E-rate

Background

E-rate is the name given to the program that provides money to schools and libraries in the USA to help with their telecommunications and broadband needs. The program rules are set by the Federal Communications Commission (FCC) and the program is managed and administered by the Universal Service Administrative Company (USAC). E-rate is one of the programs that receive money from Universal Service funds. Universal Service receives its funds from telecommunications service providers. Each service provider is assessed a percentage of revenue. Many providers will pass the charge onto consumers. You may see a line item in your phone bill referencing “Universal Service”. All funds are received by the Universal Service Administrative Company for USAC to then provide to one of its four programs:

• High Cost
• Lifeline
• Rural Healthcare
• Schools and Libraries

– High Cost help service providers bring telecommunications service and broadband to rural high cost areas in the US.

– Lifeline helps low income consumers with their phone bill

– Rural Healthcare helps rural hospitals with their broadband connectivity

– Schools and Libraries helps schools with the broadband connectivity to their premises as well as the broadband connections within the premises

We will focus only on the Schools and Libraries program. This program is commonly known in the industry as E-rate.

E-rate Modernization

The E-rate program has been in existence since 1996. Its initial focus was on ensuring schools and libraries had support for their telecommunications needs, specifically voice service. Since 1996 until the present time, there have been periodic updates to the E-rate rules. The rules changes are managed and put in place by the FCC. Each rule change by the FCC typically has a period of public comment, allowing the public and all interested parties to submit comments, with the hope of influencing the subsequent FCC rules.

In 2014, E-rate shifted to the support of broadband, and is phasing out support for voice service over the coming 5 years. The new rules in 2014 were issued in 2 documents, called Report and Orders. The first was released in July 2014 and the second was released in December 2015. Note that these documents describe the rule changes, they do not comprehensively describe all the E-rate rules. This is one of the reasons why E-rate is so difficult to master. To know all the rules and what the rules are, you literally have to read all the rules documents (Report and Orders) starting in 1996. And read them in order, from 1996 to December 2014. This way, you get an understanding of what has changed in each rules document.

The two documents released in 2014 represent major rule changes for E-rate. The July 2014 document is focused on internal broadband connections. Internal broadband connections are the broadband connections within the property line of a school. For example, the switches, routers, wireless access points and cabling that enables a computer at the school to access the internet. Or that enables a student with a tablet device to access the internet. Internal broadband connections are known within E-rate as Category 2. Prior to July 2014, E-rate used the term Priority 2 to describe internal broadband connections.

The December 2014 rules document focuses on ‘External Broadband Connections’. External broadband connections are the broadband connections to the school, typically provided by a service provider. External broadband connections are the high speed connections to the property line of the school and are known within E-rate as Category 1. Prior to July 2014 the term ‘Priority 1’ was used instead of ‘Category 1’. A key objective of the December 2014 document is to close the rural broadband gap for schools in the US, i.e. ensure schools in rural areas as well as urban areas have access to high speed broadband. The rule changes promote the build of high speed broadband networks and the reason School Fiber was created was to help you take advantage of these rule changes. We aim to facilitate schools getting access to high speed broadband taking advantage of all the new rules announced for E-rate.