Rex Miller

E-Rate UpdateWinter 2015

Introduction

E-Rate 2.0 has arrived• Today’s session is focused on the changes enacted by the recent

E-Rate 2.0 and 2.1 FCC orders• Seek out experienced assistance as you prepare and work

through the next E-Rate season

Q & A• At the end of the presentation• ENA is available at your convenience• Webinar will be available on the ENA website at www.ena.com

ENA Background

Customer service and education focus• K-12 customized service• E-Rate expertise

• E-Rate Program Service Provider since Year 1 (1998)• Experienced E-Rate team

• Rex Miller, April Scott, Kris Vivrette, Madeline Dusenberry, Ward Chaffin

E-Rate Service Provider Leader • A Top-10 E-Rate Service Provider• Over $500M in E-Rate funded• Over $144M in 2014 E-Rate filings

E-Rate News

Window Opening Date set • Opening January 14, 2015

• Closing March 26, 2015

• Similar to last year

• Filing early is strongly encouraged

Eligible Services List issued for ’15-16• Streamlined to match the E-Rate 2.0 order

• Includes overview of items removed from list

New 470 and 471 for ‘15-16

E-Rate Order 2.1 Approved December 11th

• Order has been released

E-Rate 2.0 Things to Remember

On Dec 11th, the FCC approved the 2nd Order related to E-Rate 2.0• The Main Focus is an increase in E-Rate funds of $1.5 Billion • This Order includes several changes to support fiber deployment including

dark fiber and fiber construction Many of these changes go into effect 7/1/16, but require actions well in

advance of that date to understand and execute on the changes• The Order also requires a performance management system for USAC to be

developed which appears to focus on both USAC efficiency but also USAC ability to manage cost effectiveness and provide technical support to applicants

All of this subject to - • WCB/USAC interpretation –

Where they are tasked to figure things out• PIA Review 2015 –

Where the things they don’t always tell us will be implemented re: testing

The original order indicated that much of this was a two year test• The Second Order removed the two year test concept for most items

Stay tuned for more changes and updates

Goals

Per FCC, E-Rate 2.0 has three main goals:

1.Affordable access to high speed broadband

2.Maximizing cost effectiveness

3.Making E-Rate fast, simple and efficient

We will attempt to combine both orders in the overview

Goal 1 – Affordable Access to High Speed Broadband

• Affordable access to high speed broadband

Created Category 1 and Category 2

– Category 1 – Broadband – this is funded first» Discount rates remain same matrix» Construction cost amortization no longer required –

can receive all construction costs in Year 1» For 2016 -

• Certain differences between dark fiber and lit fiber have been removed

• Applicants can construct their own fiber if most cost-effective and subject to certain safeguards to be described in Order 2.1

» Construction for C1 SCC can begin Jan 1st

– Category 2 – Internal Connections

Category 2

Category 2 – Internal Connections• $1 B target for internal connections

Order 2.1 guarantees the $1 B target each year This not just Wi-Fi Shortened list of eligible items

– Routers, Switches, Wi-Fi– Added caching– Cloud services OK– Basic maintenance of eligible items is OK as

part of the per student cap

• ENA – even if districts have Wi-Fi, they still get to spend $150 on basic maintenance, routers, switches, etc. for LAN

Category 2

• Managed Wi-Fi Eligible – Renamed Managed Broadband Internal

Connections by FCC Third party service allowed for LAN and WLAN

management

• Eliminated – Everything else – including PBXs and Servers

Category 2 Funding

• 90% discount reduced to 85% All other discount levels unchanged

• $150 per student available over 5 years ($2.30 per square foot for libraries) Can be received all in year 1 Ordered by discount rate 5 year applicant “budget” $9,200 funding floor per school/library Order 2.1 includes more $ for large urban libraries ($5 per sq ft)

– Libraries should test their status – IMLS codes 11, 12 and 21

• Current 2 in 5 rule removed

• Student Counts – Can use estimate for new buildings Can count students at 2 buildings if attend multiple schools

– Order 2.1 – must prove that part-time students regularly increase the maximum number of students on school premises at the same time during the school day

• Category 2 Installation can begin on April 1st

Category 1 Services

• Phase down support for Voice, VoIP and other legacy services Voice including VoIP and cellular/mobile

– 20% discount rate reduction per year starting 2015

• Items removed 2015 – no phase-down» Web Hosting» Voice Mail» E-Mail» Paging» Texting» Directory Assistance

Category 1 Services

• Items removed 2015 – no phase-down Cell Service data plans and Air Cards – unless they can be

cost effective vs. other internal broadband or external broadband– Presumption that data plans are not cost effective and

you will have to prove otherwise Custom Calling Plans Direct Inward Dialing

• Cost allocation of bandwidth related to voice Order 2.1 attempted to clarify If bandwidth is dedicated to voice, must cost allocate

• ENA – some pieces of currently eligible voice are immediately ineligible and some are phased out

Need to watch how PIA treats this as some of these items are normal components of voice service

Goal 2- Maximizing Cost Effectiveness

• Adopt Cost Transparency to share cost and connectivity data Item 21 Data now public

• Encourage Consortia Purchasing Still being determined

• Emphasize Lowest Corresponding Price

Goal 3 – Making E-Rate Fast Simple and Efficient

• Streamline application process? SLD goal – all workable applications approved by 9/1 Tech Plan eliminated

• Simplify discount rates? District wide rate – not school by school CEP option method available Rural/Urban – now using Census Data

– SLD Tool on-line now

• Simplify invoicing/disbursement BEAR payments direct to applicants – next year

• Protect against fraud, waste and abuse Increase Document Retention to 10 years

New Forms

• Form 470 Very few changes Can use 2014 form until new form is available

online

• Form 471 Redesigned to meet new rules New questions regarding network scalability Discount Rate changes included Separate category for Voice Services Item 21 part of 471 – not a separate attachment Category 2 Budget Information Test this when it is available

Order 2.1

• In addition to $1.5B of added funding, the new Order makes the following changes to incent rural broadband Removes multi-year amortization of one-time

charges Starting in 2016 –

– Allows applicants to pay one-time in installments– Equalizes treatment of dark fiber –

» Allows SCC» Allows modulating equipment

– Permits self construction of fiber» Requires bid for lit to qualify

– Potential for State Investment Match– High Cost Program recipients required to bid

Performance Management Program for USAC/SLD

Things We Think We Know

• Test your discount rate now so that it is not a surprise

Could have changes due to district wide average/CEP Make sure to test all sites in new Urban/Rural Tool

– Correct any invalid addresses ASAP

• Start thinking about your budget

Can you get $ for new Category 2– FCC/SLD encourage all to apply?– Order 2.1 seems to confirm that there will be $1 B– Will Category 2 get any leftover $

Impact of Voice and other changes– 20% Phase Down means 20% of total cost of voice

Things We Think We Know

• Form 471 Likely to Require More Time To Complete

Item 21 new format

Category 2 Budget

Discount rate changes – Some should be automatic– Different discount rates for Voice vs. Internet vs C2– Urban/Rural changes

Separate category for Voice Services– Allocation of Cost Allocated Bandwidth $ to Voice?

Eligible vs Ineligible Items and Cost Allocation

Timing of 2015 Approvals

• 2014 Year has been a great year for approvals – much improvement

2014 year had unique circumstances» No P2 funding for two years leading to

significantly fewer applications to review» More staffing hired to make sure process was

faster

• 2015 year is much more complex New Category 2 funding to be approved Integration of significant changes in eligible services Up to three different discount rate matrixes to apply Additional items requiring changes to forms and practices

• Expect slowdown in approvals – especially if FCC wants to push Category 2 approvals faster or at equal speed as Category 1 funding requests

471 Timing

E-Rate Timing Soapbox

E-Rate continues the trend of the later closing of filing window in March

Strongly encourage applicants who want to get approved before July 1 to file their 471s as soon as possible

• Target mid-February at the latest

PIA will likely start for you before the 471 filing window is closed, so be ready

Advantages• Earlier approval• No last-minute rush to file• If you have an error, you can file another 471 before filing

deadline and cancel initial incorrect filing – probably easier than using RAL process

Resources

Contact ENA• Rex Miller – rmiller@ena.com• April Scott – ascott@ena.com• Kris Vivrette – kvivrette@ena.com• Ward Chaffin – wchaffin@ena.com• Madeline Dusenberry – mdusenberry@ena.com

SLD News Brief – make sure your are signed up for these e-mails

• Go to the SLD website’s training section to sign up• Key info provided on changes to the program all year long

Websites • SLD – main E-Rate rule site – training/WebEx

www.universalservice.org/sl/ Fall training slides will be posted if you cannot attend E-Rate Modernization section and webinars

– Specific topic videos posted and to be added

www.ena.com@ENAconnects ⎜ facebook.com/ENAconnects

Contact ENA TodayRex Miller

rmiller@ena.com - 615.312.6005