E-rate Overview

What is E-rate?

E-rate is the commonly used name for the Schools and Libraries Program of the Universal Service Fund, which is administered by the Universal Service Administrative Company (USAC) under the direction of the Federal Communications Commission (FCC). The E-rate Program provides discounts on high-speed Internet access and telecommunications in eligible schools and libraries nationwide. E-rate was created with the Telecommunications Act of 1996. The intent of the act was to ensure that schools and libraries have affordable access to telecommunications, Internet services and related equipment. Priority was given to schools and libraries in low-income and rural areas. Kansas currently receives approximately $23 million (including Category 1 and Category 2 funds) per year in E-rate funds.

E-rate 1.0 – On July 11, 2014, the Federal Communications Commission (FCC) adopted the E-rate Modernization Order (summary). The Order takes major steps to modernize and streamline the E-rate program and focuses on expanding funding for Wi-Fi networks in eligible elementary and secondary schools and libraries.

E-rate 2.0 – On December 19, 2014, the FCC issued the Second E-rate Modernization Report and Order on Reconsideration (summary). Building on the E-rate Modernization Order adopted by the FCC in July 2014, the improvements to the program adopted in this Order seek to close the high-speed connectivity gap between rural schools and libraries and their urban and suburban counterparts. It also provides sufficient and certain funding for high-speed connectivity to and within all eligible schools and libraries.

For more information on E-rate, access the Schools and Libraries (E-rate) Program Overview document on the USAC website. For more information on the application process, see the Applicant Process overview on the USAC website.

Who manages E-rate?

Federal Communications Commission (FCC), an independent government agency, oversees the E-rate Program. Universal Service Administrative Company (USAC), a not for-profit company, administers the E-rate Program under FCC guidance. The Schools and Libraries Division (SLD) is the section of USAC that has responsibility for the E-rate Program.

Who qualifies for E-rate?

Eligible participants include public and most non-profit K-12 schools as well as all public and many private libraries. All program participants must carry out a competitive bidding process to select the most cost-effective companies to provide the goods and/or services requested.

Schools operating as for-profit businesses or that have endowments exceeding $50 million are not eligible. Non-traditional facilities and students may be eligible.

Eligibility of Head Start, pre-kindergarten, juvenile justice, adult education, and special education students and facilities is summarized in the table below. More information can be found on the Non-traditional Education page on the USAC website.

  • Head Start services for children less than three years old are not eligible for discounts and must be cost allocated, unless otherwise noted.
  • Home-based Head Start programs are not eligible.
  • Per the federal Individuals with Disabilities Education Act (IDEA), special education students who are 3-21 years of age are eligible in all states.

What types of services are eligible for funding?

Category One

The first category of supported services, Category One, includes the services needed to support broadband connectivity to schools and libraries. Eligible Category One services are listed in the entries for data transmission services and Internet access and voice services. This category consists of the services that provide broadband to eligible locations including data links that connect multiple points, services used to connect eligible locations to the Internet, and services that provide basic conduit access to the Internet. With the exception of leased dark fiber and self-provisioned broadband networks, maintenance and technical support appropriate to maintain reliable operation are only eligible for support when provided as a component of these services. Voice services, as described below, are subject to a phase down of support that began in Funding Year (FY) 2015.

Data transmission services and Internet access

Digital transmission services and Internet access are eligible in Category One. These services include:

  • Asynchronous Transfer Mode (ATM)
  • Broadband over Power Lines
  • Cable Modem
  • Digital Subscriber Line (DSL)
  • DS-1 (T-1), DS-3 (T-3), and Fractional T-1 or T-3
  • Ethernet
  • Integrated Services Digital Network (ISDN)
  • Leased Lit Fiber
  • Leased Dark Fiber (including dark fiber indefeasible rights (IRUs) for a set term)
  • Self-Provisioned Broadband Networks
  • Frame Relay
  • Multi-Protocol Label Switching (MPLS)
  • OC-1, OC-3, OC-12, OC-n
  • Satellite Service
  • Switched Multimegabit Data Service
  • Telephone dial-up
  • Wireless services (e.g., microwave)
  1. E-rate support is available for leased lit fiber, leased dark fiber, and self-provisioned broadband networks as described in the Second E-rate Modernization Order (FCC 14-189). Eligible costs include monthly charges, special construction, installation and activation charges, modulating electronics and other equipment necessary to make a Category One broadband service functional (“Network Equipment”), and maintenance and operation charges. Network Equipment and maintenance and operation costs for existing networks are eligible. All equipment and services, including maintenance and operation, must be competitively bid.
  2. Applicants that seek bids for leased dark fiber must also seek bids for leased lit fiber service and fully consider all responsive bids. Similarly, applicants that seek bids for self-provisioned broadband networks must also seek bids for the needed connectivity via broadband services provided over third party networks, and fully consider all responsive bids.
  3. Applicants may seek special construction funding for the upfront, non-recurring costs for the deployment of new or upgraded facilities. The eligible components of special construction areconstruction of network facilities, design and engineering, and project management.
  4. Staff salaries and labor costs for personnel of the applicant or underlying beneficiary are not Erate eligible.
Eligible voice services

Eligible voice services are subject to an annual 20 percentage point phase down of E-rate support that began in FY 2015, as described in the E-rate Modernization Order. For FY 2017, the effective discount rate will be 60 percentage points less than other Category One services. The reduced discount rate for voice services will apply to all applicants and all costs for the provision of telephone services and circuit capacity dedicated to providing voice services including:

  • Centrex
  • Integrated Services Digital Network (ISDN)
  • Interconnected voice over Internet protocol (VoIP)
  • Local, long distance, and 800 (toll-free) service
  • Plain old telephone service (POTS)
  • Radio loop
  • Satellite telephone service
  • Shared telephone service (only the portion of the shared services relating to the eligible use and location may receive discounts)
  • Wireless telephone service including cellular voice and excluding data and text messaging

Category Two

The second category of equipment and services eligible for E-rate support, Category Two, includes the internal connections needed for broadband connectivity within schools and libraries. Support is limited to the internal connections necessary to bring broadband into, and provide it throughout, schools and libraries. These are broadband connections used for educational purposes within, between, or among instructional buildings that comprise a school campus (as defined on p. 7) or library branch, and basic maintenance of these connections, as well as services that manage and operate owned or leased broadband internal connections (e.g., managed internal broadband services or managed Wi-Fi). Category Two support is subject to per-school or per-library budgets as set forth in the E-rate Modernization Order and Second E-rate Modernization Order. The eligible components and services in Category Two are:

Eligible Broadband Internal Connections
  • Access points used in a local area network (LAN) or wireless local area network (WLAN) environment (such as wireless access points)
  • Antennas, cabling, connectors, and related components used for internal broadband connections
  • Caching
  • Firewall services and components separate from basic firewall protection provided as a standard component of a vendor’s Internet access service.
  • Switches
  • Routers
  • Racks
  • Uninterruptible Power Supply (UPS)/Battery Backup
  • Wireless controller systems
  • Software supporting the components on this list used to distribute high-speed broadband throughout school buildings and libraries
  1. Functionalities listed above that can be virtualized in the cloud, 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 that is provided as an integral part of an eligible component, without a separately identifiable cost, may be included in the cost of the component.
  3. Caching is defined as a method that stores recently accessed information. Caching stores information locally so that the information is accessible more quickly than if transmitted across a network from a distance. A caching service or equipment that provides caching, including servers necessary for the provision of caching, is eligible for funding.

What type of discount will we get with E-rate?

E-rate discounts range from 20% to 90% of the cost of eligible services. There is a single discount rate for the entire district. Discounts are based on the combination of the number of students eligible for National School Lunch Program (NSLP) and the designation of urban or rural status. Use the E-rate Discount Matrix provided by the Schools and Libraries Division (SLD) of USAC to find your district’s E-rate discount.

National School Lunch Program

Discounts are calculated and used by USAC based on the NSLP data in the ‘Discount Calculation’ section of the FCC Form 471. The NSLP percent is determined by dividing the total number of students eligible for NSLP for the entire district by the total number of students in the school district.

Each year, schools and districts in Kansas submit enrollment data to KSDE based on the number of students enrolled and attending on the September 20 Count Day. These data are audited and posted publicly on the Kansas K-12 Reports. These data are used by the SLD’s Program Integrity Assurance (PIA) reviewers as part of the application review process. If the data entered on the application do not match the data on the Kansas K-12 Reports, the PIA reviewer will request additional documentation or third party verification. Please contact Kansas’ State E-rate Coordinator (Kimberly Wright kwright@ksde.org 785-296-6331) if there is a request for third party verification.

A guidance document, Free and Reduced Lunch Eligibility Data Instructions link to this document, is available to help locate the posted NSLP data that are posted on the Kansas K-12 Report.

Urban/Rural Designations

The FCC determines urban and rural status based on the 2010 U.S. Census Bureau data. If more than 50 percent of the schools in a school district are considered rural, the school district is eligible for a rural discount. If 50 percent or less of the entities are considered rural, the school district is eligible for an urban discount.

USAC provides a lookup tool to help school districts determine the individual and aggregate urban/rural designations used in calculating the E-rate funds discount. The Urban/Rural Lookup Tool is available on the USAC website. You will need to know the entity numbers of all the schools in the school district to utilize this tool.

What is CIPA and how is it connected to E-rate?

The Children’s Internet Protection Act (CIPA) addresses concerns about children’s access to obscene or harmful content over the Internet. CIPA requires school districts that receive discounts through E-rate to certify that an Internet safety policy has been approved, after reasonable notice and one public hearing, and that protection measures have been put in place. See the Resources tab for links to additional CIPA resources.

Copyright © Kansas State Department of Education 2016

Email: erate@ksde.org