Service Provider Training Schools and Libraries Division Eligible Services Service Provider Training Schools and Libraries Division April 18, 2007 – Atlanta • April 25, 2007 – Chicago

Overview Eligible Services List When to Cost-Allocate Service Substitutions The Importance of Clarity

The Eligible Services List ESL History Public Comment Period Introduction to the Categories of Service Special Eligibility Conditions On-Premise Priority One Equipment Wide Area Networks Amortization

History Why was the Eligible Services List created? As a reference for participants in the program to use to find out what E-rate will support How is the Eligible Services List created? Input from FCC Orders, USAC, and recommendations from the Public Comment Period When does the Eligible Services List get posted? The list will be posted at least 60 days prior to the opening of the filing window

Public Comment Period Things you can comment on: Note: Why comment? What services are eligible under the Commission’s current rules Things that can make the list more user friendly Note: This period is not intended to be a vehicle for changing FCC rules and policies Why comment? This is your opportunity to directly impact the ESL If the type service or product you’re providing is not on the list, it may not be funded

Categories of Service Telecommunications The transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received. Examples: ATM, T-1, Centrex, Local and Long Distance Telephone Service, Cellular Service and Paging Service

Categories of Service Internet Access Basic conduit access to the Internet or for services that are an integral component part of basic conduit access. Examples: T-1, DSL, DS-3, and Wireless service Eligibility also extends to E-mail and Web hosting services Rule of thumb: We fund the conduit to the Internet NOT content on the Internet

Categories of Service Internal Connections Components at the applicant site that are necessary to transport information to the school or library. Examples: Access Points, Routers, Switches, Hubs, Wiring, PBXs and Codecs We will fund the items that get the information to the classroom or room in the library, not the end-user equipment such as telephones or laptops

Categories of Service Basic Maintenance of Internal Connections Ensures the necessary and continued operation of eligible internal connection components at eligible locations. Ex: Repair and upkeep of eligible hardware, wire and cable maintenance. We will fund basic technical support of eligible hardware. We will not fund end-user support such as a student calling a help desk for technical assistance.

Categories of Service Miscellaneous Entries in this section should reflect the same category as the product or service being installed or obtained. Ex. Installation, training, shipping charges, and taxes Duplicative services are not eligible. Any service that is duplicative of a service already requested or being used by the applicant will not be eligible. Training is only eligible for eligible products or services and for eligible users

Special Eligibility Conditions This section contains information on the following: Ancillary use, Cost Allocation, Eligible Users and Locations, Internet Access with Ineligible Features, Leased Wide Area Network (WAN) Infrastructure, the Two-in-Five Rule, WANs, WAN vs. LAN Components.

On-premise Priority One Equipment What is it??? Equipment located on the applicant’s premise is presumed to be Internal Connections. However, the FCC’s Tennessee Order establishes that this presumption can be rebutted under certain conditions as part of an end-to-end Priority One Service.

Conditions of the Tennessee Order The leased on-premise equipment is an integral component of a Telecommunications or Internet Access service. The on-premise equipment will be provided by the same service provider that provides the eligible telecommunications or Internet access service of which it is a part. Responsibility for maintaining the equipment rests with the service provider, not the school or library. Ownership of the equipment will not transfer to the school or library in the future, and the relevant contract or lease does not include an option to purchase the equipment by the school or library.

Tennessee Order Cont’d 5. Upfront, capital charges of the eligible on-premise equipment are less than 67% of total charges (recurring plus non-recurring) in the funding year. 6. The equipment will not be used by the school or library for any purpose other than receipt of the eligible telecommunications or Internet access service of which it is a part. 7. The Local Area Network of the school or library is functional without dependence on the equipment. 8. There is no contractual, technical, or other limitation that would prevent the service provider from using its network equipment in part for other customers

On-Premise Equipment Is it possible for this Router to be eligible as Priority One equipment?

On-Premise Equipment Is it possible for this Router to be eligible as Priority One equipment?

On-Premise Equipment Is it possible for this Router to be eligible as Priority One equipment?

On-Premise Equipment Is it possible for this Router to be eligible as Priority One equipment?

Wide Area Networks Definition Exclusions WAN Diagrams Amortization

Wide Area Networks (WANs) FCC’s definition: A wide area network (WAN) is a voice, data, or video network that provides connections from one or more computers or networks within an eligible school or library to one or more computers or networks that are external to such eligible school or library.

WANs Cont’d Are there any exclusions? Yes, excluded from this definition is a network that provides connections between or among buildings of a single school campus or between or among buildings of a single library outlet or branch, when those connections do not cross a public right of way.

Wide Area Network???

Eligible Telecommunications WAN?

Eligible Internet Access WAN?

Why is this Ineligible?

Amortization Eligible telecommunications services and Internet access can include service provider equipment costs and/or a non-recurring charge for capital investment by the service provider. However, in cases where the upfront or non-recurring charge is greater than $500,000, this charge must be prorated over a period of at least three years.

Cost Allocation Why and When How Examples

Cost Allocation Why and When should I Cost Allocate? When a product or service contains ineligible components, a cost allocation may be used so that support can be provided for the eligible portion.

Cost Allocation How do I cost allocate? Several methods of cost allocation can be used, but they must be based on tangible criteria that provide a realistic result.

Cost Allocation Example 1: If you are installing the following: Routers, switches, a PBX, and an ineligible Paging system The paging system should have the costs associated with its installation removed from the request. This could be achieved by providing the typical number of hours it takes to install the system and the cost per hour.

Cost Allocation Example 2: Say you’re providing an eligible web-hosting and email service that contains ineligible web creation software If there is no separate cost that can be removed for the web creation software the straight line method can be utilized. Of the three services web hosting, e-mail, and software, 2/3rds are eligible, therefore 1/3rd should be removed from the request.

Cost Allocation Example 3: If a school is sharing a telephone line with their church Applicants can submit an estimate of the percent of use at each location in order to obtain funding for the eligible portion only.

Service Substitutions Definition Rules Global Service Substitutions FAQ’s Helpful Hints

Service Substitutions A service substitution is a change in the products and/or services specified in the Services Ordered and Certification Form, FCC Form 471. In certain limited circumstances, applicants or service providers may request and be approved for service substitutions.

Global Service Sub A Global service substitution can involve a product and/or service that is being discontinued, has a model number change, or is being replaced. In this case, the manufacturer or service provider may submit notification to USAC that the product or service is being changed, along with a listing of one or more replacement products or services.

Global Service Sub FAQ’s Can I substitute anything? Service provider-initiated service substitutions are designed to accommodate replacements that USAC can substantiate are near-identical. How do I benefit from submitting a Global Service Sub? You will be paid quicker. An Invoice with equipment different than the 471 requested equipment are rejected. Invoices that have the new product on file will not be rejected, which means quicker payment and less additional work to re-file an invoice.

Global Service Sub FAQ’s Do I receive any deadline extensions? Since a service provider-initiated service substitution does not reference any specific funding request, such service substitutions will not result in a change to an applicant's funding commitment, and no time extension for the completion of non- recurring services is provided under this approach. Can I specify applicants this Global sub affects? No. You can submit a batch of individual service sub requests which MUST be signed by the applicants. Go to www.usac.org, visit the Reference Area, Service Substitutions. Relevant info is in section two.

Helpful Hints Be sure to include your contact information, e.g. Name, phone number, fax and email. If submitting multiple products, track it with a spreadsheet showing your end-of-life/replacement products. Providing a digital copy can drastically improve processing time. manufacturerproducts@sl.universalservice.org

The Importance of Clarity Put on your PIA reviewer shoes and tell me what you think of the following scenarios

The Importance of Clarity Scenario #1 An applicant’s Priority One Service mentions equipment Scenario #1: If you were the one reviewing this request for eligibility, what would you want to know? Where is the equipment located? If on-premise make and model.

The Importance of Clarity Scenario #2 PIA receives a request for Dark Fiber Service with no mention of the provision of modulating electronics

The Importance of Clarity Scenario #3 PIA receives a telephone bill that gives no detail but states there are other charges

Summary Know where your services and products fit in the Eligible Services List Comment on the ESL Understand the Special Eligibility Conditions Utilize the ability to submit Service Substitutions if applicable Provide clear information as to what services or products you are supplying

The End

Questions???