E-Rate SimplifiedFY2011 Opportunities forCalifornia Libraries

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Don DietrichBTU Consultants, LLC

(Includes content from October, 2010 SLD Seminars, with permission)

"Make everything as simple as possible, but not simpler."

Albert Einstein

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E-Rate 2011 Agenda

• Preparing for E-Rate & CTF• Applying for E-Rate

• Approval and Acceptance of Funds• Record Keeping• What’s new for FY2011

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E-Rate and CTF – What are they?

• E-Rate (Education Rate - Federal)–Provides up to 90% discounts on broad array of services–“…deliver information to and from libraries…”

• CTF (California Teleconnect Fund– CA only)–Provides 50% discounts on telecom services only–To receive CTF, you only need to verify once and your discounts will continue with your existing vendors.

• Both are results of Universal Service concept –1934 - “EVERYONE deserves an affordable telephone”–1996 – “ALL SCHOOL & LIBRARIES deserve high speed Internet”

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• File for E-Rate Discounts – Pays 20-90% based on poverty level– Different for every library, branch or system

• File for CTF Discounts– Assumes all libraries already file for E-Rate– Pays 50% of ‘Non-E-Rate’ amount

• Ex: if your library qualifies for 70% E-Rate Discount…– for each $1000 spent you could receive: – $700 (70% E-Rate discount)– $150 (50% CTF of the remaining $300)

E-Rate & CTF Work Together

IF you don’t file for E-Rate and CTF you are losing money

USAC E-Rate Information

http://www.usac.org/sl/

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California State Library E-Rate Information

http://www.library.ca.gov/services/libraries/erate.html

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California Teleconnect Fund (CTF) Information

CTF Homepage

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CTF Training Slides

Libraries currently approved for CTF http://docs.cpuc.ca.gov/ctf/weblibs.csv

E-Rate Annual Cycle - 7/1/xxxx through 6/30/xxxx

Plan & File Form 470 September – October Review / Update / Approve Technology Plan

Free & Reduced Lunch Counts

Competitive RFPs Developed (if required) October - November

Vendor Conference(s) October - November

Vendor Responses Received Early December

System / Vendor Selection Mid December

Contract Negotiation December - January

Forms Submission to SLD (Form 471) Feb (March ‘11?)

Implementation (Form 486 / 500 / 472) July – June

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10http://www.usac.org/_res/documents/sl/pdf/application-process-flow-chart.pdf

E-Rate Program Rules – Basic Requirements

• NEW FOR 2011 - Must be based on Technology Plan only if applying for Priority 2 services

• Competitive Process – requests must be posted for 28 calendar (not business) days

• All funds must be used for– eligible goods and services– installed at eligible facilities – provided by eligible service providers

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Before Filing…

Everything must be documented

Technology Plan Assistance

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Rushton Brandis Programs Consultant at California State Library Sacramento, California Area

Email rushbrandis@library.ca.gov Ph: 916-653-5471

CA Library E-Rate Site

Before Filing…

You must demonstrate CIPA compliance for E-Rate

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• CIPA (Children’s Internet Protection Act) compliance is only required if you are applying for Internet or Internal Connections

• If you don’t want to mess with CIPA…you should still file E-Rate for Telecom

See CIPA Resources on Webliography

Before Filing…

CIPA Requirements

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• Must have an Acceptable Use Policy or Internet Safety Policy that contains specific elements

• Must have a public hearing and public notice

• Must have technology protection (filtering) software in place to protect minors.

• All documentation supporting compliance with CIPA rules is maintained in E-rate binder.

Before Filing…

Acceptable Use Policy Requirements

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• Access by minors to inappropriate matter on the Internet and World Wide Web.

• The safety and security of minors when using electronic mail, chat rooms, and other forms of direct electronic communications.

• Unauthorized access including "hacking" and other unlawful activities by minors online.

• Unauthorized disclosure, use, and dissemination of personal information regarding minors.

• Measures designed to restrict minors' access to materials harmful to minors.

Before Filing…

Protecting Children in the 21st Century Act (New)

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• Enacted in Fall 2008 to address Internet Safety in schools, specifically cyber-bullying awareness and response

• Before USAC can enforce new requirements the following must occur:

– FCC will issue a Notice of Proposed Rulemaking (NPRM) seeking comment on the Act

– FCC will draft new rules and the new rules must be voted by the FCC Commissioners

– FCC will release guidance to USAC in an Order

Before Filing…

E-Rate Eligible – 2 Priorities / 4 Categories

• Priority 1 (to the Library) – always funded

– Telecommunications Services Category

– Internet Access Category

• Priority 2 – (within the Library) - awarded to poorest

applicants first, until all funds are exhausted– Internal Connections Category (only available 2 out of 5 years)

– Basic Maintenance of Internal Connections Category

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Before Filing…

What’s Covered Is On the Eligible Services List (ESL)

Priority 1• Local and long distance telephone usage, Cellular and Paging

• Internet access costs, Web Hosting, Email Service

Priority 2• Cabling and hardware (switches, routers, racks, UPS…)

• Network Servers for Internet access and E-mail

• Telephone systems (PBX’s) including VoIP and VoiceMail

• Maintenance charges

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Before Filing…

What’s Not Covered ?

• Computers, Telephone instruments, Video Cameras

• Power infrastructure

• Physical security or construction

• Application Software

• Consulting Services, Training, Personnel Costs

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Before Filing…

Eligible Services List (ESL)

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20Eligible Services List - Schools and Libraries - USAC

Before Filing…

Eligible Services List (ESL)

Take some time to Review this ESL

Put a Check Mark in the margins of the items that you are sure you will need

Put a question mark in the margins of the items that you have questions about

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21Eligible Services List - Schools and Libraries - USAC

Before Filing…

E-Rate Eligible Locations – Priority 1

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http://www.usac.org/sl/applicants/step01/

SLD eligibility requirements

• Libraries that meet Library Services and Technology Act (LSTA) requirements.

• Library Administration Buildings

• Bookmobile garages

• Interlibrary loan facilities

• Library technology centers

Before Filing…

E-Rate Eligible Locations – Priority 2Be Careful

Priority 2 services for administrative sites are NOT eligible unless those services are “essential for the effective transport of information to a library”.

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Before Filing…

E-Rate Eligible Locations – start your own list

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1. What library locations (entities) are you responsible for ?

2. Which will you want to include on E-Rate Form 470 ?

3. Assume all locations are in need of Priority 1

4. Are some (all) locations in need of Priority 2 ?

Before Filing…

Priority 1 On-Premise Equipment – Be Careful

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“My Internet Provider wants to ‘give’ me a router.”

“My Phone Company wants to sell me a phone system under E-Rate Priority One”

Be CAREFUL – you must satisfy SLD’s 8 Requirements

Before Filing…

Priority 1 On-Premise Equipment – Example 1

This leased router may be eligible for P1 funding if all conditions are met. Single demarcation – if the router is removed, the LAN would continue to function

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Before Filing…

Priority 1 On-Premise Equipment – Example 2

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Leased VoIP and PBX equipment are NOT eligible for Priority One funding.By removing the VoIP PBX equipment, the local voice network will cease to function. This equipment is eligible ONLY as Internal Connections.

Before Filing…

Web Hosting – What is it and What’s Eligible

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Source: http://www.usac.org/sl/about/training-presentations/training-presentations-archive/training-2009/fall/materials.aspx

(Advanced Eligible Services)

• Provides a means for a library to display content on the Internet.

• Generally includes:– provision of web site traffic (bandwidth)– provision of disk space for storing applicant provided

content– provision of File Transfer Protocol (FTP) transfer or a

Web interface to upload files

Before Filing…

Web Hosting – Not Eligible

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Before Filing…

Calculating E-rate discounts depend on:

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• The percentage of students eligible for the National School Lunch Program (NSLP) or an equivalent measure of poverty in the school district where your library resides

– current Discount Data is online at http://www.cde.ca.gov/ds/sh/cw/filesafdc.asp

• The urban or rural status of the county or census tract in which the library building is located

– current U/R status lookup online at http://www.usac.org/sl/applicants/step05/urban-rural/

Before Filing…

E-Rate Discounts are Based on Poverty Level

INCOME URBAN LOCATION RURAL LOCATION

Measured by % of students eligible for the National School

Lunch Program

Discount Discount

If the % of students in your school that

qualifies for the National School Lunch

Program is…

…and you are in an URBAN area, your discount will be…

…and you are in a RURAL area, your discount will be…

Less than 1% 20% 25%

1% to 19% 40% 50%

20% to 34% 50% 60%

35% to 49% 60% 70%

50% to 74% 80% 80%

75% to 100% 90% 90%

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Before Filing…

Calculating Discounts

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• Single Library Outlet or Branch– use discount for the School District in which the library or

branch is located• Library System & Consortia

– calculate discount for each individual entity– calculate simple average discount

(total discounts/total entities)• New Construction

– use discount for the School District in which the library is located

Before Filing…

Should I file for Priority 1, Priority 2 or Both?

• Your discount level determines whether or not you will be funded for Priority 2 goods and services:

– below 70% = low probability of Priority 2 funding

– 80% and above = high probability of Priority 2 funding

– cutoff level changes every funding year

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Before Filing…

Exercise #1 – E-Rate Background Data

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Exercise #1 – E-Rate Background Data

Before Filing…

Non-E-Rate Procurement Process

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Plan Procure Implement

Tech Plan

Requirements

Design

Detail Specifications

Internal Approvals

Competitive RFP (if required)

Vendor Selection

Award Contracts

Submit Specific Requests

Coordinate Vendors

Monitor Installation

Resolve Upsets

Audit Financial Documents

Assure Completion

Recommend Acceptance

E-Rate Forms Follow the Same Flow

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Plan Procure Implement

Form 470

Notice of applicant’s intent to acquire goods and services (non-specific as to amounts or vendors)

Form 471

Specific request for goods and services by entity, category, detailed costs and vendor (requires signed contract with vendor)

Form 486

Notice of intent to accept funds awarded

Form 500

Change award amount or items

Form 472 (BEAR) – Recover discounts already paid to vendors for eligible goods and services.

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37http://www.usac.org/_res/documents/sl/pdf/application-process-flow-chart.pdf

E-Rate Form 470 – A Poor Man’s RFP

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38Step 3: Form 470 Filing Information - Applicants - Schools and Libraries - USAC

Filing your Form …

E-Rate Form 470 is New for 2011

If it’s not available when you need it you

can use the old Form 470

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Filing your Form …

E-Rate Form 470 – What’s it for?

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• Filing Form 470 opens a competitive bidding process– can also issue a Request for Proposals (RFP)

• Applicants are responsible for ensuring an open and fair process and selecting the most cost-effective provider of the desired services

• RFP is not required under FCC rules• Even if you have an RFP, you must describe the services

you desire on your Form 470

Filing your Form …

E-Rate Form 470 – Gotcha’s

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• You must wait at least 28 days from the submission date before entering into a contract for services

• If filed online, the form will calculate this date for you• If you are under a multi-year contract from a previous

year, you do not need to file a Form 470 every year• If you are under Month-Month or Tariff rates, you must

file a Form 470 every year• Must indicate willingness for a multi-year contract or

contract with extensions if appropriate

Filing your Form …

E-Rate Form 470 – What you will need

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• File online – only use paper as a last resort• Online Filers can use Interview Mode or Form Fill-out• You will need to know how many entities you are applying

for and the area-code, prefix of each (going away in 2011)• You will need the general descriptions for each service that

you are requesting• You will need a PIN # (automatically issued the first time

you file a paper form)

Filing your Form …

E-Rate Form 470 – Online

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Take notes on your Form 470 Handout

Training Website SLD Training Site

Filing your Form …

Exercise #2 Form 470 Prep Worksheet

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44Ex #2 – Form 470 Descriptions

Exercise #3 – Form 470 Details

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• Transfer the items from your Form 470 Prep Worksheet from previous Exercise to the Form 470 Handout

• Review the Eligible Services List Handout for possible additional items or services

• Goal is to compile a completed Form 470 Handout that you can use to enter your own online

Filing your Form …

RFP Process – Issues in Competitive Bidding

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SLD is on the lookout for these common ‘problems’ • Must wait 28 days and ‘be accessible’• Must respond to all legitimate inquiries• Vendor cannot help you with Form 470 or be involved in

competitive process• Multi-tiered vendor selection must follow rules• NO ‘Sham’ Bidding (i.e. “I already know who I want”)• Cost to transfer to another provider alone is not by itself

a good enough reason to stay with incumbent• NO Gifts or ‘Free’ Services

Source: http://www.usac.org/sl/about/training-presentations/training-presentations-archive/training-2009/fall/materials.aspx

(Issues In Competitive Bidding)

After Form 470…

Vendor Selection – if there’s not a formal RFP

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• You must document and retain your vendor selection process

• Use this template or one of your own to record Form 470 responses from vendors

• Keep logs of all vendor emails

See Handout Form 470 Response Log Spreadsheet

E-Rate Form 470 Service Provider Response and Selection Log

Use this form to log all vendor contacts regarding non-RFP items on this Form 470. Document Service Provider Selection and assign FRN numbers only after the Allowable Contract Date. Form 470 Items that are described by a formal RFP should be documented elsewhere.

Funding Year: 2010 Contact Name:

Applicant Name: Your CA Library Latest Update: 1/5/2010

BEN: 470 Posting Date: 12/4/2009

Form 470 No.: 963940000779355 470 Allowable Contract Date: 1/1/2010

470 Date Closed: 1/31/2010 470 Review/Selection Date: 2/8/2010

Form 470 Description: Priproty One services, no RFP.

Use Item Descriptions from Form 470 Date Vendor Name / SPIN Mode of

Contact Notes, Comments and Actions Taken FRN

Telecommunications

Local Voice Tel Services Approx 430 Centrex Lines to 14 Locations. Provided by Verizon North on a tariff basis.

incumbent Verizon North Most cost effective since no new equipment required - only solution that will run over existing WAN. 1984425

12/4/2010 Calltower email Rec'd proposal for VoIP - requires new equipment (Cisco VoIP) and new phones. Also would require upgrade to WAN beyond DS1s.

12/7/2010 Trumpet Networks email

Rec'd requiest for information but no pricing. Trumpet provides both WAN and VoIP services. This vendor would require new equipment (VoIP PBXs) and new phones. Also would require upgrade to WAN

beyond DS1s.

Dedicated Data Lines - Pt-Pt DS1 lines to 12 locations. Provided by Verizon North on Tariff basis.

incumbent Verizon North Most cost effective solution - other two offerors do not match specs and would require new equipment. 1984427

12/7/2010 Trumpet Networks email Rec'd requiest for information but no pricing. Trumpet provides both WAN and VoIP services as P1.

1/11/2010 Comcast email Proposed Fiber WAN and 50mb Internet. Does not match specs, would require new equipment and higher cost.

Long Distance - Approx 300 lines. Provided by Qwest on MTM basis.

incumbent Qwest No responses received - remaining with incumbent provider. 1984430

Cellular Voice - 35 existing plus up to 15 new phones. Provided by Verizon Wireless on MTM basis.

incumbent Verizon Wireless No responses received - remaining with incumbent provider. 1984435

Internet Cellular Data - / Internet 35 existing plus up to 15 new phones. Provided by Verizon Wireless on MTM basis.

incumbent Verizon Wireless No responses received - remaining with incumbent provider. 1984435

After Form 470…

Vendor Selection – if there is a formal RFP

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48..\Training Presentation Fall 2010\samples-checklist-vendor-selection-worksheet.pdf

After Form 470…

CompetitiveProcessTip Sheet

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49..\Training Presentation Fall 2010\Tip Sheets\Tip Sheet competitive-bidding-process.pdf

E-Rate Form 471 – Do You Need a Contract?

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• Applicants and service providers must sign contracts for services that are not provided under tariff or under month-to-month arrangements

• Contracts can cover more than one year or contain extensions, but applicant must have indicated these options in the Form 470

Step 4: Contract Guidance - Schools and Libraries - USAC

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ContractsTip Sheet

..\Training Presentation Fall 2010\Tip Sheets\Tip Sheet contracts.pdf

E-Rate Form - 471

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52Step 7: Form 471 Filing Information - Applicants - Schools and Libraries - USAC

E-Rate Form - 471

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• Provides specific information on services, service providers selected, and contracts

• Provides discount calculation information

• Must be filed for each funding year

• Contains certifications of compliance

• Includes one or more funding requests

• Each FRN must reference a specific Form 470

E-Rate Form – 471 - Deadline

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• Must be filed online or postmarked on or before the close of the Form 471 application filing window.

• Forms 471 filed after the close of the window will be considered after all Forms 471 filed on time.

• Certifications for associated Forms 470 also must be filed online or postmarked before the close of the window.

E-Rate Form 471 – Online

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55Training Website SLD Training SiteExample Stockton 2010

E-Rate Form 471 – Gotcha’s

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• Don’t combine Priority 1 and Priority 2 requests on the same Form 471.

– review of Priority 2 requests may hold up Priority 1 commitments.

• If filing for more than one discount rate – use separate Form 471 applications.

• For 2011 you will need an FCC Registration # avail at: https://fjallfoss.fcc.gov/coresWeb/publicHome.do

E-Rate Form 471 - Tips

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• Remove ineligible costs from funding requests– document ineligible costs carefully– 30% rule – if 30% or more of the dollar value of the

request is for ineligible products and services, the entire request will be denied

• You can work with your service provider(s) to create your Item 21 attachment(s)

• File Item 21 Attachments online

Form 471 Project Tracking Spreadsheet

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58(Sample Project Tracking Spreadsheet )

Form – 471 – Item 21 – Paper Example

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Step 7: Item 21 Attachments for Form 471 - Applicants - Schools and Libraries - USAC

Training Website SLD Training Site

Form – 471 – Item 21 – Online Example

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60Training Website SLD Training Site

SLD E-Rate Resources – When you need help…

• Service Provider Hotline (1-973-428-7335)• User Hotline (1-888-203-8100) • Online “Submit a Question” www.slforms.universalservice.org• Email Questions to: questions@sl.universalservice.org• Search Reference Area: Reference Area - USAC• SLD Newsbriefs: News-briefs - Schools & Libraries – USAC• Training Website: SLD Training Site • One Page Guidelines: SLD TIP Sheets • SLD Training Presentations

http://www.usac.org/sl/about/training-presentations/training-presentations-archive/training-2008/fall/materials.aspx

• E-Rate Central Newsletter (example)– http://www.e-ratecentral.com/subscribe.asp

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E-Rate Resources

(questions@sl.universalservice.org)

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PIA Review – What is it ?

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Forms 471 are reviewed by Program Integrity Assurance (PIA) for compliance with program rules concerning areas such as:

• Competitive bidding process• Contracts• Discount Calculation• Sufficient Budget• Establishing Form 470• Technology Plan & CIPA

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Source: http://www.usac.org/sl/about/training-presentations/training-presentations-archive/training-2009/fall/materials.aspx

(Pre-Commitment Corrections)

Examples:• Entered the incorrect amount (i.e., data

entered $100 instead of $1,000) • Omitted an entity from the Block 4• Provided the incorrect Form 470 number

on the Form 471• Selected the wrong category of service• Submitted an unsigned contract to PIA• Omitted an FRN

Clerical Corrections

PIA Review – Corrections Allowed

PIA Review – Know Your Rights

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• At the end of the review, your reviewer must give you an opportunity to respond to any reductions or denials

• Applicants can cancel or reduce funding requests as a result of PIA-detected errors

• Applicants can “split out” services or entities into separate (new) funding requests.

PIA Review – If you don’t comply – you will be denied.

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66SLD Training Presentations FY2010

Denials Tip Sheet

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67..\Training Presentation Fall 2010\Tip Sheets\Tip Sheet common-applicant-errors.pdf

E-Rate Approval & Acceptance!

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• You will receive an FCDL (Funding Commitment Decision Letter)

– cover page of important reminders– reports status of individual funding requests:

o fundedo not fundedo as yet unfunded (Priority 2 requests)o cancelled

– may receive more than one FCDL

E-Rate Form 486 – Accepting the Funding

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69Step 10: Form 486 Filing Information - Applicants - Schools and Libraries - USAC

E-Rate Form 486 – Certifications Required

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• Notifies USAC that services have started and invoices can be paid

• Certifies that Tech Plan (if required) is in force and meets program requirements.

• Certifies that CIPA is in force and meets requirements.

E-Rate Form 486 Deadline

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• Form 486 must be filed online or postmarked no later than

– 120 days after the Service Start Date OR– 120 days after the date of the FCDLwhichever is later.

• If the Form 486 is late, the date 120 days before the Form 486 online filing or postmark date will become the start date for discounted services and funding may be reduced.

E-Rate ReimbursementsYou Have To Ask For The Money

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• Applicants must use SPI (Service Provider Invoicing) or BEAR (Billed Entity Application for Reimbursement) process to actually GET THE MONEY.

• CTF participants must use DISCOUNTS• Contact your vendor if not sure (most vendors

have standard forms for E-Rate discounts)

INVOICE DEADLINE IS 10/28 – every year

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• Requests for extensions must be postmarked or received by USAC as soon as possible after the last date to invoice

• USAC provides for the extension of invoice deadlines under certain conditions, such as

– authorized service provider changes – authorized service substitutions – USAC errors (for example, in data entry) that ultimately

result in a late invoice – circumstances beyond the service provider’s control

If you need more time to invoice, file an invoice deadline extension request

Record Retention – “if it isn’t written down it didn’t happen”

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• Setup an electronic and paper file for each funding year

• Make a checklist of included items

• Make a spreadsheet across years

• Monitor at least monthly

• Build an E-Rate Binder

Record Retention – USAC Guidance

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• Downloadable Table of Contents Guide

• Downloadable Table of Contents (Word document

preformatted for Avery© Ready Index 10)

• Located in USAC web site Reference Area

http://www.usac.org/sl/tools/reference-area.aspx#c

E-Rate Changes – Form 500

• Change FRN Start Date

• Contract Extensions

• FRN Reductions

• FRN Cancellations (Unused Funds)

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E-Rate Changes – Stuff Happens…

• You must notify SLD of any changes in the services that have been approved– FRN Implementation Extensions – you need more time to

implement a Priority 2 project– Service Substitutions – you change your Internet from a

DSL line to a T1 line– SPIN Changes – your ISP goes out of business and you need

a new provider• There are standard SLD processes for all of these

(and more)• Examples and assistance at SLD website or ask for

help.

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Appeals

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• USAC decisions can be appealed to USAC or to the FCC.– generally, appeal first to USAC.– can appeal to the FCC if USAC denies.

• Can be filed electronically or on paper.

• Must be filed within 60 days of the USAC decision.

• Requests for waivers of rules must be filed with the FCC.

File an Appeal - Schools and Libraries - USAC

Audits – Why me?

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• Applicants and service providers certify and agree to be audited for up to five years from end of service

• Some are random• Some are not (whistle-blower complaints)• You will receive advance notice of the audit• Auditors can be from USAC, the FCC or external

auditors

Understanding Beneficiary Audits - Schools and Libraries - USAC

Changes for Year 2011

• More Focus on School Closings & Mergers• Changes to Audit and Review

– “Heightened Scrutiny Reviews”– PQA (Payment Quality Assurance) Audits– More detailed Compliance Audits– Cost Effectiveness Review

• Impact of Broadband Stimulus still not known

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Final Tips

• Document everything• Email yourself• Build and retain an “E-Rate Binder”• Plan for eventual audit• File for BOTH E-Rate and CTF

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FY 2011 Window – not yet announced

471 Filing Window:

opens at noon (EST) on ????

closes at 11:59pm (EST) on ????

LAST DAY FOR Form 470 is ????

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Information & Assistance

BTU Consulting, LLC

Email to:

Carol Underriner: carol@btu-consultants.com

Lori Thompson: lori@btu-consultants.com

Don Dietrich’s email: ddietrich01@earthlink.net

Don Dietrich’s Cell Phone: 314-378-1667

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Questions & Evaluation Oct

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