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CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-RATE OVERVIEW
What is E-Rate? What is Changing?
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
Aruba Networks
HQ: Sunnyvale, CA
Founded in February of 2002
$730M in Revenue
2,000 Employees
Leader in Unified Access & NAC
40,000 Customers World-wide
NASDAQ: ARUN
Comprehensive list of Industry Partners
Ecosystem • Channel • Distribution
Leader: 2014 Wired & Wireless Magic Quadrant
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
What is E-Rate?
Created in the Telecommunications Act of 1996
– First funding year in 1998 (Year 1)
– Funding years are July 1 through June 30 (FY2014: July 1, 2014 – June 30, 2015)
Provides subsidies of up to 90% for eligible services
Available to schools and libraries
Administered by the Universal Service Administration Company (USAC)
– Specifically, the Schools & Libraries Division (SLD)
– Universal Service Program overseen by FCC
Original Funding Cap of $2.25B, adjusted for inflation
– Currently at $2.4 Billion (Funding Year 2014)
– Funding committed to Category 1, then (if funding remains) Category 2
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-Rate Eligible Services
CATEGORY 1 SERVICES (Formerly Priority
1)
– Telecommunications services
– Telecommunications
– Internet access services
CATEGORY 2 SERVICES (Formerly Priority
2)
– Broadband internal connections
– Managed internal broadband services
– Basic maintenance of eligible broadband internal
connections
E-Rate Process
• ESL Released
• Application Window Announced
• Form 470/RFP Filed
Bids Submitted
• Bids Reviewed
• Service Provider Selected
Form 471 Filed • PIA Review
• FCDL Issued
• Form 486 Filed
Service Starts
• Invoices Submitted (BEAR or SPI)
Funding Disbursed
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-Rate FY2015 Timeline
Applicants can file Form 470 (July 1, 2014)
Draft ESL Released (August 4, 2014)
Draft ESL Comment Date (September 3, 2014)
Draft ESL Reply Comment Date (September 18, 2014)
Final ESL Released* (Estimated)
Application Window Opens* (Estimated)
Application Window Closes* (Estimated)
Cat2 Installations Can Begin (April 1, 2015)
Cat1 Services Begin (June 1, 2015)
1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-Rate Modernization Order (E-rate 2.0)
Change in Nomenclature
– Priority 1, now Category 1
– Priority 2, now Category 2
$2 Billion Additional Funds for
FY2015 & FY2016
– Category 2 has annual target budget
of $1B; Keyword “Target”
5-Year Category 2 Budget
Maximum for Applicants
– Schools: $150/student ;
Libraries: $2.30/sq.ft
– Rolling Budget, eliminates 2-in-5 rule
Flexible spending patterns
Subscription-based pricing
Fresh start in FY2015
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-rate Modernization Order (E-rate 2.0)
NEW DISCOUNTING
Category 2 maximum discount
reduced to 85%
FASTER RESPONSE
Target FCDL issue date of
Sept.1 of each funding year
FUNDING FLOOR
Establishes a funding floor of
$9,200 in Category 2 support
ADDS & REMOVES
(+) Managed internal broadband
eligible in FY2015 (Managed LAN &
WLAN)*
(--) Voice & Video components
removed from Cat-2 in FY2015 ESL
PRICING TRANSPARENCY
Item 21 attachments will be public
* Per Draft ESL. Subject to change.
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-rate Modernization Order (E-rate 2.0)
PREFERRED MASTER
CONTRACTS
Bureau will designate specific national
contracts as “Preferred Master
Contracts”
Allows applicants to bypass the Form
470 filing requirement
For equipment purchases only; no
labor services
EARLY INSTALLATIONS
Category 2 installations can begin on April 1 of funding year
Eliminate RFP process
Choose pre-negotiated contracts
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
Category 2 products*
-Network switches
-Routers
-Wireless LAN Controllers
-Access Points used in LAN/WAN
environment
-Cabling, connectors, and related
components -Racks that support
eligible internal connections
components
-Uninterruptible Power Supply (UPS)
necessary for basic power protection
for eligible equipment
-Caching
-Firewalls
-Software necessary to support this list
of eligible broadband internal
connections components, including
Client Access Licenses for LAN/WLAN
networks
-Improvements and upgrades to
components on this list of eligible
broadband internal connections
*Per Draft ESL – Subject to
Change
Eligible Broadband Internal Connections Components
Notes: (1) Functionalities listed above that can be virtualized, and equipment that combines eligible functionalities, like
routing and switching, are also eligible
(2) A manufacturer’s multi-year warranty for a period up to three years and provided as an integral part of an eligible
component, without a separately identifiable cost, may be included in the cost of the component.
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
Category 2 products*
Services provided by a third party for the operation, management, and/or monitoring of eligible broadband internal connections components.
– For example, managed internal broadband services may include services necessary to manage and repair the LAN/WLAN network, such as diagnostic services, 24-hour network monitoring, or helpdesk support.
In some managed services models, the third party manager owns and installs the equipment and school and library applicants lease the equipment as part of the managed services contract. In other cases, the school or library may own the equipment, but have a third party manage it for them.
*Per Draft ESL – Subject to
Change
Eligible Managed Internal Broadband Services(e.g. Managed WiFi)
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
Category 2 products*
*Per Draft ESL – Subject to
Change
Basic Maintenance of Eligible Broadband
Internal
Connections Components
E-rate support is available for basic maintenance and technical
support appropriate to maintain reliable operation when provided
as a component of eligible broadband internal connections.
The following basic maintenance services are eligible:
-Repair and upkeep of eligible hardware
-Wire and cable maintenance
-Configuration changes
-Basic technical support including online and telephone based technical
support
-Software upgrades and patches including bug fixes and security patches
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
Aruba Product Eligibility*
?
*Per Draft ESL. Subject to change. ** When purchased as a managed service.
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-rate Modernization Order
Voice services being phased down beginning FY2015
– 20-Point reduction each year. FY2015 max discount 70%, FY2016 max
discount 50%, etc.
Legacy telephone features eliminated
– Paging, Text, Directory Assistance
Email, Web Hosting, Voice Mail eliminated
Wireless Data Plans and Air Cards eligible in certain
circumstances only
– Only eligible when proven to be most cost-effective way to connect students
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-rate Modernization Order
Discounts calculated district-wide
Document retention increased to 10-Years from last date of install
Contract signature requirements eased
Applicants can receive BEAR disbursements directly from USAC
Manufacturers eligible products database program will be
terminated
Invoice deadline extensions will be automatically granted one-
time for 120-Days
– No other extensions will be granted
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
USAC Applicant Training
Philadelphia - Tuesday, October 7, 2014
Minneapolis - Monday, October 13, 2014
New Orleans - Thursday, October 16, 2014
Portland - Tuesday, October 28, 2014
Los Angeles - Thursday, October 30, 2014
St. Louis - Tuesday, November 4, 2014
Orlando - Tuesday, November 11, 2014
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
USEFUL LINKS
USAC Website
www.usac.org/sl
USAC E-Rate Modernization Resources
http://www.usac.org/sl/tools/modernization-order/default.aspx
FCC (E-Rate Specific) Website
http://www.fcc.gov/guides/universal-service-program-schools-and-libraries
E-Rate Modernization Order
http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0723/FCC-14-99A1.pdf
Draft ESL
http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0804/DA-14-1130A1.pdf