Issue 23-05

August 18, 2023

E-Rate News Flash

Contents:

• Announcements
• Funding Commitment Summary
• Pending Dates and Deadlines
• E-Rate and Emergency Connectivity Fund Training Resources
• E-rate Process: Activities to Work on Now

Announcements

FCC Provides Additional Time to File For Emergency Connectivity Fund (ECF) Reimbursements

The Federal Communications Commission (FCC) recently announced that it will provide additional time for schools or service providers to request reimbursement on ECF funding requests that currently have an invoicing deadline of October 29, 2023 and earlier. The new deadline to submit requests for reimbursement is October 30, 2023. This deadline extension is automatic and applies to the large number of funding requests that had an invoice deadline of August 29, 2023.

Per our recent Special Emergency Connectivity Fund (ECF) News Flash, some late commitments and revised commitments may make invoice deadlines change. It is important to verify your organization’s ECF deadlines by checking the tools made available by the Universal Service Administrative Company (USAC): 

• You may look up the status of your funding requests and reimbursements at the Emergency Connectivity Fund Invoice Deadline Tool at https://opendata.usac.org/stories/s/gtgw-jmy3
• You may view the deadline to receive services, called the Service Delivery Date, for your funding requests at the  Emergency Connectivity Fund FCC Form 471 Tool at https://opendata.usac.org/Emergency-Connectivity-Fund/Emergency-Connectivity-Fund-FCC-Form-471/i5j4-3rvr 

Both tools will allow you to filter to your organization’s funding requests by Billed Entity Number (BEN) or by Applicant Name. 

If you or your service provider(s) are unable to file for reimbursement by the revised October 30, 2023, deadline but do have expenditures eligible for reimbursement, please file a request for more time with the Federal Communications Commission. You may do this by filing a simple letter on your organization's letterhead in the Electronic Filing System, located at this website: https://www.fcc.gov/ecfs/filings/standard. The number of the proceeding to reference is 21-93. In your letter, please explain any extenuating circumstances which prohibited your organization or service provider(s) from being able to request reimbursement by the October 30 deadline.

Emergency Connectivity Fund Cost Effectiveness Reviews

The Universal Service Administrative Company (USAC) is currently examining ECF applications and reimbursements for cost effectiveness. During these reviews, USAC is applying a standard recently clarified by the FCC in its Emergency Connectivity Fund FAQs under the section Reasonable Support Amounts (see https://www.fcc.gov/emergency-connectivity-fund-faqs):

5.10 Q: Will applicants be reimbursed for the committed $400 or $250 per connected device or hotspot if the actual price of the equipment is lower?

A: No. Those are the reasonable support amounts that could be used to apply for funding, but reimbursement will be based on the actual costs of the eligible devices or hotspots. If the reimbursement request is based on an amount that is determined to be greater than the actual or market-based cost of the equipment requested, the request for reimbursement may be reduced or denied because the requested costs may be determined to be unreasonable. The Commission was directed to provide 100% reimbursement of the costs associated of the eligible equipment and services, except for any amounts that the Commission determines to be unreasonable. (emphasis added).

If USAC finds that the cost for equipment or services exceeds current market-based costs, it will indicate its intent to deny a funding request or reimbursement, and will give the applicant an opportunity to provide a rebuttal. In reviewing these “Intent to Deny” notifications, the applicant should consider the following:

• Do your research on what the current market-based cost is for the goods and services requested. If the goods or services have not yet been ordered and/or delivered, request a revised quote from the service provider and for them to demonstrate that it is consistent with current market-based cost. Consider seeking quotes from alternative providers as a basis for comparison of market-based costs. The ECF program does allow for applicants to change service providers on ECF funding requests as long as it is allowed under state and local procurement requirements.
• If you have already ordered and/or received goods and services, consult with your service provider on why the market-based cost may have been higher historically than it is today. Were there extenuating factors due to the COVID-19 pandemic? 
• Because the ECF program did not enforce competitive bidding rules other than the requirement to comply with state and local rules, it is up to the applicant organization to provide a response as to how it determined the services ordered and received were cost effective. Did your organization request multiple quotes or purchase from a State Master Contract (SMC)? Did the SMC contain published rates at the time of your purchase that would support then market-based costs?

While most applicants will not undergo USAC’s Cost Effectiveness Review, it can be very stressful to receive a notification of intent of denial or funding reduction. If this occurs, do your homework and prepare an analysis to support your position. If USAC still denies or reduces your funding request or reimbursement, you may file an appeal with USAC within 30 calendar days of any adverse USAC decision in the ECF application platform. Further appeals may be made to the Federal Communications Commission. Appeal guidelines are available at USAC’s website at: https://www.emergencyconnectivityfund.org/file-an-appeal/.

FCC Offers Cost Allocation Relief and Asks How the E-Rate Program Can be Further Simplified and Improved

In July, the FCC approved a Report and Order and Further Notice of Proposed Rulemaking that offered both immediate relief of some complicated aspects of the E-Rate program and also asked for public comment on ways to further simplify and streamline the program.

Immediate Relief of Complicated Cost Allocations

The FCC clarified that applicants no longer need to perform complicated cost allocations for what they are considering to be ancillary usages of eligible services as described below.

• If at least 90% of an applicant’s requested Category 1 Internet and/or data transmission service is being used for eligible purposes, the remaining ineligible use of the service will be presumed to be ancillary and, therefore, cost allocation is not required.
• Category 2 cabling “drops” or “jacks” that are part of a local area network primarily serving an eligible purpose (i.e., distributing broadband throughout a school or library building) are eligible for E-Rate and do not require cost allocation even if found to be used for security cameras or voice systems. This is because equipment being plugged into the drops or jacks may change over time and it is unworkable to track usage on a drop-by-drop basis. However, dedicated networks used exclusively for security cameras or voice continue to be ineligible for program support. 
• Non-instructional facility use of Category 2 network equipment that is shared with schools is no longer subject to cost allocation. Common examples of shared equipment include core network switches, firewalls, and wireless controllers. Equipment being used exclusively by non-instructional facilities continues to be ineligible for program support.

Request for Comment on Further Program Simplification

The FCC poses multiple questions for public comment on ways to improve the E-Rate program. The questions are extensive; below are some highlights.

• Should there be exemptions to competitive bidding requirements for small applicants and/or small purchases; for example, less than $3,600 per school?
• Should the signed contract requirement be eliminated?
• Can the process be improved for contract transitions so funding loss is minimized?
• Should discounts be established for three or five year intervals?
• Should there be an FCC Form 471 EZ and should the FCC Form 486 be eliminated?
• Should service providers only charge the amount net of anticipated E-Rate discounts at all times if the applicant selects the service provider discount method?

Schools are highly encouraged to submit comments to the FCC on how the E-Rate program can be simplified and improved. Comments are due to the FCC by September 23, 2023 and may be filed in the Electronic Comment Filing System under Proceeding Number 02-6.

California Funding Commitment Summary

Emergency Connectivity Fund

Windows 1 and 2

In the Emergency Connectivity Fund (ECF) first and second application windows, California applicants requested over $923 million in funding. To date, USAC has issued $688 million in commitments for California applicants.

Window 3

In the Emergency Connectivity Fund (ECF) third application window, California applicants requested $447 million in funding. To date, USAC has issued $29 million in commitments for California applicants. USAC is currently reviewing applications at the 50% priority level.

E-Rate 

Funding Year 2023

For Funding Year 2023, California applicants have successfully submitted 5,447 “In Window” funding requests for $394 million. California applicants requested $244 million for Category 1 services and $150 million for Category 2 services. To date, USAC has committed $226 million for California applicants.

Funding Year 2022

For Funding Year 2022, California applicants have successfully submitted 5,396 funding requests for $496 million. California applicants requested $237 million for Category 1 services and $259 million for Category 2 services. To date, USAC has committed $442 million for California applicants.

Pending Dates and Deadlines

E-Rate deadlines may be viewed or calculated on the Universal Service Administrative Company (USAC) website at https://www.usac.org/sl/tools/deadlines/default.aspx.

September 30, 2023 Service Delivery Deadline for Funding Year 2022 Non-recurring Category 2 Internal Connections and Category 1 Installation

September 30 Service Delivery Deadline for Non-recurring Services

September 30, 2023 is the service delivery deadline for non-recurring services for Funding Year 2022. Non-recurring services typically include Category 2 internal connections and one-time installation costs for Category 1 services. For Category 2 internal connections, service delivery equates to installation of the equipment at the intended location(s), not just receipt of equipment in a warehouse. If you have a Category 2 project and do not anticipate that all equipment will be installed as of September 30, it’s best to request an extension of this deadline by filing an FCC Form 500 in the E-rate Productivity Center (EPC) portal. The deadline to file this form is September 30, 2023. Failing to request an extension and installing services after the deadline may result in funding recovery and/or rejection of invoices for any services delivered after September 30. More information on service delivery deadlines may be accessed on USAC’s website: https://www.usac.org/e-rate/applicant-process/before-youre-done/service-delivery/.

September 30 Service Substitution Deadline for Non-recurring Services

If your Category 2 project will be completely installed by September 30, 2023, but there are changes in the equipment received versus what was reported on the E-Rate funding request, it is necessary to file a service substitution request by the September 30 deadline. After September 30 passes, the module in EPC where applicants file these requests will no longer be accessible. Remember that if USAC reviews invoices and finds that products do not match what were approved on the E-rate application, it will reject the invoices until a service substitution is completed and approved. Please review USAC’s website for guidelines on service substitutions at https://www.usac.org/e-rate/applicant-process/before-youre-done/service-substitutions/.

FCC Form 486 Filing Reminder

The FCC Form 486 (Receipt of Service Confirmation and Children's Internet Protection Act Certification Form) notifies USAC that the billed entity and/or the eligible entities that it represents is receiving, or has received, service in the relevant funding year from the named service provider(s).

Funding Year 2023

FCC Form 486 must be filed 120 days from the date of the issuance of the Funding Commitment Decision Letter (FCDL) or the start date of E-Rate eligible services, whichever is later. The earliest deadline to certify FCC Form 486 for Funding Year 2023 is October 30, 2023.

Funding Year 2022

FCC Form 486 must be filed 120 days from the date of the issuance of the Funding Commitment Decision Letter (FCDL) or the start date of E-Rate eligible services, whichever is later.

Applicants missing these or earlier deadlines should closely monitor their News Feed in the E-Rate Productivity Center for an FCC Form 486 Urgent Reminder Letter notification. This letter will allow the applicant a 15-day extension to submit an FCC Form 486 without penalty.

Upcoming Training Events

Numerous training opportunities available for E-Rate and Emergency Connectivity Fund applicants are available or are coming soon.

Universal Services Administrative Company Recorded Resources 

E-Rate Resources

USAC has pre-recorded webinars and other materials available at its website at  https://www.usac.org/E-Rate/learn/webinars/. Recently held webinars include the following:

• E-Rate Systems Consolidation: Kick-off Webinar
• Beginning E-Rate Services Webinar
• Filing the FCC Form 470 and Competitive Bidding Webinar

USAC will be holding additional webinars throughout the Fall and is anticipated to have two in-person training events. Please subscribe to USAC’s Schools and Libraries News Brief to receive further announcements.

Emergency Connectivity Fund Resources

USAC has conducted multiple office hour webinars for ECF. You may view the webinars and register at this website: https://www.emergencyconnectivityfund.org/training/live-sessions/.

K12 High Speed Network E-Rate Resources 

California’s K12 High Speed Network will be offering multiple webinars throughout the E-Rate process specifically tailored to assist California’s school and school district applicants navigate the process. The Fall Training Schedule will be announced soon! 

Recent sessions:

• Office Hour and Review of Post Application Window Activities Recording Passcode: VP2t*HVP / Materials 
• Office Hour and Important Invoicing Reminders Recording Passcode: 2P^j4sv. / Materials 
• Emergency Connectivity Fund: Final Invoicing and Program Closeout  Recording  Passcode: h@?wP36G / Materials

E-Rate Process: Activities to Work on Now

File FCC Form 486 for FY 2023 Services

Once a FCC Form 471 annual application for funding is successfully reviewed and approved by USAC, USAC will issue a funding commitment decision letter (FCDL) notifying the applicant of funding approval or denial of its FY 2023 funding requests. Upon receipt of a positive FCDL, applicants must file an FCC Form 486 in the E-Rate Productivity Center to notify USAC that services have started for the funding year and to certify compliance with the Children’s Internet Protection Act (CIPA). 

IMPORTANT: The FCC Form 486 filing deadline is 120 days from the date of the issuance of the FCDL or the start date of E-Rate eligible services, whichever is later. For most applicants with recurring services that started July 1, 2023 of the funding year and who received their FCDL on or before July 1, 2023, the FCC Form 486 deadline is October 30, 2023. It is also important to note that USAC will not process invoices on any funding requests that do not have both a positive FCDL and a certified FCC Form 486. Therefore, in order to facilitate the receipt of approved E-Rate funds, it is important for applicants to file their FCC Forms 486 in a timely manner. Below are some FCC Form 486 filing reminders:

• Ensure compliance with CIPA and Do Not check the “CIPA Waiver” box unless are you eligible for a CIPA waiver
• Select only relevant Funding Request Numbers (FRNs)
• Applicants may file additional FCC Forms 486 for services that have not yet begun at a later date
• Correctly identify your Service Start Date (SSD)
• For Category 1 and Category 2 services that were installed before July 1, 2023 under Advance Installation rules, please note the SSD should default to July 1, 2023
• Review the FCC Form 486 carefully before certification. Incorrect information may delay the review and processing of your form

Schools new to the E-Rate program are encouraged to review training videos posted by USAC at https://www.usac.org/e-rate/learn/videos/#FCC-Form-486-and-CIPA and K12HSN at https://www.k12hsn.org/resources/erate/training which explain the purpose of the FCC Form 486 and outline the requirements of the Children’s Internet Protection Act.

Communicate E-Rate Discounting Preferences to Service Providers

E-Rate funding, commonly known as “Discounts,” is disbursed by USAC via two available forms of invoicing on approved E-Rate funding requests: 

1. FCC Form 474 Service Provider Invoice (SPI) - This method of invoicing consists of the service provider invoicing USAC for the approved E-Rate discounted amount for services rendered and invoicing the applicant the net or “undiscounted” amount after the E-Rate reimbursement is applied. This is often reflected as a discount or credit on the service provider bill to the applicant. 
2. FCC Form 472 Billed Entity Applicant Reimbursement (BEAR) invoice - This method requires that applicants pay for the full amount of services received after which they may claim direct reimbursement for the approved E-Rate discount amount by filing the BEAR with USAC.

It is important to note that is the applicant’s choice of which invoicing method is to be used for each of its approved E-Rate funding requests. This choice may vary funding request-by-funding request and/or year-by-year. The service provider may not dictate the invoicing method. However, the Form 474 SPI method is required for any Category 1 broadband services that also receive the California Teleconnect Fund (CTF) discount. More information on the California Teleconnect Fund and how it interrelates with E-Rate may be viewed on the California Public Utilities Commission’s website at: https://www.cpuc.ca.gov/ctf/ and in the CTF Applicant & Participant Guidebook which may be downloaded by clicking this link: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/communications-division/documents/california-teleconnect-fund/ctf_applicant_and_participant_guidebook.pdf.     

It is important for applicants to communicate early each year with service providers their choice of invoicing method for each of their funding requests so that there are no misunderstandings. Once USAC has processed a SPI or BEAR invoice on a funding request it will not allow for a change in the invoicing method on that same funding request except for in extraordinary circumstances.

USAC will accept and process SPI and BEAR invoices under the following conditions:

1. There is an approved FCC Form 471 funding request
2. There is a certified and approved FCC Form 486 for the funding request
3. Services have been started

IMPORTANT: Many Category 1 service providers require additional forms to be completed before they will process a SPI with USAC and post E-Rate discounts on your bills. If you have met the three conditions above and have not received the anticipated E-Rate discounts on your bills, contact your service provider(s) to determine if there are additional steps required in order for them to post discounts. Invoicing tips and E-Rate contact information for common Category 1 broadband providers in California may be viewed by accessing K12HSN’s Office Hour and Important Invoicing Reminders - Recording Passcode: 2P^j4sv. / Materials .