E-Rate for Tennessee Intermediate/Advanced Applicants - PowerPoint PPT Presentation

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E-Rate for Tennessee Intermediate/Advanced Applicants


E-Rate for Tennessee Intermediate/Advanced Applicants Presented by: Kim Friends State E-Rate Coordinator for the Tennessee Department of Education – PowerPoint PPT presentation

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Title: E-Rate for Tennessee Intermediate/Advanced Applicants

E-Rate for TennesseeIntermediate/Advanced
Presented by Kim Friends State E-Rate
Coordinator for the Tennessee Department of
  • General Information
  • E-rate Technology Planning
  • Discount Calculations/Strategies
  • Eligible Services
  • Forms 470/471
  • Procurement/Competitive Bidding
  • Program Compliance and Updates
  • E-rate Gift Rules
  • Post-Commitment Processes

The Role of TN Dept. of Ed
  • TDoE has no statutory authority to administer the
    federal E-Rate program
  • TDoE only provides general information about the
    E-Rate program including training and outreach,
    reference materials, and other publicly available
    SLD/USAC resources

What is Kims Role?
  • Contracted with by TDoE to serve as TN State
    E-rate Coordinator
  • Provide outreach and training to applicants in TN
  • Represent TN before federal policymakers
  • Maintain TN E-rate website and listserve
  • Act as resource when E-rate administrator cant

Tennessee E-Rate Website
  • Intermediate/Advanced Presentation
  • E-Rate Technology Planning

Purpose of the Tech Plan
  • Tech plans ensure that schools and libraries are
    prepared to effectively use the requested
    services to integrate telecommunications and
    internet access into the educational program or
    library services that they provide to students.

Technology Plan Review
  • ONLY required if applying for Priority 2 funding
  • Plan must include four SLD technology plan
  • Goals and Strategies for using technology
  • Needs Assessment
  • Professional Development
  • Evaluation
  • Must align with funding requests
  • Must be written before 470 is filed
  • Be sure to document the existence of this draft
  • Must cover full 12 months of upcoming funding
    year (include dates!)
  • 3 year maximum

Must Do Reminders
  • Must be Written prior to posting Form 470
  • It must be documented that it is written before
    the posting of the form 470! (Applicant must
    document the existence of this plan, i.e., e-mail
    with plan attached, memo from cabinet level about
    the plan being written, including the date. DATE
  • Must include a sufficient level of detail and
    cover all services (priority 2) for which E-Rate
    discounts are being sought on the Form 470(s) and
    subsequent Form 471(s).
  • Must be approved by the start of services (July
    1) or the filing of Form 486, whichever is
  • E-rate Tech Plans must be approved by a USAC
    Certified Technology Plan Approver see USAC
    link http//www.usac.org/sl/tools/reference/tech/
  • Must include all four required elements (as noted

Additional Reminders
  • Service Providers may not act as technology plan
    approvers, write/create, or assist in the tech
    plan in any capacity (except as offering
    technology/provider neutral information only)
  • Remember to include in your tech plan all the
    services that you apply for on Form 470/471,
    required for Priority 2 (Internal connections
    and Basic Maintenance of Internal Connections)

Additional Reminders
  • There are some non-starters that will require
    revision (even to draft plans)
  • If your dates have not been changed throughout
    the entire document to reflect the period for
    which the draft is being written, revisions will
    be required
  • The TDoE and my office will be presenting a
    Technology Planning workshop toward the end of
    January, 2013 to help those of you who actually
    need your plans APPROVED before July 1, 2013.
  • Stand by for details

Tech Plan Help and Approval
  • Email your questions/concerns to the TennSEC
    office at kfriends_at_tennsec.com or
  • Email your draft plans for verification of
    receipt and review in anticipation of approval.
  • Tech Plan approval letters will be issued from
    the TN State E-Rate Coordinators Office.

  • Intermediate/Advanced
  • Presentation
  • Discounts

  • Calculating Your Discount
  • Schools/School Districts
  • Calculate the discount rate for each individual
  • School District average weighted average of the
  • Multiply E-Rate discount by total student
    population of the school to get weighted product
  • Add all weighted products and divide by total
    students in school district
  • Discounts are based on schools actually receiving
    services in the FRN (may not be all schools in
    the district)

  • Calculating Your Discount Using the Matrix

INCOME Measured by of students eligible for NSLP URBAN LOCATION Discount RURAL LOCATION Discount
If the of students in your school that qualifies for the NSLP... ...and you are in an URBAN area, your discount will be... ...and you are in a RURAL area, your discount will be...
Less than 1 20 25
1 to 19 40 50
20 to 34 50 60
35 to 49 60 70
50 to 74 80 80
75 to 100 90 90
  • Calculating Your Discount
  • Calculate the discount rate for each individual
  • School District average weighted average of the
  • Multiply E-Rate discount by total student
    population of the school to get weighted product
  • Add all weighted products and divide by total
    students in school district
  • Discounts are based on schools actually receiving
    services in the FRN (may not be all schools in
    the district)

Calculating Your Discount Individual School
  • Individual School uses straight Discount from

School District Discounts the Weighted
  • Weighted Average of Individual School Discounts

  • Calculating Your Discount
  • Non-Instructional Facilities (NIFs)
  • NIFs on the campus of single school/library and
    that serve only that entity, get the discount of
    that school/library (Separate entity number
    necessary only if located at a different physical
  • NIFs that serve multiple schools/libraries, and
    without classrooms or public areas, get shared
    discount for the school district/library system
  • NIFs that serve multiple schools and with
    classrooms use the snapshot method to get
  • Snapshot method Choose a specific day and
    determine the NSLP eligibility of the student
    population that is in class on that day
  • DOCUMENT your process

  • Calculating Your Discount - Strategy
  • Please refer to exercise Kim is showing

  • Alternative Discount Mechanisms
  • Alternative Discount Mechanisms
  • NSLP eligibility based on students family being
    at or below 185 of federal poverty levels
  • Income Eligibility Guidelines (IEG) published
    annually by U.S. Department of Agriculture
  • Other alternative discount methodologies seek to
    determine if a student meets the NSLP IEG

  • Alternative Discount Mechanisms
  • Acceptable Mechanisms
  • Programs that meet the IEG threshold for the
  • Medicaid
  • Food stamps (SNAP)
  • Supplementary Security Income (SSI)
  • Section 8 Housing Assistance
  • Low Income Home Energy Assistance Program
  • Food Distribution Program on Indian Reservations

Unacceptable Mechanisms
  • Programs that do not meet the IEG threshold for
    the NSLP
  • Temporary Aid to Needy Families (TANF)
  • Title 1
  • Scholarship programs

  • Alternative Discount Mechanisms
  • Sibling Match
  • If school can establish that one sibling in a
    family is eligible for NSLP, then it can count
    the other siblings in the same family as eligible
    for NSLP even if the other siblings do not
    participate .

  • Alternative Discount Methods
  • Surveys
  • Must be sent to all families whose children
    attend the school
  • Surveys must contain at least student and family
    name, size of family, income level of family or
    acceptable alternative mechanism
  • Surveys are valid for two years
  • NSLP application forms are never an acceptable
    survey instrument

  • Calculating Your Discount (Advanced)
  • Use the survey method
  • Can conduct family survey even if your school
    participates in NSLP
  • Must survey all families in the school
  • If more than 50 of surveys are returned, survey
    is considered valid and results may be
    extrapolated for entire school
  • Keep careful documentation
  • Beneficial for both public and nonpublic schools
    seeking funding
  • Use common sense when deciding whether to try to
    utilize the survey method

  • Alternative Discount Methods
  • Survey Extrapolation
  • If a survey is sent to all households of its
    students, and
  • If at least 50 of surveys are returned
  • School may extrapolate the data to 100 of its
  • Example
  • 100 families received the survey 75 returned
  • 25 of the 75 families are eligible for NSLP
  • 25/75 0.33
  • School can report 33 of all students are eligible

  • Alternative Discount Methods
  • Combining Alternative Discount Methods
  • Ensure that the same students are not double
  • Surveys cannot be combined with other alternative
    discount methods if you have extrapolated
  • Provisions 1-4 cannot be combined with other
    alternative discount methods since they include
  • Keep detailed records to show that the same
    students were not double counted

  • Alternative Discount Methods
  • Unacceptable Alternative Discount Calculation
  • Feeder School Method
  • Extrapolating from elementary to secondary
  • Principals Survey/Estimate
  • Based on administrators knowledge of some of
    their students
  • Title I eligibility alone
  • Neighborhood poverty measurements

  • Intermediate/Advanced Presentation
  • Eligible Services List (ESL)

  • New for 2013/2014
  • FCC changed their rule regarding designation of
    service for Telecommunications and/or Internet
    Access (P1) to indicate that the applicant is
    only required to check one of the two boxes on
    Form 470 as long as the services requested are
    described in sufficient detail to allow
    prospective service providers. Updated forms for
    next year expected to indicate only a single
    category of service as Priority One.

  • Priority One
  • Telecommunications Services
  • Local, long distance, cellular phone service and
  • Includes voice mail and custom calling features
  • Centrex, hosted VOIP phone service
  • Broadband services (WAN services)
  • T-1, PRI, Frame Relay, ISDN, leased lit and dark
    fiber, etc.
  • Installation of eligible telecom services
  • If installation is included on your application
  • Most taxes and surcharges
  • Telecommunications services must be provided by
    an Eligible Telecommunications Provider (ETP)
  • Exception Hosted VOIP and Fiber WAN services can
    be provided by non-ETP

  • Priority One
  • Not Eligible as Telecom Services
  • Broadcast Blast messaging
  • Monitoring services for 911, E911 or alarm
    telephone lines
  • Services to ineligible locations
  • End-user devices
  • Cell phone, tablet computers

  • Priority One
  • Internet Access (IA)
  • Support for IA includes Internet Service Provider
    (ISP) fees as well as the conduit to the Internet
  • Other eligible IA services include
  • E-mail service
  • Wireless Internet access
  • Interconnected VoIP
  • Basic Web hosting

  • Priority One
  • Not eligible as Internet Access
  • Costs for Internet content
  • Subscription services such as monthly charges for
    on-line magazine subscriptions
  • Internet2 membership dues
  • Web site creation fees
  • Web based curriculum software
  • Software, services or systems used to create or
    edit Internet content

Interconnected VoIP (aka Hosted VoIP)
  • Defined as a service that
  • Enables real-time, two-way voice communications.
  • Requires a broadband connection from the users
  • Requires Internet protocol-compatible customer
    premises equipment (CPE).
  • Permits users generally to receive calls that
    originate on the public switched telephone
    network and to terminate calls to the public
    switched telephone network.

Interconnected VoIP
  • Priority One Services
  • May be applied for in either Telecommunications
    or Internet Access on Form 470.
  • The Form 471 application category of service
    selection will be decided by the type of
    provider, whether ETC or not.

  • Priority Two
  • Internal Connections
  • Support for equipment and cabling on-site that
    transport information to classrooms or public
    rooms of a library
  • Subject to the Two-in-Five Rule
  • Entities can only receive funding every two out
    of five years

  • Priority Two
  • Basic Eligibility Conditions

  • Priority Two
  • Basic Maintenance of Internal Connections
  • Support for basic maintenance of eligible
    internal connections (BMIC) such as
  • Repair and upkeep of hardware
  • Wire and cable maintenance
  • Basic tech support
  • Configuration Changes
  • Agreements or contracts MUST state the eligible
    components covered, make, model and location
  • Service must be delivered within the funding year
  • July 1 June 30
  • Two-in-Five Rule does not apply to BMIC

  • Priority Two
  • BMIC Updated Guidance
  • Standard manufacturer warranties of no more than
    three years remain eligible as long as it is
    provided as BUNDLED (included) with the purchase
    of the device.
  • If there is a line item cost associated with the
    warranty, then the warranty is not eligible
  • Support for BMIC for hardware is limited to
    actual work performed under the contract

  • Priority Two
  • BMIC Updated Guidance
  • Applicants may make estimates based on
  • Hours per year of maintenance
  • History of needed repairs and upkeep
  • Age of eligible internal connections
  • Applicants using the factors listed above must
    submit a bona fide request
  • It is not reasonable to estimate an amount that
    would cover the full cost of every piece of
    eligible equipment.

  • Priority Two
  • BMIC Updated Guidance
  • Flat rate contracts may be eligible however,
    applicants may only invoice for services actually
    delivered/work performed.
  • Exceptions that will not require demonstration
    that work was performed are
  • Software upgrades and patches
  • Bug fixes and security patches
  • Online and telephone based technical support

  • Equipment Transfers
  • Equipment transfer rules
  • A transfer may occur three years or more after
    the purchase of the equipment to other eligible
  • No equipment transfer may occur prior to three
    years from the date of installation, unless the
    eligible entity is permanently or temporarily

  • Equipment Transfers
  • Equipment transfers less than 3 years
  • Notify USAC
  • Both the closing entity and the recipient must
    retain records of the transaction
  • Include the reason for the transfer
  • Records must be kept for five years after the
    date of the transfer
  • Records for equipment transferred after gt3 years
    follow the traditional document retention

  • Disposal of Equipment
  • Disposal of Equipment Rules
  • As of January 3, 2011, applicants can dispose of
    obsolete equipment, but no sooner than five years
    after the date the equipment is installed
  • Resale for payment or other consideration is
    allowable no sooner than five years after the
    equipment is installed
  • Resale or disposal is prohibited before the five
    years have passed.

  • Trade-ins and Exchanges
  • Trade-ins and Exchanges
  • Trade-ins of equipment may be permitted if the
    E-rate funded equipment to be traded in has been
    installed for at least five years
  • This limitation does not apply for equipment not
    funded through E-rate
  • Value of trade-in does not have to be shared
    with USAC.

  • Intermediate/Advanced
  • Presentation
  • Form 470

Form 470 Starts Competitive Bidding
  • Makes yourselves familiar with eligible services
    and various categories of service
  • Service or Function
  • MUST provide enough detail to encourage service
    providers to bid
  • Broaden scope plan for growth or reduction in
    number of eligible entities or bandwidth or
    number of lines
  • Any limiting or disqualification factors related
    to bidding should be identified unless on RFP

Killer Gotchas Funding DENIAL
  • Did not identify the correct service category on
    Form 470
  • Mostly relates to P2 services now.
  • Hint Always indicate BMIC when asking for IC
  • If you indicate that you dont have an RFP when
    you really do have one, and vice-versa

  • Intermediate/Advanced
  • Presentation
  • Competitive Bidding/
  • Procurement

Fair and Open Competitive Bidding is a Program
  • Avoid conflicts of interests
  • Independent Consultant vs. Service Provider
  • Applicant vs. Service Provider
  • Follow and UNDERSTAND the rules FCC, State and
  • Board Policy
  • Tennessee State Bidding rules and regulations
  • Master Contracts
  • Consortium Contracts
  • Document the process!!!

  • Competitive Bidding
  • Service providers CANNOT
  • Help prepare the Form 470
  • Help write or provide a RFP to applicant
  • Be a contact person on Form 470
  • Sign any applicant forms
  • Be involved with bid development or evaluation in
    any way
  • Provide funding for the applicant's non-discount
    portion or waive the applicant's non-discount
  • Coerce or pressure the applicant to use a
    specific service provider
  • Provide gifts to applicants that violate the gift

  • Competitive Bidding
  • Service providers CAN
  • Offer neutral technical assistance on development
    of technology plan
  • Cannot exert undue influence on applicant's
    ability to conduct a fair and open competitive
  • Answer general questions about the products and
    services they sell in response to applicant
  • Once a contract has been signed, provide
    information to applicants to assist with
    responding to USAC questions regarding their
    application/funding requests(s)
  • Provide assistance with service substitutions and
    other post-commitment activities

  • Competitive Bidding
  • Applicants CANNOT
  • Have a relationship with service providers that
    would unfairly influence the outcome of the
  • Furnish service providers with inside competitive
  • Have ownership interest in a service providers
    company competing for services
  • Violate gifting rules

  • Competitive Bidding
  • Applicants can
  • Have pre-bidding discussions with potential
    bidders as long as that doesnt lead to one
    bidder having inside information
  • Attend product demonstrations
  • Encourage and seek vendors to bid
  • Do research to determine what cost-effective
    solutions are available (in a service provider or
    manufacturer neutral manner)

  • FCC Form 470 RFPs
  • FCC rules refer to RFPs generically but they may
    have a variety of names (Request for Quotes,
    Request for Bids)
  • FCC rules do not require RFP but state and local
    procurement rules may
  • Must be available to bidders for at least 28 days
    (we recommend 29 days) from the posting of
    whichever is released last, the RFP or the Form
  • Retain a copy of the RFP, including evidence of
    publication date and any solicitation
  • MUST indicate any special requirements and/or
    disqualification factors

  • FCC Form 470 RFPs
  • Applicants must ensure that they post for the
    correct category or categories of service
    (Non-allowable MC correction.)
  • Does not apply for Priority One services for 2013
    and beyond
  • Sufficient detail in FCC Form 470
  • Cannot provide generic descriptions (e.g., All
    eligible telecom services or Digital
    Transmission Services)
  • Cannot provide laundry lists of products and
  • Addendums or changes to the RFP may require
    applicants to re-start the 29 day period when
    there is a significant change to the original
    scope of the procurement

  • FCC Form 470 RFPs
  • Imposing Restrictions
  • Setting eligible services requirements
  • Applicants may require service providers to
    provide services that are compatible with one
    kind of system over another (e.g., Cisco
  • Applicants cannot state make and model on FCC
    Form 470 or RPF, but may state equivalent make
    model (e.g., IBM router 628 or equal

  • Vendor Selection
  • Bid Evaluation
  • Vendor selection criteria MUST be posted with the
  • Vendor evaluation begins after 29-day waiting
  • Follow your vendor selection criteria
  • Price of the eligible goods and services must be
    the criteria given the highest allowable point
  • Other factors, including other price factors, can
    be considered as well but they cannot be weighted
    equally or higher than cost of the eligible goods
    and services

  • Competitive Bidding
  • Sample Bid Evaluation Matrix

Factor Points Available Vendor 1 Vendor 2 Vendor 3
Price of the ELIGIBLE goods and services 30 15 30 25
Prior experience w/ vendor 20 20 0 20
Prices for ineligible services, products Fees 25 20 15 25
Flexible Invoicing 472 or 474 15 0 15 15
Environmental objectives 10 5 3 2

Total 100 60 63 87
  • Vendor Selection
  • Selecting the Winning Bidder
  • Solution must be cost-effective
  • An existing contract can be used as a bid
    response to your posted FCC Form 470
  • Post 470, evaluate all bids existing contract,
    memorialize your decision if existing contract is
  • No bids or one bid (email yourself noting the
  • Retain all vendor selection documentation
  • Winning and losing bids, correspondences, memos,
    bid evaluation documents, etc.

Avoid Sham Bidding
  • Must respond to all legitimate inquiries
  • You do not have to respond to SPAM emails or
    emails that do not reference any specific service
    or product that youve requested
  • Providers that feel they are being stonewalled
    may contact USAC for assistance
  • Cost to transfer to another provider alone is not
    by itself a good enough reason to stay with
  • Avoid appearances of a done deal
  • Dont post for something you dont want
  • If plans change, have a plan to communicate with
    potential bidders

  • Vendor Selection
  • Free Services
  • Cant use E-Rate to get free ineligible products
    and services
  • Must deduct the value of the free stuff,
    discounts, trade-ins, etc., from the pre-discount
    amount in order get equal comparison between
  • Cost allocation is NOT required when the
    product/service (e.g., free cell phones) is
    available to the public or a class of subscribers
    (not just E-Rate)
  • End user handsets and softphones are currently
    not eligible
  • Be wary of vendors that try to bundle this
    equipment in their proposals the FCC still
    hasnt ruled officially on this open item
  • Cost of eligible goods and services cannot be
    inflated to cover the free ineligible products
    and services

  • Must be signed AFTER at least 29 days have
    elapsed but BEFORE you file your Form 471
  • Must be signed and dated by applicant at a
  • Allow enough time to take contracts to Board for
    approval (if required by Board policy)
  • Be prepared to explain documents that dont look
    like a traditional contract.

  • Intermediate/Advanced
  • Presentation
  • Form 471

Form 471 Your Application for Discounts
  • Must be filed every funding year
  • This is your actual request for funding
  • This is where you specifyWho, What, Where, When,
  • WHO Service providers chosen
  • WHAT Services being requested
  • WHERE Service Delivery locations
  • WHEN Dates for services
  • HOW Costs for services and terms

Form 471 Your Application for Discounts
  • Include ALL NIFS that will be receiving
    discounted services
  • Separate Priority 1 and Priority 2 services on
    two different Forms 471
  • Separate Recurring from Non-Recurring charges
  • Recurring Block 5, Question C.
  • Non-Recurring Block 5, Question H.
  • Contract expiration date for non-recurring
    services - September 30 (coincides with default
    deadline for delivery of services for
    non-recurring charges)

Form 471 Your Application for Funds
  • Priority Two Filing Strategies
  • Create multiple Block 4s to identify different
    groups of sites.
  • Create multiple Forms 471 for widely varying
  • i.e. one Form 471 for 80 and one for 90

Potential Funding Deal Breakers
  • DONT file Priority One and Priority Two funding
    requests on the same Form 471
  • DONT forget to wait at least 29 days after any
    mandatory processes associated with your
    competitive bidding before selecting a service
    provider or signing any contracts
  • DONT submit your Form 471 BEFORE signing all
    related contracts
  • DONT forget to CERTIFY your submitted
    application (whether electronic or paper

Item 21 Attachment
  • MUST be submitted by the end of the Form 471
    filing window
  • Avoid TMI (Too Much Information) Syndrome PIA
    will thank you
  • Remove ineligible costs be careful
  • 30 rule 30 or more of funding request dollar
    value cannot be for ineligible products and
    services. the entire request may be denied
  • it can be rectified during your PIA process
    Remove it-Split it up- separate FRN
  • If possible, work with service provider(s) to
    create your Item 21 attachment(s)

Application Review FCDL
  • Be Responsive to PIA reviewer
  • Answer all PIA reviewer questions
  • Establish a working relationship with PIA
  • Request additional time if you need it to respond
  • When you do receive your FCDL, review it
  • You have 60 days from date of FCDL to submit an
    appeal if you do not agree with the funding

  • Intermediate/Advanced
  • Presentation
  • Program Updates and Compliance

  • Document Retention
  • Retain Documents to Show Compliance
  • 5 years from last date to receive service in
    electronic format or paper
  • Any document from a prior year that supports
    current year must be kept for at least 5 years
    from last date to receive service
  • E.g., Contract from 2005, used to support FY 2012
    recurring service FRNs, must be kept until at
    least June 30, 2018
  • Applicants service providers must retain ALL
    documentation that shows compliance with all FCC

  • Document Retention
  • Retain Documents to Show Compliance
  • Consultant authorization such as Letter of
  • Document Examples, e.g.
  • Competitive Bidding Documents include all bids
    winning and losing
  • Compliance review documents (PIA, TPA, CIPA,
  • Invoices, bills, contracts
  • Asset registries, inventory logs
  • NSLP discount documentation (including NSLP
    applications, etc.)
  • Technology plans in effect for each Funding Yr
  • NOTE See complete list on USAC website

2-in-5 Year Rule
  • An entity may only receive discounts 2 out of
    every 5 years for internal connections
  • Doesnt include basic maintenance
  • Applies at the building level, not district level
  • If central equipment is purchased for NOC, each
    building receiving benefit of that equipment
    receives a strike
  • Plan accordingly to maximize discounts
  • Strikes related to funding commitment (FCDL),
    not 471 or invoices
  • Can cancel FRN to get strike (year) back, but not
    after funding has been disbursed
  • Hint Dont use a strike (year) for a 500 piece
    of equipment

Will P2 Be Available in FY 2013?
  • Lets look at FY 2012
  • 2,290,683,250 available
  • Demand for Priority 1 (telecom and Internet) was
    2.444 billion
  • an increase of 12.5 from last year
  • Demand for Priority 2 (internal connections) at
    90 discount level was 1.379 billion
  • All P1 and 90 P2 funded with unprecedented
  • If P1 grows again by 12.5, P1 demand will be
    2.737 billion
  • Very little rollover funds remain
  • No certainty as to the availability of P2 funding
    in 2013

Should You Apply for P2 Funding?
  • Year 1 -- funded to 70
  • Year 2 all funded
  • Year 3 down to 82
  • Year 4 down to 87
  • Year 5 down to 81
  • Year 6 down to 70
  • Year 7 down to 81
  • Year 8 down to 80
  • Year 9 down to 86
  • Year 10 down to 81
  • Year 11 down to 87
  • FY 2009 down to 77
  • FY 2010 -- all funded
  • FY2011 down to 88
  • FY 2012 down to 90 (barely)

Funding Predictions for FY 2013
  • P1 Enough funding should be available to fund
    all P1 requests
  • P2 It is doubtful that all 90 P2 requests will
    be funded, at least not without pro-ration
  • FY 2014? Will enough funding be
  • available to pay for Priority 1 requests without

What is Proration?
  • The rules of the E-Rate program have provisions
    to pro-rate funding approval in the event there
    is not enough money to fund all of the valid
  • This is already being done in the P2 category
    when the FCC cuts off funding at a certain
    discount level when there is not enough money to
    fund an entire discount band
  • Proration in this context means that it is
    likely there will not be enough money to fund
    even all of the 90 requests
  • The FCC will authorize USAC to fund a
    commensurate portion of each of the requests
  • For example, if 40 of funding is available to
    fund all of the 90 requests, then applicants
    will be approved for 40 of their entire funding
  • 10,000.00 requested 4,000.00 funded

What is Proration?
  • The more concerning/alarming possibility is a
    proration of P1 requests
  • Based on the rules, if there is not enough money
    available to fund even all of the P1 requests,
    then the FCC will use same model as has been used
    for P2 threshold determination and will apply
    that theory to P1
  • Long story shortwithout swift and substantive
    change to the program (either by cap increase or
    other administrative adjustments), applicants in
    the lower discounts bands (lt50 weighted
    discount) may see zero E-Rate funding

How Will This Problem Get Fixed?
  • FCC currently wrestling with this issue
  • Possible solutions could include
  • Removing certain services from the eligible
    services list
  • Consider what this would mean if voice services
    were no longer eligible
  • Adjusting the discount matrix to decrease each
    discount level by 5 or 10
  • Find other funding sources to add to E-rate
  • Requiring ISPs and IC vendors to pay into fund
  • Assessing contributions differently

  • Intermediate/Advanced
  • Presentation
  • Childrens Internet Protection Act (CIPA)

  • New for Funding Year 2012
  • New requirements under CIPA
  • SCHOOLS By July 1, 2012, you should have
    amended your existing Internet safety policy to
    provide for the education of minors about
    appropriate online behavior, including
    interacting with other individuals on social
    networking sites and in chat rooms, and
    cyberbullying awareness and response.
  • Overall - several existing statutory requirements
    were codified and others have been clarified.

  • CIPA - FCC Report and Order
  • Additional Information on New Requirements
  • New requirements come from the Protecting
    Children in the 21st Century Act, which updated
    the Childrens Internet Protection Act.
  • Internet safety policies for schools must have
    been updated on or before July 1, 2012 to provide
  • The education of minors about appropriate online
    behavior, including interacting with other
    individuals on social networking sites and in
    chat rooms
  • Cyberbullying awareness and response

  • CIPA - FCC Report and Order
  • Additional Information on New Requirements
  • Social networking and cyberbullying are not
    defined, nor are specific procedures or curricula
    detailed for schools to use in educating students
  • Congress intent is that local authorities should
    make decisions in this area.
  • FCC recently issued some clarifying guidance
    regarding what the expectations are as to how
    often students should be educated and some loose
    guidelines regarding documenting proof of the
  • Resources are available to assist in this process
    if needed e.g., OnGuard Online.gov, FBI and the
    Google project (see TN E-Rate website for
    specific URL information)

  • More user friendly processes
  • Corrections of Ministerial Clerical Errors
  • 15 Day Rule eliminated (CORRECTIONS ONLY)
  • RNL RAL corrections can be submitted until the
    FCDL is issued
  • PIA will ask if this is a ministerial or clerical
  • Tell us what error occurred
  • Provide a reasonable explanation
  • Documentation may be requested

  • Ministerial/Clerical Errors
  • Some allowable corrections
  • Using wrong Form 470 number or wrong billed
    entity number
  • Using wrong name or service provider
    identification number (SPIN)
  • Using wrong expiration date for a contract
  • Requesting recurring service when the service is
    one time charge
  • Requesting one time service when the service is
  • Inaccurately reporting the pre-discount amount on
    Block 5
  • Leaving off a building from Block 4
  • Referring to wrong Block 4 worksheet for a
    funding request
  • Listing wrong service category in Block 5
  • Simple math errors
  • Failing to enter an item from the source list
    (e.g., NSLP data, uploading Block 4 data, FRN,

  • New starting in 2011
  • Operational SPIN Changes
  • Starting with FY 2011 FRNs, Operational SPIN
    change requests can be approved when there is a
    legitimate reason to change providers (e.g.,
    breach of contract or the service provider is
    unable to perform)
  • Operational SPIN changes will not be approved
  • to purchase a service or product for a cheaper
    price or
  • because of preference for a bidder that didnt
    participate in or win the competitive bidding

  • New for Funding Year 2011
  • Operational SPIN Changes (contd)
  • Operational SPIN Change Request
  • The newly selected vendor must receive the next
    highest point value in the original bid
    evaluation if more than one vendor submitted a
  • You can select a vendor without conducting
    another competitive bid if only one bid was
  • You must state your reason for the request
  • Indicate the new SPIN start date and funding
    amount and the former SPIN end date and funding

  • Gifts
  • E-rate Gift Rules

  • E-rate Gift Rules
  • Gift Rules
  • Solicitation or receipt of gifts by applicants
    from service providers and potential service
    providers and vice versa is a competitive bidding
  • Rules apply to everyone participating in the
    E-rate whether public or private, and whether
    operating at the local, state or federal level.
  • Must always follow FCC rules. May also need to
    comply with additional state/local requirements.
    If those provisions are more stringent than
    federal requirements, failure to comply with them
    will be a violation of FCC rules.

  • E-rate Gift Rules
  • Gift Prohibitions
  • Gift prohibitions are applicable year-round, not
    just during the competitive bidding process
  • Prohibition including soliciting and receiving
    any gift or thing of value from an applicant or a
    service provider participating in, or seeking to
    participate in the E-rate.
  • Service providers may not offer or provide any
    gifts to applicant personnel involved in the
    E-rate or vice versa.

  • E-rate Gift Rules
  • Gift Rule Exceptions
  • Modest refreshments not offered as part of a
    meal, items with little intrinsic value intended
    for presentation, and items worth 20 or less,
    including meals, may be offered or provided , and
    accepted by any individuals or entities subject
    to this rule, if the value of these items
    received by any individual does not exceed 50
    from one service provider per funding year.
    See 47 C.F.R. 54.503(d)(1).
  • Single source all employees, officers,
    representatives, agents, contractors, or
    directors of the service provider.

  • E-rate Gift Rules
  • Gift Rule Exceptions Examples
  • A Service Provider has offered a school district
    employee lunch at a local sandwich shop three
    times during the course of the year. The value of
    the school district employees meal is 9 each
    time. The total value of the gifts is 27. No
    other gifts are received by this employee from
    this provider. The meals fall in the 20 per
    instance and 50 per annum exception and there is
    no rule violation.

  • E-rate Gift Rules
  • Gift Rule Exceptions Examples
  • A school system employee and his spouse are
    invited by a service provider to attend a play,
    tickets to which have a face value of 30 each.
    The aggregate market value of the gifts offered
    on this single occasion is 60, 40 more than the
    20 amounts that may be accepted for a single
    event or presentation. The employee may not
    accept the gift of the evening of entertainment.
    He and his spouse may attend the play only if he
    pays the full 60 value of the two tickets.
  • For more details/examples http//www.usac.org/_r

  • E-rate Gift Rules
  • Gift Rule Exceptions
  • Gifts to family and friends when those gifts are
    made using personal funds of the donor (without
    reimbursement from the employer) and are not
    related to a business transaction or business
    relationship are exempt. See 47 C.F.R.

  • E-rate Gift Rules
  • Curing Violations
  • Return any tangible item to the donor, or pay the
    donor its market value, or, if perishable, the
    item may be given to an appropriate charity or
    shared within the office or destroyed. See CFR
  • To avoid public embarrassment to the seminar
    sponsor and E-rate service provider, the
    Superintendent did not decline a barometer worth
    200 given at the conclusion of her speech on the
    districts education initiatives. The
    Superintendent must either return the barometer
    or promptly reimburse the provider 200 to cure
    the violation.

  • E-rate Gift Rules
  • Curing Violations Examples
  • With approval from the recipients supervisor, a
    floral arrangement sent by a service provider may
    be placed in the offices reception area.
  • A district employee wishes to attend a charitable
    event to which he has been offered a 300 ticket
    by a service provider. Although his attendance is
    not in the interest of the district, he may
    attend if he promptly reimburses the donor the
    300 face value of the ticket.

  • Charitable Donations
  • Charitable Contributions
  • Gift rules are not intended to discourage
    charitable donations as long as the donations
  • Are not directly or indirectly related to E-rate
    procurement activities or decisions, and
  • Are not given with the intention of circumventing
    competitive bidding or other FCC rules

  • Charitable Donations
  • Allowable Charitable Contributions
  • Paid-for-exchange services at market rates, such
    as the purchase of advertising space, is neither
    a gift nor a charitable donation as long as it is
    not intended to influence the competitive bidding
  • For example, service providers purchasing
    advertising space on the high school football
    score board, for which they pay market rates,
    would not cause any violations.

  • Charitable Donations
  • Questionable Charitable Contributions
  • Equipment, including laptops and cell phones, may
    be permissible if it benefits the school or
    library as a whole and broadly serves an
    educational purpose.
  • Gifts of equipment that increase demand for a
    donors services, and thus cause the applicant to
    purchase more of a providers services, are
  • Example Service provider donates computers,
    causing a need for more Internet Access, which
    the provider sells to the library
  • Captain Obvious Note Free computers are not
    ever allowed as part of an E-Rate procurement

  • Charitable Donations
  • Potentially Allowable Charitable Contributions
  • Cash, equipment, including sporting, musical or
    playground equipment, may be permissible if they
    benefit the school or library as a whole and
    broadly serve an educational purpose.
  • For example, a donation of books for a literacy
    campaign, given to a school by an E-rate service
    provider, would be acceptable donation that
    benefits the school and broadly serves an
    educational purpose.

  • Charitable Donations
  • Unallowable Charitable Contributions
  • Service providers cannot offer special equipment
    discounts or equipment with service arrangements
    to E-rate recipients that are not currently
    available to some other class of subscribers or
    segment of the public.
  • Free phone/tablet with purchase of service
    contract must be available to non-E-rate
    customers as well
  • Donations to cover the applicants non-discount

  • Charitable Donations
  • Unallowable Charitable Contributions
  • Equipment for a specific individual or group of
    individuals associated with or employed by an
    E-rate participant.
  • Service provider may not give a gift to a teacher
    who helps draft a districts technology plan,
    even if that teacher does not ultimately help
    select the E-rate service provider.

  • Conferences and Training Sessions
  • Widely Attended Events
  • Widely attended events are exempt from gift
    rules. See 5 C.F.R. 2635.203(g)
  • Gathering is widely attended if
  • Employees attendance must be in the interest of
    the agency (i.e. school or library) and further
    its programs and operations, and
  • It is expected that a large number of persons
    will attend, and
  • Persons with a diversity of views or interests
    will be present.
  • Event is open to members from throughout the
    interested industry or professional or those in
    attendance represent a range of persons
    interested in a given matter.

  • Conferences and Training Sessions
  • Conferences Permissible Actions
  • Food, refreshments, instruction and documents
    given to all attendees at Widely Attended Events
    are permissible.
  • Trainings offered by state, regional or local
    government bodies or non-profits or trade
    associations that include those bodies are not
    considered vendor promotional training
  • Vendor promotional training means training
    provided by any person for the purpose of
    promoting its products or services. See 5 C.F.R.

  • Conferences and Training Sessions
  • Conferences Permissible Actions
  • Service providers can host, sponsor, or conduct
    E-rate training, as long as they do not provide
    any gift that exceeds the gift exceptions
  • Service providers cannot provide demonstrations
    or help with preparation or completion of forms,
    or determining the services listed on the Form
    470 and/or RFP.

  • Conferences and Training Sessions
  • Conferences Registration Fees
  • Service providers can offer an educational
    discount on the attendance fee to a Widely
    Attended Event as long as it is available to all
    employees of schools and libraries.
  • Applicants cannot accept free attendance, paid by
    a service provider, even if the school or library
    has assigned the employee to attend the event.
  • A Service provider cannot pay for or reimburse
    expenses for an applicant to speak at a
    conference on behalf of that service provider, or
    in any other setting, e.g. newspaper or magazine.

  • Intermediate/Advanced
  • Presentation
  • Post-Commitment Processes

Form 486Receipt of Services Confirmation
Form 486 Review
  • Notifies USAC that services started or are
    scheduled to start and invoices can be paid
  • Applicant makes additional program certifications
  • Filed AFTER receipt of FCDL
  • Form 486 must be filed online or postmarked, no
    later than
  • 120 days after Service Start Date
  • OR
  • 120 days after FCDL date
  • Whichever is later
  • Due to Super Storm Sandy, 2012 Form 486s
    associated with Waves 1-17 are due no later than
    Jan 28, 2013
  • No word yet on prior years pending Forms 486

Process after the Processi.e. GET YOUR MONEY!
WHEN will I get ?
  • E-rate is a discount program
  • Funding is based on a discount on actual costs
    incurred not on total funded amount
  • District must experience costs before
    disbursements of funding are made
  • FCDL Date
  • Can be months to over a year after the start of
    the E-rate/fiscal year Plan for it!
  • Form 486
  • Must be filed before any disbursements can be
  • Invoice Deadline
  • October 28 after close of funding year for
    recurring services
  • January 28 after close of funding year for
    non-recurring services
  • Invoice Deadline Extensions are available

HOW will I get it?
  • Its a long and complicated journey
  • always flows through the service provider
    never directly to applicant
  • FCDL -gt Form 486 -gt Carrier Forms -gt SPI or BEAR
    -gt Invoice Reconciliation
  • Carrier Forms, including
  • Grids, certifications, and data gathering forms
  • MUST be filed before the service providers will
    process discounts
  • TIP Get to know the SPIN contact

HOW will I get it? (Contd)
  • SPI or BEAR?
  • SPI (Service Provider Invoice) Form 474
  • Service provider invoices USAC directly for
    E-rate discounted amount
  • Applicant pays its share after discount (in a
    perfect world)
  • Complications timing of FCDL and posting of
    discounts, verification of receipt of discounts
  • BEAR (Billed Entity Application Reimbursement)
    Form 472
  • Prepared by applicant applicant is responsible
    for calculations
  • Full costs incurred by applicant
  • E-rate funds disbursed in a check (check issued
    by SP)

WHEN will I get it? (Contd)
  • After FCDL issued by SLD
  • After Applicant has submitted Form 486
  • After Applicant has submitted Service Provider
    required paperwork
  • After Service provider has processed paperwork
  • THEN
  • If E-rate discounts are credits on the bill, it
    may take 2-3 bill cycles for those credits to
    actually be realized
  • If BEAR is filed, applicants will receive a check
    from Service Provider approximately four six
    weeks from the time it is submitted.

DID I get it???!!!
  • BEAR Method
  • Check received by district full closure
  • Make sure to retain documentation on how BEAR
    calculations were made
  • SPI Method
  • Requires alert and methodical accounting
  • Reconciliation of bills required in order to
    verify if discounts are received
  • Discounts often overlap funding years its a
    TRUE challenge!
  • Do not assume that SP calculations are correct!

  • Invoice Deadline Extension
  • Must be filed in order to collect funds after
    invoice deadline has passed (October 28)
  • Implementation Deadline Extension (a.k.a. Service
    Delivery Deadline)
  • Must be filed if non-recurring services will be
    installed after September 30 deadline
  • If a service delivery extension occurs, your
    contract may need to be extended
  • (HINT Set contracts for non-recurring services
    to expire September 30)
  • Applicants must extend the contract AND file a
    Form 500 to extend the contract expiration date
    in USACs records before an invoice dated after
    that date can be paid

  • Due to Super Storm Sandy, the invoice deadlines
    for ALL 2011/2012 recurring services has been
    extended until January 28, 2013.
  • If you havent submitted your BEARs or if youre
    not sure that you have received everything youre
    entitled to, you now have a special extra
    window of time to check and double check.

  • Invoice Deadline
  • What if the Invoice deadline was missed?
  • An Invoice Deadline Extension request must be
    submitted to USAC
  • There is no official form, but there is a
    format criteria for request(s)
  • Typically, request is submitted by applicant to
  • See your binder for specific instructions or
    consult USACs website OR call the TennSEC office
    with questions

  • Intermediate/Advanced
  • Presentation
  • Form 500

  • Form 500
  • To request one or more of the following changes
    to a Funding Request Number (FRN) to
  • Change service start date on the FRN
  • Change contract expiration date on the FRN
  • Reduce funding amount on the FRN
  • Cancel the FRN
  • NOTE Once you submit a Form 500 to reduce or
    cancel the funding amount, it is irreversible.

  • Intermediate/Advanced
  • Presentation
  • Service Substitutions

  • Service Substitutions
  • To request change in products and/or services
    specified in Form 471
  • Substitution of a service or product must meet
    the following conditions
  • Substituted services or products have same
    functionality as services or products contained
    in original proposal.
  • Substitution does not violate any contract
    provisions or state or local procurement laws.
  • Substitution does not result in an increase in
    percentage of ineligible services or functions.
  • Requested change is within the scope of
    controlling FCC Form 470, including any Requests
    for Proposal, for the original service.
  • For details http//www.universalservice.org/sl/a

  • Intermediate/Advanced Presentation
  • SPIN Changes

  • SPIN Changes
  • SPIN changes Operational vs. Corrective
  • Pre-commitment SPIN changes
  • Corrective SPIN changes only (i.e., data entry
  • Post-commitment SPIN changes (as referenced
    previously in this presentation) 6th Report
    Order restricted Operational SPIN changes as
  • Operational SPIN changes must have legitimate
    reason to change, such as breach of contract or
    provider unable to perform, and
  • must select provider with the next highest point
    value in evaluation.
  • For more details http//www.usac.org/sl/about/ch

  • Intermediate/Advanced Presentation
  • Audits

  • Audits
  • Purpose of E-rate audits
  • Primary purposes of audits to ensure compliance
    with FCC rules and program requirements and to
    assist in prevention and detection of waste,
    fraud, abuse
  • If you cannot prove that you followed the rules,
    then it will be assumed that you DID NOT follow
    the rules.
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