1. FY 2015 Roadshow E-rate 2.0 E-rate!

2. FY 2015 E-rate Cap – How much funding will be available Discount rate Eligible services Budget for Category 2 services Direct Connect schools and/or libraries Contracts Forms

3. Form Review Team

5. FY 2015 Funding Cap $2,400,000,000Previous Cap $1,500,000,000Additional funds $3,900,000,000New Cap $1,000,000,000Additional C2 Funding $4,900,000,000Funding available for FY15 and FY16

6. The December 11 th Order COULD YOU TALK A LITTLE BIT MORE ABOUT THE ABILITY OF SCHOOLS TO BUILD THEIR OWN NETWORKS? IT SEEMS IF IT'S NOT COST EFFECTIVE THEY CAN BUILD THEIR OWN, IS THAT RIGHT? RIGHT. SO THE -- WHAT THE COMMISSION ADOPTED TODAY ESSENTIALLY MAKES A SELF- CONSTRUCTED NETWORK, SELF-CONSTRUCTED CONNECTION AN ELIGIBLE E-RATE SERVICE, JUST LIKE ASKING FOR A REGULAR CONNECTION FROM, SAY, THE LOCAL CARRIERS TODAY. IT IS SUBJECT TO ALL OF THE CORE E-RATE PROGRAM SAFEGUARDS, KIND OF THE MOST FUNDAMENTAL ONE IS IT HAS TO BE SHOWN TO BE THE MOST COST EFFECTIVE WAY TO MEET THE DESIRED SERVICE LEVEL. AND I THINK THE BEST WAY TO ILLUSTRATE THAT IS AN E-RATE A SCHOOL OR WHATEVER GROUP OF SCHOOLS IS APPLYING, YOU PUT OUT AN R.F.P. FOR BID. TO QUALIFY FOR THIS, YOU WOULD HAVE TO SOLICIT BIDS FROM ALSO, SAY, THE LOCAL CARRIER F. THAT WAS AN OPTION. YOU COULDN'T JUST SAY, I ONLY WANT TO DO THIS. AND SO WE'LL HAVE TO REALLY SEE WHAT KIND OF PROPOSALS COME IN, AND WHO CHOOSES TO USE IT. BUT I THINK THE NATURE OF SAFEGUARDS, YOU KNOW, THE EXPECTATION IS THAT BY FAR THE MOST STRAIGHTFORWARD EXAMPLE WHERE THIS WOULD BE FOUND TO BE COST EFFECTIVE IS IF THERE IS NO EXISTING NETWORK. AND SO THERE WAS A SURVEY THAT WAS DONE THAT'S IN THE RECORD THAT SAID 6% OF SCHOOLS SEEKING HIGH SPEED BIDS GET NO BIDS. SO THAT WOULD BE AN EASY ONE WHERE WE WANT TO HAVE A TOOL SO THAT THOSE SCHOOLS HAVE SOMETHING TO TURN TO. BUT CERTAINLY OUR EXPECTATION IS THAT WILL BE A SMALL NUMBER OF SCHOOLS WILL NEED TO DO THAT, BUT WE THINK IT'S A REALLY IMPORTANT TOOL FOR THOSE WHO DO.

7. The December 11 th Order WHAT THE CHAIRMAN WAS TALKING ABOUT, THE SITUATION WHERE ONE SCHOOL DISTRICT PAYS, LIKE, 10 TIMES AS MUCH AS THE NEXT SCHOOL DISTRICT OVER S THAT PART OF THE RATIONAL? RIGHT. SO I MEAN, I'LL JUST QUOTE OUR BOSS A MINUTE AGO. COMPETITION, COMPETITION, COMPETITION. SO THAT SAME SURVEY THAT SAID 6%, THAT SAME SURVEY FOUND THAT 26% ONLY GET ONE BID. AND I THINK E-RATE PAYS A HEALTHY SUBSIDY, BUT YOU AS THE LOCAL SCHOOL DISTRICT STILL HAS TO PAY A PORTION OF IT. YOUR PORTION OF IT, IF IT'S AN OLD, MAYBE YOU'RE PAYING $500 A MONTH FOR SLOW SPEED, IT'S THE BID THOUGH IS $10,000 A MONTH, $15,000 A MONTH, WHICH IS WHAT WE SEE IN SOME CASES TODAY, THE IDEA OF HAVING OTHER TOOLS SO THAT YOU AS THE SCHOOL BUYER CAN GET SOME COMPETITION GOING IN YOUR BIDDING. THAT'S WHAT THE CHAIRMAN WAS REFERRING TO AROUND OPTIONS AND HOW THAT RELATES TO AFFORDABILITY.

8. The December 11 th Order ONE FOLLOWUP. IF A SCHOOL DISTRICT HAS ACCESS TO A CONNECTION BUT IT'S SLOW, ARE THEY ONLY -- DOES THAT MATTER? LIKE, COULD THEY SAY, YOU KNOW, WHAT WE HAVE IS TOO SLOW, THEREFORE, WE WOULD LIKE TO BUILD OUR OWN? THAT'S -- I MEAN, I THINK THAT IS WHAT THE DYNAMIC WILL LOOK LIKE. THE CHAIRMAN REFERENCED MAYBE A THIRD -- IS THAT THE NUMBER HE USED, THAT'S THE NUMBER OF SCHOOLS THAT THE DATA SHOW -- A LOT OF THEM HAVE INTERNET ACCESS BUT NOT AT THE 100 MEGS TODAY SCALING TO A GIGABYTE WITHIN FIVE YEARS THAT WE'VE ADOPTED AS TARGETS. AND SO, RIGHT, THE IDEA IS LOCAL SCHOOLS, THE SCHOOL BOARD SAYS, WE WANT TO UPGRADE OUR NETWORK CONNECTIVITY. THE BID WE'LL PUT OUT WILL NOT BE FOR OUR OLD 10 MEGABIT CONNECTION, IT WILL BE FOR 100 MEGS. IF THE EXISTING PROVIDERS CAN PROVIDE THAT AT A GOOD PRICE, OUR EXPECTATION IS THEY'LL PROBABLY JUST KEEP DOING IT. WELL, IF THE RESPONSE BACK IS IT’S NOT AVAILABLE OR IT COSTS A LOT, SOME OF THE OTHER TOOLS THEN COME INTO PLAY.

9. E-rate Program Fall 2014 Applicant Trainings Simplifying Discount Calculations

10. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings10 Revised Discount Matrix Simplified School District Calculations School Calculations Library System Calculations Consortia Urban/Rural Classifications Alternative Discount Mechanisms Discount Exceptions Community Eligibility Provision Simplifying Discount Calculations Overview

11. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings11 Discounts are calculated for the organization as a whole. Discount rates do not change based on which entities within a district/system are receiving service. Libraries derive their discount from the NSLP eligibility of the district in which the main outlet is located. Consortia continue to use simple average of member discounts. Rural status is determined at the district/system level and only if more than 50% of schools or libraries are rural. Simplifying Discount Calculations New Discount Principles

12. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings12 Revised Discount Matrix Note lower top discount rate for Category Two services.

13. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings13 All schools in the school district get the same discount. – Simplifies process by not having to calculate multiple discount rates for different groups of schools. – When eligible, Non-Instructional Facilities (NIFs) get the same discount as the schools in district. – Single schools within a district never get their own discount rate, even if they are the only school receiving that service. – Urban/Rural status based on all of the schools in the district (not including NIFs). Simplifying Discount Calculations School Districts

14. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings14 Libraries get their discount based on the percentage of student eligible for the NSLP in the school district in which the main outlet is located. – No longer calculate discount based on all districts in which library system has outlets. Libraries calculate their own urban/rural status based on their own outlets. Therefore, the library system’s discount may not match the school district’s discount rate. – Bookmobile and kiosks count as library outlets. Simplifying Discount Calculations Libraries and Library Systems

15. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings15 By definition, NIFs are neither schools nor libraries. NIFs get the discount of the school district or library system, regardless of the entities they serve. NIFs with classrooms, like all other entities in the school district or library system, get the same district-wide discount. NIFs don’t get an urban/rural status – NIFs get their discount from the district/system, regardless of their physical location and are not counted in the urban/rural determination. Simplifying Discount Calculations Non-Instructional Facilities (NIFs)

16. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings16 Consortia calculate their discount based on the simple average of their consortia members. However, all consortia members now 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 FRNs, regardless of the entities served, get the same consortia-wide discount rate. Simplifying Discount Calculations Consortia

17. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings17 School District A (10 schools) – Total student population 3,000 students – Total students eligible for NSLP = 1,000 students – All but one of the schools are located in urban areas, so district = urban – 1,000 students eligible for NSLP/3,000 students = 33% eligible School District Calculations School District Discount Example

18. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings18 School District A School District Calculations School District Discount Example

19. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings19 Library System ABC – Has library outlets in School Districts A, B, and C. – Main outlet is located in School District A. Calculate NSLP eligibility based only on School District A’s population. – Determine own urban/rural status based on library outlets. Over 50% of library outlets are rural; therefore library system is rural. School District Calculations School District Discount Example

20. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings20 Library System ABC School District Calculations School District Discount Example

21. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings21 Voice Services Phase Down – All voice service (POTS, Centrex, VOIP, cellular voice, etc.) are subject to 20 percentage point reduction per year from your regular discount FY 2015 = Regular discount – 20% FY 2016 = Regular discount – 40% etc. Category Two Top Discount – Top discount rate = 85% instead of 90% Discount Calculation Exceptions Exceptions to Discount Calculations

22. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings22 ABC Charter High School – Total student population = 1,000 – Total student population eligible for NSLP = 800 = 80% students eligible for NSLP Category One Discount = 90% Category One Discount for Voice = 70% (90 - 20) Category Two Discount = 85% Advanced Discount Calculations One School; Three Discounts

23. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings23 (CEP) provides an alternative approach for offering school meals to local educational agencies (LEAs) and schools in low income areas, instead of collecting individual applications for free and reduced price meals. Allows schools that predominantly serve low-income children to offer free, nutritious school meals to all students through the National School Lunch and School Breakfast Programs (NSLP). http://www.fns.usda.gov/school-meals/community- eligibility-provision http://www.fns.usda.gov/school-meals/community- eligibility-provision Community Eligibility Provision (CEP)

24. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings24 Nationwide program to reduce NSLP paperwork burden. Schools must have at least 40% of their students directly certified to qualify for CEP – By April 1 of prior school year. All students eat free, but this does not mean they are counted as eligible for E-rate purposes. Must still determine eligibility percentage. Schools apply national multiplier (1.6) to directly certified population to determine NSLP eligible population. Schools are capped at 100% NSLP eligible for purposes of determining the E-rate discount. Community Eligibility Provision (CEP)

25. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings25 Districts report TOTAL student counts – Document student counts used to arrive at your total numbers for PIA and audit purposes.  Remember how you determined numbers for each school and summed to determine total student counts (School A = CEP, School B = participation for Oct 2014, School C = survey, etc).  Optional worksheet in online FCC Form 471 keeps numbers for you. Community Eligibility Program (CEP)

26. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings26 School population = 1,000 students 50% are direct certified = 500 students 500 students * 1.6 = 800 students eligible for NSLP 800/1000 = 80% of students are eligible E-Rate Discount level - 90% (Rural or Urban) CEP – Calculation

27. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings27 Discount Matrix

28. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings28 School District Example – Calculate student population for each school – Calculate NSLP eligible population for each school  May require calculation for CEP schools – Sum NSLP eligible population for entire school district – Sum student population for entire school district – Calculate percentage of students eligible in district – Determine urban/rural status of district – Look up discount rate in discount matrix Community Eligibility Program (CEP)

29. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings29 Mixed District – CEP & NSLP

30. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings30 Discount Matrix

31. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings31 Month One Data - MSIS Verification Webpage - Emailed Data Calculation Page will contain Simple Discount percentage E-Rate Census Discount Calculations

32. Simplifying Discount Calculations I 2014 E-rate Program Applicant Trainings Simplifying Discount Calculations Questions?

33. E-rate Program Fall 2014 Applicant Trainings Eligible Services

34. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings34 Eligible Services List (ESL) – Category One Broadband Voice Services Eliminated Services Eligibility Limitations – Miscellaneous Lit and Dark Fiber Pricing Transparency Bundling Order Eligible Services Overview – Category Two Internal Connections Eliminated Internal Connections Managed Internal Broadband Networks Basic Maintenance of Internal Connections

35. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings35 The FY 2015 Draft ESL was released August 4 th, 2014 – Comments were due 9/3/14 and reply comments were due 9/18/14 Streamlined – For FY 2014, the ESL was 49 pages – For FY 2015, the ESL is 8 pages – Divides services into Category One (those providing high-speed connectivity to the building) and Category Two (those services providing high-speed connectivity throughout the building) Eligible Services Eligible Services List

36. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings36 Focus support on Broadband Phase down of Voice Services Eliminates outdated legacy services and other former Priority One services Eligible Services Eligible Services List

37. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 37 ESL – Category One From Internet Access – Web Hosting – E-mail – Voice Mail Eliminated services From Telecom Services – Paging – Custom Calling Services – 900/976 call blocking – Inside Wire Maintenance – Directory Assistance – DID lines From Cellular – Text Messaging

38. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 38 Centrex Circuit capacity dedicated to providing voice service Interconnected VoIP Local, long distance, 800 service POTS Radio Loop ESL – Category One Satellite telephone service Shared telephone service Wireless telephone service including cellular voice – Excludes data and text messaging Eligible Voice Services Subject to Phase Down

39. If you are 90% 2015 = 70% discount (90%-20%) 2016 = 50% discount (90%-40%) 2017 = 30% discount (90%-60%) 2018 = 10% discount (90%-80%) 2019 = 0% discount (ineligible) (90%-100%) If you are 60% discount 2015 = 40% discount (60%-20%) 2016 = 20% discount (60%-40%) 2017 = 0% discount (ineligible) (60%-60%)

40. We have a 2 year cellular bundle plan under SMC for $59.95. It includes voice, data, texting, pictures…..and a free $600 (cost to the provider) iPhone 5s. Annual Pre-discount cost = $719.40. So, we first must cost allocate the ineligible phone for each year ($300 per year – let’s assume the FCC will allow us to cost allocate over the two year period). New pre-discount cost = $419.40. Then we have to cost allocate the data, which has been determined to be 50% ( of the plan. Newest pre-discount cost = $209.70. Highest discount would be 70% (90-20 for FY2015) and 50% (90-40) for FY2016. FY2015 FRN request = $146.79 (20% savings) FY2016 FRN request = $104.85 (15% savings)

41. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings41 Support is limited to those cases where individual data plans are the most cost-effective option for providing internal broadband access for portable mobile devices Funding is considered not cost-effective when users can already access the Internet through internal wireless broadband networks Off-campus use, even if used for an educational purpose, is ineligible for support and must be cost allocated out of any funding request. Exceptions may include library bookmobiles or where there is a very small number of students or patrons ESL – Category One Eligibility Limitations for Data Plans, Air Cards and Mobile Hotspots for Portable Devices

42. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 42 – Access points – Cabling – *NEW* Caching – Firewalls – Network switches – Routers – Racks ESL – Category Two – UPS – Wireless LAN Controllers – Improvements, upgrades and software necessary to support eligible broadband internal connections components Eligible Internal Connections *NEW*Subject to the Category Two five-year budget approach

43. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 43 o Circuit Cards/Components o Interfaces o Gateways o Antennas o Servers o Software ESL – Category Two o Storage Devices o Telephone Components o Video Components o Voice over IP components o Video over IP components Formerly Eligible as Internal Connections The following are no longer eligible for E-rate support:

44. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings44 Subject to the Category Two five-year budget approach Services provided by a third party – Operation – Management – And/or monitoring of eligible broadband internal connection components The third party may manage the school or library’s equipment or provide the equipment as part of a lease ESL – Category Two *NEW* Managed Internal Broadband Services (e.g. Managed Wi-Fi)

45. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings45 Eligibility Limitations – Supports only the equipment listed as eligible as a broadband internal connections component – Upfront charges as part of the contract are eligible Any ineligible internal connections components (e.g. content filtering) must be cost allocated out ESL – Category Two *NEW* Managed Internal Broadband Services (e.g. Managed Wi-Fi)

46. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings46 ESL – Category Two Wi-Fi; Minimum of 3 options: 1.Managed solution where a service provider owns, manages, monitors, installs and maintains the Wi-Fi equipment. The school or library leases the equipment as a managed service. 2.The school or library purchases the equipment but hires a service provider to manage, monitor, install and maintain the equipment, but the school or library retains ownership. 3.The school or library purchases the equipment and performs all related management, installation and maintenance of the equipment.

47. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 47 ESL – Category One

48. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings48 Schools and libraries unable to get fiber will be able to build out a private, district wide networks. This will only be available to those that cannot get access to fiber. (not to replace current leased services) It will have to be the most cost effective means of getting access to fiber. (competitive bid) Does not have to be a Telecom Provider or ISP, can be a Fiber Construction Company Starts in 2016 ESL – Category One Fiber – Waiting for Order, But Rumor has it

49. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings49 Transparency requirements for both E-rate recipients and vendors begin in FY 2015 Provides greater visibility into pricing and technology choices by peers Improves analyses performed by the Commission, state coordinators and third parties regarding the program’s effectiveness and potential improvement of cost-efficient purchasing Help identify best practices for purchasing and reducing waste Pricing Transparency Increasing Pricing Transparency

50. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings50 In order to create pricing transparency, Item 21 information entered in the FCC Form 471 will be publicly available Applicants may opt out of this public disclosure requirement only if a specific state law or statute, local rule, or other restriction, such as a court order or pre-existing contract, which bars publication of the purchasing price data Vendor contracts executed after the effective date of the Order may not contain any restriction barring publication of this pricing data Pricing Transparency Increasing Pricing Transparency

51. Eligible Services I Fall 2014 E-rate Program Applicant Trainings 51 On May 23, 2014, the FCC issued the Bundling Order effective for FY 2015 and forward Applicants must cost allocate non-ancillary components including, but not limited to, end user devices such as: – Telephone handsets – VoIP handsets – Computers – Cell Phones Bundling Order – Tablets – Netbooks – Laptops – Filtering The Bundling Order - DA 14-712

52. Simplifying Discount Calculations I 2014 E-rate Program Applicant Trainings Questions?

53. E-rate Program Fall 2014 Applicant Trainings Category Two Budgets

54. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings54 What are Category Two budgets? Which entities have budgets? How much is my budget? Can my budget change from year to year? What period of time does my budget cover? How are services counted against my budget? How do I allocate costs for shared services? Examples Category Two Budgets Overview

55. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings55 Each school or library receiving Category Two support will have a five-year budget for Category Two products and services (those that distribute broadband within schools and libraries). – Category Two products and services include Internal Connections, Managed Internal Broadband Services, and Basic Maintenance of Internal Connections. – Products and services ordered in excess of an entity’s Category Two budget will not receive E-rate discounts. – There is no budget for Category One services (those that connect broadband to schools and libraries). Category Two Budgets What are Category Two budgets?

56. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings56 Each individual school and each library outlet or branch has a pre-discount budget. School districts or library systems may not average their costs across multiple school or library budgets. Non-instructional facilities (NIFs) – including school NIFs with classrooms and administrative buildings – do not have pre- discount budgets. – If a NIF is essential for the effective transport of information to or within a school or library, the applicant must allocate the NIF costs to the entities benefiting from the service while the costs for ineligible services to a NIF should be allocated out. Category Two Budgets Which entities have Category Two budgets?

57. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings57 The pre-discount budget for a school is calculated by multiplying the total number of students at the school by $150, with a minimum of $9,200 if the school has fewer than 62 students. The pre-discount budget for a library is calculated by multiplying the total area in square feet – including all areas enclosed by the outer walls of the library and occupied by the library – by $5.00, with a minimum of $20,000 if the library is less than 4,000 square feet. Category Two Budgets How much is my budget?

58. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings58 Remember that 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. Category Two Budgets How much is my budget (cont’d)?

59. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings59 Your pre-discount budget in FY2016 is decreased based on the commitments featuring your entity (e.g., on your application and on any other application with your entity number, such as on a consortium application) starting with FY2015 commitments. – It could go up in FY2016 if your student count or square footage increases, or down if your student count decreases. Category Two Budgets Can my budget change from year to year?

60. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings60 For existing schools: If your student count decreases in subsequent funding years, you 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. For new schools: If you overestimate your student count and exceed the five year pre-discount budget based on your actual student count, you must return any funds in excess of the allowable budget to USAC. Category Two Budgets Can my budget change from year to year (cont’d.)?

61. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings61 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. Category Two Budgets What period of time does my budget cover?

62. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings62 Any funding commitments that include your entity as a recipient of service in FY2015 count against your pre- discount budget for that entity. If funding is remaining on a funding request, you can file an FCC Form 500 to return the funding to USAC. If entities are sharing the service, we will need specific information so that we know how to apply the returned funds to specific entities. Category Two Budgets How are services counted against my budget?

63. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings63 On the FCC Form 471, you indicate how funding 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) Category Two Budgets How do I allocate costs for shared services?

64. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings64 My District has 2400 students. How do I calculate my Category Two pre-discount budget? – 2400 students x $150 per student = $360,000 Elementary900 students @$150 = $135,000 Middle800 students @$150 = $120,000 High700 students @$150 = $105,000 Category Two Budgets Example 1

65. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings65 My library is 3,500 square feet. How do I calculate my Category Two pre-discount budget? – 3,500 square feet x $5.00 per square foot = $17,500. – However, there is a $20,000 floor. Since the result of the calculation is less than $20,000, the pre-discount budget is $20,000. Category Two Budgets Example 2

66. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings66 My school has 100 students and a Category Two pre-discount budget of $15,000. I plan to use the entire amount for FY2015. If we get 20 additional students for FY2016, how does this impact my pre-discount budget? Calculate the budget each year using the total number of students that year. – In FY2016, 120 students x $150 per student = $18,000. – Subtract the pre-discount amount used in FY2015 to determine the amount available in FY2016. Subtract $15,000 budget used in FY2015 from $18,000. – Available pre-discount budget for FY2016 is $3,000. Category Two Budgets Example 3

67. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings67 My library has a $23,000 pre-discount budget. We used exactly half for FY2015. However, we were eligible for a 50% discount in FY2015 but are eligible for a 70% discount in FY2016. What is in my pre-discount budget for FY2016? – Half of the budget ($11,500) was used in FY2015, so half ($11,500) remains for FY2016. – Because the budget is PRE-DISCOUNT, a change in the E-rate discount does not change the budget. Category Two Budgets Example 4

68. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings68 My school district has three schools – Elementary School with 25 students, Middle School with 50 students, and High School with 75 students. How do I correctly allocate a shared service with a pre-discount cost of $300? Category Two Budgets Example 5 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

69. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings69 On my FCC Form 471, I estimate that 90 students will attend a new school we are building. However, only 80 students actually register and attend. If I am at an 80% discount and I spent my entire pre- discount budget in FY2015, how much money must I return to USAC? – Original budget for FY2015 = 90 x $150 = $13,500 – E-rate discount of 80% is $10,800 in E-rate funding – Actual budget should have been 80 x $150 = $12,000 – E-rate discount of 80% would have been $9,600 – $10,800 - $9,600 = $1,200 to be returned. Category Two Budgets Example 6

70. Simplifying Discount Calculations I 2014 E-rate Program Applicant Trainings Category Two Budgets Questions?

71. E-rate Program Fall 2014 Applicant Trainings Maximizing Cost Effectiveness and Simplifying the Process

72. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings72 Competitive Bidding Exemptions Preferred Master Contracts Seeking Bids on behalf Consortium Members Simplified Application Process Invoice Deadline Extension Requests Overview

73. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings73 Preferred Master Contracts (PMC) The FCC has not yet designated any contracts as PMC Once the FCC does designate one or more PMCs, applicants seeking Category Two equipment are exempt from filing the FCC Form 470 if they purchase from PMC, required to include services available on the PMC in bid evaluations or both. Competitive Bidding Exemptions When is the FCC Form 470 not required? (cont’d)

74. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings74 Preferred Master Contracts (PMC) 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. State master contracts and nation-wide contracts are not the same as preferred master contracts The updated FCC Form 471 will have a check box to indicate you purchased from a PMC. Competitive Bidding Exemptions When is the FCC Form 470 not required? (cont’d)

75. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings75 Yes, consortium leaders may seek bids on behalf of members without purchasing the E-rate eligible services and equipment Consortium leaders must have authority to conduct the competitive bidding for consortium members. A Letter of Agency (LOA) is one way to show authority. Consortium Leader Can consortium leaders conduct competitive bidding?

76. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings76 Beginning in FY2015, technology plans are NO longer required to be eligible for E-rate support. The FCC, however, strongly encourages all applicants to carefully review existing plans given the many changes in the program resulting from the E-rate Modernization Order. Simplified Application Process When are technology plans required?

77. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings77 Yes, FCC Form 471 must be filed annually. There is no multi-year FCC Form 471. A simplified application process will be available for applicants who have a multi-year contract. They will not be required to complete a full FCC Form 471 during the subsequent contract years. – Must complete a full FCC Form 471 the first year you apply for discounts for that contract using the new FCC Form 471 – Indicate on the FCC Form 471 you have multi-year contract the first year you apply using the new FCC Form 471 Simplified Application Process Do I have to file FCC Form 471 annually?

78. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings78 – Contract cannot be longer than 5 years – Required to provide basic information during the subsequent contract years – Does not guarantee funding in the subsequent years – Required to explain changes to funding (e.g., discount change, services, etc.) Simplified Application Process Do I have to file FCC Form 471 annually? (cont’d)

79. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings79 Simplified Application Process Do I have to file FCC Form 471 annually? (cont’d) Contract Dates: 07/2015 – 6/2020 FY 2015 – Complete Full FCC Form 471 FY 2016 - Complete Simplified FCC Form 471 Contract Dates: 07/2013- 06/2018 FY 2015- Complete Full FCC Form 471 FY 2016 –Complete Simplified FCC Form 471 Contract Dates: 07/2015 – 06/2022 FY 2015 –Complete Full FCC Form 471 FY 2016 – Complete the Full FCC Form 471

80. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings80 Applicants should have a signed contract or legally binding agreement prior to filing the FCC Form 471. – Contract must be signed and dated on or before the FCC Form 471 certified postmark date – Legally Binding Agreement is acceptable when the applicant can demonstrate written offer and acceptance exist. Verbal offer and/or acceptance is not allowable. – Purchase Orders? Generally purchase orders do not meet USAC contract guidelines. We recommend that if applicants intend to use a purchase order as their contract, they check their state and/or local contract laws to ensure that purchase orders meet state and/or local contract requirements. Simplified Application Process Legally Binding Agreement

81. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings81 Rural schools and libraries may establish Direct Connections for the purpose of accessing high-speed broadband services. For example, libraries with low bandwidth within close proximity to a school with higher bandwidth could be added to the school’s WAN. If program rules need to be waive, schools and libraries should file a waiver request with the FCC for the purpose of seeking E-rate support for direct connections. Simplified Application Process How can rural schools and libraries share broadband services?

82. Simplifying Discount Calculations I Fall 2014 E-rate Program Applicant Trainings82 Direct Connections waiver requests should be filed with the FCC. For more information on how to submit a waiver request visit the FCC’s websiteFCC’s website Waiver requests can be filed now for the FY 2015 funding year Simplified Application Process How can rural schools and libraries share broadband services?

83. 100 meg@ $500

84. 1000 meg@ $750 Dark Fiber Lit Fiber Microwave We recognize that it will likely be necessary to waive some of our rules to allow E-rate support for such connections. We therefore encourage applicants to file waiver requests for the purpose of seeking E-rate support for such direct connections.

85. 1000 meg@ $750 Dark Fiber Lit Fiber Microwave Category 1 services Include Equipment as a managed service

86. http://www.usac.org/sl/applicants/beforeyoubegin/eligible-services/wan.aspx Waive what rules? Wide Area Network Rules – Leasing a WAN is eligible for Schools and Libraries Program support but building or purchasing a WAN is not eligible. – FCC rules provide that the actual wires that carry data across public rights-of-way and the components located outside a school or library facility are WAN components and are evaluated for eligibility under Telecommunications Services and Internet Access. USAC will not provide support on an agreement that is titled or described as a lease when, in effect, the terms of the agreement constitute a purchase. Factors evaluated when making this determination include whether the applicant has exclusive access to the WAN facilities, whether a lease-purchase agreement exists, and whether a substantial payment for upfront capital costs is part of the agreement.

87. Simplifying Discount Calculations I 2014 E-rate Program Applicant Trainings Questions?