant pays non-discounted amount

24 E-Rate Central & E-Rate Exchange Item 23: Resources Must have supporting resources –Computer hardware and software –Training –Maintenance –Electrical capacity Dollar amount must be quantified –In Selective Reviews –In Form 471 Certification

25 E-Rate Central & E-Rate Exchange Other Certifications Item 19: Eligible Entities Item 24: Authorization to order and file Item 25: Compliance with FCC, state, and local procurement rules Item 26: Penalty acknowledgment

26 E-Rate Central & E-Rate Exchange Form 471: Purpose Calculation of discount rate(s) Requests specific discount on each tariffed, monthly, and contract service Separates eligible from ineligible costs An important and complex form

27 E-Rate Central & E-Rate Exchange New on Form 471 Simplified service impact blocks Single Block 4 discount worksheet –Different columns and sections used for different applicants –“NCES” Code requirement –Special check boxes for special schools and alternative measures New check boxes on Block 5 requests New certifications Authorized person’s employer identification Relaxed minimum process standards for paper filings

28 E-Rate Central & E-Rate Exchange Block 4: Discount Rates Based on need –Poverty ∙ Defined by National School Lunch Program –Location ∙ Rural vs. Urban All flow from individual school data School districts use weighted average of school discounts Libraries use aggregate school district data

29 E-Rate Central & E-Rate Exchange Discount Percentages % of Students Eligible for School Lunch Program Discounts

30 E-Rate Central & E-Rate Exchange Features: –Search feature for individual school or group –Data available on month-by-month basis –Pro forma enrollment numbers for Provision II schools –Note: Must use with Internet Explorer, not Netscape NYSED Web Site for School NSLP Enrollment Data

31 E-Rate Central & E-Rate Exchange

32 Participation vs. Eligibility: Alternative Measures Comparable measures (milk/breakfast programs, Medicaid/public housing data) Sibling searches Survey (can extrapolate from 50% response rate) Feeder system not approved Note: SLD reviews using state lunch program participation data, so document all higher eligibility data

33 E-Rate Central & E-Rate Exchange New on Block 5 New Priority 2 category for maintenance Special check boxes for: –Duplicate funding requests (requires prior year FRN) –Non-contract services –Master contracts –Multi-year contract continuation (requires prior year FRN) –Multiple billing accounts (requires attachment)

34 E-Rate Central & E-Rate Exchange Item 21 Attachments Required to describe and document actual services requested on Block 5 Types of documentation –Copy of contract –Vendor quote or bill –Applicant-provided description –Eligible Products database may provide Item 21 attachment

35 E-Rate Central & E-Rate Exchange SLD Telecommunications Example

36 E-Rate Central & E-Rate Exchange 470-Type Certifications Item 24: Eligible entities Item 26: Technology plans Item 27: Competitive bidding Item 28: Procurement rules Item 29: Educational purpose Item 32: Record retention Item 33: Authorization Item 34: Penalty acknowledgment

37 E-Rate Central & E-Rate Exchange Item 25: Resources Must have supporting resources –Computer hardware and software –Training –Maintenance –Electrical capacity Requires budgeted amount for these resources Special “killer” check box for vendor funding –See related certification in Item 37

38 E-Rate Central & E-Rate Exchange Item 30: Compliance Catch-all for overall program compliance Signed contracts for all services –Except tariff and MTM Certification penalty acknowledgment

39 E-Rate Central & E-Rate Exchange Other Certifications Item 31: Eligible Entities - Particularly important for consortiums Item 35: Eligibility allocation Item 36: Compliance with “2 in 5” rule Item 37: Non-discount payments

40 E-Rate Central & E-Rate Exchange Selected Topics Basic Maintenance WANs Compliance Issues

41 E-Rate Central & E-Rate Exchange Basic Maintenance What is “basic” maintenance? “Without the maintenance, the connection would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace.” Generally eligible: Repair and upkeep of eligible hardware Wire and cable maintenance Basic technical support Configuration changes.

42 E-Rate Central & E-Rate Exchange Basic Maintenance, cont. NOT eligible: On-site technical support –i.e., contractor duty station is at the applicant site –When off-site technical support can provide basic maintenance on an as-needed basis Help Desks –Providing a comprehensive level of support beyond basic maintenance, even if only for eligible components

43 E-Rate Central & E-Rate Exchange Basic Maintenance, cont. NOT eligible, cont.: 24-hour network monitoring Network management Technical support contracts that are more than basic maintenance.

44 E-Rate Central & E-Rate Exchange Basic Maintenance, cont. Question #1: Eligible or Ineligible? Hardware maintenance contract (“break/fix”) for 40 routers, 200 network switches, 50 eligible file servers, and internal network cabling. Answer: Eligible as basic maintenance if: Components are all eligible Services are cost effective Agreement provides make, model, and location

45 E-Rate Central & E-Rate Exchange Basic Maintenance, cont. Question #2: Eligible or Ineligible? Technical support described as “basic maintenance” that provides break/fix, configuration changes, and network monitoring and management. Answer: Ineligible A funding request for these services would be denied in full because the services go beyond basic maintenance as defined by the FCC. The ineligible components are network monitoring and management.

46 E-Rate Central & E-Rate Exchange Technical Services Conditionally eligible Technical Services: Design & Engineering Installation Project Management Training To be eligible, services must be: Basic Necessary for installation and initial configuration Coincident with (occurring at the same time) Part of the same contract or bid as the related products and services

47 E-Rate Central & E-Rate Exchange WANs and On-Premise Equipment WAN eligibility requirements –Service of a telecommunications carrier (with a “Y”) –Not purchased (or equivalent) –Installation charges >$500K amortized WAN eligibility issues –Exclusive use (non-rural) –Dark fiber systems –Internet allocation –On-premise equipment

48 E-Rate Central & E-Rate Exchange WANs and On-Premise Equipment, cont. On-premise equipment is Priority 2, unless: –Integral component of Telecom/Internet service –Provided by same vendor –Maintained by same vendor –Ownership will remain with vendor –Installation < 67% of total charges –Used only for eligible Priority 1 service –Independent of applicant’s internal network –Non-exclusive usage

49 E-Rate Central & E-Rate Exchange Program Compliance Issues Greater focus on “waste, fraud, and abuse” –PIA scrutiny, including selective reviews –Audits by SLD, FCC, and contractors –Vendor investigations by SLD, FCC, DOJ, etc. Consequences for applicants and vendors –Denied or reduced funding –Delayed funding decisions –Retroactive commitments (“COMAD”) –Criminal indictments

50 E-Rate Central & E-Rate Exchange Applicant Reviews Increasing review of all E-rate forms Data entry of mailed applications –Problem resolution review –Minimum processing standards issues Program Integrity Assurance (“PIA”) –Requests for supporting documentation –Seven day response cycles –Selective (or Item 25) Reviews On-site audits

51 E-Rate Central & E-Rate Exchange Selective Reviews Special PIA review team –Typically initiated with 14 page fax of questions and instructions. Sample available at: –Target criteria: “Large” requests or suspected vendor problems Areas of concern –Technology plans –Budget to cover all needed resources (see Form 471 Item 25) –Competitive procurement (bids and evaluations) –Consultants –Contracts

52 E-Rate Central & E-Rate Exchange On-site “Beneficiary” Audits In-depth, on-site audits –USAC staff or FCC’s OIG staff –Professional outside auditors (e.g. KPMG) –Approximately 100+ full on-site audits this year –1000 site “visits” –Target criteria: Random (with weighted probabilities) or suspected problems Areas of concern –Technology plans– Supporting resources –Discount rate– Invoices –Competitive procurement– Equipment verification

53 E-Rate Central & E-Rate Exchange Required Recordkeeping Technology plan and approval letter Application documentation –NSLP data –Budget for Item 25 resources –Backup for Item 21 attachments –PIA submissions –All forms and attachments Bids and evaluations (incl. losing bids or “no” bids) Contracts Delivery, testing, and asset inventory records Invoices and proof of payment

54 E-Rate Central & E-Rate Exchange SLD Help Web: Help lines: (General) (Fax questions) universalservice.org Web: Weekly news (via ) Help lines -- Fax: e-ratecentral.com OGS: NYS Help


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