January 19, 2018
Though technology has the potential to revolutionize the educational standards of our country, schools and libraries face budgetary challenges that most businesses do not. A business can justify an IT investment through vast increases in employee productivity, but a school or library does not operate on the same principles. There are no end of quarter revenue reports or product distribution processes to enhance.
The E-Rate program was established in 1996 to address this exact issue, because schools and libraries find it harder to reinvest in new technologies. This is especially true for educational institutions in low-income areas who already have little room in the budget. The E-Rate program subsidizes technology infrastructure upgrades, so schools and libraries can access the new technology they need at a very attractive price.
The submission window to claim your E-Rate dollars is open now through March, 22, 2018. For schools and libraries looking to receive government subsidies on advanced technology products, the time is now. Start preparing applications, filing paperwork, and planning to address the technology needs of the organization.
To help your school navigate this process, we’ve assembled this essential guide.
The Funding Window
First and foremost, there are set deadlines that the school must keep in order to receive funding. The 2018 FCC Form 471 Application Filing Window opened January 11, 2018 and closes March 22, 2018 at 11:59 PM EDT. You must file form 471 within this time frame.
E-Rate’s Original Mission
In 1996, the federal government established the E-Rate program to encourage schools and libraries to improve their internet and voice network infrastructure. The program provides discounts on installation or services to schools and libraries looking to pursue these projects. As the networking industry boomed in the 90s, the E-Rate program was necessary to keep schools and libraries up to date.
Back in 1996, “up-to-date” meant Voice over Internet Protocol (VoIP) systems. Today, the program has been modernized, and schools and libraries can use these subsidies to acquire a wide range of networking technologies.
The 2015 E-Rate Update
In 2015, the program was modernized by the FCC and now has new guidelines and requirements. With these new rules, every school and library can access these federal subsidies. Nearly twenty years after its inception, this update shifted the program’s focus to more contemporary technologies.
Switch from Priorities to Categories
Previously, the E-Rate Program organized the types of eligible services into two “Priorities.” With the modernization, the “Priorities” were replaced by two “Categories.”
- Category 1: Category 1 reflects technologies and services that connect the school or library to the internet at large.
- Category 2: This Category includes the various network technologies that create connections within the school.
Fund Allocations
Upon inception, the E-Rate program set out to assist schools and libraries in low-income areas, so funding was allocated by referencing the National School Lunch Program. The percentage of students that qualify for free lunches directly impacts the amount of E-Rate funding a school receives. This ensured that the schools that needed the most assistance received the most aid.
Now, funding works differently. Instead of referencing the individual school’s percentage of students receiving free lunches, it takes a broader view and looks at the entire district.
- Category 1 Funding Requirement: Funds are awarded for Category 1 products based on the income level of the school or library involved. By determining the percentage of children in the district that qualify for free lunches, a set amount of Category 1 dollars are awarded accordingly.
- Category 2 Funding Requirement: However, funds for Category 2 services are available to all schools and libraries based on student population or square footage respectively. Schools that previously were unable to receive government aid now have the opportunity to enhance their WiFi and network infrastructure at significantly subsidized prices. Schools receive $150 per student total over a five year period, while libraries receive $2.30 per square foot over a five year period.
Declining Voice Funding
Voice funding was not eliminated entirely or immediately, though several related services and features were. Voice funding will be reduced by 20% every year until it is completely gone.
As this is now the fourth year since the update, the funding for voice modernization is minimal in 2018.
Category Breakdown of E-Rate Services
There are strict rules detailing how money awarded through this program can be spent. If your school or library is pursuing any of these initiatives, contact Mindsight to discuss your E-Rate options. Mindsight is a certified E-Rate vendor and each year completes the required SPAC form to maintain our standing.
Below, we’ve detailed the kinds of projects each category covers.
Category 1
Schools and libraries can use Category 1 dollars to establish a basic connection to the internet. In total, funding ranges from 20% to 90% of the project cost depending if the location is rural or urban. Category 1 projects may include:
- Cable modem
- Ethernet
- Integrated Services Digital Network (ISDN)
- Self-provisioned broadband networks
- Wireless services
- Interconnected voice over internet protocol (VoIP)
- Satellite telephone service
- And more
As a side note, you’ll notice that some voice services are still included in Category 1. Remember, the amount of resources allocated to the E-Rate fund for these projects is diminishing year by year. If you require a voice project, take advantage of the E-Rate program soon, or the discounts may dry up.
Eligibility Caveat
Category 1 does not extend beyond connectivity and does not cover fiber, network equipment, or managed services. Funds for these products and services are available through Category 2.
| % of Students Eligible for National School Lunch Program | Urban School Discount | Rural School Discount |
| Less than 1% | 20% | 25% |
| 1% – 19% | 40% | 50% |
| 20% – 34% | 50% | 60% |
| 35% – 49% | 60% | 70% |
| 50% – 74% | 80% | 80% |
| 75% – 100% | 90% | 90% |
Category 2
Category 2 dollars can be applied to a much wider range of projects. All in all, there is $1Billion allocated to the program and can cover up to 85% of the total project cost. These Category 2 projects may include:
- Internal Connections: This section covers the basic hardware for an internal network, including access points, routers, switches, hubs, wiring, etc.
Eligibility Caveat
The hardware selected must exist on the applicant’s site and be deemed absolutely necessary to provide connectivity to classrooms or areas of the library.
- Managed Internal Broadband Services: A school or library using a third party IT consultant to manage, monitor, and operate their network may qualify for Category 2 dollars.
Eligibility Caveat
Expenses or portions of expenses can only be covered by Category 2 E-Rate dollars if the managed services are deemed absolutely essential for connectivity.
- Basic Maintenance of Internal Connections: The E-Rate program is not exclusively for new acquisitions and management. Category 2 funds can also be used for the repair and upkeep of the eligible hardware products outlined above.
Eligibility Caveat
The expenses covered by Category 2 must be for the actual work performed and/or parts repaired or replaced.
| % of Students Eligible for National School Lunch Program | Urban School Discount | Rural School Discount |
| Less than 1% | 20% | 25% |
| 1% – 19% | 40% | 50% |
| 20% – 34% | 50% | 60% |
| 35% – 49% | 60% | 70% |
| 50% – 74% | 80% | 80% |
| 75% – 100% | 85% | 85% |
For a full list of accepted qualifying projects and services, read the report released by the Federal Communications Commission.
Take Advantage of E-Rate
E-Rate presents schools and libraries with an excellent opportunity to follow-through on their networking projects without breaking their budget. Whether your school or library is ready for a hardware refresh or looking to modernize your network, there’s no reason to pay full price after the E-Rate window has closed.
You can keep an eye on the FCC website for any updates to the program throughout the year.
Mindsight and Certified Vendors
Organizations looking to take advantage of the federal subsidies can only purchase products and services from certified E-Rate vendors. Typically, one vendor will assist the school or library in designing the solution, and then once the project details are complete, the specifics are posted on the E-Rate website for other companies to bid on over the following twenty-eight days. The school or library then has the option to choose one of the certified E-Rate vendors to perform the work.
Mindsight is a certified E-Rate vendor and every year completes the required SPAC form to maintain our status. Contact Mindsight today to discuss how your school or library can substantially cut project costs for Category 1 and Category 2 products and services.
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About Mindsight
Mindsight, a Chicago IT services provider, is an extension of your team. Our culture is built on transparency and trust, and our team is made up of extraordinary people – the kinds of people you would hire. We have one of the largest expert-level engineering teams delivering the full spectrum of IT services and solutions, from cloud to infrastructure, collaboration to contact center. Our highly-certified engineers and process-oriented excellence have certainly been key to our success. But what really sets us apart is our straightforward and honest approach to every conversation, whether it is for an emerging business or global enterprise. Our customers rely on our thought leadership, responsiveness, and dedication to solving their toughest technology challenges.
Contact us at GoMindsight.com.
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