On August 22nd 2017 USAC issued a news brief titled “Simplified Drop-down Options for Eligible Services on FY2018 FCC Form 470”. Click here for the news brief. Also, additional information on the Eligible Service Options is given in the FCC Form 470 User Guide, available here – the document is actually called “Filing FCC Forms 470”.
USAC have clarified the meaning of the drop down options “Leased Lit Fiber”, “Internet Access & Transport Bundled” and “Transport Only – No ISP Service Included”.
In prior funding years it was not clear how Leased Lit Fiber differed from “Internet Access & Transport Bundled” and “Transport Only – No ISP Service Included”. I don’t believe USAC knew either.
For funding year 2018, USAC has provided some clarification. The service option Leased Lit Fiber means a fiber based solution is requested whereas the options “Internet Access & Transport Bundled” and “Transport Only – No ISP Service Included” requests non-fiber based solutions e.g. copper or wireless or some other non fiber technology. This distinction is new to funding year 2018 and is very important for applicants to be aware of. If, on your Form 470, you request a non-fiber based solution, providers that utilize fiber to deliver broadband to your premises will not be able to respond. And likewise, if you only request a fiber based solution, meaning you only include the option Leased Lit Fiber, on your form 470, then non fiber providers will not be able to respond.
The reason a provider would not be able to respond to a service option the provider cannot support, is that this would be a violation of E-rate competitive bidding rules if that provider was selected by the applicant. This violation would mean the applicant funding request is likely to be denied by USAC. For example, if an applicant currently served by a copper network, puts on their Form 470 service request the option “Internet Access & Transport Bundled” – this means a non-fiber solution, where Internet Access and Transport are bundled. Only providers with non fiber based solutions can respond. If a fiber based provider responds, and even comes in cheaper than the copper based provider, such that the fiber provider is the most cost effective, the applicant would be prohibited from selecting the fiber provider. USAC would contend that there may be other fiber providers that ignored the applicant 470, since it did not request a fiber solution. Hence, there has not been an open and competitive bidding process. The best thing for the fiber based provider to do is to notify the applicant, that if they want the provider to respond with a fiber solution, the applicant will need to re-issue their Form 470, and include the service request “Leased Lit Fiber”.
Now that is it understood that Leased Lit Fiber means a fiber based solution, and “Internet Access & Transport Bundled” and “Transport Only – No ISP Service Included” means a non-fiber based solution we now need to clarify how to use these service request options.
Before we dive into how the service request options are used, we need to understand the diagram shown below.
The flow of the Internet is from the Provider Point of Presence (POP) to the applicant head end location, which is the location that receives the Internet from the provider, and then from the applicant head end location, there are broadband connections to other schools within the school district. For example, the applicant head end location could be the high school, and the two remote locations could be the middle school and the elementary school. The applicant head end location (high school) is the location that receives the Internet from the provider.
In this scenario, there could be 4 different service providers. For the purposes of this example, we will name the service providers A, B, C and D.
Service Provider A is the service provider at the POP and provides the Internet Access. Service Provider B provides the transport connection between the applicant head end site and the POP. Service Provider C provides the connection between the applicant head end site and the elementary school and Service Provider D provides the connection between the High School and the Middle School.
In practice, you typically don’t have 4 different service providers in this scenario. A more likely scenario is that you have a service provider at the POP providing the Internet Access, and a second different service provider providing the 3 transport connections (from the POP to the applicant head end site, and from the head end site to the elementary school and middle school). Or you could have the same service provider at the POP also providing the 3 transport connections.
In the Form 470 the relevant service options for this example are:
- Leased Lit Fiber
- Internet Access & Transport Bundled
- Transport Only – No ISP Service Included
- Internet Access: ISP Service Only
The service request Leased Lit Fiber should be used when you want a transport connection to be fiber based and should also be used if you want the Internet to be bundled into the transport connection. The narrative section of the form 470 should describe what type of circuit you are looking for with the service request Leased Lit Fiber. Since there are not two Leased Lit Fiber service requests (one for the transport only and the other for transport with Internet bundled) then we have to state in the narrative section what exactly we are looking for.
The service request Internet Access and Transport Bundled should be used when you are looking for a non-fiber transport circuit from the applicant head end site to the POP and you also want Internet access bundled in, from the same provider.
The service request Transport Only – No ISP Service Included should be used when you want a non-fiber transport only connection from the applicant head end site to the POP, but you don’t want the service provider, that is providing the transport connection, to also provide the Internet access. You will find another provider for the Internet access. Note that this service request is also used for the non-fiber transport connections from the applicant head end site to the elementary school and middle school.
The service request Internet Access: ISP Service Only is where you need Internet access from a POP from a provider, but you don’t need the transport connection to the applicant head end site. Thus, in your form 470, you could include the service request Leased Lit Fiber together with the service request Internet Access: ISP Service Only and include in the narrative section that the Leased Lit Fiber service request is for a fiber connection from the applicant head end site to the POP. This combination of services on the form 470 tells the provider community that you are looking for a provider for the fiber based transport connection and a different provider (although could be the same) for the Internet access.
Alternatively, if on the form 470 you include the service request Transport Only – No ISP Service Included together with the service request Internet Access: ISP Service Only, this tells the provider community that you are looking for a provider for the non-fiber transport connection and a different provider (although could be the same) for the Internet access.
Now that we have described when you should use each service option, another aspect to understand is what combination of service options should be requested on your form 470. If you currently have a fiber based solution to your location, and you are only interested in receiving fiber based responses, then the service option “Leased Lit Fiber” should be selected on the form 470. And as described, you should include in the narrative section a clear explanation of what specifically you are requesting. For example, a transport connection only, or a transport connection with Internet bundled. The location of the sites should also be clearly stated in the form 470. By including the service option “Leased Lit Fiber” you do not need to consider any non-fiber based responses received, meaning, any non-fiber based responses can be discarded, and you do not need to include non-fiber based responses in the bid evaluation.
If you have a copper based solution to your locations, for example Ethernet over copper, and you would like to move to a fiber based solution, but you are not sure there are providers capable of providing fiber in your area, then you should include in your form 470 service options for both fiber and non fiber based solutions. This will solicit responses from providers for both fiber and non-fiber solutions. You then need to include all responses (both fiber and non fiber based) in your bid evaluation. Remember, that in your bid evaluation, price must be the highest weighted factor (not necessarily above 50% but must be the highest weight). You could have another factor such as “scalability” that could be weighted at e.g. 30%, if price was weighted at e.g. 40%. The scalability factor would be used to favor a fiber based solution (since fiber is currently the most scalable broadband technology).
Alternatively, if you have a copper based solution to your locations and you know for sure there is fiber in your area, and that there are providers that can bring fiber to your locations and you want to upgrade to fiber, you can put in your form 470 “Leased Lit Fiber”, and explain in the narrative section what exactly you are looking for (i.e. whether you want transport only connections, or you want the Internet to be bundled). You can exclude from your form 470 the non fiber based options. This means that providers have to respond to your form 470 with fiber only responses. Any responses that are non-fiber solutions (e.g. wireless, copper) can be discarded. You don’t have to put these responses through your bid evaluation, they can be just discarded.
If any of the above text is not clear, feel free to email me with your question.