Upcoming E-rate Changes

E-rate graphic

by Jan Wall, northern Idaho field consultant
The Federal Communications Commission (FCC) voted to modernize the federal E-rate program with a July 11 E-rate Order. Below are some upcoming changes: 

Basic telephone service
Funding for basic telephone (including VoIP, fax, and cellular service) will be phased out, beginning in the E-rate year that starts on July 1, 2015. If you depend on E-rate to help fund basic telephone service, you can expect to spend more on telephone service.

In short, beginning in July 2015, your discount rate will drop 20% each year.
Example—If your current discount is 80% then this is what you can expect:
• 2015: 60% discount
• 2016: 40% discount
• 2017: 20% discount
• 2018: no discount on basic telephone (i.e., there will be no E-rate funding for this service).
This is the anticipated timeline, but the FCC will review the impact sometime in 2016-2017.

Discount percent
Starting in 2015, each district will now have the discount percent of the headquarters (HQ) library; there will be no more shared discount or branch-specific discount. If a service is specifically for one location, the discount for the administrative agency (school district location and NSLP numbers) will be applicable. This will obviously be advantageous for some libraries but not for others.

Urban/Rural status
The Urban/Rural status of your library may change, depending on the Census definition. Again, this may benefit some libraries but not others.

Internal connections
You will need to know your square footage; it will be asked on Form 471. The reason for that is funding for your library in Category 2 (formerly Priority 2 – internal connections and basic maintenance of internal connections) will be based upon that figure.

In the past, many libraries have been reluctant to apply for internal connections, since there were several hoops to jump through and there was little possibility of funding (especially below the 90% discount rate).

What has changed (or will change before E-rate funding year 2015-2016):
• Technology plans are no longer required.
• Money has been set aside for at least the next two years to fund Category 2 (internal connections and basic maintenance of internal connections).
•  The FCC’s goal is to make funding available to all discount levels.
•  A proposed “Preferred Master Contract” list would allow libraries to purchase internal connection components off this list and not do Form 470 to establish the service.
•  There is a $2.30 per square foot funding limit, with a “floor” (i.e., potential minimum) of $9200 (pre-discount) per outlet. The top discount level for Category 2 is 85%. (Libraries at 90% discount for internet will receive 85% for Category 2, but all other discount levels will remain the same.)
•  A streamlined Eligible Services List should make understanding what is eligible for internal connections funding clearer. (The Public Notice about the draft Eligible Services List is at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0804/DA-14-1130A1.pdf

Plan ahead; if you need internal connections, or need to upgrade your internal connections, now is the time to consider it.

Form 470 for 2015-2016 is not yet available, but should be available by November. (Jan Wall will post to the LibIdaho listserv when Form 470 is available.)

More information
If you want to know more about the changes, here are some webpages that summarize them:
• E-rate Modernization Order (USAC): www.usac.org/sl/tools/modernization-order/default.aspx
• E-rate Modernization (FCC): www.fcc.gov/e-rate-update (Click on “Summary of E-Rate Modernization Order”)