E-Rate for Tennessee Intermediate/Advanced Applicants

1
E-Rate for TennesseeIntermediate/Advanced
Applicants
Presented by Kim Friends State E-Rate
Coordinator for the Tennessee Department of
Education
2
Agenda

• General Information
• E-rate Technology Planning
• Discount Calculations/Strategies
• Eligible Services
• Forms 470/471
• Procurement/Competitive Bidding
• Program Compliance and Updates
• E-rate Gift Rules
• Post-Commitment Processes

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The Role of TN Dept. of Ed

• TDoE has no statutory authority to administer the
  federal E-Rate program
• TDoE only provides general information about the
  E-Rate program including training and outreach,
  reference materials, and other publicly available
  SLD/USAC resources

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What is Kims Role?

• Contracted with by TDoE to serve as TN State
  E-rate Coordinator
• Provide outreach and training to applicants in TN
• Represent TN before federal policymakers
• Maintain TN E-rate website and listserve
• Act as resource when E-rate administrator cant
  help

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Tennessee E-Rate Website
6

• Intermediate/Advanced Presentation

• E-Rate Technology Planning

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Purpose of the Tech Plan

• Tech plans ensure that schools and libraries are
  prepared to effectively use the requested
  services to integrate telecommunications and
  internet access into the educational program or
  library services that they provide to students.

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Technology Plan Review

• ONLY required if applying for Priority 2 funding
• Plan must include four SLD technology plan
  criteria
• Goals and Strategies for using technology
• Needs Assessment
• Professional Development
• Evaluation
• Must align with funding requests
• Must be written before 470 is filed
• Be sure to document the existence of this draft
  plan
• Must cover full 12 months of upcoming funding
  year (include dates!)
• 3 year maximum

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Must Do Reminders

• Must be Written prior to posting Form 470
• It must be documented that it is written before
  the posting of the form 470! (Applicant must
  document the existence of this plan, i.e., e-mail
  with plan attached, memo from cabinet level about
  the plan being written, including the date. DATE
  STAMP)
• Must include a sufficient level of detail and
  cover all services (priority 2) for which E-Rate
  discounts are being sought on the Form 470(s) and
  subsequent Form 471(s).
• Must be approved by the start of services (July
  1) or the filing of Form 486, whichever is
  earlier
• E-rate Tech Plans must be approved by a USAC
  Certified Technology Plan Approver see USAC
  link http//www.usac.org/sl/tools/reference/tech/
  default.asp
• Must include all four required elements (as noted
  previously)

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Additional Reminders

• Service Providers may not act as technology plan
  approvers, write/create, or assist in the tech
  plan in any capacity (except as offering
  technology/provider neutral information only)
• Remember to include in your tech plan all the
  services that you apply for on Form 470/471,
  required for Priority 2 (Internal connections
  and Basic Maintenance of Internal Connections)

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Additional Reminders

• There are some non-starters that will require
  revision (even to draft plans)
• If your dates have not been changed throughout
  the entire document to reflect the period for
  which the draft is being written, revisions will
  be required
• The TDoE and my office will be presenting a
  Technology Planning workshop toward the end of
  January, 2013 to help those of you who actually
  need your plans APPROVED before July 1, 2013.
• Stand by for details

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Tech Plan Help and Approval

• Email your questions/concerns to the TennSEC
  office at kfriends_at_tennsec.com or
  bfriends_at_tennsec.com
• Email your draft plans for verification of
  receipt and review in anticipation of approval.
• Tech Plan approval letters will be issued from
  the TN State E-Rate Coordinators Office.

13
Questions?
14

• Intermediate/Advanced
• Presentation

• Discounts

15

• Calculating Your Discount

• Schools/School Districts

• Calculate the discount rate for each individual
  school
• School District average weighted average of the
  schools
• Multiply E-Rate discount by total student
  population of the school to get weighted product
• Add all weighted products and divide by total
  students in school district
• Discounts are based on schools actually receiving
  services in the FRN (may not be all schools in
  the district)

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• Calculating Your Discount Using the Matrix

INCOME Measured by of students eligible for NSLP URBAN LOCATION Discount RURAL LOCATION Discount
If the of students in your school that qualifies for the NSLP... ...and you are in an URBAN area, your discount will be... ...and you are in a RURAL area, your discount will be...
Less than 1 20 25
1 to 19 40 50
20 to 34 50 60
35 to 49 60 70
50 to 74 80 80
75 to 100 90 90
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• Calculating Your Discount

• Calculate the discount rate for each individual
  school
• School District average weighted average of the
  schools
• Multiply E-Rate discount by total student
  population of the school to get weighted product
• Add all weighted products and divide by total
  students in school district
• Discounts are based on schools actually receiving
  services in the FRN (may not be all schools in
  the district)

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Calculating Your Discount Individual School

• Individual School uses straight Discount from
  Matrix

19
School District Discounts the Weighted
discount

• Weighted Average of Individual School Discounts

20

• Calculating Your Discount

• Non-Instructional Facilities (NIFs)

• NIFs on the campus of single school/library and
  that serve only that entity, get the discount of
  that school/library (Separate entity number
  necessary only if located at a different physical
  address)
• NIFs that serve multiple schools/libraries, and
  without classrooms or public areas, get shared
  discount for the school district/library system
• NIFs that serve multiple schools and with
  classrooms use the snapshot method to get
  discount
• Snapshot method Choose a specific day and
  determine the NSLP eligibility of the student
  population that is in class on that day
• DOCUMENT your process

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• Calculating Your Discount - Strategy

• Please refer to exercise Kim is showing

22

• Alternative Discount Mechanisms

• Alternative Discount Mechanisms

• NSLP eligibility based on students family being
  at or below 185 of federal poverty levels
• Income Eligibility Guidelines (IEG) published
  annually by U.S. Department of Agriculture
• Other alternative discount methodologies seek to
  determine if a student meets the NSLP IEG
  threshold

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• Alternative Discount Mechanisms

• Acceptable Mechanisms

• Programs that meet the IEG threshold for the
  NSLP
• Medicaid
• Food stamps (SNAP)
• Supplementary Security Income (SSI)
• Section 8 Housing Assistance
• Low Income Home Energy Assistance Program
  (LIHEAP)
• Food Distribution Program on Indian Reservations

Unacceptable Mechanisms

• Programs that do not meet the IEG threshold for
  the NSLP
• Temporary Aid to Needy Families (TANF)
• Title 1
• Scholarship programs

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• Alternative Discount Mechanisms

• Sibling Match

• If school can establish that one sibling in a
  family is eligible for NSLP, then it can count
  the other siblings in the same family as eligible
  for NSLP even if the other siblings do not
  participate .

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• Alternative Discount Methods

• Surveys

• Must be sent to all families whose children
  attend the school
• Surveys must contain at least student and family
  name, size of family, income level of family or
  acceptable alternative mechanism
• Surveys are valid for two years
• NSLP application forms are never an acceptable
  survey instrument

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• Calculating Your Discount (Advanced)
• Use the survey method

• Can conduct family survey even if your school
  participates in NSLP
• Must survey all families in the school
• If more than 50 of surveys are returned, survey
  is considered valid and results may be
  extrapolated for entire school
• Keep careful documentation
• Beneficial for both public and nonpublic schools
  seeking funding
• Use common sense when deciding whether to try to
  utilize the survey method

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• Alternative Discount Methods

• Survey Extrapolation

• If a survey is sent to all households of its
  students, and
• If at least 50 of surveys are returned
• School may extrapolate the data to 100 of its
  students
• Example
• 100 families received the survey 75 returned
  them
• 25 of the 75 families are eligible for NSLP
• 25/75 0.33
• School can report 33 of all students are eligible

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• Alternative Discount Methods

• Combining Alternative Discount Methods

• Ensure that the same students are not double
  counted.
• Surveys cannot be combined with other alternative
  discount methods if you have extrapolated
• Provisions 1-4 cannot be combined with other
  alternative discount methods since they include
  extrapolation
• Keep detailed records to show that the same
  students were not double counted

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• Alternative Discount Methods

• Unacceptable Alternative Discount Calculation
  Methods

• Feeder School Method
• Extrapolating from elementary to secondary
  schools
• Principals Survey/Estimate
• Based on administrators knowledge of some of
  their students
• Title I eligibility alone
• Neighborhood poverty measurements

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Questions?
31

• Intermediate/Advanced Presentation

• Eligible Services List (ESL)

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• New for 2013/2014

• FCC changed their rule regarding designation of
  service for Telecommunications and/or Internet
  Access (P1) to indicate that the applicant is
  only required to check one of the two boxes on
  Form 470 as long as the services requested are
  described in sufficient detail to allow
  prospective service providers. Updated forms for
  next year expected to indicate only a single
  category of service as Priority One.

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• Priority One

• Telecommunications Services

• Local, long distance, cellular phone service and
  paging
• Includes voice mail and custom calling features
• Centrex, hosted VOIP phone service
• Broadband services (WAN services)
• T-1, PRI, Frame Relay, ISDN, leased lit and dark
  fiber, etc.
• Installation of eligible telecom services
• If installation is included on your application
• Most taxes and surcharges
• Telecommunications services must be provided by
  an Eligible Telecommunications Provider (ETP)
• Exception Hosted VOIP and Fiber WAN services can
  be provided by non-ETP

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• Priority One

• Not Eligible as Telecom Services

• Broadcast Blast messaging
• Monitoring services for 911, E911 or alarm
  telephone lines
• Services to ineligible locations
• End-user devices
• Cell phone, tablet computers

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• Priority One

• Internet Access (IA)

• Support for IA includes Internet Service Provider
  (ISP) fees as well as the conduit to the Internet
• Other eligible IA services include
• E-mail service
• Wireless Internet access
• Interconnected VoIP
• Basic Web hosting

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• Priority One

• Not eligible as Internet Access

• Costs for Internet content
• Subscription services such as monthly charges for
  on-line magazine subscriptions
• Internet2 membership dues
• Web site creation fees
• Web based curriculum software
• Software, services or systems used to create or
  edit Internet content

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Interconnected VoIP (aka Hosted VoIP)

• Defined as a service that
• Enables real-time, two-way voice communications.
• Requires a broadband connection from the users
  location.
• Requires Internet protocol-compatible customer
  premises equipment (CPE).
• Permits users generally to receive calls that
  originate on the public switched telephone
  network and to terminate calls to the public
  switched telephone network.

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Interconnected VoIP

• Priority One Services
• May be applied for in either Telecommunications
  or Internet Access on Form 470.
• The Form 471 application category of service
  selection will be decided by the type of
  provider, whether ETC or not.

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• Priority Two

• Internal Connections

• Support for equipment and cabling on-site that
  transport information to classrooms or public
  rooms of a library
• Subject to the Two-in-Five Rule
• Entities can only receive funding every two out
  of five years

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• Priority Two

• Basic Eligibility Conditions

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• Priority Two

• Basic Maintenance of Internal Connections

• Support for basic maintenance of eligible
  internal connections (BMIC) such as
• Repair and upkeep of hardware
• Wire and cable maintenance
• Basic tech support
• Configuration Changes
• Agreements or contracts MUST state the eligible
  components covered, make, model and location
• Service must be delivered within the funding year
• July 1 June 30
• Two-in-Five Rule does not apply to BMIC

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• Priority Two

• BMIC Updated Guidance

• Standard manufacturer warranties of no more than
  three years remain eligible as long as it is
  provided as BUNDLED (included) with the purchase
  of the device.
• If there is a line item cost associated with the
  warranty, then the warranty is not eligible
• Support for BMIC for hardware is limited to
  actual work performed under the contract

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• Priority Two

• BMIC Updated Guidance

• Applicants may make estimates based on
• Hours per year of maintenance
• History of needed repairs and upkeep
• Age of eligible internal connections
• Applicants using the factors listed above must
  submit a bona fide request
• It is not reasonable to estimate an amount that
  would cover the full cost of every piece of
  eligible equipment.

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• Priority Two

• BMIC Updated Guidance

• Flat rate contracts may be eligible however,
  applicants may only invoice for services actually
  delivered/work performed.
• Exceptions that will not require demonstration
  that work was performed are
• Software upgrades and patches
• Bug fixes and security patches
• Online and telephone based technical support

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• Equipment Transfers

• Equipment transfer rules

• A transfer may occur three years or more after
  the purchase of the equipment to other eligible
  entities
• No equipment transfer may occur prior to three
  years from the date of installation, unless the
  eligible entity is permanently or temporarily
  closing

46

• Equipment Transfers

• Equipment transfers less than 3 years

• Notify USAC
• Both the closing entity and the recipient must
  retain records of the transaction
• Include the reason for the transfer
• Records must be kept for five years after the
  date of the transfer
• Records for equipment transferred after gt3 years
  follow the traditional document retention
  requirements

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• Disposal of Equipment

• Disposal of Equipment Rules

• As of January 3, 2011, applicants can dispose of
  obsolete equipment, but no sooner than five years
  after the date the equipment is installed
• Resale for payment or other consideration is
  allowable no sooner than five years after the
  equipment is installed
• Resale or disposal is prohibited before the five
  years have passed.

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• Trade-ins and Exchanges

• Trade-ins and Exchanges

• Trade-ins of equipment may be permitted if the
  E-rate funded equipment to be traded in has been
  installed for at least five years
• This limitation does not apply for equipment not
  funded through E-rate
• Value of trade-in does not have to be shared
  with USAC.

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Questions?
50

• Intermediate/Advanced
• Presentation

• Form 470

51
Form 470 Starts Competitive Bidding

• Makes yourselves familiar with eligible services
  and various categories of service
• Service or Function
• MUST provide enough detail to encourage service
  providers to bid
• Broaden scope plan for growth or reduction in
  number of eligible entities or bandwidth or
  number of lines
• Any limiting or disqualification factors related
  to bidding should be identified unless on RFP

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Killer Gotchas Funding DENIAL

• Did not identify the correct service category on
  Form 470
• Mostly relates to P2 services now.
• Hint Always indicate BMIC when asking for IC
• If you indicate that you dont have an RFP when
  you really do have one, and vice-versa

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• Intermediate/Advanced
• Presentation

• Competitive Bidding/
• Procurement

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Fair and Open Competitive Bidding is a Program
Requirement

• Avoid conflicts of interests
• Independent Consultant vs. Service Provider
• Applicant vs. Service Provider
• Follow and UNDERSTAND the rules FCC, State and
  local
• Board Policy
• Tennessee State Bidding rules and regulations
• Master Contracts
• Consortium Contracts
• Document the process!!!

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• Competitive Bidding

• Service providers CANNOT

• Help prepare the Form 470
• Help write or provide a RFP to applicant
• Be a contact person on Form 470
• Sign any applicant forms
• Be involved with bid development or evaluation in
  any way
• Provide funding for the applicant's non-discount
  portion or waive the applicant's non-discount
  portion
• Coerce or pressure the applicant to use a
  specific service provider
• Provide gifts to applicants that violate the gift
  restrictions

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• Competitive Bidding

• Service providers CAN

• Offer neutral technical assistance on development
  of technology plan
• Cannot exert undue influence on applicant's
  ability to conduct a fair and open competitive
  bidding
• Answer general questions about the products and
  services they sell in response to applicant
  inquiries
• Once a contract has been signed, provide
  information to applicants to assist with
  responding to USAC questions regarding their
  application/funding requests(s)
• Provide assistance with service substitutions and
  other post-commitment activities

57

• Competitive Bidding

• Applicants CANNOT

• Have a relationship with service providers that
  would unfairly influence the outcome of the
  competition
• Furnish service providers with inside competitive
  information
• Have ownership interest in a service providers
  company competing for services
• Violate gifting rules

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• Competitive Bidding

• Applicants can

• Have pre-bidding discussions with potential
  bidders as long as that doesnt lead to one
  bidder having inside information
• Attend product demonstrations
• Encourage and seek vendors to bid
• Do research to determine what cost-effective
  solutions are available (in a service provider or
  manufacturer neutral manner)

59

• FCC Form 470 RFPs

• FCC rules refer to RFPs generically but they may
  have a variety of names (Request for Quotes,
  Request for Bids)
• FCC rules do not require RFP but state and local
  procurement rules may
• Must be available to bidders for at least 28 days
  (we recommend 29 days) from the posting of
  whichever is released last, the RFP or the Form
  470
• Retain a copy of the RFP, including evidence of
  publication date and any solicitation
• MUST indicate any special requirements and/or
  disqualification factors

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• FCC Form 470 RFPs

• Applicants must ensure that they post for the
  correct category or categories of service
  (Non-allowable MC correction.)
• Does not apply for Priority One services for 2013
  and beyond
• Sufficient detail in FCC Form 470
• Cannot provide generic descriptions (e.g., All
  eligible telecom services or Digital
  Transmission Services)
• Cannot provide laundry lists of products and
  services
• Addendums or changes to the RFP may require
  applicants to re-start the 29 day period when
  there is a significant change to the original
  scope of the procurement

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• FCC Form 470 RFPs

• Imposing Restrictions

• Setting eligible services requirements
• Applicants may require service providers to
  provide services that are compatible with one
  kind of system over another (e.g., Cisco
  compatible).
• Applicants cannot state make and model on FCC
  Form 470 or RPF, but may state equivalent make
  model (e.g., IBM router 628 or equal
  functionality)

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• Vendor Selection

• Bid Evaluation

• Vendor selection criteria MUST be posted with the
  RFP
• Vendor evaluation begins after 29-day waiting
  period
• Follow your vendor selection criteria
• Price of the eligible goods and services must be
  the criteria given the highest allowable point
  value
• Other factors, including other price factors, can
  be considered as well but they cannot be weighted
  equally or higher than cost of the eligible goods
  and services

63

• Competitive Bidding

• Sample Bid Evaluation Matrix

Factor Points Available Vendor 1 Vendor 2 Vendor 3
Price of the ELIGIBLE goods and services 30 15 30 25
Prior experience w/ vendor 20 20 0 20
Prices for ineligible services, products Fees 25 20 15 25
Flexible Invoicing 472 or 474 15 0 15 15
Environmental objectives 10 5 3 2

Total 100 60 63 87
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• Vendor Selection

• Selecting the Winning Bidder

• Solution must be cost-effective
• An existing contract can be used as a bid
  response to your posted FCC Form 470
• Post 470, evaluate all bids existing contract,
  memorialize your decision if existing contract is
  selected BE CAREFUL, A NEW CONTRACT MAY BE
  REQUIRED, EVEN FROM EXISTING VENDOR
• No bids or one bid (email yourself noting the
  fact)
• Retain all vendor selection documentation
• Winning and losing bids, correspondences, memos,
  bid evaluation documents, etc.

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Avoid Sham Bidding

• Must respond to all legitimate inquiries
• You do not have to respond to SPAM emails or
  emails that do not reference any specific service
  or product that youve requested
• Providers that feel they are being stonewalled
  may contact USAC for assistance
• Cost to transfer to another provider alone is not
  by itself a good enough reason to stay with
  incumbent
• Avoid appearances of a done deal
• Dont post for something you dont want
• If plans change, have a plan to communicate with
  potential bidders

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• Vendor Selection

• Free Services

• Cant use E-Rate to get free ineligible products
  and services
• Must deduct the value of the free stuff,
  discounts, trade-ins, etc., from the pre-discount
  amount in order get equal comparison between
  offerings
• Cost allocation is NOT required when the
  product/service (e.g., free cell phones) is
  available to the public or a class of subscribers
  (not just E-Rate)
• End user handsets and softphones are currently
  not eligible
• Be wary of vendors that try to bundle this
  equipment in their proposals the FCC still
  hasnt ruled officially on this open item
• Cost of eligible goods and services cannot be
  inflated to cover the free ineligible products
  and services

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Contracts

• Must be signed AFTER at least 29 days have
  elapsed but BEFORE you file your Form 471
• Must be signed and dated by applicant at a
  minimum
• READ AND UNDERSTAND THE FINE PRINT!
• Allow enough time to take contracts to Board for
  approval (if required by Board policy)
• Be prepared to explain documents that dont look
  like a traditional contract.

68
Questions?
69

• Intermediate/Advanced
• Presentation

• Form 471

70
Form 471 Your Application for Discounts

• Must be filed every funding year
• This is your actual request for funding
• This is where you specifyWho, What, Where, When,
  How
• WHO Service providers chosen
• WHAT Services being requested
• WHERE Service Delivery locations
• WHEN Dates for services
• HOW Costs for services and terms

71
Form 471 Your Application for Discounts

• Include ALL NIFS that will be receiving
  discounted services
• Separate Priority 1 and Priority 2 services on
  two different Forms 471
• Separate Recurring from Non-Recurring charges
• Recurring Block 5, Question C.
• Non-Recurring Block 5, Question H.
• Contract expiration date for non-recurring
  services - September 30 (coincides with default
  deadline for delivery of services for
  non-recurring charges)

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Form 471 Your Application for Funds

• Priority Two Filing Strategies
• Create multiple Block 4s to identify different
  groups of sites.
• Create multiple Forms 471 for widely varying
  discounts
• i.e. one Form 471 for 80 and one for 90

73
Potential Funding Deal Breakers

• DONT file Priority One and Priority Two funding
  requests on the same Form 471
• DONT forget to wait at least 29 days after any
  mandatory processes associated with your
  competitive bidding before selecting a service
  provider or signing any contracts
• DONT submit your Form 471 BEFORE signing all
  related contracts
• DONT forget to CERTIFY your submitted
  application (whether electronic or paper
  certification)

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Item 21 Attachment

• MUST be submitted by the end of the Form 471
  filing window
• Avoid TMI (Too Much Information) Syndrome PIA
  will thank you
• Remove ineligible costs be careful
• 30 rule 30 or more of funding request dollar
  value cannot be for ineligible products and
  services. the entire request may be denied
  unless
• it can be rectified during your PIA process
  Remove it-Split it up- separate FRN
• If possible, work with service provider(s) to
  create your Item 21 attachment(s)

75
Questions?
76
Application Review FCDL

• Be Responsive to PIA reviewer
• Answer all PIA reviewer questions
• Establish a working relationship with PIA
  reviewer
• Request additional time if you need it to respond
• When you do receive your FCDL, review it
  thoroughly
• You have 60 days from date of FCDL to submit an
  appeal if you do not agree with the funding
  decision(s).

77

• Intermediate/Advanced
• Presentation

• Program Updates and Compliance

78

• Document Retention

• Retain Documents to Show Compliance

• 5 years from last date to receive service in
  electronic format or paper
• Any document from a prior year that supports
  current year must be kept for at least 5 years
  from last date to receive service
• E.g., Contract from 2005, used to support FY 2012
  recurring service FRNs, must be kept until at
  least June 30, 2018
• Applicants service providers must retain ALL
  documentation that shows compliance with all FCC
  rules.

79

• Document Retention

• Retain Documents to Show Compliance

• Consultant authorization such as Letter of
  Agency
• Document Examples, e.g.
• Competitive Bidding Documents include all bids
  winning and losing
• Compliance review documents (PIA, TPA, CIPA,
  Invoice)
• Invoices, bills, contracts
• Asset registries, inventory logs
• NSLP discount documentation (including NSLP
  applications, etc.)
• Technology plans in effect for each Funding Yr
• NOTE See complete list on USAC website

80
2-in-5 Year Rule

• An entity may only receive discounts 2 out of
  every 5 years for internal connections
• Doesnt include basic maintenance
• Applies at the building level, not district level
• If central equipment is purchased for NOC, each
  building receiving benefit of that equipment
  receives a strike
• Plan accordingly to maximize discounts
• Strikes related to funding commitment (FCDL),
  not 471 or invoices
• Can cancel FRN to get strike (year) back, but not
  after funding has been disbursed
• Hint Dont use a strike (year) for a 500 piece
  of equipment

81
Will P2 Be Available in FY 2013?

• Lets look at FY 2012
• 2,290,683,250 available
• Demand for Priority 1 (telecom and Internet) was
  2.444 billion
• an increase of 12.5 from last year
• Demand for Priority 2 (internal connections) at
  90 discount level was 1.379 billion
• All P1 and 90 P2 funded with unprecedented
  rollover
• If P1 grows again by 12.5, P1 demand will be
  2.737 billion
• Very little rollover funds remain
• No certainty as to the availability of P2 funding
  in 2013

82
Should You Apply for P2 Funding?

• Year 1 -- funded to 70
• Year 2 all funded
• Year 3 down to 82
• Year 4 down to 87
• Year 5 down to 81
• Year 6 down to 70
• Year 7 down to 81
• Year 8 down to 80
• Year 9 down to 86
• Year 10 down to 81
• Year 11 down to 87
• FY 2009 down to 77
• FY 2010 -- all funded
• FY2011 down to 88
• FY 2012 down to 90 (barely)

83
Funding Predictions for FY 2013

• P1 Enough funding should be available to fund
  all P1 requests
• P2 It is doubtful that all 90 P2 requests will
  be funded, at least not without pro-ration
• FY 2014? Will enough funding be
• available to pay for Priority 1 requests without
  proration?

84
What is Proration?

• The rules of the E-Rate program have provisions
  to pro-rate funding approval in the event there
  is not enough money to fund all of the valid
  requests
• This is already being done in the P2 category
  when the FCC cuts off funding at a certain
  discount level when there is not enough money to
  fund an entire discount band
• Proration in this context means that it is
  likely there will not be enough money to fund
  even all of the 90 requests
• The FCC will authorize USAC to fund a
  commensurate portion of each of the requests
• For example, if 40 of funding is available to
  fund all of the 90 requests, then applicants
  will be approved for 40 of their entire funding
  request
• 10,000.00 requested 4,000.00 funded

85
What is Proration?

• The more concerning/alarming possibility is a
  proration of P1 requests
• Based on the rules, if there is not enough money
  available to fund even all of the P1 requests,
  then the FCC will use same model as has been used
  for P2 threshold determination and will apply
  that theory to P1
• Long story shortwithout swift and substantive
  change to the program (either by cap increase or
  other administrative adjustments), applicants in
  the lower discounts bands (lt50 weighted
  discount) may see zero E-Rate funding

86
How Will This Problem Get Fixed?

• FCC currently wrestling with this issue
• Possible solutions could include
• INCREASING THE CAP
• Removing certain services from the eligible
  services list
• Consider what this would mean if voice services
  were no longer eligible
• Adjusting the discount matrix to decrease each
  discount level by 5 or 10
• Find other funding sources to add to E-rate
• Requiring ISPs and IC vendors to pay into fund
• Assessing contributions differently

87

• Intermediate/Advanced
• Presentation

• Childrens Internet Protection Act (CIPA)

88

• New for Funding Year 2012

• New requirements under CIPA

• SCHOOLS By July 1, 2012, you should have
  amended your existing Internet safety policy to
  provide for the education of minors about
  appropriate online behavior, including
  interacting with other individuals on social
  networking sites and in chat rooms, and
  cyberbullying awareness and response.
• Overall - several existing statutory requirements
  were codified and others have been clarified.

89

• CIPA - FCC Report and Order

• Additional Information on New Requirements

• New requirements come from the Protecting
  Children in the 21st Century Act, which updated
  the Childrens Internet Protection Act.
• Internet safety policies for schools must have
  been updated on or before July 1, 2012 to provide
  for
• The education of minors about appropriate online
  behavior, including interacting with other
  individuals on social networking sites and in
  chat rooms
• Cyberbullying awareness and response

90

• CIPA - FCC Report and Order

• Additional Information on New Requirements

• Social networking and cyberbullying are not
  defined, nor are specific procedures or curricula
  detailed for schools to use in educating students
• Congress intent is that local authorities should
  make decisions in this area.
• FCC recently issued some clarifying guidance
  regarding what the expectations are as to how
  often students should be educated and some loose
  guidelines regarding documenting proof of the
  education
• Resources are available to assist in this process
  if needed e.g., OnGuard Online.gov, FBI and the
  Google project (see TN E-Rate website for
  specific URL information)

91

• More user friendly processes

• Corrections of Ministerial Clerical Errors

• 15 Day Rule eliminated (CORRECTIONS ONLY)
• RNL RAL corrections can be submitted until the
  FCDL is issued
• PIA will ask if this is a ministerial or clerical
  error
• Tell us what error occurred
• Provide a reasonable explanation
• Documentation may be requested

92

• Ministerial/Clerical Errors
• Some allowable corrections

• Using wrong Form 470 number or wrong billed
  entity number
• Using wrong name or service provider
  identification number (SPIN)
• Using wrong expiration date for a contract
• Requesting recurring service when the service is
  one time charge
• Requesting one time service when the service is
  recurring
• Inaccurately reporting the pre-discount amount on
  Block 5
• Leaving off a building from Block 4
• Referring to wrong Block 4 worksheet for a
  funding request
• Listing wrong service category in Block 5
• Simple math errors
• Failing to enter an item from the source list
  (e.g., NSLP data, uploading Block 4 data, FRN,
  etc.)

93

• New starting in 2011

• Operational SPIN Changes

• Starting with FY 2011 FRNs, Operational SPIN
  change requests can be approved when there is a
  legitimate reason to change providers (e.g.,
  breach of contract or the service provider is
  unable to perform)
• Operational SPIN changes will not be approved
• to purchase a service or product for a cheaper
  price or
• because of preference for a bidder that didnt
  participate in or win the competitive bidding
  process

94

• New for Funding Year 2011

• Operational SPIN Changes (contd)

• Operational SPIN Change Request
• The newly selected vendor must receive the next
  highest point value in the original bid
  evaluation if more than one vendor submitted a
  bid
• You can select a vendor without conducting
  another competitive bid if only one bid was
  received
• You must state your reason for the request
• Indicate the new SPIN start date and funding
  amount and the former SPIN end date and funding
  amount

95

• Gifts

• E-rate Gift Rules

96

• E-rate Gift Rules

• Gift Rules

• Solicitation or receipt of gifts by applicants
  from service providers and potential service
  providers and vice versa is a competitive bidding
  violation.
• Rules apply to everyone participating in the
  E-rate whether public or private, and whether
  operating at the local, state or federal level.
• Must always follow FCC rules. May also need to
  comply with additional state/local requirements.
  If those provisions are more stringent than
  federal requirements, failure to comply with them
  will be a violation of FCC rules.

97

• E-rate Gift Rules

• Gift Prohibitions

• Gift prohibitions are applicable year-round, not
  just during the competitive bidding process
• Prohibition including soliciting and receiving
  any gift or thing of value from an applicant or a
  service provider participating in, or seeking to
  participate in the E-rate.
• Service providers may not offer or provide any
  gifts to applicant personnel involved in the
  E-rate or vice versa.

98

• E-rate Gift Rules

• Gift Rule Exceptions

• Modest refreshments not offered as part of a
  meal, items with little intrinsic value intended
  for presentation, and items worth 20 or less,
  including meals, may be offered or provided , and
  accepted by any individuals or entities subject
  to this rule, if the value of these items
  received by any individual does not exceed 50
  from one service provider per funding year.
  See 47 C.F.R. 54.503(d)(1).
• Single source all employees, officers,
  representatives, agents, contractors, or
  directors of the service provider.

99

• E-rate Gift Rules

• Gift Rule Exceptions Examples

• A Service Provider has offered a school district
  employee lunch at a local sandwich shop three
  times during the course of the year. The value of
  the school district employees meal is 9 each
  time. The total value of the gifts is 27. No
  other gifts are received by this employee from
  this provider. The meals fall in the 20 per
  instance and 50 per annum exception and there is
  no rule violation.

100

• E-rate Gift Rules

• Gift Rule Exceptions Examples

• A school system employee and his spouse are
  invited by a service provider to attend a play,
  tickets to which have a face value of 30 each.
  The aggregate market value of the gifts offered
  on this single occasion is 60, 40 more than the
  20 amounts that may be accepted for a single
  event or presentation. The employee may not
  accept the gift of the evening of entertainment.
  He and his spouse may attend the play only if he
  pays the full 60 value of the two tickets.
• For more details/examples http//www.usac.org/_r
  es/documents/sl/pdf/2010_training/Applicant-6th-Or
  der.ppt

101

• E-rate Gift Rules

• Gift Rule Exceptions

• Gifts to family and friends when those gifts are
  made using personal funds of the donor (without
  reimbursement from the employer) and are not
  related to a business transaction or business
  relationship are exempt. See 47 C.F.R.
  54.503(d)(3).

102

• E-rate Gift Rules

• Curing Violations

• Return any tangible item to the donor, or pay the
  donor its market value, or, if perishable, the
  item may be given to an appropriate charity or
  shared within the office or destroyed. See CFR
  2635.205(a).
• To avoid public embarrassment to the seminar
  sponsor and E-rate service provider, the
  Superintendent did not decline a barometer worth
  200 given at the conclusion of her speech on the
  districts education initiatives. The
  Superintendent must either return the barometer
  or promptly reimburse the provider 200 to cure
  the violation.

103

• E-rate Gift Rules

• Curing Violations Examples

• With approval from the recipients supervisor, a
  floral arrangement sent by a service provider may
  be placed in the offices reception area.
• A district employee wishes to attend a charitable
  event to which he has been offered a 300 ticket
  by a service provider. Although his attendance is
  not in the interest of the district, he may
  attend if he promptly reimburses the donor the
  300 face value of the ticket.

104

• Charitable Donations

• Charitable Contributions

• Gift rules are not intended to discourage
  charitable donations as long as the donations
• Are not directly or indirectly related to E-rate
  procurement activities or decisions, and
• Are not given with the intention of circumventing
  competitive bidding or other FCC rules

105

• Charitable Donations

• Allowable Charitable Contributions

• Paid-for-exchange services at market rates, such
  as the purchase of advertising space, is neither
  a gift nor a charitable donation as long as it is
  not intended to influence the competitive bidding
  process.
• For example, service providers purchasing
  advertising space on the high school football
  score board, for which they pay market rates,
  would not cause any violations.

106

• Charitable Donations

• Questionable Charitable Contributions

• Equipment, including laptops and cell phones, may
  be permissible if it benefits the school or
  library as a whole and broadly serves an
  educational purpose.
• Gifts of equipment that increase demand for a
  donors services, and thus cause the applicant to
  purchase more of a providers services, are
  prohibited.
• Example Service provider donates computers,
  causing a need for more Internet Access, which
  the provider sells to the library
• Captain Obvious Note Free computers are not
  ever allowed as part of an E-Rate procurement

107

• Charitable Donations

• Potentially Allowable Charitable Contributions

• Cash, equipment, including sporting, musical or
  playground equipment, may be permissible if they
  benefit the school or library as a whole and
  broadly serve an educational purpose.
• For example, a donation of books for a literacy
  campaign, given to a school by an E-rate service
  provider, would be acceptable donation that
  benefits the school and broadly serves an
  educational purpose.

108

• Charitable Donations

• Unallowable Charitable Contributions

• Service providers cannot offer special equipment
  discounts or equipment with service arrangements
  to E-rate recipients that are not currently
  available to some other class of subscribers or
  segment of the public.
• Free phone/tablet with purchase of service
  contract must be available to non-E-rate
  customers as well
• Donations to cover the applicants non-discount
  share

109

• Charitable Donations

• Unallowable Charitable Contributions

• Equipment for a specific individual or group of
  individuals associated with or employed by an
  E-rate participant.
• Service provider may not give a gift to a teacher
  who helps draft a districts technology plan,
  even if that teacher does not ultimately help
  select the E-rate service provider.

110

• Conferences and Training Sessions

• Widely Attended Events

• Widely attended events are exempt from gift
  rules. See 5 C.F.R. 2635.203(g)
• Gathering is widely attended if
• Employees attendance must be in the interest of
  the agency (i.e. school or library) and further
  its programs and operations, and
• It is expected that a large number of persons
  will attend, and
• Persons with a diversity of views or interests
  will be present.
• Event is open to members from throughout the
  interested industry or professional or those in
  attendance represent a range of persons
  interested in a given matter.

111

• Conferences and Training Sessions

• Conferences Permissible Actions

• Food, refreshments, instruction and documents
  given to all attendees at Widely Attended Events
  are permissible.
• Trainings offered by state, regional or local
  government bodies or non-profits or trade
  associations that include those bodies are not
  considered vendor promotional training
• Vendor promotional training means training
  provided by any person for the purpose of
  promoting its products or services. See 5 C.F.R.
  2635.203(g)

112

• Conferences and Training Sessions

• Conferences Permissible Actions

• Service providers can host, sponsor, or conduct
  E-rate training, as long as they do not provide
  any gift that exceeds the gift exceptions
• Service providers cannot provide demonstrations
  or help with preparation or completion of forms,
  or determining the services listed on the Form
  470 and/or RFP.

113

• Conferences and Training Sessions

• Conferences Registration Fees

• Service providers can offer an educational
  discount on the attendance fee to a Widely
  Attended Event as long as it is available to all
  employees of schools and libraries.
• Applicants cannot accept free attendance, paid by
  a service provider, even if the school or library
  has assigned the employee to attend the event.
• A Service provider cannot pay for or reimburse
  expenses for an applicant to speak at a
  conference on behalf of that service provider, or
  in any other setting, e.g. newspaper or magazine.
  

114
Questions?
115

• Intermediate/Advanced
• Presentation

• Post-Commitment Processes

116
Form 486Receipt of Services Confirmation
117
Form 486 Review

• Notifies USAC that services started or are
  scheduled to start and invoices can be paid
• Applicant makes additional program certifications
• Filed AFTER receipt of FCDL
• Form 486 must be filed online or postmarked, no
  later than
• 120 days after Service Start Date
• OR
• 120 days after FCDL date
• Whichever is later
• Due to Super Storm Sandy, 2012 Form 486s
  associated with Waves 1-17 are due no later than
  Jan 28, 2013
• No word yet on prior years pending Forms 486
  deadlines

118
Process after the Processi.e. GET YOUR MONEY!
119
WHEN will I get ?

• E-rate is a discount program
• Funding is based on a discount on actual costs
  incurred not on total funded amount
• District must experience costs before
  disbursements of funding are made
• FCDL Date
• Can be months to over a year after the start of
  the E-rate/fiscal year Plan for it!
• Form 486
• Must be filed before any disbursements can be
  made
• Invoice Deadline
• October 28 after close of funding year for
  recurring services
• January 28 after close of funding year for
  non-recurring services
• Invoice Deadline Extensions are available

120
HOW will I get it?

• Its a long and complicated journey
• always flows through the service provider
  never directly to applicant
• FCDL -gt Form 486 -gt Carrier Forms -gt SPI or BEAR
  -gt Invoice Reconciliation
• Carrier Forms, including
• Grids, certifications, and data gathering forms
• MUST be filed before the service providers will
  process discounts
• TIP Get to know the SPIN contact

121
HOW will I get it? (Contd)

• SPI or BEAR?
• SPI (Service Provider Invoice) Form 474
• Service provider invoices USAC directly for
  E-rate discounted amount
• Applicant pays its share after discount (in a
  perfect world)
• Complications timing of FCDL and posting of
  discounts, verification of receipt of discounts
• BEAR (Billed Entity Application Reimbursement)
  Form 472
• Prepared by applicant applicant is responsible
  for calculations
• Full costs incurred by applicant
• E-rate funds disbursed in a check (check issued
  by SP)

122
WHEN will I get it? (Contd)

• After FCDL issued by SLD
• After Applicant has submitted Form 486
• After Applicant has submitted Service Provider
  required paperwork
• After Service provider has processed paperwork
• THEN
• If E-rate discounts are credits on the bill, it
  may take 2-3 bill cycles for those credits to
  actually be realized
• If BEAR is filed, applicants will receive a check
  from Service Provider approximately four six
  weeks from the time it is submitted.

123
DID I get it???!!!

• BEAR Method
• Check received by district full closure
• Make sure to retain documentation on how BEAR
  calculations were made
• SPI Method
• Requires alert and methodical accounting
• Reconciliation of bills required in order to
  verify if discounts are received
• Discounts often overlap funding years its a
  TRUE challenge!
• Do not assume that SP calculations are correct!

124
Deadlines/Extensions

• Invoice Deadline Extension
• Must be filed in order to collect funds after
  invoice deadline has passed (October 28)
• Implementation Deadline Extension (a.k.a. Service
  Delivery Deadline)
• Must be filed if non-recurring services will be
  installed after September 30 deadline
• If a service delivery extension occurs, your
  contract may need to be extended
• (HINT Set contracts for non-recurring services
  to expire September 30)
• Applicants must extend the contract AND file a
  Form 500 to extend the contract expiration date
  in USACs records before an invoice dated after
  that date can be paid

125
Deadlines/Extensions

• Due to Super Storm Sandy, the invoice deadlines
  for ALL 2011/2012 recurring services has been
  extended until January 28, 2013.
• If you havent submitted your BEARs or if youre
  not sure that you have received everything youre
  entitled to, you now have a special extra
  window of time to check and double check.

126

• Invoice Deadline

• What if the Invoice deadline was missed?

• An Invoice Deadline Extension request must be
  submitted to USAC
• There is no official form, but there is a
  format criteria for request(s)
• Typically, request is submitted by applicant to
  USAC.
• See your binder for specific instructions or
  consult USACs website OR call the TennSEC office
  with questions

127
Questions?
128

• Intermediate/Advanced
• Presentation

• Form 500

129

• Form 500

• To request one or more of the following changes
  to a Funding Request Number (FRN) to
• Change service start date on the FRN
• Change contract expiration date on the FRN
• Reduce funding amount on the FRN
• Cancel the FRN
• NOTE Once you submit a Form 500 to reduce or
  cancel the funding amount, it is irreversible.

130

• Intermediate/Advanced
• Presentation

• Service Substitutions

131

• Service Substitutions

• To request change in products and/or services
  specified in Form 471

• Substitution of a service or product must meet
  the following conditions
• Substituted services or products have same
  functionality as services or products contained
  in original proposal.
• Substitution does not violate any contract
  provisions or state or local procurement laws.
• Substitution does not result in an increase in
  percentage of ineligible services or functions.
• Requested change is within the scope of
  controlling FCC Form 470, including any Requests
  for Proposal, for the original service.
• For details http//www.universalservice.org/sl/a
  bout/changes-corrections/service-substitutions/

132

• Intermediate/Advanced Presentation

• SPIN Changes

133

• SPIN Changes

• SPIN changes Operational vs. Corrective

• Pre-commitment SPIN changes
• Corrective SPIN changes only (i.e., data entry
  errors).
• Post-commitment SPIN changes (as referenced
  previously in this presentation) 6th Report
  Order restricted Operational SPIN changes as
  follows
• Operational SPIN changes must have legitimate
  reason to change, such as breach of contract or
  provider unable to perform, and
• must select provider with the next highest point
  value in evaluation.
• For more details http//www.usac.org/sl/about/ch
  anges-corrections/spin-change-guidance.aspx

134

• Intermediate/Advanced Presentation

• Audits

135

• Audits

• Purpose of E-rate audits

• Primary purposes of audits to ensure compliance
  with FCC rules and program requirements and to
  assist in prevention and detection of waste,
  fraud, abuse
• If you cannot prove that you followed the rules,
  then it will be assumed that you DID NOT follow
  the rules.