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e-Rate 2.0: A Shellshocker? Early in President Obama’s second term he announced that he would use his executive powers to make the changes without waiting for Congressional approval. E-Rate 2.0, to this observer, is a shell shocking implementation of that effort. Federal Communications Commission Chairman Wheeler, in less than a year, completely redirected the focus and intent of the e-Rate Program. The Past When the Program began in 1996, it supported telephony, Internet access, and the connections necessary to bring the Internet to schools and libraries. It also supported the internal connections needed to bring the Internet from building entry to the desktop. The Program made the connections to the building Priority One and those within Priority Two. In this system many schools and libraries never saw Priority Two dollars. The Shift “e-Rate 2.0” dramatically shifts the focus while remaining within the parameters of the original legislation. The intent is to provide students and patrons with robust Internet access and, thus, address the President’s ConnectED goals. The shift also attends to the recent situation where Priority One demands outstrip the Program’s funding ability. Elimination To make more money available for Internet access, e-Rate 2.0 eliminates support for “obsolete” and “ancillary” services. Beginning immediately with Funding Year 2015 (7/1/2015 – 6/30/2016), the Program will no longer support:
This list is stolen from E-rate Weekly News for July 28, 2014 - E-Rate Central (http://www.e-ratecentral.com/archive/News/News2014/weekly-news-2014-0728.asp#b2[8/11/2014 10:02:13 AM). Phasing Out In addition, it will also begin the phase out of support for telephony services by reducing the discount 20% in Funding Year 2015 and each subsequent year until the support zeroes out. The services included are:
Stolen from the same place as the prior list. Two comments: first, it will take longer to analyze invoices in order to find and remove the newly ineligible services and, secondly, applicants will need to plan on supporting all voice services including VoIP and fiber circuits carrying voice on their own. Name Changes On the other side of the coin, e-Rate 2.0 ends the Priority One and Two designations and begins the Category One and Two buckets. For Funding Year 2015 and 2016, it will infuse $1 Billion each year from unclaimed Universal Service Funds so that more money will be available for the new Category Two goods and services. The directive to first fund all Category One services still stands. Category Two’s 85% Cap In addition to the extra money allocated to Funding Years 2015 and 2016, e-Rate 2.0 tries to provide more Category Two dollars to more schools and libraries by reducing the maximum level of support from 90% to 85% (otherwise the “Discount Matrix” is unchanged) and limits the dollar amount a district may receive to $150/student and $2.30/square foot for libraries. These are pre-discount dollar amounts. Not only does e-Rate 2.0 have a Category Two ceiling, it also has floor. It will provide a minimum of support for $9,200 pre-discount Category Two expenditures over the same five year period. Managed WLANs Another intriguing initiative in e-Rate 2.0 is support for managed Wireless Local Area Networks (WLANs). A library or school may contract with a third party to maintain its WLAN or even to own the WLAN for $30/student/year or $0.46/square foot for libraries. The new Category Two rules give reason to pause. Schools and libraries should assess their current WLANs and consider what upgrading they might need within five years. Additionally, the basic maintenance support also is noteworthy. Consortia One additional area to note is the FCC’s directive to give consortia applications priority in the review process. It is the Commission’s belief that schools and libraries can receive more favorable pricing it they pool their efforts. We encourage entities to begin or continue such conversations. Item 21s Finally, the Commission also believes that better pricing would become available if there is more transparency in the process. We take that to mean that the Form 471’s Item 21 attachments will be publically available. Currently, access to them is password protected. In order for that information to be useful and also to meet the data gathering demands the FCC is imposing on the Program, applicants will have to provide more detailed information than in the past. Be forewarned. Shell Shocker? It probably was not a shell shocker. We all knew major changes were coming. But, it remains a major repurposing of the available dollars.
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