ERate

1
Welcome
E-Rate Introduction and Update New York State
Training Fall 2009
2
Agenda

• Overview of the E-Rate Process
• Overview of program
• Basic application and funding cycle
• Common problems
• Timetable
• Record retention

• New for FY 2010

3
Overview

• Largest federal technology funding program
• Initiated in 1998 under auspices of FCC
• One of 4 Universal Service Fund programs
• Supports technology infrastructures for
  schools and libraries
• Telecommunications
• Internet access
• Intra-building network equipment and
  maintenance
• Discounts range from 20-90 on eligible
  products and services
• 2.25 billion per year (plus roll-overs)

4
Discount Matrix
5
Eligible Services

• Priority 1 (funded first)
• Telecommunications Services
• Local and long distance
• Wireline or wireless
• Voice/data/video
• Provided by Eligible Telecom Provider (Form 499
  filer)
• Internet Access
• Basic conduit access to the Internet
• E-Mail
• Web hosting

6
Eligible Services

• Priority 2 (funded beginning with neediest
  applicants first)
• Internal Connections
• Infrastructure Switches, hubs, routers, wiring,
  cable,
• telephone systems, etc.
• End-user equipment not eligible
• Site funding subject to 2-in-5 Rule
• Basic Maintenance
• Basic break-fix only of eligible equipment
• Exempt from 2-in-5 Rule

7
Overview

• Important source of technology funding (FY 1998
  2009)
• 25 billion nationwide
• 3.5 billion for New York
• Time-consuming, bureaucratic, and confusing
  program
• Forms 470, 471, 472, 479, 486, and 500
• Service eligibility and discount rate issues
• Long lead time and competitive bidding
  procedures
• Strict application review process
• Audits and retroactive refund exposure

8
Application Process
1. Create Technology Plan
2. File Form 470 (quasi-RFP)
3. Wait 28 days (vendor selection period)
4. File Form 471 (application)
5. PIA review and FCDL
6. File Form 486 (confirmation)

• Submit invoices to USAC

9
Tech Plan

• Everything starts with a technology plan
• Required for all but basic telephone
  services
• Must be written by the start of the
  application cycle
• Must be approved by the start of the funding
  year
• Plan must contain five components
• Assessment of current technology/services
• Technology goals and strategies
• Professional development
• Budget for all technology/services
• Evaluation process

10
Tech Plan Problems

• Timing
• No draft (with documentation) before filing
  of Form 470
• Note Current plans expiring 6/30/2010
  must be updated NOW
• Not approved by Certified Tech Plan Approver
  before July 1st
• Content
• Not including all five required components
• Not including all services requested in
  E-rate application

11
Form 470

• E-rate procurement initiated with Form 470
• Filed by applicants to define desired
  services
• Telecommunications
• Internet Access
• Internal Connections
• Basic Maintenance of Internal Connections
• Form 470 request must be based on the
  technology plan
• Posted on the USAC website for at least 28
  days before selecting service provider
  and/or signing a contract
• Annual posting requirement, except for
  multi-year contracts
• Requests For Proposals (RFP), if used, must
  also be available for at least 28 days before
  making a vendor selection

12
Form 470

• Form 470 available online or on paper

13
Form 470

• Block 1 Applicant identification and contact
• Applicant name and address
• Type of application
• Individual school
• School district
• Library
• Consortium
• Applicant contact
• Primary contact individual to interface with
  potential bidders
• Optional technical contact listed later in
  Block 2

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Form 470

• Block 2 Summary description of services
  requested
• Tariffed or month-to-month services
• Contract services
• Multi-year?
• Voluntary extensions?
• Recommendation Check all
• Contracts signed before 7/10/1997 generally
  not applicable

15
Form 470

• Block 2 Summary description of services
  requested, cont.
• Required for each category of service
• RFP (Yes/No) critical
• Discount/reimbursement preference not
  critical
• Service request descriptions
• Service or function
• Quantity and/or capacity
• Examples
• Local and LD telephone 100 lines
• Cellular voice/data 25 lines
• Fiber optic Gigabit WAN 5 buildings
• Internet access 5 buildings _at_ 10 Mbps
• Network cabling and WAPs 1 building
• LAN maintenance 5 buildings

16
Form 470

• Block 3 Technology resources
• Basic telephone service only Be careful
• Other services purchased or being sought
• Software
• Computers and maintenance
• Staff development
• Electrical systems
• Recommendation Check all can leave
  Additional details blank

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Form 470

• Block 4 Recipients of service
• Scope
• Telephone area code and prefix designations
• Billed entities
• Ineligible entities
• Block 5 Certifications and signature
• Technology plan status
• Compliance with 28-day posting requirement
• Service procurement certifications

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Form 470 Apply Online
SLD Training Site
19
Form 470 Problems

• Content
• Failure to indicate RFP or no-RFP
• Not including all services requested in
  E-rate application
• Not including services requested in proper
  category
• Failure to certify
• Timing
• Late filing less than 28 days before close
  of application window

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Form 470 RNL
Receipt Notification Letter

• Issued by USAC after Form 470 is posted
• Provides important information
• Shows Allowable Vendor Selection/Contract Date
• Indicates certification status
• Lists service categories requested
• Offers limited opportunity to make corrections
  without filing a new Form 470 (and resetting
  28-day clock)

21
Procurement
Competitive Bidding

• Applicant must conduct a fair and open bidding
  process
• All bidders must be treated the same
• All bidders must have equal access to information
• Vendors cannot be involved in Form 470/RFP
  development
• Bid assessment is critical
• Applicant must choose the most cost-effective
  offering
• Price of eligible product or service must be
  the primary factor
• Bid responses and assessments must be
  documented

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Procurement
Bid Assessment Matrix
http//e-ratecentral.com/applicationTips/bidAssess
ment/CompetitiveBidResponseDocumentation.asp
23
Contracts

• Applicants must sign and date contracts
• before the Form 471 is submitted
• Contracts can cover more than one year or contain
  voluntary extensions, but these options must be
  indicated in the establishing Form 470
• Tariffed and month-to-month services do not
  require a contract, but they are considered
  contracted services if a contract is signed

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Procurement Problems

• Timing
• Not waiting 28 days before picking vendors
  and signing contracts
• Mismatch of Form 470 and RFP bidding periods
• Process
• Failure to respond fairly to all potential
  bidders
• Possible whistleblower calls
• Invalid contracts (must abide by state rules)

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Form 471
Funding Application

• Must be filed each year within the application
  window
• Contains specific information on services
  ordered, quantities, vendor, and price
• Shows entities receiving services and discount
  rate calculations
• Certifies compliance with rules and verifies
  access to resources to make effective use of
  discounted services

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Form 471
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Form 471

• Block 1 Applicant identification and contact
• Similar to Form 470
• Applicant contact
• Primary contact individual to interface with
  PIA reviewers
• Optional contact information
• Block 2/3 Impact of services ordered
• Lines/speeds/buildings/computers before and
  after
• Not graded

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Discounts

• Schools and libraries can receive discounts
  ranging from 20 - 90 on eligible products and
  services
• Note Discounts, not grants
• Discounts are based on
• Percentage of students eligible for the National
  School Lunch Program (NSLP)
• Shared discounts
• School district uses weighted average of
  individual school discounts
• Library uses discount based on total student
  eligibility of local district
• Consortium uses simple average of individual
  member discounts

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Form 471

• Block 4 Discount rate calculation
• Schools and libraries can receive discounts
  ranging from 20 - 90 on eligible products and
  services
• Note Discounts, not grants
• Discounts are based on
• Percentage of students eligible for the National
  School Lunch Program (NSLP)
• Shared discounts
• School district uses weighted average of
  individual school discounts
• Library uses discount based on total student
  eligibility of local district
• Consortium uses simple average of individual
  member discounts

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Form 471

• Block 5 Discount funding requests (FRN)
• Requires at least one FRN per
  service/vendor/contract
• Designates service provider and contract
• References Form 470 and Allowable Contract
  Dates
• Calculates funding request
• Pre-discount recurring and non-recurring
  charges
• Less ineligible charges
• Times discount rate
• Linked to Item 21 attachment
• Online or on paper
• Filed with application of after

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Form 471

• Item 21 example

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Form 471

• Block 5 Certifications and signature
• Technology plan status
• Compliance with 28-day posting requirement
• Service procurement certifications
• Technology budget information

33
Form 471 Problems

• Content
• Unsupported discount rate data
• Incorrect Form 470 reference
• Contract date precedes Allowable Contract
  Date
• Contract dated after Form 471 submission
• Use of non-ETP for telecommunications
  services
• Missing Item 21 Attachments
• Timing
• Late filing including certification by
  close of application window

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Form 471 RAL
Receipt Acknowledgment Letter

• Issued by USAC to applicant and service providers
  after Form 471 is certified
• Confirms the filing of the Form 471 and provides
  summary information on all funding requests
• Offers an opportunity to make certain corrections
  

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PIA Review
Program Integrity Assurance

• Checks for compliance with
• Program rules
• Eligibility of entities and services
• Verification of service prices and types
• Responding to PIA
• Provide complete and prompt responses to PIA
  inquiries
• Ask for clarification if unsure (or talk with
  manager)
• Service providers can help on questions about
  services, but not about bidding

36
PIA Review Problems

• Timing
• Failure to respond on time (or request
  extension)
• Common review issues
• Missing Item 21 Attachments
• Validation of discount rate data if different
  from NYSED database
• See http//portal.nysed.gov/pls/cn_port/mel
  3_pkg.elig_enroll_query
• Eligibility of entities
• Equipment details and cost allocations

37
Funding Commitments

• Funding Commitment Decision Letter (FCDL)
  issued to applicant and service provider(s) after
  PIA review
• Funding issued in weekly waves
• Funding status provided by FRN
• Funded (with or without modification)
• Not funded
• As Yet Unfunded
• Canceled
• Funds approved for specific services, from
  specific service providers, at the applicants
  approved discount rate

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Form 486
Service Confirmation

• Notifies USAC that services have started and that
  invoices can be paid
• Certifies that applicants technology plan meets
  program requirements
• Certifies that applicant is in compliance with
  the Childrens Internet Protection Act (CIPA)

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Form 486
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Form 486 Problems

• Timing
• Failure to file within 120 days (of SSD or
  FCDL)
• Common Form 486 review issues
• Technology plan problems
• No documentation on tech plan creation date
• No proof of tech plan approval
• CIPA compliance problems
• No documentation on ISP board meeting and
  notice

41
Discount Invoicing

• Two applicant options
• Discounted bills Service provider files Form 474
  (SPI)
• Discount reimbursement Applicant files Form 472
  (BEAR)
• Invoice deadline for both 120 days after last
  date to receive service
• Critical point Applicant must pay non-discounted
  share

42
Form 472 (BEAR)
Billed Entity Applicant Reimbursement

• Filed if applicant paid for services in full
• Filing requirements
• One or more per year and per vendor
• Must be acknowledged by vendor
• Reimbursement is processed through the service
  provider
• Service provider must reimburse (or credit)
  applicant within 20 days of receipt of funds

43
Form 472 (BEAR)
44
BEAR Problems

• Timing
• Failure to file within 120 days (of last
  date to receive service)
• Process
• Failure to file BEAR at all
• Lack of documentation bills, payments,
  service certifications
• Unrecognized Pass Zero condition
• Failure to follow up on service provider
  payment

45
Record Retention

• Records must be retained for at least five years
  after last date to receive services
• FY 2010 example
• 2009 records (Tech plan draft, Form 470, RFP,
  contracts, NSLP data, etc.)
• Last date to received services
• Recurring services 6/30/2011
• Non-recurring services 9/30/2011 or 1-2 years
  after
• Actual record retention requirement
• At least seven years (i.e., 2009 2016)
• Or longer (e.g., multi-year contracts, CIPA,
  etc.)

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Application Process
1. Create Technology Plan Now
2. File Form 470 Nov.- Dec.
3. Wait 28 days Dec.- Jan.
4. File Form 471 By early Feb.
5. PIA review and FCDL Feb. onward
6. File Form 486 After approval

• Submit invoices to USAC Within 120 days

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New for 20092010

• Form color is pink for FY 2010
• Proposed changes to Eligible Services List
  (ESL)
• Potential new CIPA guidance
• Program compliance issues
• Multi-location schools
• ARRA stimulus and National Broadband Plan

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Possible ESL Changes

• FCC Notice of Proposed Rulemaking
• Issued July 31, 2008
• Changes proposed for FY 2009, but were not made
• NPRM issues
• Expanded definition of basic telephone service
• Possible eligibility of
• Filtering
• Firewall, anti-virus, anti-spam
• Dark fiber
• Video scheduling service
• Text messaging
• Telephone broadcast messaging
• Other?
• Final ESL for 2010 expected in November with
  minor changes and clarifications

49
CIPA Amendment

• Protecting Children in the 21st Century Act
• Enacted October 10, 2008
• Act provides for
• Public awareness campaign (FTC)
• Online Safety and Technology working group
  (Commerce)
• Forfeitures related to child pornography
  violations
• Act includes expanded CIPA requirements for
  Internet Safety Policies
• Must include educating minors about appropriate
  online behavior regarding social networking, chat
  rooms, cyber bullying, etc.
• No guidelines yet for implementation

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Program Compliance

• Compliance changes
• Retrenchment on Bishop Perry procedures
• Expanded Special Compliance Reviews
• Expansion of HATS program
• Black Holes
• Round 4 Audits

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Black Holes

• Problem No funding for one or more years,
• often without explanation
• Typically triggered by real or suspected
  procurement violations
• by applicant and/or service providers
• Broad scale use of Selective Reviews and
  Special Compliance Reviews
• Adverse audit findings may require formal
  procedural changes memo
• Problem identification tools
• Vendor SPIN analysis
• Special USAC letters
• Ombudsman
• HATS visits
• Gray Hole problem Post-PIA delays

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Additional SLD Resources

• Web www.usac.org/sl/
• Help lines 888-203-8100 (General)
• 888-276-8736 (Fax questions)
• Online Submit a Question facility
• www.slforms.universalservice.org/EMailResponse/
  EMail_Intro.aspx
• Hint Get a Case and keep records

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Additional NYS Resources

• Web E-rate www.e-ratecentral.com/us/nys
• www.e-ratecentral.com/us/stateInformation
  .asp?stateNY
• OGS www.ogs.state.ny.us/purchase/snt/w
  iredindex/default.asp
• CNS portal.nysed.gov/pls/cn_
  port/mel3_pkg.elig_enroll_query
• Weekly news (via e-mail) www.e-ratecentral.com/
  subscribe.asp
• Questions 516-8301-7810 (Fax) or
  question_at_e-ratecentral.com

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