E-Rate Program

The E-Rate Program Defined

The Federal Communications Commission (FCC) established the E-rate program in 1996 to provide funding to connect the nation’s schools and libraries to broadband. At that time, only 14 percent of the nation’s K-12 classrooms had Internet access. While E-rate succeeded in connecting virtually all schools and libraries to the Internet, the program was not geared to support the bandwidth required for today’s world of interactive digital learning via laptops and tablets.

The FCC released a second E-rate Modernization Order in December 2014, making further changes to the program, which subsidizes Internet connectivity at schools and libraries across the country. Building on the FCC’s July 2014 E-rate Modernization Order — which took initial steps to improve WiFi connectivity in schools and libraries, and streamline program administration and data collection — the new order tackles the underlying connectivity challenges and addresses the fact that the program has been historically underfunded.

Special Construction of New Fiber

1. Ammortization of Upfront Construction Costs

Old Rule

Districts had to amortize large upfront construction costs in excess of $500,000 over three years.

New Rule

E-rate will pay the full discounted share of upfront special construction charges in the first year.

Benefit

This significantly reduces the financial impact on districts that are deploying fiber networks.

2. Installation Payment for Construction Costs

Old Rule

Districts had to pay their share of non-recurring cost of special construction within 90 days of the start of service.

New Rule

Applicants are allowed to pay their share of those upfront costs in installment payments over up to four years.

Benefit

This significantly reduces the financial impact on districts that are deploying fiber networks.

3. Equaliizing Dark and Lite Fiber

Old Rule

E-rate would only pay special construction costs up to the district’s property line.

Modulating electronics not eligible in Category One.

New Rule

E-rate will now pay special construction costs beyond a district’s property line.

Modulating electronics to light dark fiber will be eligible for Category One support.

Benefit

Funding supports fiber construction up to the service demarcation, and it removes a barrier that may have discouraged districts from building their own dark fiber network.

The incentive of deeply discounted electronics encourages districts to upgrade to dark and self-provisioned fiber networks.

Other important points:

Districts can receive funding for incurred Category One infrastructure costs up to six months prior to start of the funding year.
Districts seeking dark fiber bids must also seek lit fiber service over a comparable time period; they need to fairly compare the costs for dark fiber and lit fiber, and ensure that the most cost-effective option is chosen.
Districts seeking funding for equipment and maintenance costs associated with lighting dark fiber must be included in the same application with the dark fiber lease.
Districts may seek E-rate support for self-construction of their own high-speed broadband networks, or portions, when self-construction is the most cost-effective solution.

Serving over 3-million students and over 300 educational organizations, we can provide your schools and libraries with the bandwidth and services you need to meet the ever-increasing demand for technology-enabled learning environments.

Our experience in partnering with educators through the E-Rated process allows us to deliver the advanced network you expect, when you need it.

Much of this material was obtained from the USAC presentation available here.