Special Construction is a term used in E-rate that has a distinct meaning. Before I talk about what Special Construction means and how it can be used by the school or service provider, I would like to spend a few minutes on the terms used in E-rate. The E-rate rules, represented by the two Orders the Federal Communications Commission (FCC) released in 2014 contain many terms. It is important to realize that these terms each have a distinct meaning, and to properly understand the rules you will need to understand their meaning. For example Special Construction means the construction of a broadband network, that includes the project management, design, engineering and physical construction. The FCC want to promote construction of scalable broadband to schools in the US (for those schools that do not currently have a scalable broadband connection) and thus the FCC has made special allowance for Special Construction, providing certain benefits for Special Construction projects.
These benefits include:
- For the next two years there is no limit to the size of Special Construction projects
- For the portion of the Special Construction project not subsidized by the FCC, the school is allowed to pay the service provider the school required match over up to 4 years
- The State can contribute to a Special Construction project to help pay for the school required match. If the State does contribute, the FCC will match the State contribution on a dollar for dollar basis until the FCC has contributed 10% of the total Special Construction cost. Thus, if the Special Construction cost is $1M and the school E-rate discount rate is 80% then the school match is $200K. If the State contributes $100K, then the FCC will contribute an additional $100K, meaning the school does not have to pay any match.
These rules only apply to Special Construction costs. Not other eligible E-rate category 1 costs, that are not classified as Special Construction. Thus, its important to understand the costs that are Special Construction costs.
An Important Point on Special Construction!
It is very important to understand that a Special Construction project can be initiated by the school or by a service provider. Thus a school, acting in its role as E-rate applicant, can launch a construction project. When the school does their own construction, this is called Self Provisioning in E-rate terminology. Thus when a school Self Provisions their own broadband network, they can take advantage of the Special Construction rules.
Alternatively, if a service provider is bringing a new fiber connection to the school, the service provider can state the build is being done via Special Construction, and thus wants to take advantage of the E-rate rules that are specific to Special Construction.
Special Construction should not be confused with Self Provisioning. When you hear the term Special Construction this could be a construction project by either the school (E-rate applicant) or the service provider.
Feel free to email me with any questions you have on this.
Patti Daley says
What is the cost of bringing broadband connection to a single school or library and how long on average does the construction take?
How does this compare to bringing high-speed broadband to a single house?
Thank you for your help.
Essam El-Beik says
The cost of construction is very much dependent on the type of broadband and the type of construction. Currently, the most scalable technology is fiber. Fiber can be placed above ground on utility poles, or buried underground. Construction cost can vary from $25,000 per mile for fiber on poles to over $100,000 per mile for underground fiber. And multiple $100,000’s per mile for underground fiber in dense urban areas. As a rough estimate, you could assume $35,000 per mile for fiber on poles and $60,000 per mile for underground fiber in a suburban/rural area. Service providers will typically amortize the fiber construction cost in urban areas over many houses. In rural areas, the service provider will have a certain number of houses per mile that need to subscribe to service, to make the build worthwhile (e.g. 8 houses per mile). The actual cost of construction is the same irrespective if the customer is a school/library or household. For schools and libraries, I would check if your state has a matching program for E-rate special construction projects, and if so, take advantage of the construction subsidy provided by the FCC and USAC.