From 2015 Fall Director's Institute, Presented by Greg Gantz

1. Libraries and the
E-rate Program
FUNDING YEAR 2016
BY GREG GANTZ

2. What is E-rate?
 The E-rate program was created as part of the Telecommunications Act
of 1996.
 Funding for the program is generated through the Universal Service
Fund.
 The annual budget for the program was recently increased to $3.9
billion. It is also now scheduled to be adjusted for inflation every year.
 All schools and libraries are eligible to participate in the program if they
are compliant with the rules that USAC and FCC have set forth.
 There are two service categories that are eligible for E-rate funding.
Categories One and Two.

3. The E-rate Modernization Order
 The FCC passed the E-rate Modernization Order in 2014.
 The goal was to re-focus the program to provide broadband
connectivity to schools and libraries, and to improve the LAN
infrastructure so that this bandwidth could be better utilized.
 Specifically they were concerned with closing what has been termed
“the Wi-Fi gap”
 This is being achieved by increasing the program’s annual budget, and
by phasing out support for some Category One Services.
 The maximum discount percentage for Category Two services is 85%
versus the maximum of 90% for Category One services.

4. E-rate Discount Percentages
 E-rate discount percentages for
libraries are directly tied to the
discount percentage of their local
school district.
 There are several ways for the
school districts to calculate their
discount percentages, but the most
common is to use the number of
students that are utilizing free and
reduced school lunches.

5. Category One Services
 Formally referred to as Priority One Services.
 Category One Services include:
 Internet Access (any technology)
 Dark Fiber
 Local and long distance telephone service, VOIP, PRI, T-1, WAN, or
Cellular
 Funding for telephony services is being gradually phased out, and will be
completely eliminated by 2020.

6. Category One Changes

7. Category One Changes cont.
 The following services are no longer eligible for E-rate funding:
 Servers
 Voice and Video Equipment
 Telephony equipment
 Power infrastructure
 Physical Security or construction
 Application software
 Internet content
 Consulting services, Training, an Personnel costs

8. Category Two Services
 Formally referred to as Priority Two Services.
 In the past most Priority Two requests were going unfunded.
 All Category Two requests were funding for the current funding year.
 Category Two Services include:
 Internal broadband and Wi-Fi
 LAN/WAN wired and wireless components including cabling, switches,
routers, racks and UPS. Installation and maintenance of these items is
eligible for funding as well.
 Managed LAN and Wi-Fi services (referred to as Managed Internal
Broadband)
 Caching services

9. Category Two Budgets
 Each library that receives Category Two support in Funding Years 2015 or
2016 will have a five-year budget for Category Two products and services.
 For libraries this budget is based on the total square footage. This includes all
areas enclosed by the outer walls of the library and occupied by the library.
 The formula that E-rate is using to determine the budget is:
Total Square Feet x $2.30 = Cat. Two Budget
With a minimum budget of $9,200 if the library is less than 4,000 square feet.

10. Working with Category Two Budgets
 Library X E-rate Discount
Percentage = 80%
 Library X Total Square Feet = 3,500
 Library X Cat. Two Budget =
$9,200
 Library X Cat. Two funding request
= $7,500
 Discount % x Funding Request =
E-rate commitment
 80% X $7,500 = $6,000
 Library X is responsible for the
remaining $1,500
 The five year budget now has
$3,200 remaining for future
projects.

11. E-rate Productivity Center (EPC)
 Another piece of the E-rate Modernization Order was to streamline all
interactions between applicants and the program.
 To achieve this goal USAC created the E-rate Productivity Center or EPC.
 All forms, contact information, trouble tickets, and funding requests will be
tracked and stored in EPC.
 The account administrator is whoever certified the Form 471 last year.
 Passwords and privileges are required. Passwords have to be reset every 60
days.
 There are a lot of very good video resources regarding EPC on USAC’s
website.

12. Filing for E-rate
 So you have decided to file for E-rate
 What service would you like to receive funding for?
 Are you already under contract for the service for which you wish to receive
funding?
 Is the service or product Category One or Two?
 Do you work with a consultant? If so do you have updated contact
information for that firm?
 Establish goals, and be prepared to spend to reach them.

13. Filing for E-rate: Forms 470 and 471
Form 470
 Available July, 1 of each new funding
year.
 Acts as a notice of intent to acquire
goods and services.
 Both Category One and Two services
can be requested on the same form.
 If you have a separate RFP out for the
requested services, link it to the form.
 Be specific … to a point.
Form 471
 Filing window typically opens some
time late to mid January and runs for
approximately two months.
 Indicates which products or services
the library is purchasing for the next
year.
 Category One and Two services
require separate Form 471s.
 Requires detailed knowledge of the
products and services

14. Filing for E-rate: Forms 486 and 500
Form 486
 Also known as the Receipt of Service
Confirmation and CIPA Certification
form.
 This form must be filed and certified
before USAC will disburse any E-rate
funds.
 The deadline to file this form is 120
days after the service is delivered or
after the funding decision has been
made. Whichever date is later.
Form 500
 Referred to as the Funding
Commitment Adjustment request
form
 Only necessary if the products or
services that the applicant wishes to
purchase do not match those listed
on the completed 471
 Important in case of audits which may
result in funds being returned to
USAC.

15. Invoicing E-rate: BEAR vs SPI
BEAR
 Billed Entity Applicant Reimbursement
 Form 472
 Library pays full cost of service, and
after the funding year has completed,
files a BEAR form to receive the
appropriate disbursement of funds
from USAC.
 The responsibility for requesting these
funds falls solely on the library.
SPI
 Service Provider Invoicing
 Form 474
 Invoices from Service Providers are
discounted before they are sent to the
library.
 The responsibility for requesting the
funds from USAC falls solely on the
Service Provider.

16. Document Retention and PIA Review
 All documents must now be retained for 10 years from the end date of the
contracted service.
 Electronic copies are acceptable, and even preferred.
 Program Integrity Assurance (PIA) Reviews or Audits can happen to any entity
which takes part in the E-rate program.
 These reviews can be a very painful process if record keeping is not well done.
This includes maintaining an accurate inventory of all items purchased via
Category Two.
 Worst case scenario from PIA reviews result in returned funds or potentially
being banned from the E-rate program altogether.

17. Final Thoughts
 Get out there and apply! The money is available right now, and who knows
how long that may remain the case.
 You can file a Form 470 and elect not to move forward if all proposals you
receive are out of scope.
 Be prepared for numerous calls and emails from vendors. If you need help
deciding whether a vendor is on the up and up contact NEKLS or you E-rate
consultant if you use one.
 Take this opportunity to enhance the experience for your patrons, and to
continue to provide awesome service!