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to the Information Highway for Our Children |
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to the Information Highway for Our Children |
Who is eligible for the e-rate?
The universal service discount or e-rate is available to all elementary and secondary public schools and not-for-profit, non-public schools with endowments of $50 million or less. To be eligible, a school must meet the statutory definition of an elementary or secondary school found in the Elementary and Secondary Education Act of 1965.
In addition, not-for-profit libraries are eligible for the e-rate if they are eligible for assistance from a state library administrative agency under the Library Services and Technology Act and are funded as an independent entity; i.e., the library's budget is totally separate from that of any learning institution. For example, higher education institutions are not eligible for e-rate discounts, so an academic library is only eligible if its funding is completely separate from the funding of any higher education institution. A library within an eligible school, however, may receive discounted services as part of the school.
What services are eligible for the e-rate?
Eligible schools and libraries may purchase any commercially available telecommunications services, Internet access and internal connections at discounted rates. To ensure that schools and libraries have maximum flexibility to purchase whatever services they want and need, the ruling allows schools and libraries to select both the technology and the provider that best meet their needs (subject to the competitive bidding process described below). For example, the e-rate applies to basic telephone service, a T-1 line and wireless telecommunications services. E-rate discounts also apply to non-content Internet access (for example, an Internet service provider), including e-mail.
Both installation and maintenance of internal connections are eligible for discounts. E-rate discounts apply to wireline, wireless or cable technology, including the costs of materials, labor and maintenance for internally wiring or networking computers within an eligible school or library. Equipment needed to transfer information within a school or library is also eligible for discounts, including routers, hubs, network file servers (including software to run the servers) and wireless local area networks (LANs).
What is not covered by the e-rate?
Equipment such as computers (with the exception of network file servers) and other hardware, software (with the exception of the software required to run network file servers), fax machines, modems, teacher training, upgrades to the electrical system and asbestos removal are not eligible for discounts. In addition, the e-rate does not cover subscriptions to online content providers or online services that bundle content with Internet access, unless their service is the most cost-effective way of providing Internet access.
Restrictions of Schools & Libaries
Schools and libraries are prohibited from reselling services purchased under the e-rate discount. However, schools may offer dial-in access for their students and teachers, so long as they do not charge for this access. (The costs for phone lines, etc. in students' and teachers' homes are not covered.) Schools and libraries may charge fees for any services purchased for which they receive no universal service discounts; for example, a school can charge computer lab fees to defray the costs of computers and/or training since neither of these items are eligible for e-rate discounts.
When will the e-rate be available?
Before schools and libraries are eligible to apply for discounted services, their state's Public Utilities Commission (PUC) must adopt a discount structure for intrastate services (those within the state) that is at least equal to those established by the FCC for interstate services (those services that cross state lines, such as long distance service). It is important to understand, however, that the federal universal service funding will pay for schools' and libraries' discounts on both intrastate and interstate services; i.e., state PUCs do not have to provide funding for the discounts on intrastate services in their state, unless they approve additional discounts beyond the FCC's. Once a state PUC complies with this requirement, its schools may apply for the e-rate as soon as the application forms are released (expected in fall 1997) for funds to become available beginning January 1998.
How much funding is available?
All telecommunications carriers that provide interstate telecommunications services are required to contribute to the universal service fund, based on their interstate and intrastate end-user telecommunications revenues. E-rate expenditures are capped annually at $2.25 billion. The funding year follows the calendar year.
While the Computer Learning Foundation hopes all eligible schools and libraries will avail themselves of this opportunity to expand their use of telecomunications, the ruling provides for carrying forward up to half of the unused funds from 1998 to 1999.
If during any given year only $250 million remains available, a priority system will go into effect, in which the most disadvantaged schools and libraries that have not yet requested universal service funding will be funded first, followed by schools and libraries in the two most disadvantaged categories that have previously received e-rate discounts, and finally all other eligible schools and libraries.
What is the e-rate discount structure?
Discounts range from 20% to 90% on all commercially available telecommunications services, Internet access, and internal connections. The level of discount is based on a school's or library's level of economic disadvantage and its location in an urban or rural area, as shown on the next page.
A school's level of economic disadvantage is defined by the percentage of its students eligible for either a free or reduced price lunch under the national school lunch program, regardless of whether the school participates in this program; i.e., the percentage of its students whose family income falls within 185% of the poverty line. A school may also use federally approved alternative mechanisms to determine the percentage of their students eligible for the school lunch program [see 34 C.F.R. 200.28(a)(2)(i)(B)].
A library's economic disadvantage level is based on the percentage of students eligible for the national school lunch program in the school district in which the library is located.
If a state or a school district applies for discounted services on behalf of its schools, the school district or state may compute the discounts on an individual school basis or it may compute an average discount. Similarly, libraries ordering discounted services at the library system level may compute discounts on either an individual branch basis or an average of all branches within the system. In these cases, the state, the district and the library systems must strive to ensure that each school or library branch receives the full benefit of the discount to which it is entitled.
Rural areas are defined according to the Office of Management and Budget's Metropolitan Statistical Area (MSA) designation of metropolitan and non-metropolitan counties, adjusted by the most recent Goldsmith Modification, which identifies rural areas within large metropolitan counties.
How do schools apply for the e-rate?
Before applying for discounted services, schools and libraries must prepare technology plans that address the near term and the future and how they plan to integrate the use of the planned technologies into their curriculum. The technology plan must be independently approved by a state agency that oversees schools or libraries or by an alternative method to be developed by the U.S. Department of Education. Plans that have been approved for other purposes, e.g., for participation in federal or state programs such as Goals 2000 or the Technology Literacy Challenge do not require further approval. If your school has not yet developed a technology plan, the e-rate is one more reason to do so. For tools to help you, see page 21. Make sure to enter the Certified School Program and the Technology Planning Sweepstakes (page 12) as soon as you have a current technology plan. Beginning in late 1997, the Computer Learning Foundation will begin posting technology plans on its Web site as a resource to help schools develop and update their plans.
Schools and libraries are required to participate in a competitive bidding process in order to apply for discounted services. Contracts signed prior to the availability of the e-rate are not subject to this bidding process until they come up for renewal.
Schools and libraries are encouraged to form consortia to aggregate sufficient demand to attract competitors and negotiate lower rates. While entities ineligible for e-rate discounts may be consortium members, only those consortia composed exclusively of other schools and libraries, rural health care providers, and governmental entities may receive below tariff rates on any eligible tariffed services they order.
Schools and libraries must complete an application which includes a description of the services requested in sufficient detail to allow a company to bid on the services, along with self-certification of the percentage of students eligible for the school lunch program, eligibility to participate in the universal service discount program and the school's or library's agreement not to resell any discounted services. The universal service administrator then posts the application on a Web site dedicated to this purpose. Competing providers bid on the descriptions of services. (The submitted description of services is not a substitute for state, local, or other procurement processes with which schools and libraries must still comply.) Pre-discount prices offered by companies to eligible schools and libraries may not exceed the lowest price charged to similarly situated non-residential customers. Schools and libraries must then wait four weeks after posting of their applications on the Web site before they may sign contracts with any service providers. Once approved for services, schools and libraries must only pay the portion of their bill after the discount. For example, a school that is eligible to receive a 90% discount will pay only 10% to the companies providing the services. These companies must apply for reimbursement of the remaining 90% of the bill from the universal service administrator.
For more information and application details as they are released, visit the FCC Web site: <http://www.fcc.gov/learnet> or <http://www.fcc.gov/ccb>
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