Higher Education Technology Consultant. 19811993. Presiden

1

E-rate What is it?

• Presented by
• Joe Melloy
• April 19, 2007

2
My BackgroundJoseph P. Melloy, Sr.

• 33 years with IBM
• Technical marketing, systems engineering,
  management
• Higher Education Technology Consultant
• 1981-1993
• President, Technology Planning Group,Inc
• 1993 to the present
• Higher education clients Mid-Atlantic area
• Delaware, Virginia, Maryland, Pennsylvania, New
  Jersey
• K-12 clients Pennsylvania and Delaware
• Recent activities Vision 2015 Working Group
• Technology plans charter schools
• E-Rate expertise Pennsylvania and Delaware

3
Contact Information

• joemelloy_at_comcast.net
• Cell 302-547-8517

4
Agenda

• Background of the E-Rate
• What products and services are eligible for
  discounts?
• How is the discount determined?
• When is the next E-Rate process Year?
• What is the process?
• HOW HAS DELAWARE DONE IN ACQUIRING E-RATE FUNDS?
• What is my school or districts plan to secure
• E-Rate funding for educational technology?

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What is E-rate?

• Telecommunications Act of 1996 established
  Universal Service Discount Program for Schools
  and Libraries
• Annual 2.25 billion program
• Provides 20-90 discounts on telecommunications
  services, Internet access, and internal
  connections
• Fund made up from charges on your phone bills
• Most public libraries, public and private K-12
  schools, including charters and vo-techs are
  eligible

6
How Has Delaware Done?

• Over ten years of the E-Rate program..

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The Answer

• NOT WELL!

8
Last Place Among Fifty States for Each of the Ten
Years of the Program

• Source Article E-Rate Discount Totals Over 10
  Years
• Source www.nctet.org
• Total of Ten years of Discounts
• Delaware 11,044,978.
• Similar population states
• New Hampshire 15,875,210
• South Dakota 42,258,467.
• Rhode Island 58,958,867.
• North Dakota 32,628,670

9
DE Comparison to Nearby States

• NORMALIZE 10 years of data to PER STUDENT /
  PER YEAR COMPARISON
• State E-Rate Students / Student/ Yr
• MD 152mm 865,561 17.54
• PA 629mm 1,828,089 34.42
• NJ 436mm 1,393,347 31.28
• DE 11mm 116,342 9.50

10
New DE E-Rate Strategy Needed

• First, Lets Talk About the Details of the
  E-Rate
• Strategy will evolve by the end of this
  presentation after we look at
• THE PROCESS..

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Who Administers E-rate?

• FCC
• Created program and its rules
• USAC
• Universal Services Administrative Company
• Created by FCC to run E-rate and other universal
  service programs
• Pays invoices
• SLD
• Schools and Libraries Division
• Entity within USAC that runs E-rate
• Makes no policy decisions

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E-Rate Funds

• Who contributes the funds that are set aside to
  fund technology for schools in schools and
  libraries?

13
The Answer

• We all do!
• When we pay our telephone bills.
• Universal Access Charge

14
Public Service Commision Report

• Delaware PSC, FCC hearing, June 14, 2005
• Delaware end-users pay 10.2 surcharge on their
  telephone bills.
• In 2005, Delawareans will pay 21 million in
  this surcharge and will receive back only
  685,000 in federal E-Rate funds. Something must
  be done to limit the size of this fund.
• Source
• Bruce Burcat, Executive Director
• Delaware Public Service Commission

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How are they distributed?

• WE APPLY FOR THEM.
• OUR APPLICATIONS ARE APPROVED, BASED ON THE FACTS
  WE PROVIDE.
• THE DISCOUNTS ARE DETERMINED BY THE
  ADMINISTRATIVE ENTITY IN WASHINGTON USAC.
• THE APPROVED SERVICES ARE PROVIDED AT THE
  DISCOUNTED RATE.

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Why Are We Talking About E-Rate?

• DE schools and libraries can apply alongside
  30,000 other schools and libraries in U.S
• You want to make sure you know how to complete
  forms, etc., so you can get the funding youre
  entitled to.
• Work with a qualified consultant and/or utilize
  in-house staff to insure accuracy and legitimacy
  of all requests.

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Fair Warning!

• E-rate is not an easy process
• Only for the strong willed and determined
• Long process, a lot of paperwork, some
  frustration
• Patience is needed, in addition to diligence in
  reading correspondence
• Rewards can be great
• Never ever try to cheat the program

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Resources to Remember

• SLD web site www.sl.universalservice.org
• SLD CSB 888-203-8100
• Or Google search SLC E-Rate
• Other state E-Rate websites

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Applicants

• Must use E-rate Entity Number in order to
  participate
• One for every building in your district or
  library
• All applicants already have unless its a new
  building
• Must have FCC Registration Number (FCCRN)
• Just for billed entity
• All applicants should have obtained in Yr 7
• Must have NCES code (schools) or FSCS (libraries)
• Listed on PA E-rate website under Helpful
  Documents
• Leave blank if none exists

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Service Providers

• Must obtain Service Provider Identification
  Number in order to participate (9 digit )
• Info on SLD web site under Vendor Area
• Service Provider/SPIN Search on SLD web site
• Not required to pay into Fund to get SPIN
• Only telecom carriers must pay
• Only sign contracts with providers that have SPIN
• Providers should update contact info on Form 498,
  Block 11

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Funding Priorities

• Needed - demand exceeds cap of 2.25 billion
• Priority One Telecommunications and Internet
  Access
• All approved-inside the window-likely to be
  funded
• Priority Two Internal Connections Basic
  Maintenance of IC
• Funds go first to neediest applicants (90
  discount level), then to others in order of
  discount until funds are exhausted
• Year 1 -- funded to 70
• Year 2 all approved applications funded
• Year 3 down to 82
• Year 4 down to 87
• Year 5 down to 81
• Year 6 down to 70 - significant rollover funds
• Year 7 down to 81
• Year 8, 9, 10 approximately 86

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Funding Priorities

• What does this mean?
• Always apply for all telecommunications services
  and Internet access youll get those discounts.
• Make judgement call on internal connections
  depending on discount level and time available to
  complete application

23
Exactly what services ARE and are NOT eligible?

• Current and Future Services You Use or Plan to Use

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Eligible Telecom Services

• MUST be provided by regulated telecommunications
  carrier
• Basic Telecom Services
• Local, long distance voice mail
• Advanced Telecom Services
• T-1, ATM, Frame Relay, ISDN, lit fiber, etc.
• Satellite services and leased dishes
• Voice over IP (Internet Protocol) -
• ADDED IN 2007!

Including most taxes and surcharges!
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E-Rate Discount Checklist

• Source
• www.universalservice.org/
• Eligible Services List
• Note page number in first column
• IMPORTANT
• Check conditions of Eligibility of
• each service or product
• Can be done at school, district or consortium
  level.

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Eligible Telecom Services, cont.

• Wireless Services
• Cellular service all staff eligible
• Paging service
• Calling cards
• Not pre-paid cards
• Centrex, custom calling features
• Installation fees OK
• Can be installed before funding year begins so
  services are ready by July 1

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Ineligible Telecom Services

• 900 Calls
• Payphones
• Cost of not-publishing phone numbers
• Cost of additional directory listings
• End user equipment (phones, beepers, cell phones,
  fax machines, etc.)

28
Eligible-Tariffed Services/MTM

• Services that are purchased mainly from a phone
  company, such as T1
• OR
• Monthly services such as cell or Internet Access
• For which no contract is signed
• Must competitively bid every year, regardless of
  competition in your area for those services

29
Fiber Networks

• Dark Fiber (unlit) is not eligible
• Lit Fiber is eligible IF
• Modulating electronics are bundled with the lease
  cost of the fiber
• Applicant will never own fiber
• Applicant cost allocates any lease of fiber that
  isnt being used in that funding year.

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Internet Access

• Eligible
• Subscription fee to ISP
• E-mail
• Firewall fees
• Webhosting
• Internet bandwidth

• Ineligible
• Filtering
• Any remote access outside school property to
  internet
• Blackberry services presumed ineligible

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On-premise, Priority 1 Equipment

• Permitted if bundled from telco or ISP
• Must certify
• No applicant ownership ever
• No exclusive use
• LAN functions without use of equipment
• Service provider maintains equipment
• Not applicant

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Eligible Internal Connections

• System operating software
• Wireless Access Points
• Private branch exchange (PBXs)
• Firewalls
• Anything needed for transport not end user
  devices
• Installation of eligible internal connections
• Basic Maintenance contracts on eligible
  internal connections
• basic maintenance

• Network and phone wiring
• Routers
• Switches
• Hubs
• Network servers
• Video codecs

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Ineligible Internal Connections

• Network management s/w
• Routers used for remote access
• Curriculum software
• Phones, beepers
• Owned WANs
• Salaries of SD staff to install or maintain
  network or components
• Any equipment used for remote access to network
  or Internet

• Personal computers
• FAX machines
• Asbestos removal
• Cameras
• Electrical wiring
• Teacher training

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Gotcha!Words to Never Use with SLC

• 2-way Radios/walkie-talkie (direct connect OK as
  a cell service)
• Filtering
• Network monitoring
• Directory advertising/listings

• Cellular phones
• Management
• Redundancy
• Helpdesk
• 24 hour technical support
• Insurance policies
• Remote access

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Application process at a Glance
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UPCOMING Year 11 - Details

• For services rendered 7/1/2008 - 6/30/2009
• Application process begins Nov., 2007
• Five months away..ninety day exercise.
• Write tech plan now
• Review Form 470 requirements
• File 471 when window opens (normally beginning of
  November)
• Window will close first week in February, 2008
• Must be inside window to be funded for 08-09

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You Must Have a Technology Plan!

• Five SLC technology plan criteria
• Goals and Strategies for using technology
• Needs Assessment
• Professional Development
• Budget including sources of funding
• Evaluation
• Must align with 470 request for services
• Must be written before 470 is filed
• Must cover full 12 months of NEXT funding year
• Plan must be approved by DCET (Denise Allen)

38
Technology Plans, cont.

• Vendors cannot write or approve technology
  plans
• No tech plan required for basic phone service or
  long distance (includes cell and voice mail)
• Centrex is not basic phone service
• Be sure to include dates of tech plan!
• Get approval letter by July 1
• then Print/Maintain Approval Letter
• Tech plans approved for no more than 3 years
• Certify on 486 who approved plan
• Can amend technology plan if yours is not
  specific enough

39
Competitive Bidding

• Everyone must do it
• Even if no competition in your area
• Even if bidding under state law
• Must be done when signing any new contracts
• Must be done each year for all tariffed/MTM
  services
• Bidding on web site does not exempt you from
  bidding under state law
• Can be done simultaneously
• Only exception is if someone bid it for you

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Choosing the Winning Bid

• Applicant must to pick most cost-effective bid
• Cost doesnt have to be only factor, but must be
  most heavily weighted factor
• For example, if you have 3 bid evaluation
  criteria, price must be at least 34 of total
  weight.
• Examples of other specified factors
• Prior experience
• Personnel qualifications
• Technical excellence
• Management capability
• Cost of switching providers
• Etc.

41
Signing E-rate Contracts

• Signing Contracts/Selecting Provider must be done
  before you submit 471
• Be careful not to make any decisions, sign
  anything or file any forms during 28 day waiting
  period.
• Contracts must be signed and dated by both
  parties
• Must sign contracts unless tariff or MTM service
• If selecting PEPPM, no contract needed, but you
  must be able to explain why you chose reseller A
  over reseller B

42
Signing E-rate Contracts

• List contract extensions and contract expiration
  dates
• These also must be listed in RFP or 470, Item 7b
• Include non-E-rate funding out clauses
• Separate internal connections/wiring portions of
  contracts for highest discount schools

43
What is My Discount?

• Two criteria make up discount
• Poverty level - Federal School Lunches
• Location -rural classification

44
Discount Matrix for Single School
of Students Eligible for School Lunch Program
Discounts
45
Alternative Measures to NSLP Data

• Goal Discounts based on true eligibility not
  participation.
• 2 Ways to do this
• Take existing participation data and add to it
• Using sibling match
• Using existing family income data
• Conduct family income survey
• Must survey 100 of families. If 50 response
  rate, then OK to extrapolate the rest
• Maintain complete records
• Sample survey available
• Valid for 2 years

46
Discount Calculations by Entity

• Schools Use straight matrix discount
• Districts Use weighted average of schools
  individual discounts
• Library Use the total number of students
  eligible for NSLP in the school district in which
  the library is located divided by the total
  number of students in that school district, then
  use matrix discount
• Library System Uses simple average of member
  libraries discounts
• Consortium Uses simple average of members
  discounts

47
If You Are an Individual School
Always uses straight matrix discount for single
schools.
48
If You Are a School District
District discounts are based on weighted average
discounts, based on individual school discounts.
49
If You are a Library Outlet/Branch or Library
System
50
If You Are a Consortium
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Paying Non-Discounted Portion

• If your discount is 65, you MUST have the
  ability to pay the remaining 35
• Must have the nondiscounted portion in budget
• Many vendors will say they can get a grant for
  this amount NOT PERMITTED

52
How do YOU get E-rate ?

• Two choices
• Discounts on bills
• OR
• Reimbursement process
• Must select one or the other for entire year
• Try to determine choice in contract or prior to
  choosing service provider
• If you want discounted bills, call provider as
  soon as you are funded

53
Document Retention

• Rules now require all applicants to retain ALL
  E-rate and related documents for 5 years from
  last day of service in a particular funding year
• If auditor visits in 4 years, and documents are
  missing, it will be the basis to recover all
  funding from that funding year

54
Documents to Retain

• Tech plan and approval letter
• Consultant agreements
• RFP and proof of publication date
• All vendor correspondence
• Winning and losing bids
• Professional development records

• Contracts signed by both parties
• NSLP documentation
• Budgets
• Purchase orders
• Packing slips
• Asset or inventory records
• Installation records
• Invoices
• Proof of payment to SLD

55
Transfer of Equipment

• E-rate funded equipment must remain at approved
  site for 3 full years after installation
• After which it may be moved to another eligible
  location, providing documentation is retained
  describing transfer
• If school or library closes, equipment may be
  moved to another entity, regardless of discount
• Must send letter to SLD outlining closing of
  school and transfer of equipment
• Must keep documentation regarding transfer for 5
  years

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E-rate Consultants

• Not a bad idea if you have complex application
• Be certain that the consultant
• Provides training
• Is in constant communication with you
• Provides you with copies of all forms
• Provides you with periodic updates on your
  applications
• Does not sign your forms
• Does not have any relationships with vendors
• Sign Letter of Agency

57
E-Rate Consultants

• Unique skill and experience required
• Best to work with the school or district
• Cost of Consultant? Depends
• Fixed Price Contract
• Pay by the hour
• OR
• Based on dollar savings in obtaining discounts
  for equipment, services, etc.
• Usually 25 to 30!

58
Future of E-rate - FCC

• New FCC Chairman, Kevin Martin
• Appears to be supportive of E-rate
• Congress will continue to evaluate
• DELAWARE
• Public Service Commission unhappy that too little
  funds from Universal Access Charges are coming
  back to the state.
• State must seize the opportunity and go after
  E-Rate funds its entitled to!

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WHO IS RESPONSIBLE?

• WE ALL ARE!

60
Follow-up Interested in Proposal of Consulting
Services?

• Send Letter of Intent of your E-Rate interest
• Direct to
• Joe Melloy, President
• Technology Planning Group, Inc.
• PO 149
• Montchanin, DE 19710
• OR
• Email joemelloy_at_comcast.net

61
Thank You

• Questions