Presented by:
Tricia Dalton
Fall 2006
E-rate Newbie Training 2007
2
What is E-rate? Telecommunications Act of 1996 established
“Universal Service Discount Program for Schools and Libraries”
Annual $2.25 billion program Provides 20-90% discounts on telecommunications
services, Internet access, and internal connections Fund made up from charges on your phone bills Most public libraries, public and private K-12
schools, including charters and vo-techs are eligible
3
Who Administers E-rate?* FCC
Created program and its rules USAC
Universal Services Administrative Company Created by FCC to run E-rate and other universal service
programs Pays invoices
SLD Schools and Libraries Division Entity within USAC that runs E-rate Makes no policy decisions
4
Fair Warning! E-rate is not an easy process Only for the strong willed and determined Long process, a lot of paperwork, some frustration Patience is needed, in addition to diligence in
reading correspondence Rewards can be great Never ever try to cheat the program
5
Getting Organized E-rate Binder contains everything:
Forms, Instructions, Samples Tips, checklists, contact sheets PowerPoint handouts Timeline
Rule 1 – Get Organized Create your Own Year 10 Binder Keep copies of all forms, letters, bids,
correspondence, etc. Important!
6
E-rate Admin Acronyms Client Service Bureau (CSB)
E-rate “Help Desk” where applicant & service providers can get answers to questions
Accessed via toll-free number Technical Client Service Bureau (TCSB)
Team answering technical questions about eligible services & program rules.
Also accessed via same toll-free number. CSB will refer you to this area.
Program Integrity Assurance (PIA) Team that reviews every application for compliance w/FCC rules. Everyone receives calls from PIA before funding
7
Resources to Remember* SLD web site: www.sl.universalservice.org SLD CSB: 888-203-8100 E-rate listserve Contacts:
Tricia Dalton [email protected] Rawson [email protected]
8
Applicants Must have E-rate Entity Number to participate
One for every building in your district or library All applicants already have unless it’s a new building
Must have FCC Registration Number (FCCRN)* Just for billed entity All applicants should have obtained in Yr 7
Must have NCES code (schools) Found at: www.nces.ed.gov Leave blank if non exists
9
Funding Priorities
Needed because demand exceeds cap of $2.25 billion Priority One: Telecommunications and Internet Access
All approved-inside the window-likely to be funded Priority Two: Internal Connections / Basic Maintenance of IC
Funds go first to neediest applicants (90% discount level), then to others in order of discount until funds are exhausted Year 1 -- funded to 70% Year 2 – all approved applications funded Year 3 – down to 82% Year 4 – down to 87% Year 5 – down to 81% Year 6 – down to 70% - significant rollover funds Year 7 – down to 81% Year 8 – down to 81% so far Year 9 – non so far
10
Funding Priorities What does this mean?
Always apply for all telecommunications services and Internet access
Make judgment call on internal connections depending on discount level and planning for the Two in Five Rule
Exactly what services ARE and are NOT eligible?
New Eligible Services Listed has not been released yet.
12
Eligible Telecom Services MUST be provided by regulated
telecommunications carrier Must have Y on SPIN search
Basic Telecom Services Local, long distance & voice mail
Advanced Telecom Services MPLS, ATM, Point-to-Point, Frame Relay,
ISDN, lit fiber, etc.
Including most taxes
and surcharges!
13
Eligible Telecom Services, cont. Wireless Services
Cellular service – all staff eligible Paging service Blackberry service – only at eligible locations
Calling cards Not pre-paid cards
Centrex, custom calling features Installation fees OK Can be installed before funding year begins so services
are ready by July 1 Limited to priority 1 services
14
Ineligible Telecom Services
Sharing of bandwidth 900 Calls Payphones Cost of not-publishing phone numbers Cost of additional directory listings End user equipment (phones, beepers, cell
phones, fax machines, etc.) VOIP as an actual service
15
Tariffed Services/MTM* Services that are purchased mainly from a phone
company, such as T1
OR Monthly services such as cell or Internet Access For which no contract is signed Must competitively bid every year, regardless of
competition in your area for those services E-rate does not recognize multi-year tariffs… these
must be contracts.
16
Fiber Networks* Dark Fiber (unlit) is not eligible Lit Fiber is eligible … IF
Modulating electronics are bundled with the lease cost of the fiber
Applicant will never own fiber Applicant cost allocates any lease of fiber that
isn’t being used in that funding year.
17
Internet Access Eligible:
Subscription fee to ISP E-mail Firewall fees Webhosting – be careful! Internet bandwidth
Ineligible: Filtering Any remote access
outside school property to internet
Blackberry services presumed ineligible
18
On-premise, Priority 1 Equipment* Permitted if bundled from telco or ISP Must certify:
No applicant ownership – ever No exclusive use LAN functions without use of equipment Service provider maintains equipment
Not applicant
19
Eligible Internal Connections Network and phone
wiring Routers Switches Hubs Network servers Video codecs
System operating software Wireless Access Points Private branch exchange (PBXs) Firewalls Anything needed for transport –
not end user devices Installation of eligible internal
connections “Basic” Maintenance contracts
on eligible internal connections New category for basic
maintenance on 470/471
20
Ineligible Internal Connections Network management s/w Routers for remote access Curriculum software Phones, beepers Owned WANs Salaries of SD staff to
install or maintain network or components
Any equipment used for remote access to network or Internet
Personal computers FAX machines Asbestos removal Cameras Electrical wiring Teacher training
21
Eligibility Issues* Purchased Wide Area Networks (WANs) are not E-rate
eligible. If leased from a regulated telecommunications provider then
it’s eligible as a Telecommunications Service Local Area Networks (LANs) are eligible
SLD has made the WAN/LAN distinction as follows: If the network crosses a public right-of-way, it’s considered a
WAN. Connections considered LANs:
computer to computer classroom to classroom building to building on the same campus that does not cross a
public right-of-way
22
Gotcha!Words to Never Use 2-way Radios/walkie-
talkie (direct connect OK as a cell service)
Filtering Network monitoring Directory
advertising/listings
Cellular phones Management Redundancy Helpdesk 24 hour technical
support Insurance policies Remote access
23
Application process at a Glance*
24
Year 10 Details For services rendered 7/1/2007 - 6/30/2008 Application process has begun!
Write tech plan now File 470 now once tech plan is written File 471 when window opens (normally middle
of November) Window normally closes first week in February
Must be inside window to be funded
25
You Must Have a Technology Plan!*
Five SLD technology plan criteria Goals and Strategies for using technology Needs Assessment Professional Development Budget – including sources of funding
Evaluation
Must align with 470 request for services Must be “written” before 470 is filed Must cover full 12 months of NEXT funding
year
26
Technology Plans, cont. Vendors cannot write or approve technology plans No tech plan required for basic phone service or long
distance (includes cell and voice mail) Centrex is not basic phone service
Be sure to include dates of tech plan! Get approval letter by July 1
then Print/Maintain Approval Letter Tech plans approved for 3 years Certify on 486 who approved plan Can amend technology plan if yours is not specific enough
27
Competitive Bidding
Everyone must do it Even if no competition in your area Even if bidding under state law Must be done when signing any new contracts Must be done each year for all tariffed/MTM services
Bidding on web site does not exempt you from bidding under state law Can be done simultaneously Only exception is if someone bid it for you (ITS)
28
Competitive Bidding on SLD web site using Form 470*
File Form 470 any time to begin procurement process Listserve reminder sent out
Should align with technology plan Provide as much detail as possible so bidders can
respond – a mini RFP If you have an RFP, list where it can be obtained,
AND provide description of what’s in RFP Make sure you list possibility of multi-year
contract and/or contract with voluntary extensions
Vendors cannot help with RFP/470 process
29
Form 470 File online Posted on SLD web site 28-days Must have form posted on web at least 29 days
before the Form 471 window close (example: Feb 4 close = Jan 7 deadline) Don’t wait this long File 470 by Thanksgiving, if possible
Mail certification page to SLD ASAP unless eCertifying Read the
Instructions!
30
Get 470 Information Immediately!* Posted 470 available on SLD web site to view Upper right corner of online application shows:
Posting date of application Earliest date that your contract can be signed and thus 471
submitted Date that certification page was received at the SLD
View and print immediately after posting SLD also sends this info in Receipt Notification
Letter*
31
Next: Bid Evaluation* After 470 is posted for at least 28 days, review all bids
received for all services Cannot consider “free services” such as “I’ll give you 20
computers if you purchase my service” Cannot consider ineligible services in price evaluation factor
Can be considered in another category Cost must be highest percentage amount
Keep documentation of criteria used to select vendor Keep all winning and losing bids Retain all correspondence between applicant and all vendors
(winning and losing)
32
Choosing the Winning Bid Applicant must pick “most cost-effective bid” Cost doesn’t have to be only factor, but must be most heavily
weighted factor For example, if you have 3 bid evaluation criteria, price must
be at least 34% of total weight. Examples of other specified factors:
Prior experience Personnel qualifications Technical excellence Management capability Cost of switching providers Etc.
33
Signing E-rate Contracts* Signing Contracts/Selecting Provider must be done
before you submit 471 Be careful not to make any decisions, sign anything
or file any forms during 28 day waiting period. Contracts must be signed and dated by both parties Must sign contracts unless tariff or MTM service
If using EPL, no contract needed, but you must be able to explain why you chose reseller A over reseller B
34
Signing E-rate Contracts* List contract extensions and contract expiration dates
These also must be listed in RFP or 470, Item 7b Include non-E-rate funding out clauses Separate internal connections/wiring portions of
contracts for highest discount schools
35
Next: Filing the 471 Very important form
Watch listserve for reminders Filed by entity that actually pays the bills Shows discount calculations Requests discounts (funding) Describes services ordered and details contract
information Must be filed at least 29-days after posting Form 470 eCertify!! Or submit signed certification page ASAP
(postmarked within window)
36
What is My Discount?* Two criteria make up discount:
Poverty Location
37
Poverty – NSLP Data* Based on National School Lunch Program Eligibility
Eligibility based on % of student whose family’s income is within 185% of federal poverty level
Doesn’t matter if school serves lunch or participates in NSLP
38
Discount Matrix for Single School*
Urban Rural
<1% 20% 25%
1-19% 40% 50%
20-34% 50% 60%
35-49% 60% 70%
50-74% 80% 80%
75-100% 90% 90%
% of Students Eligible for School Lunch Program Discounts
39
Alternative Measures to NSLP Data*
Goal: Discounts based on true eligibility – not participation. 2 Ways to do this
Take existing participation data and add to it Using sibling match Using existing family income data
Conduct family income survey Must survey 100% of families. If 50% response rate, then OK to
extrapolate the rest Maintain complete records Sample survey available* Valid for 2 years
40
Alternative Measures to NSLP* Also, participation in these programs also
qualifies: TANF Medicaid Food Stamps Supplementary Security Income Federal public housing assistance (section 8) Low income home energy assistance (LIHEAP)
41
Discount Calculations by Entity* Schools: Use straight matrix discount Districts: Use weighted average of schools’ individual
discounts Library: Use the total number of students eligible for
NSLP in the school district in which the library is located divided by the total number of students in that school district, then use matrix discount
Library System: Uses simple average of member libraries’ discounts
Consortium: Uses simple average of members’ discounts
42
Form 471 Filing Tips
File and certify online! Multiple forms OK No one-to-one correlation with 470
required Meaning, you can have (1) 471, but (3) 470’s.
All services listed on 471 must have been listed on a 470
43
30% Rule - Important
30% or more of FRN Ineligible SLD will deny entire request
29% or less of FRN is Ineligible SLD will attempt to remove ineligible costs and
approve only eligible costs Why? SLD Time Allocation Issues
44
Cost Allocation Guidelines*
If service or component is part eligible/part ineligible: Must perform cost allocation based on percentage of
function that is eligible Cannot request discounts on ineligible portion
Can subtract ineligible costs before 471 OR Can subtract ineligible costs on 471, Block 5 Cannot list any ineligible service/component on
attached description of services. Example: networks shared by district and community
(ineligible) organization
45
Item 21: Description of Services* Probably most crucial piece of 471
Part of form used to deny applications Never, ever list an ineligible item PIA will call applicants with specific questions Must have separate description for each FRN (funding
request) Detailed list of products with associated prices that add
up to funding request Maintenance request showing equipment being
maintained
46
Item 21 Attachments – Paper* Provide enough information, but not too much Identify each attachment Be sure to mail with signature page or fax to SLD
Not required to be postmarked or faxed within window, but should do so a few days after window closes
Copies of bills if ongoing service, and explanation if request exceeds documented costs Quote sheet from service provider if new tariff or month-to-
month service -- Itemized details of one-time costs associated with Internet access or telecommunications services
Copies of contract
47
Item 21: New Online Description of Services* Consistent format Don’t need to submit bills or contracts
But must have available and may be asked to submit during application review
Should speed processing of application
48
471 Certifications - Important Have secured access to all non-eligible resources
(computers, training, software, maintenance, etc) Tech plan written (covering all 12 months) Carefully considered all bids Selected most cost effective solution with price
being primary factor Complied with state procurement laws Won’t resell services or products Will retain all documents for 5 years
49
471 Certs, cont. Authorized to submit application Acknowledge that if you lie or cheat that you’ll be
disbarred from program and prosecuted Have cost-allocated out any ineligible functions or
components Haven’t violated 2/5 rule Non-discounted portion won’t be paid or waived by
service provider Nothing free offered by service provider
50
Paying Non-Discounted Portion If your discount is 65%, you MUST have the
ability to pay the remaining 35% Cannot come from outside source Must have the nondiscounted portion in budget
Many vendors will say they can get a “grant” for this amount – NOT PERMITTED
90% discount applicants beware.
51
Paying for Non-Eligible Resources* Applicant must certify that they can also pay for
the non-E-rate eligible items that are needed to effectively use the E-rate eligible services/equipment
Future budget tally now required on 471, Item 25b
If you file multiple Forms 471 for this funding year, you must calculate your total budgeted amount allocated for these resources and enter that total on Item 25d of each Form 471.
52
Item 25d, cont. Hardware
Such as computers, printers, fax machines, video equipment, scanners, CD-ROM drives, and application servers
Professional development Such as ongoing technology-related training for technical staff, teachers
and/or librarians Software
Such as end-user applications Maintenance
Such as systems maintenance and operations costs for ineligible hardware and software and salaries of technical staff
Retrofitting Such as electrical wiring, asbestos removal, building modifications,
renovations, and repairs.
53
Next: SLD Sends 471 Receipt Acknowledgment Letter (RAL)*
Confirms receipt Verifies block 5 information Confirms successful data entry of application
into SLD system Example in binder Service provider receives similar letter when
they are listed as SPIN on 471 Make corrections, if any, and fax back to SLD
ASAP
54
Next: Application moves to Program Integrity Assurance (PIA) Review*
Checks for rule compliance – Audit phase Eligible Services Eligible Entities Appropriate discount
Almost everyone receives a PIA call Document contacts with PIA May be sent to Selective Review Process
Copies of budget, tech plan, all correspondence, winning and losing bids, bid evaluation process and documentation, etc.
55
Next Step?
Wait Return PIA calls within 7 days
Ask for extension if absolutely necessary E-mail Tricia if you’re not sure how to answer a
question Watch E-rate listserve and mail to see
which wave of funding you’re in!
56
Next: SLD Sends Funding Commitment Decision (FCDL) Letter!* Tells you which funding requests (block 5’s) of
Form 471 are approved or denied Provides information for Form 486 Can appeal if you don’t agree with your
decision Must do so within 60 days Can appeal to the SLD for their errors, or FCC if policy
decision. If SLD denies, can appeal to the FCC within 60 days
57
Next: Applicant Files 486* Must be postmarked no later than:
120 calendar days after the Service Start Date featured on the Form 486 or
120 calendar days after the date of the Funding Commitment Decision Letter
whichever is later. Signifies that it’s OK for SLD to pay any invoices for that FRN Lists who approved tech plan Certifies CIPA compliance Submit online (using PDF version – not interview) Most information contained on FCDL Use 07/01/2007 as service start date for Yr 10
Usually
around Oct.
28
58
CIPA* Filtering and Internet Safety Policies Required for any school or library receiving:
Either Internal connections or Internet access
Recipients of only Telecommunications services are exempt from E-rate CIPA compliance
Consortium members submit Form 479 to consortium leader certifying compliance
Details in binder
59
How do YOU get E-rate $? Two choices
Discounts on bills OR Reimbursement process
Must select one or the other for entire year Try to determine choice in contract or prior to choosing
service provider Now a non-binding choice on 470
If you want discounted bills, call provider as soon as you are funded
60
Discounted Billing Method* Discounts appear on applicant’s bill Service providers submit Form 474.
the Service Provider Invoice Form (SPIF)* Provider should get reimbursed by SLD within 60 –
90 days from date of submission. Applicants do nothing except make sure they are
getting discounts they deserve on bills. Do the math!
61
Reimbursement Method*
Applicant pays bill in full Applicant submits Form 472 – BEAR Form for reimbursement*
Quarterly, semi-annually, or at end of year Complete one BEAR for each SPIN Must contain SPIN signature on last page
Send or fax to SPIN SPIN will mail or fax back
AT&T has signed copy on web www.att.com/erate
Must be submitted by Oct. 28 (following funding year) for recurring services; by Jan. 28 for non-recurring services.
62
Reimbursement Method, cont.
SLD approves BEAR and sends approval letter to vendor and copy of letter to applicant
SLD then waits 20 days and sends check to SPIN SPIN must send check to applicant within 20 days Call SLD if:
You don’t get a check in a timely manner after receiving approval letter or SPIN takes too long to sign BEAR
NEW ONLINE BEAR COMING IN LATE OCTOBER
63
Invoicing Scrutiny Auditors found that many applicants were:
Substituting products or services without E-rate approval Not basing reimbursement requests on actual bills
Result: BEAR and SPIF invoices are being heavily scrutinized
Be careful not to switch services/products in mid-funding year. If so, seek clarification whether it’s allowable and get official permission from the SLD
SLD may ask you to sign service cert for SPIF SLD may ask for copies of bills for BEAR
64
Quarterly Disbursement Reports
Sent only to applicantsAuthorized personBilled Entity (BEN) address
Contains all invoice (Form 472 and Form 474) payment authorization amounts for the Billed Entity for all funding years approved during that quarter
65
Optional Form 500* File Form 500 to either:
Change a service start date or a contract expiration date
Cancel or reduce a funding commitment Warning: reductions or cancellations of funding
commitments are irreversible But: Auditors are citing applicants for leaving
significant $ on the table and not filing a Form 500
66
Changing Service Providers* Can change providers Only after receiving funding commitment letter Must write a letter to the SLD requesting change
Must certify that you are permitted in your contract and by state law to do so, and that you have informed your current provider.
Sample letter/form on SLD website Can also submit on web at “Submit a Question” Can request to split an FRN
Allocate $ to 2 providers in same funding year
67
eCertification* You will receive a PIN once you have signed a 470, 471
or 486 PIN then may be used for 470, 471, 486, & coming soon
the online BEAR Forms PIN is given to a person and is specific to that entity. Not
given to an entity Must accept terms/conditions before use Can change PIN to your own password
6-8 characters, at least 1 special character (*&%$#@) Applicants are highly encouraged to use their PINs Old PINs should be discarded eventually
68
Document Retention* Rules now require all applicants to retain
ALL E-rate and related documents for 5 years from last day of service in a particular funding year
If auditor visits in 4 years, and documents are missing, it will be the basis to recover all funding from that funding year
69
Documents to Retain*
Tech plan and approval letter
Consultant agreements RFP and proof of
publication date All vendor
correspondence Winning and losing bids Professional development
records
Contracts signed by both parties
NSLP documentation Budgets Purchase orders Packing slips Asset or inventory records Installation records Invoices Proof of payment to SLD
70
2/5 Rule* An entity may only receive discounts 2 out of
every 5 years for internal connections Doesn’t include basic maintenance
Building level, not district level Plan accordingly to maximize discounts
71
Transfer of Equipment* E-rate funded equipment must remain at approved
site for 3 full years after installation After which it may be moved to another eligible
location, providing documentation is retained describing transfer
If school or library closes, equipment may be moved to another entity, regardless of discount Must send letter to SLD outlining closing of school and
transfer of equipment Must keep documentation regarding transfer for 5 years
72
Service Substitutions* SS required when a change is made to any service on your
approved 471, Item 21 attachments After FCDL issued Applicant must seek SLD approval which meets all of these
conditions: The substituted services or products have the same functionality as the services or
products contained in the original proposal. The substitution does not result in an increase in the requested pre-discount amount.
(The substitution amount may be higher, but will only be funded at the amount originally approved.)
The substitution does not violate any contract provisions or state or local procurement laws.
The substitution does not result in an increase in the percentage of ineligible services or functions.
The substitution is consistent with the establishing Form 470 posting and original RFP, if any.
73
Red Light Rule/FCCRN* Says if a service provider or applicant owe $
to the feds, no E-rate $ will be paid until all debts are cleared
Must now have FCCRN for billed entity, in addition to E-rate entity number https://svartifoss2.fcc.gov/cores/CoresHome.html
Most entities’ FCCRNs are now in SLD system Ask service provider if they are on red-light list
Questions?
Time to take an E-rate Quiz
76
E-rate Quiz
You must have the non-discounted share of the service in your budget?
True False
77
E-rate Quiz
You don’t need a contract for any tariffed service.
True False
78
E-rate Quiz
A school must use NSLP participation to calculate discounts.
True False
79
E-rate Quiz
Under the FCC rules of priority, who receives E-rate funding first?
1. Everyone who applies for telecom services and internet access
2. Applicants with discounts of 90%
3. Applicants who have never applied before
80
E-rate Quiz
Which of these services is not eligible for E-rate discounts?
1. Basic phone service
2. T1 lines
3. Leased satellite dishes
4. Voice mail
5. Filtering
81
E-rate Quiz Which of these
instances of remote internet access is eligible for E-rate discounts?
A teacher dials-in from home to District’s computer system to access the Internet.
The superintendent dials-in from a conference to the District’s computer system to access the Internet.
The technology director uses her Blackberry phone to access the internet from home.
82
E-rate Quiz
E-rate contracts may be signed on or after what day?
1. 1st day after 470 is posted to web
2. 28th day after 470 is posted to web
3. Anytime
4. 29th day after 470 is posted to web
83
E-rate Quiz A Form 470 is not
required if you bid under state law.
Contracts may be voluntarily extended if such extensions were listed in the 470/RFP OR in the contract?
True False
True False
84
E-rate Quiz
A Form 486 is used to:
1. Return unused funds to the SLD
2. Request discounts
3. Post requests to SLD web site
4. Tell the SLD to turn on funding/CIPA certification
85
E-rate Quiz
The 486 must be submitted by July 1.
True False
86
E-rate Quiz
For recurring services, the BEAR Form (472) must be submitted by:
November 4 January 16 July 1 October 28
87
E-rate Quiz
An applicant-owned WAN is not eligible.
True False
Now that you know the rules…
Let’s complete the forms, step-by-step